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Biden administration sends Congress long-awaited Ukraine strategy report, sources say

Official White House Photo by Cameron Smith

WASHINGTON – US President Joe Biden‘s administration has sent Congress a classified report on its strategy for the war in Ukraine, three sources said on Monday, months after a June deadline mandated in a multibillion-dollar spending bill lawmakers passed in April.

A congressional aide said the long-awaited report had reached lawmakers on Monday and they had not yet had a chance to review it. Two other sources, requesting anonymity to discuss a classified matter, confirmed that it had been delivered. The White House did not immediately respond to a request for comment.

Congress has approved nearly $175 billion of aid and military assistance for Ukraine and allied nations in the 2-1/2 years since Russia’s full-scale invasion.

After months of delay, the Republican-led House of Representatives passed a $95 billion supplemental spending bill in April that included $61 billion in funding for Ukraine, as well as billions for Israel, civilians in conflict zones around the world and to “counter communist China” in the Indo-Pacific.

As part of that bill, Congress asked the Biden administration to submit a detailed strategy for Ukraine by early June.

Mr. Biden’s support for Ukraine is backed by Democrats and many Republicans in Congress. Some Republicans, however, have criticized his administration for restricting how Ukraine can use US equipment, for example by refusing to supply weapons that could strike targets deep inside Russia.

Washington has restricted the weapons’ use because of limited supply of missiles, the lack of a rationale for using them given most Russian aircraft are out of range and for fear it would escalate the conflict.

Weeks after the deadline passed with no report, some members of Congress said they were frustrated and would consider blocking further funding.

In a statement emailed to Reuters in late August about the report, Senator Jim Risch, the top Republican on the Senate Foreign Relations Committee, said he supported assisting Ukraine but did not do so blindly.

“Since the earliest days of (Russian President Vladimir) Putin’s war on Ukraine, we have asked the Biden-Harris Administration for a strategy on how the U.S. and our allies can help Ukraine win the war,” Mr. Risch said.

“When they did not respond to our requests, we mandated in law that a strategy be sent to Congress, but the deadline has passed with no response. President Biden and VP (Kamala) Harris owe a strategy not just to us, but to the American people, and their dereliction suggests they don’t have one or are afraid to share it.” – Reuters

James Earl Jones, renowned actor and voice of Darth Vader, dies at 93

By John mathew Smith Kingkongphoto & www.celebrity-photos.com from Laurel Maryland, USA - [https://www.flickr.com/photos/kingkongphoto/5113180682/, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=74924607
By John mathew Smith Kingkongphoto & www.celebrity-photos.com from Laurel Maryland, USA – [https://www.flickr.com/photos/kingkongphoto/5113180682/, CC BY-SA 2.0, https://commons.wikimedia.org/w/index.php?curid=74924607

LOS ANGELES – American actor James Earl Jones, an imposing stage and screen presence who overcame a childhood stutter to develop a stentorian voice recognized the world over as intergalactic villain Darth Vader, died on Monday at the age of 93.

Mr. Jones, a longtime sufferer of diabetes, died at his home surrounded by family members, his agent, Barry McPherson, said.

No cause of death was provided.

Mr. Jones had a great physical presence on stage and television, as well as in movies, but he would have been a star even if his face was never seen because his voice had a career of its own. The resonating bass could instantly command respect – as with the sage father Mufasa in “The Lion King,” and many Shakespeare roles – or instill fear as the rasping Vader in the “Star Wars” films.

Mr. Jones laughed when a BBC interviewer asked if he resented being so closely tied to Darth Vader, a role that required only his voice for a few lines while another actor did the on-screen work in costume.

“I love being part of that whole myth, of that whole cult,” he said, adding that he was glad to oblige fans who asked for a command recital of his “I am your father” line to Luke Skywalker, played by Mark Hamill.

“#RIP dad,” Mr. Hamill wrote on X on Monday with a broken heart emoji above a story about the death of Jones.

Mr. Jones said he never made much money off the Darth Vader part – only $9,000 for the first film – and that he considered it merely a special effects job. He did not even ask to be in the credits of the first two “Star Wars” movies.

His long list of awards included Tonys for “The Great White Hope” in 1969 and “Fences” in 1987 on Broadway and Emmys in 1991 for “Gabriel’s Fire” and “Heat Wave” on television. He also won a Grammy for best spoken word album, “Great American Documents” in 1977.

