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Philippine banks seen resilient, stable amid potential tariff shocks

THE PHILIPPINE banking system is expected to be more resilient against shocks caused by the United States’ tariff policies compared to its neighbors, Fitch Ratings said.

“The imposition of tariffs will likely be negative, potentially more so for the likes of Vietnam and Thailand than is the case for the Philippines, where we view the banking system as exhibiting a degree of resilience and stability in terms of growth prospects,” Fitch Ratings Head of Asia-Pacific Banks Jonathan Cornish said on Money Talks with Cathy Yang on One News on Tuesday.

“It should be largely manageable, especially in the case of the Philippines, that’s reflected in Fitch’s neutral outlook for the Philippine banking system,” he added. “This means the banking sector’s business generation and financial prospects will remain “broadly similar in 2025 versus last year.”

US President Donald J. Trump earlier this month slapped “reciprocal” tariffs on its major trading partners. The Philippines was slapped with a 17% rate, the second-lowest in Southeast Asia.

However, the implementation of the reciprocal rates was suspended for 90 days, with countries currently subject to a blanket 10% duty.

Lingering uncertainties over the US tariff policies may be a “deterrent for business investment across the region, and that’s going to weigh on economic growth and hit banks’ growth prospects, albeit to varying degrees across the region,” Mr. Cornish said.

The potential economic impact of these changing tariff policies could also prompt the credit rater to revise its outlook on banking systems in the Asia-Pacific region, but this is less likely for the Philippines, he added.

“The threat of high tariffs increases the potential that we’ll revise the likes of Vietnam’s sector and look back to neutral. Thailand actually could move to deteriorating from neutral. We see less risk of change for the Philippines overall,” he said.

“If the tariff level remains lower, together with what is a relatively low single-digit exposure to US exports as a percentage of GDP (gross domestic product), then the Philippine economy and banking system should remain relatively stable.”

Mr. Cornish noted Fitch’s recent actions on major Philippine banks’ viability ratings, adding that these reflect their neutral view on the sector.

“Their viability ratings reflect our assessment of the price behind credit risk. And the credit rating outlook for the Philippine banks also remains the same,” he added.

In March, the credit rater hiked the country’s banking sector operating environment score to “bbb-” from “bb+.” All rated Philippine banks’ viability ratings were also revised one notch higher this month.

“The authorities in the Philippines including the Bangko Sentral ng Pilipinas (BSP) certainly have presided over relatively robust credit growth in recent years,” Mr. Cornish said. “We expect that to continue as genuine demand for credit to support robust economic growth, and which is likely to be aided by policy rate cuts in 2025 and 2026.”

The BSP resumed its easing cycle earlier this month with a 25-basis-point (bp) rate cut.

“But in the Philippines, rate cuts have not always weighed on bank net interest margins (NIMs) in the past. That’s partly to do with the nature of bank lending in the Philippines,” Mr. Cornish noted.

“We expect NIMs of the major commercial banks to narrow slightly. The same goes for our major banks, which are offering profit to risk-weighted assets, but this is on the back of double-digit total loans growth. So, overall bank earnings should really hold up in the Philippines.”

Bank lending rose by 12.2% year on year to P13.03 trillion in February, slower than the 12.8% expansion in January, which was the fastest in two years. — Luisa Maria Jacinta C. Jocson

Sistine Chapel’s conclave preparations leave tourists shut out

MUSEIVATICANI.VA

VATICAN CITY — It is one of the wonders of the world, attracting millions of visitors every year. But those now in Rome hoping to admire the Sistine Chapel will not get their fix of its monumental Michelangelo frescoes.

“Notice is hereby given that the Sistine Chapel will be closed to the public from Monday 28 April 2025 for the requirements of the Conclave,” reads a terse statement on the Vatican Museums’ website.

The conclave, the secret meeting to elect a new leader of the Catholic Church after the death of Pope Francis, starts on May 7, but preparations to host the more than 130 cardinals due to take part take several days.