Although he never won a competitive Academy award, he was nominated for best actor for the film version of “The Great White Hope” and was given an honorary Oscar in 2011.

He began his movie career playing Lieutenant Luther Zogg in Stanley Kubrick’s 1964 classic “Dr. Strangelove or: How I Learned to Stop Worrying and Love the Bomb.”

Later acclaimed movie roles included novelist Terence Mann in 1989’s “Field of Dreams” and South African Reverend Stephen Kumalo in 1995’s “Cry, the Beloved Country.” He also starred in “Conan the Barbarian,” “Coming to America,” “The Sandlot,” “Matewan,” “The Hunt for Red October” and “Field of Dreams,” among others.

Mr. Jones also was heard in dozens of television commercials and for several years CNN used his authoritative “This is CNN” to introduce its newscasts.

 

ESTRANGED FROM FATHER

James Earl Jones was born on January 17, 1931, in the tiny community of Arkabutla, Mississippi, to a family with a mixed ethnic background of Irish, African and Cherokee.

His father, prizefighter-turned-actor Robert Earl Jones, left the family shortly afterward. James was raised by his maternal grandparents, who forbade him to see his father, and the two did not get together until James moved to New York in the 1950s. Eventually they appeared in several plays together.

Mr. Jones was about 5 years old when his grandparents moved the family from Mississippi to a farm in Michigan and it was around that time that he quit speaking because of his stutter.

He was mostly silent for a decade until a ploy by his high school English teacher got him to speak up. The teacher made Jones recite to the class a poem that he said he had written to prove he was familiar enough with it to be the author.

Although after that he said he still had to choose his words carefully, Jones learned to control his stutter and became interested in acting.

After studying drama at the University of Michigan, he moved to New York, where his theater performances increasingly attracted critical attention and acclaim.

His breakthrough role on Broadway was “The Great White Hope,” playing a character based on Black heavyweight champion Jack Johnson. The play examined racism through the lens of the boxing world and critics raved about Jones’ performance.

A popular theater draw for decades, his Shakespeare leading roles included Hamlet, Macbeth, King Lear and Othello. He also had a notable portrayal of singer-actor-activist Paul Robeson on Broadway in 1977 and of author Alex Haley in the television mini-series “Roots: The Next Generation.”

He was “capable of moving in seconds from boyish ingenuousness to near-biblical rage and somehow suggesting all the gradations in between,” the Washington Post wrote in a 1987 review of “Fences.”

Mr. Jones’ first wife was Julienne Marie Hendricks, one of his “Othello” co-stars. Earl and his second wife, actress Cecilia Hart, who died in 2016, had one child, Flynn Earl Jones.

Mr. Jones was a trailblazing Black actor, winning big roles in racially charged movies and plays that broke ground for Black actors that came after him.

But Mr. Jones, who first found fame at the height of the Civil Rights movement in the 1960s and 1970s, largely kept himself out of direct action on matters of race.

In a 2013 interview with the Toronto Star, Jones said he imagined that a lot of people felt he was cowardly at the time for not using his fame and voice to more robustly support the cause. But the actor said he preferred to let his work do the talking for him.

“Don’t get me wrong. I believe in the same things that all those people demonstrating believe in, but I just look for plays or movies that say the same thing and play characters in them,” Mr. Jones told the Star.

Dominic Hawkins, a spokesperson for the NAACP in Washington, said Jones’ winning of big roles even as the Jim Crow racial caste system still plagued the American South was hugely important for the Black community.

“That was his contribution to civil rights, his representation on screen and stage,” Mr. Hawkins said. “Film and TV has the power to shape hearts and minds, and that’s what he did.”

Australia plans social media minimum age limit, angering youth digital advocates

FREEPIK

SYDNEY – Australia plans to set a minimum age limit for children to use social media citing concerns about mental and physical health, sparking a backlash from digital rights advocates who warn the measure could drive dangerous online activity underground.

Prime Minister Anthony Albanese said his center-left government would run an age verification trial before introducing age minimum laws for social media this year.

Albanese didn’t specify an age but said it would likely be between 14 and 16.