“To come from so far, to not be able to go into one of the major sites is very disappointing,” said Leonie Shannon, a 67-year-old tourist from Australia.

The chapel’s ceilings are adorned with scenes painted between 1508 and 1512 from the Bible’s Old and New Testaments. The most famous is The Creation of Adam, in which God reaches with his finger to touch the outstretched hand of the first man.

Michelangelo also painted the awe-inspiring Last Judgment on the wall behind the altar, while other Renaissance artists such as Botticelli, Perugino, and Ghirlandaio decorated its side walls.

“This is a truly great work of art that we’ve studied, so we hoped that we could witness it firsthand,” said Guo Feng, one of a group of art students from China. “It’s really unfortunate that we can’t see it on this trip. It’s a big regret for us.”

But many visitors also acknowledged the extraordinary circumstances that required the closure of the most popular part of the Vatican Museums.

“We were a little bit sad (when) we heard the Sistine Chapel was closed, we really wanted to see the Creation of (Adam), right?” said Ahmad Mourad, a visitor from Texas in the US. “But we understand the situation and everything.”

Even without the chapel, the Vatican Museums contain one of the great art collections, stretching from ancient Roman sculptures to 19th– and 20th-century masters such as Van Gogh and Matisse.

“(It) would have been amazing to see the Michelangelo, … I mean, that’s stunning. But look, I think we still enjoyed what we saw. There were still many, many, many rooms that we could explore… But yeah, obviously disappointed,” said Australian Sharyn Davis. — Reuters

US director Alexander Payne to head Venice Film Festival jury

US film director Alexander Payne — LABIENNALE.ORG

ROME — US director Alexander Payne will head the main competition jury at this year’s Venice Film Festival, the organizers said on Monday.

Mr. Payne’s films, including the comedies The Holdovers, Sideways, and The Descendants, have been nominated for a total 24 Oscars, including four times for Best Picture and three times for Best Director.

He has won twice for Best Adapted Screenplay.

“It’s an enormous honor and joy to serve on the jury at Venice. Although I share a filmmaker’s ambivalence about comparing films against one another, I revere the Venice Film Festival’s nearly 100-year history of loudly celebrating film as an art form,” Mr. Payne said in a statement.

The 82nd Venice Film Festival, held on the lagoon city’s Lido island, will run from Aug. 27 to Sept. 6. The movies in competition will be announced in July.

Mr. Payne’s 2017 comedy Downsizing opened the festival in 2017. — Reuters

China’s e-commerce giants are putting up a fight

By Catherine Thorbecke

CHINA’s e-commerce players are perhaps the most exposed to the trade war, the exception to arguments that the country’s tech sector will be able to weather the storm.

If US President Donald Trump’s tariffs hold, it would be devastating for the business models of PDD Holdings, Inc.’s Temu, Shein, Alibaba Group Holding Ltd.’s international retailers, and the thousands of small Chinese companies making goods for export. But the levies have galvanized them to support each other in unprecedented ways. And Americans have simultaneously shown an unwillingness to let their access to cheap imports go.

Chinese tech giants are working to help exporters find buyers in the domestic market. JD.com, Inc. said earlier this month that it would purchase at least 200 billion yuan ($27.4 billion) of goods from exporters over the next year and help sell them at home. PDD pledged to invest 100 billion yuan to help its sellers pivot to local consumers. Alibaba’s supermarket chain launched a new channel for firms looking to sell at home. Internet giant Baidu, Inc. pledged free advertising services for a million companies. Even companies not immediately exposed to tariffs, such as ride-hailing app DiDi Global, Inc. or internet giant Tencent Holdings Ltd., have joined the crusade.

The efforts, combined with government stimulus programs aimed at boosting consumption, lifted China’s retail sales by 5.9% last month, beating estimates and marking the best pace since December 2023. It’s not yet clear if this will be enough to offset the impact from prolonged tariff pain. But if this strategy does succeed, it would show how Washington’s approach has backfired and forced Beijing to further trade-war-proof its economy.

Trump also seems to have miscalculated how his home base would respond when access to cheap Chinese e-commerce goods is cut off. It has driven hordes of Americans to do even more international bargain-hunting. The impact will really hit home now that Shein Group Ltd. has raised US prices ahead of tariffs on small parcels: Health and beauty products are increasing by 51% and women’s clothing by 8%.

US consumers have flocked to Chinese retail outlets. Downloads of Alibaba’s app have surged 34% year-to-date compared to the same period last year, according to data from market intelligence firm Sensor Tower, while DHGate and Taobao (the latter is owned by Alibaba) have rocketed 78% and 420%, respectively. It’s a notable spike given Sensor Tower estimates that Alibaba has pulled back on advertising spending in the US by nearly 45% so far this year.

The figure exposes how the unwinding of Chinese e-commerce in the US will hit revenues for Silicon Valley titans like Meta Platforms, Inc. and Alphabet, Inc.’s Google. Temu and PDD have been some of the largest buyers of ads on the platforms. In the wake of the fresh tariffs, the companies’ US advertising has cratered.

Some of the interest in Chinese wholesale retailers may have been instigated by a rash of viral videos from suppliers and manufacturers, touting the high quality and low price of goods from the “world’s factory,” and putting international brands they claim to work with on blast. This messaging highlights China’s advantages — including access to its deeply integrated and nimble supply chains. They also suggest that exporters are no longer just trying to compete on cost, but also on quality and value. These follow a separate blitz of AI-generated videos and memes from China mocking US workers trying to recreate this manufacturing ecosystem.

It will still no doubt be painful for Chinese e-commerce to weather extended tariff turmoil. The domestic pivot could just be a Band-Aid, and further escalations could eradicate American consumers’ interest. Policy rollbacks and uncertainty make it impossible to predict how sustainable these initial trends are.

But there are some lessons: Nothing galvanizes China to come together like attacks from the US, and little rouses American consumers like the threat of losing access to cheap goods. If this trade war tips the US into a recession, it will only further the desire for bargain prices, while doing little to bring back business investment or manufacturing.

BLOOMBERG OPINION

ACEN CFO says company to see ‘robust growth’ by 2026

ACEN Corp., the listed energy platform of the Ayala group, expects “robust growth” in earnings by 2026, driven by new power projects scheduled to come online, according to its chief financial officer (CFO).

“I think we’d expect to see pretty robust growth because we have good visibility on our project pipeline and new projects coming online over the next two to three years,” ACEN CFO Jonathan Back told reporters last week.

Mr. Back said that this year would be “a little bit slower” compared to 2024, as the company does not have as much new capacity coming online.

“We’re in a slightly lumpy business, so there will be years with very fast growth, like last year, and then there will be years where growth is flatter. Also, some of the projects that Patrice Clausse was referring to will only fully come online toward the end of the year, like the Monsoon project in Laos,” he said.

“So, there are some timing effects,” he added.

Based on a presentation from ACEN, the company has ongoing developments across its domestic and international projects, progressing toward its target of 20 gigawatts (GW) of renewable energy capacity by 2030.

The majority of the projects in the pipeline are set for completion by 2026, including the 300-megawatt (MW) Palauig 2 Solar power project and the 200-MW SanMar Solar power project, both located in Zambales.

Outside the Philippines, ACEN is scheduled to complete the 80-MW Solarscape & Dayasinar Solar project in Malaysia, the 68-MW Sonagazi Solar project in Bangladesh, and the New England Battery Energy Storage System project in Australia.

For this year, the company anticipates the completion of the 520-MW Stubbo Solar project in Australia, the 600-MW Monsoon Wind project in Laos, the 153-MW Maharashtra commercial and industrial (C&I) hybrid solar-wind project in India, and the 129-MW Stockyard Wind project in Texas.