“I want to see kids off their devices and onto the footy fields and the swimming pools and the tennis courts,” Mr. Albanese told the Australian Broadcasting Corp.

“We want them to have real experiences with real people because we know that social media is causing social harm,” he added.

The law would put Australia among the first countries in the world to impose an age restriction on social media. Previous attempts, including by the European Union, have failed following complaints about reducing the online rights of minors.

Representatives of Meta, owner of Facebook and Instagram, which has a self-imposed minimum age of 13, YouTube owner Alphabet and TikTok were not immediately available for comment.

Australia has one of the world’s most online populations with more than four-fifths of its 26 million people on social media, according to government and tech industry figures.

Albanese announced the age restriction plan against the backdrop of a parliamentary inquiry into social media’s effects on society, which has heard sometimes emotional testimony of poor mental health impacts on teenagers.

But the inquiry has also heard concerns about whether a lower age limit could be enforced and, if it is, whether it would inadvertently harm younger people by encouraging them to hide their online activity.

Australia’s own internet regulator, the eSafety Commissioner, warned in a June submission to the inquiry that “restriction-based approaches may limit young people’s access to critical support” and push them to “less regulated non-mainstream services”.

The commissioner was not immediately available for comment on Albanese’s plan.

“This knee-jerk move … threatens to create serious harm by excluding young people from meaningful, healthy participation in the digital world, potentially driving them to lower quality online spaces,” said Daniel Angus, director of the Queensland University of Technology Digital Media Research Centre.

Jordy Kaufman, a psychology researcher at Swinburne University, said that “for teens who gravitate to social media because of their struggles, a ban could potentially worsen their situation by reducing one of the interaction options available to them”.

A 2023 University of Sydney study found three quarters of Australians aged 12 to 17 had used YouTube or Instagram. – Reuters

Japan nominates ex-currency diplomat Kanda to head ADB

PHILSTAR FILE PHOTO

TOKYO – Japan will nominate Masato Kanda, the country’s former top currency diplomat, as its candidate to become next head of the Asian Development Bank (ADB), Finance Minister Shunichi Suzuki said on Tuesday.

Since the ADB was founded in 1966, its top post has always been filled by someone from Japan which, along with the United States, is the bank’s biggest shareholder. That makes Kanda a strong candidate to take up the post.

“(Kanda) is most appropriate to lead the ADB as he is well-versed in Asia-Pacific affairs and has built deep networks with executives from various countries and international institutions,” Mr. Suzuki said at a regular press conference.

Mr. Kanda, if elected, will succeed Masatsugu Asakawa, who announced on Monday his intention to step down from his position effective Feb. 23, 2025.

The development lender said in a statement that election of the next ADB president would follow “an open, transparent, and merit-based process”.

Mr. Kanda, who stepped down in July after three years as vice finance minister for international affairs, led massive bouts of yen-buying intervention in the currency markets in 2022 and 2024. He currently serves as a special adviser to the cabinet.

Mr. Asakawa, also a former top Japanese currency diplomat, became ADB president in January 2020 and oversaw measures to help the region’s economies deal with the COVID-19 pandemic.

Several emerging economies, emboldened by their rapid growth, have questioned the tradition of advanced economies taking the top posts at global financial institutions.

Officials from the United States head the World Bank and Europeans head the International Monetary Fund. – Reuters

Huawei teases tri-fold smartphone, raising competition with Apple in China

REUTERS

SHENZHEN, China – China’s Huawei Technologies unveils a three-way foldable phone on Tuesday, as it seeks to widen its lead over Apple in the world’s biggest smartphone market with a new form factor that has gained popularity in the China market.

Just hours after Apple unveiled its latest iPhone model, Huawei is holding a launch event of the new Z-shaped smartphone Mate XT which was displayed on its flagship e-commerce stores in mainland China a day earlier.

Huawei’s website showed on Tuesday that it had garnered more than 3.3 million pre-orders, for which no deposit is required, for the new smartphone.

By comparison, the entire global market for foldable phones was around 4 million units in the second quarter, according to research firm IDC.

The latest launch, which follows a series of successful smartphone debuts since last year, underscores Huawei’s ability to navigate U.S. sanctions and solidifies its position against Apple in China.

Huawei already has two-way foldable phones in its lineup and their strong sales in China helped it overtake Samsung Electronics this year as the biggest vendor of such phones globally.

But the hefty price tag and limited quantity are likely to make the new model more of a symbol of Huawei’s tech prowess than a major sales driver, analysts said.

“The upcoming Huawei products are not expected to significantly impact Samsung and Apple’s businesses in terms of product quantity,” said Jene Park, an analyst at research firm Counterpoint.

“There is a limit to the quantity of products supplied. However, there may be some impact on sales in certain Chinese markets.”

The foldable smartphone market grew 57% year-on-year in the second quarter with 3.9 million units shipped, largely as Chinese smartphone makers pushed into overseas markets, according to consultancy IDC.

That still remains just 1.3% of the wider smartphone market, with 292.2 million smartphones shipped in the second quarter, IDC said.

“The average consumer still has limited knowledge about them, not to mention the benefits and value of the products,” said Will Wong, a senior researcher with IDC.

High prices of such models remain another barrier. While the new model’s price tag is unknown, last year’s Mate X5 still retails for over 10,000 yuan ($1,406) domestically, almost twice as much as a new iPhone 15.

Overcoming issues such as screen wrinkles and reduced durability due to the use of more hinges will also be important for foldables’ increasing usage, said Park.

Huawei ranked as the world’s biggest foldable smartphone seller in the second quarter with a 27.5% market share, ahead of South Korea’s Samsung, with 16.4%, according to IDC.

That share rises to 42% in China’s home market, ahead of Vivo and former Huawei unit Honor, which it spun off under pressure from US sanctions in 2020.

In the broader smartphone market in China, Apple’s ranking fell from third to sixth place in the second quarter, as Huawei emerged as the third-largest vendor on the back of strong sales of its latest smartphones. – Reuters

From Peru to Tuvalu: World Bank chief says global lender must change

REUTERS

SYDNEY – World Bank President Ajay Banga said in a speech on Tuesday after visiting 27 countries from Peru to Tuvalu that the global lender needs to work faster and simplify its processes in a world experiencing greater polarization.

Speaking at the Lowy Institute think tank in Sydney on Tuesday, Mr. Banga said his visit on Friday to Tuvalu in the South Pacific marked the end of a journey that began just over a year ago when he started in the job and promised to listen to voices in every region where the Washington-based lender operates.

“Though aspirations of people around the world are universal, we live in a world of greater polarization and extremes,” Mr. Banga said.

The countries he visited “need more and require us to be faster, simpler, and more impact oriented”, he added, after meeting Pacific Islands leaders in Fiji last week, who said small island states sometimes struggled to meet World Bank requirements.

In Fiji, Mr. Banga visited chronically understaffed health clinics facing rising rates of non-communicable disease such as diabetes, an example of the importance of the bank’s new focus on job creation. The bank’s new targets include bringing affordable health care to 1.5 billion people by 2030.

The World Bank saw global challenges of climate change, inequality and fragility as intertwined, he said.

“We understand that the challenges of the Pacific Islands are a microcosm of forces playing out around the globe,” he added.

The Pacific Islands, the region most impacted by warming oceans, is also the most aid-reliant region, according to the Lowy Institute.

Mr. Banga said reforms to the World Bank in the past year were already starting to bring change, citing a corporate scorecard cutting the bank’s goals from 150 to 22 items and the shortening of approval times for projects by an average three months.

Finding new ways to stretch the World Bank’s balance sheet had found $120 billion of additional lending over 10 years, he said.

Mr. Banga said governments, philanthropies and multilateral development banks need to work together to bridge a forecast gap between the 1.2 billion young people in emerging markets who will seek work over the next decade and the 420 million projected jobs.

A “significant replenishment” of the International Development Association (IDA) in December by the World Bank’s shareholders was critical, he said. – Reuters

Japan premier hopeful Kato calls for stimulus, doubling household income

FREEPIK

TOKYO – Katsunobu Kato, Japan’s former health minister and a candidate running in the ruling party leadership race, on Tuesday called for compiling a stimulus package to fund spending to boost domestic investment and revitalize regional economies.

In announcing his intention to run in the race to replace incumbent Prime Minister Fumio Kishida, Mr. Kato said Japan must double households’ income by promoting wage hikes to ensure the economy achieves a consumption-driven recovery.