“ACEN continues to progress toward our goals, notwithstanding the global headwinds impacting the energy transition. The company remains committed to scaling up renewables in the Philippines and across the region,” said ACEN President and Chief Executive Officer Eric T. Francia.

To date, ACEN holds 7 GW of attributable renewable energy capacity across operational, under-construction, and committed projects. Its footprint spans the Philippines, Australia, Vietnam, India, Indonesia, Laos, and the United States.

For 2024, ACEN reported a 27% increase in its attributable net income to P9.36 billion, driven by higher generation output.

Revenues grew by 2.2% to P37.3 billion from P36.5 billion a year ago.

At the local bourse on Tuesday, shares in the company closed unchanged at P2.69 apiece. — Sheldeen Joy Talavera

PHL hopes to get “watch” status for JPMorgan bond index re-entry

BW FILE PHOTO

THE PHILIPPINES continues to work towards its re-inclusion in JPMorgan Chase & Co.’s emerging market government bond index and hopes to be placed under “watch” status following the latter’s latest consultation survey.

“JPMorgan will conduct another round of Index Governance Consultation survey in May-June, and hopefully we will be under its ‘watch’ status,” National Treasurer Sharon P. Almanza said in a Viber message on Tuesday.

“During the last survey, taxation and secondary market liquidity were the key issues of investors,” Ms. Almanza added.

Ms. Almanza, along with other officials from the Bureau of the Treasury as well as the Bangko Sentral ng Pilipinas and the Department of Finance, last week met with representatives from JPMorgan to discuss the inclusion of Philippine bonds in its Government Bond Index-Emerging Markets (GBI-EM), the Treasury said in a statement.

“This marks the continuation of the consultation process with JPMorgan towards index inclusion which would increase potential capital inflows, representing a significant milestone for the country’s capital markets,” it said.

JPMorgan’s GBI-EM tracks the performance of sovereign and quasi-sovereign bonds issued by emerging market countries. The country’s inclusion will need to be approved by a certain percentage of investors reviewing the index.

The Philippines last year missed the cut for the bond index, Bloomberg reported in November. This came after JPMorgan in August last year asked investors if the Philippines should be placed on “Index Watch Positive,” which is a precursor for inclusion in the GBI-EM.

The Finance department last year said it hopes the Philippines could re-enter the GBI-EM by this year, as this would “enhance foreign investor access to peso-denominated government bonds, reduce friction costs, and strengthen the country’s investment attractiveness.”

Ms. Almanza last year said it could take the Philippines two to three years to re-enter the bond index after getting added to JPMorgan’s watchlist.

The Philippines’ global peso notes were removed from the GBI-EM in January last year due to illiquidity. — Aaron Michael C. Sy

Philippines trails regional peers in UNCTAD’s Inclusive Growth Index

The Philippines was among the laggards in the East and Southeast Asian region after it scored 34.3 out of 100 in the latest edition of the Inclusive Growth Index (IGI), released by the United Nations Conference on Trade and Development (UNCTAD). Using 2023 data, the index assesses an economy’s well-being and inclusivity through its gross domestic product (GDP) with other data on living conditions, equality, and environmental sustainability.

Philippines trails regional peers in UNCTAD’s Inclusive Growth Index

Weremote eyes more startups

WEREMOTE

By Beatriz Marie D. Cruz, Reporter

WEREMOTE, a flexible workspace provider, is looking to partner with more startups and small and medium enterprises (SMEs) with limited resources.

“At Weremote, we recognize the growing need for flexible, scalable and cost-efficient workspaces especially among startups, SME, and freelancers,” Jennifer S. Tugade, general manager at Weremote, said in a Viber message.

“These groups are often the most dynamic and innovative, yet they face challenges like limited resources and rapidly changing workspace needs,” she added.