“Japan is on the cusp of emerging from deflation. We shouldn’t stop this drive and instead accelerate it” with a focus on boosting wages and capital expenditure, Kato said in a news conference announcing his intention to run in the Liberal Democratic Party’s (LDP) leadership race on Sept. 27.

The winner of the Liberal Democratic Party’s (LDP) leadership race, scheduled on Sept. 27, will become the nation’s next prime minister due to the party’s control of parliament.

In his campaign pledge, Mr. Kato said he would aim to re-direct companies’ ample reserves towards capital expenditure and wages.

“Strong consumption would create competition, which would heighten companies’ ability to earn profits. That, in turn, will lead to further wage hikes,” he said, an approach similar to that of incumbent premier Fumio Kishida’s policies.

While Mr. Kato trails behind other candidates as the public’s favorite to become next prime minister, the former finance ministry bureaucrat’s experience serving key cabinet posts make him a candidate to become next finance minister, analysts say. – Reuters

Philippines trade deficit at $4.9 billion in July

ICTSI

MANILA – The Philippines posted a trade deficit of $4.9 billion for July, preliminary official data showed on Tuesday.

Imports in July rose 7.2% from a year earlier to $11.1 billion, while exports rose just 0.1% to $6.2 billion, the Philippine Statistics Authority said.

The trade deficit in July was the largest since the $4.9 billion shortfall in March 2023, while import growth was the fastest since the 12.6% expansion in April this year. – Reuters

CICC, PayMongo step up collaboration to protect vulnerable SMEs

PROTECTING SMES. Cybercrime Investigation and Coordinating Center (CICC) Executive Director Alexander K. Ramos (3rd from left) sealed a Memorandum of Agreement with PayMongo President and Chief Executive Officer Elmer M. Malolos (2nd from left) for the protection of small and medium enterprises from cybercrime. Also present during the signing ceremony are PayMongo Co-Founder Luis Sia, CICC Highly Technical Consultant Retired Justice Andres Reyes and Scam Watch Pilipinas Lead Convenor Jocel De Guzman. The ceremony was held on Aug. 22,2024 at the National Cybercrime Hub in Bonifacio Global City.

The Cybercrime Investigation and Coordinating Center (CICC) will closely collaborate with leading digital financial service PayMongo Philippines, Inc. to protect small and medium enterprises (SMEs) from cybercrime within the next five years.

CICC Executive Director Alexander K. Ramos and PayMongo President and Chief Executive Office Elmer M. Malolos signed the Memorandum of Agreement (MoA) recently at the National Cybercrime Hub in Bonifacio Global City in Taguig City.

“This MoA means that you have a commitment to work with us closely,” Mr. Ramos reminded PayMongo officials.

“We will also provide support to PayMongo in addressing cybercrime incidents involving their stakeholders, including clients, executives, and employees,” he said.

Mr. Ramos emphasized that CICC partners, including both in the government and private sectors, have important roles in the successful prosecution and conviction of cybercrime suspects.

Mr. Malolos welcomed the signing of the MoA and emphasized that the fintech sector is the most vulnerable to cybercrime.

“We are planning to educate our merchants about financial literacy to help them grow their business and also as added protection,” he said.

“We are proposing that financial literacy for SMEs must include cybercrime awareness,” Mr. Malolos added.

PayMongo has 15,100 merchants as of July 2024. It has been receiving an average of 20 complaints per month related to scams.

Based on the MoA, CICC and PayMongo will collaborate in anti-cybercrime programs and campaigns, assistance in the investigation of cybercrimes, and in improving linkage with other agencies.

Both parties, however, have agreed to respect confidentiality and data privacy in the implementation of the collaboration or cooperation.

The CICC is an attached agency of the Department of Information and Communications Technology (DICT). It was created by virtue of Republic Act 10175 or the Cybercrime Prevention Act of 2012 and is the country’s lead agency in the prevention and suppression of cybercrime.

PayMongo was established in May 2019 by a group of software engineers and entrepreneurs. As of July 2024, its total transaction volume has reached 2.4 million valued at P2.5 billion.

 

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CEO optimism remains high — survey

Majority of chief executive officers (CEOs) in the Philippines are confident in revenue growth in the next 12 months, a survey showed. — PHILIPPINE STAR/MICHAEL VARCAS

By Justine Irish D. Tabile, Reporter

MAJORITY of chief executive officers (CEOs) in the Philippines are confident that their organizations will see revenue growth in the next 12 months, despite geopolitical uncertainties, a survey showed.

Results of the survey conducted by PwC Philippines in partnership with the Management Association of the Philippines (MAP) showed that 85% of 168 CEOs are optimistic that their companies will post revenue growth in the next 12 months.

The results of the survey, which ran from July 8 to Aug. 9, showed improved optimism compared with the 79% of 157 CEOs who said they were confident of topline growth last year.

PWC MAP 2024 CEO Survey: CEOs optimistic about their industry prospectsMeanwhile, 86% of CEOs are confident of revenue growth in the next three years, slipping from 87% in the previous survey.

The survey also showed that 86% of the CEOs are confident about industry prospects for the next 12 months, higher than the 83% seen in the previous survey. This is the highest level of optimism since the pandemic.

“What helped drive optimism among our CEOs here in the Philippines is mainly our country’s economic growth,” said Karen Patricia A. Rogacion, deals and corporate partner at PwC, at a press briefing on Monday.

She noted the Philippines recorded faster economic growth despite geopolitical uncertainties, which have affected economies in the United States and Europe.

“When the year started, at the global level, we had a slow start. We are still feeling the impact of the Russia-Ukraine war as well as the impact of China’s real estate crisis,” she said.

“Several economies, such as the US and even Europe, were expecting a recession because of the high interest rates and unstable market conditions. In the Philippines, however, we showed fast growth,” she added.

The Philippine economy grew by 6% in the first six months of the year, hitting the low end of the government’s target of 6-7% this year.

In the survey, CEOs said infrastructure development, domestic consumption, and foreign direct investments are the main drivers of growth in the next 12 months.

“Given the top three drivers, it’s also been consistent that the CEOs say that our government is doing a good job in pushing for infrastructure development, forging stronger relationships with other nations, and also managing inflation,” Ms. Rogacion said.

However, 62% of the CEOs said geopolitical uncertainties arising from the Russia-Ukraine war, conflicts in the West Philippine Sea, and upcoming elections in other countries are keeping them awake at night.

“We have actually been indirectly and directly affected by challenges due to global supply chain pressures, inflation, and other related threats,” she said.

Donald L. Lim, chair of the MAP CEO Conference Committee, said CEOs fear geopolitical uncertainties as these may suddenly disrupt supply chains and operations.

“I think the geopolitics, whether Ukraine-Russia or even the West Philippine Sea, are a great unknown. We don’t know what will happen. But if that happens, it will have a severe impact on the business,” he added.

However, Roderick M. Danao, chairman and senior partner of PwC, said that some companies are already starting to manage and mitigate the effects of geopolitical uncertainties.

“A few local companies have effectively tried to manage to mitigate the effect [through] product diversification, market diversification, and supply-chain diversification,” Mr. Danao said.

“Of course, all of these have to be backed up by long-term risk management plans for the company to adapt and to proactively manage the impact of the geopolitical conflicts,” he added.

TECHNOLOGICAL INNOVATION
Meanwhile, the survey showed that 46% of the CEOs believe that their company will no longer be viable after 10 years if it continues running on its current path.

According to PwC, new technologies such as generative artificial intelligence (GenAI) are set to revolutionize business models, redefine work processes, and transform industries.

“I always believe that AI will certainly bring more opportunities rather than threats,” said Mr. Danao.

In the survey, 40% of the CEOs said that they have already adopted the technology, while 71% believe that GenAI will change how their companies create, deliver, and capture value.

Even though 78% of the leaders believe that the technology can improve the quality of their company’s products and services, the survey also showed 61% of the CEOs said that they are not yet widely adopting the technology in their operations.

Asked why there is still low adoption, Mr. Danao and Mr. Lim said that AI in the Philippines is still in its nascent stage.

“The awareness is still very low at the Philippine corporate level. We are all excited about what this AI can bring into our organization. But embedding AI is still a work in progress. There will be investments and workforce upskilling needed,” Mr. Danao said.

“We are just at the tip of the iceberg. I think you’ll be lucky to have real AI adoption across the majority, meaning more than 50%, in five years. It will be a long time,” Mr. Lim said.