Weremote offers build-to-suit private offices, meeting rooms, virtual offices, co-working spaces and event areas. Its flexible workspaces can have 300 to 500 seats, depending on the location, Ms. Tugade said.

Startups, which typically feature a scalable business model, would be more appropriate for a flexible workspace setting than a traditional office, she said.

“Instead of locking into long-term leases or investing heavily in an office setup, startups can scale up or down easily based on their team size and business needs,” she pointed out. “This kind of adaptability is crucial in the early stages of growth, when things can shift quickly.”

The Philippines had about 1,100 startups in the capital region alone as of 2023, according to Startup Genome, a global policy advisory and research group. It has about 110,000 small enterprises and 4,763 medium-sized businesses, according to 2023 data from the Trade department.

Weremote has three workspace locations in Bonifacio Global City in Taguig — One/NEO, MyTown LA BGC, and myStay BGC East — and three in Makati, namely Villena II Poblacion, MyTown NY Makati and Makati Central Square. It also has one office in Orange Suites Alabang in Muntinlupa City.

Each workspace location has tables and chairs, air-conditioning units, a flat screen TV, unlimited water, coffee and tea, and a glassboard.

It also offers mail handling, equipment rentals, Wi-Fi connection, a shared pantry and daily cleaning and printing services. All working spaces are open 24/7.

“Access to amenities, meeting rooms and professional business support allows startups to project a more established presence without the overhead costs,” Ms. Tugade said.

Demand for flexible workspaces has been driven by many companies’ return-to-office, she earlier said.

Some companies prefer the work-from-home setup, but after the pandemic, employees still demanded to have a more professional-looking environment, she said, adding that an onsite workspace helps improve employee productivity.

Demand for flexible workspaces has grown across Metro Manila, ending 2024 with a 17.5% vacancy rate, according to property consultant Colliers Philippines.

Fort Bonifacio had the most occupied seats at 12,000, followed by Makati City at 10,000, and Quezon City at 7,000.

Elite 5,000-year-old woman’s tomb unearthed in coastal Peru

FLICKR/MINISTERIO DE CULTURA PERÚ

LIMA — Archaeologists in coastal Peru have discovered the 5,000-year-old remains of a woman who may have belonged to the upper echelons of the ancient Caral civilization, a find they say points to the importance of women in the city some five millennia earlier.

Caral, located some 180 kilometers up the Pacific coast from Lima, is considered the oldest city in the Americas and would have been inhabited at the same time as ancient Egyptian, Chinese, and Sumerian civilizations — though unlike these, researchers say it developed in complete isolation.

Aspero, the area in the Caral site where the tomb was found, was formerly used as a municipal dump.

“This is an important burial because it has elements that correspond to a woman of high status,” archeologist David Palomino told Reuters on Thursday, pointing to the way the corpse was wrapped and preservation of her skin, hair, and nails.

The body of the woman, who would have died at around 20 to 35 years of age, was found with a mantle of blue and brown feathers that could come from an Amazonian bird such as a macaw, he said, adding the tomb was surrounded by baskets with offerings, vases, gourds and a toucan’s beak.

Mr. Palomino said the finding showed that “not only men had an important association in this civilization, but this was also complementary with that of women.”

Though researchers do not know the exact date of the burial, the Caral civilization was active around 3,000 BC — Reuters

Robinsons Retail Q1 income drops 85% to P760M amid high base effect

JGSUMMIT.COM.PH

ROBINSONS RETAIL HOLDINGS, Inc. (RRHI), the retail arm of the Gokongwei group, reported an 85% decline in attributable net income for the first quarter, falling to P760 million from P5.08 billion in the same period last year, primarily due to a high base effect from a one-time gain related to the merger of Bank of the Philippine Islands (BPI) and Robinsons Bank Corp. (RBC).

Consolidated net sales rose 4.2% year-on-year to P47.8 billion, with growth driven by the food, drugstore, and department store segments, RRHI said in a regulatory filing on Tuesday.

“Revenues were also supported by new store sales and additional operating days, following the shift in the Holy Week holidays to April this year from March in 2024. These factors helped offset the impact of fewer selling days in February, as 2024 was a leap year,” RRHI said.

Gross profit grew by 6.2% to P11.59 billion, driven by a favorable category mix, continued supplier support, and improved inventory management. Core earnings increased 4.9% to P1.2 billion, largely due to lower interest expenses.

Operating income also saw an increase, rising 2.7% to P1.94 billion, although this was partly offset by higher labor expenses from the full-quarter impact of wage hikes last year and one-time costs related to improvements in the employee benefits program.

Blended same-store sales growth stood at 3%, meeting the company’s full-year guidance of 2-4%, RRHI said.

“This year is off to a strong start, with the ongoing recovery in basket sizes continuing to drive revenue growth. To sustain this momentum, we will further optimize our assortment, accelerate store expansion, and unlock greater operational efficiencies,” said Stanley C. Co, RRHI’s president and chief executive officer.

“As we navigate the dynamic retail environment, we remain focused on creating long-term value for our stakeholders by strengthening our fundamentals and advancing our sustainability agendas,” he added.

Total assets as of March 31 amounted to P168.9 billion, with capital expenditure for the quarter reaching P962 million.

Total liabilities decreased to P72.2 billion from P77.3 billion as of December 31, 2023.

As of March 31, RRHI operated 2,448 stores, comprising 760 food stores, 1,131 drugstores, 50 department stores, 225 DIY stores, and 282 specialty stores. It also operates 2,116 franchised stores under The Generics Pharmacy brand.

RRHI shares closed down by 0.25%, or 10 centavos, at P39.20 on Tuesday. — Revin Mikhael D. Ochave 

Notice of the Delisting Tender Offer to Common Shareholders of Keppel Philippines Holdings, Inc. (“KPHI” or the “Company”)



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Fintech company Skyro targeting to disburse P16 billion in loans this year

FINANCIAL TECHNOLOGY company Skyro is aiming to disburse P15 billion to P16 billion in loans this year as it looks to tap underserved provinces and increase its merchant partners.

“In US dollar terms, it’s approximately $300 million that we think that we’re going to lend. That would be approximately P15 billion, close to P16 billion in total loans that will be issued,” Skyro Co-Founder and Co-Chief Executive Officer Nasim Aliev said at a media briefing on Tuesday.

Skyro was launched in the country in 2022. It is backed by Singapore-headquartered fintech Breeze Ventures and operates in the Philippines through financing company Advanced Finance Solutions, Inc. and lending company Skyro Lending, Inc., which are both registered with the Securities and Exchange Commission. Skyro Lending owns the Skyro app.

The company has disbursed P11 billion worth of loans to date as of last week, it said.

Skyro Point of Sale Business Head Lowen Medina said 70% of their loan disbursements are used by customers to buy mobile phones, while the remaining 30% is spent on laptops or personal computers, furniture, TVs and electronics, and home appliances.

Mr. Medina said the company will continue to expand its reach to underserved areas and sectors to grow its client base.

“Even though we are 100% in regional penetration, there are still areas of opportunities for us. In the Philippines, there are some untapped provinces. There are also some untapped sectors that we want to push for, not only for this year, but in the next coming years,” he said.

Skyro is also looking to expand its partner merchants to support its loan disbursements.

“There are a lot of new merchants that we want to onboard, not only offline, but also online. We have the same goal for our cash load partner merchants,” Mr. Medina said.

The company currently has more than 100 online merchants and over 1,600 offline merchants in 5,000 locations. It also has 13 brand partners.

Mr. Aliev added that Skyro will look to raise about $90 million from both local and international banks this year to fund its growth plans.

“I think the banks are more cautious, especially international banks this time. What’s happening in international markets is incredible, but they will be more cautious. But [local] private lenders, they have more of an appetite for risk,” he added. — A.M.C. Sy