Mary Jade Roxas-Divinagracia, deals and corporate finance managing partner at PwC, said AI adoption will be led by industries like healthcare, banks, financial institutions, and retail.

“And then you have one of the major industries in the Philippines, the business process outsourcing, and this can be a game changer for them, not just on the risk side, but on the opportunity side as well,” she added.

However, Mr. Lim said that the full adoption of AI may result in job losses if the workforce will not be able to keep up.

“AI won’t replace jobs. Those people who use AI will replace those who do not know how to use it. So, I think the problem is more on education because the teachers do not understand this,” he said.

“So, we have to make sure that the educational system prepares our next three batches of graduates to use and harness AI. Will there be a loss of jobs? I think there will be. Because it won’t be able to catch up,” he added.

Banks’ NPL ratio rises to over two-year high

IIIJAOYINGIII-PIXABAY

PHILIPPINE BANKS’ asset quality worsened in July as the industry’s gross nonperforming loan (NPL) ratio rose to its highest in over two years.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed the banking industry’s gross NPL ratio went up to 3.58% in July from 3.51% in June and 3.43% a year ago.

This was the highest bad loan ratio in 25 months or since 3.6% in June 2022.

Data from the BSP showed that soured loans increased by 1.13% to P508.11 billion as of end-July from P502.42 billion a month earlier. Year on year, bad loans jumped by 15.46% from P440.07 billion.

Loans are considered nonperforming once they remain unpaid for at least 90 days after the due date. These are deemed as risk assets since borrowers are unlikely to pay.

The loan portfolio of Philippine banks slid by 0.78% to P14.21 trillion as of end-July from P14.32 trillion at end-June. However, it increased by 10.79% from P12.82 trillion a year ago.

Past due loans rose by 1.88% to P625.71 billion in July from P614.17 billion a month earlier. Year on year, it increased by 18.37% from P528.62 billion.

This brought the past due ratio to 4.4% in July, higher than 4.29% in June and 4.12% a year ago.

On the other hand, restructured loans stood at P291.08 billion in July, down by 0.86% from P293.62 billion in June. Year on year, it fell by 4.47% from P304.71 billion a year ago.

Restructured loans accounted for 2.05% of the industry’s total loan portfolio, steady from a month ago but lower than 2.38% in July 2023.

Banks’ loan loss reserves inched down by 0.05% to P479.24 billion in July from P479.46 billion in June but rose by 6.44% from P450.24 billion a year ago.

This brought the loan loss reserve ratio to 3.37%, slightly higher than 3.35% last month but lower than 3.51% a year ago.

Lenders’ NPL coverage ratio, which gauges the allowance for potential losses due to bad loans, slipped to 94.32% in July from 95.43% in June and 102.66% in July 2023.

The higher NPL ratio in July can be attributed to elevated borrowing costs, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The NPL ratio for Philippine banks reached 3.58% in July, a two-year high likely due to factors like post-pandemic recovery challenges, rising interest rates, and sector-specific issues,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas said in a Viber message.

The BSP had kept its policy rate at an over 17-year high of 6.5% from October 2023 to July 2024. At its August meeting, the Monetary Board cut its policy rate by 25 basis points (bps) to 6.25%.

“Furthermore, the latest pickup in banks’ NPL ratio may also be a function of faster loan growth in recent months, meaning the faster expansion in banks’ loan portfolio also partly corresponds to some pickup in NPLs as well, so it is very important to have tight and uncompromising credit/lending standards to curb NPLs to as minimal as possible,” Mr. Ricafort said.

Outstanding loans of universal and commercial banks rose by 10.4% year on year to P12.14 trillion in July from P11 trillion a year ago. This was the fastest loan growth in 19 months or since the 13.7% logged in December 2022.

For the rest of the year, Mr. Ricafort said rate cuts by the US Federal Reserve and the BSP would lower borrowing costs for consumers and businesses.

“(This) could also help boost economic growth and other business activities, thereby could lead to some improvement in borrowers’ ability to pay that helps ease NPL ratio and overall asset quality of banks,” he said.

Mr. Ravelas said he is “cautiously optimistic” on the outlook for banks.

“However, with improved economic conditions, accommodative measures from the BSP, and strengthened risk management by banks, the outlook for asset quality is cautiously optimistic for the rest of the year,” Mr. Ravelas added.

BSP Governor Eli M. Remolona, Jr. previously said the central bank could cut rates by another 25 bps within the year. The Monetary Board’s last two policy-setting meetings this year are on Oct. 17 and Dec. 19. — Aaron Michael C. Sy

Philippines is still most disaster-prone country for 16th straight year

Residents wade through the floodwaters in Baseco, Manila, Sept. 2, 2024. — PHILIPPINE STAR/EDD GUMBAN

THE PHILIPPINES remained the most disaster-prone country for the 16th straight year, as it continues to face extreme natural events like typhoons, earthquakes and droughts.

In the latest World Risk Index, the Philippines’ risk score inched up to 46.91 this year from 46.86 last year.

A country’s score is measured based on its exposure to disasters as well as vulnerability to its effects. A score of 100 means a country has a “very high risk” while zero suggests otherwise.

The World Risk Report, published by Germany-based Bündnis Entwicklung Hilft and the Institute for International Law of Peace and Armed Conflict at Ruhr University Bochum (IFHV), assesses the disaster risk for 193 countries using 100 indicators.

The Philippines, which faces an average of 20 typhoons every year, has topped the World Risk Index since 2009.

“In 2024, the risk hotspots remain in the Americas and Asia, hosting eight of the 10 countries with the highest risk scores. Over the long term, however, these hotspots will shift to countries with climate-sensitive exposure and high vulnerability,” the report said.

Indonesia ranked second in the index with a score of 41.13, followed by India (40.96), Colombia (37.81) and Mexico (35.93). The rest of the top 10 included Myanmar (35.85), Mozambique (34.44), Russia (28.12), Bangladesh (27.73), and Pakistan (27.02).

Global disaster risks are also closely linked to poverty and inequality, the report said.

“This persistence often results from robust interactions between increasing vulnerability and damage caused by extreme events. Countries with climate-sensitive exposure and high to very high vulnerability are particularly at risk. These countries can expect more frequent and more intense extreme natural events and damage in the future,” it said.

In terms of exposure to disasters, the Philippines ranked fourth with a score of 39.99. China had the highest exposure (64.59), followed by Mexico (50.08), and Japan (43.67). A high score means a country is most exposed to drought, earthquakes, tsunamis, cyclones, coastal and riverine flooding, and rising sea levels.

“Climate change is increasing the frequency and intensity of extreme natural events, leaving less and less time for regeneration. As soon as one disaster is overcome, the next threat is already looming,” the report said.

The Philippines also had “very high” scores in terms of vulnerability (55.03), susceptibility (51.16), and lack of coping capacities (58.07).

“Extreme weather events, conflicts and pandemics overlap and amplify each other. Global trends such as climate change, population growth and political polarization promote multiple crises and intensify their effects,” the report said.

For instance, the Philippines was hit by 22 typhoons during the coronavirus disease 2019 (COVID-19) pandemic, including Supertyphoon Rolly (international name: Goni) which was considered one of the strongest ever.

“Hundreds of thousands of destroyed homes, overcrowded evacuation centers and the resulting increase in COVID-19 cases not only led to a dramatic increase in humanitarian needs, but also had a negative impact on the mental health of the population,” the report said.

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said the Philippines’ tight fiscal space has affected risk mitigation measures.

“While government has disaster and climate bodies which craft policy relating to adaptation and mitigation measures to address disaster and climate risks, government offices have not yet done enough to actually implement climate resilient programs and projects,” he said in a Viber message.

“A particular reason for this is our limited fiscal space, in which fundamental social services and infrastructure are the most important spending priorities.”

Typhoons may have cost the Philippine economy around $20 billion in gross domestic product losses from 1990 to 2020, the Asian Development Bank said in a 2021 report.

The Philippine government should come up with ways to make its key projects or programs more climate-responsive or climate-resilient, Mr. Ridon added.

Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said the Philippines has a high risk of disasters due to its vulnerability to climate change.

“If institutions are strong, there are ways of mitigating the effects of extreme weather conditions in the country. Climate is one significant challenge we face, and our institutions are powerless in protecting our properties and lives. I am thinking of corruption, and flood control funds can be diverted into their interests,” Mr. Lanzona said. — Beatriz Marie D. Cruz

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