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Infrastructure push, employment to drive growth — ESCAP

The Philippine economy is likely to grow by 6-7% this year. — PHILIPPINE STAR/MIGUEL DE GUZMAN

PHILIPPINE ECONOMIC growth will be driven by infrastructure investments, strong employment and improved domestic demand this year, the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) said.

“Looking forward, economic growth in 2024 will continue to be supported by public investment in infrastructure and stronger employment,” Hamza Ali Malik, director at ESCAP’s macroeconomic policy and financing for development division, told BusinessWorld in an e-mail.

The unemployment rate in June fell to 3.1%, the lowest in two decades, as hiring in the construction sector surged. In the first half, the jobless rate averaged 3.9% from 4.6% a year ago.

Infrastructure spending jumped by an annual 20.6% to P611.8 billion in the first half. The Marcos administration has committed to spending 5-6% of gross domestic product (GDP) annually on infrastructure through 2028.

Mr. Malik also said the Philippine central bank’s recent rate cut could boost domestic demand.

“The recent policy rate cut should also provide some impetus to domestic demand,” he said.

The Bangko Sentral ng Pilipinas on Aug. 15 cut policy rates by 25 basis points to 6.25% from a near 17-year high of 6.5%.

High interest rates and elevated inflation put “modest pressure on domestic demand” in the second quarter, Mr. Malik said.

In the first seven months of the year, headline inflation averaged 3.7%.

The Philippine economy grew by a faster-than-expected 6.3% in the second quarter as robust state spending offset muted household consumption.

Consumption expenditure grew by 4.6% in the second quarter, slowing from 5.5% a year ago.

Mr. Malik flagged some risks to the growth outlook for the Philippines, such as a slowing global economy and rising inflation.

“Some potential risks to this outlook include a weaker-than-expected global output growth, which would affect the Philippines’ external demand and remittance inflows, thus dampening household consumption and capital investments,” he said.

He said inflation risks remain tilted to the upside as food, transport and electricity costs are still “relatively high.”

“Continued geopolitical conflict could lead to higher global oil prices,” he added.

In its April update, ESCAP upgraded its 2024 real GDP growth forecast for the Philippines to 6% from 5.7%. It projects the Philippines’ real GDP growth at 6.1% in 2025.

A country’s real GDP growth refers to the inflation-adjusted measurement of the value of goods and services produced by the economy.

ESCAP will release updates to its macroeconomic assumptions in November.

‘CAUTIOUS OPTIMISM’
Meanwhile, ESCAP said the near-term economic outlook for the Asia-Pacific region points to “cautious optimism.”

In its Asia-Pacific Quarterly Economic Update last week, ESCAP said it expects steady economic performance in the second semester, depending on favorable developments in major economies.

“Internationally, if an economic ‘soft landing’ in the United States materializes and policy rate cuts follow market expectations, the combined effect of robust external demand and easing international financing conditions may further support economic growth in Asia-Pacific,” it said.

US Federal Reserve Chairman Jerome H. Powell on Friday signaled the possibility of an easing cycle beginning in September.

With China’s domestic demand still under pressure, growth in its high-tech and “green” sectors as well as fiscal and monetary interventions will likely affect other economies in the region, ESCAP said.

However, the imposition of tariffs by the European Union, US and other Asian countries on Chinese goods may cause “additional frictions” in global trade.

“A tit-for-tat trade war will take a heavy toll on regional value chains with impacts on exports, employment and workers’ earnings,” ESCAP said.

Tourism recovery in the Philippines, Thailand, Vietnam, Palau, and Bhutan is also crucial in boosting employment, it said.

However, slow economic growth in visiting countries, high costs of living, volatile oil prices, and lasting impacts of the coronavirus pandemic continue to weigh on the sector. — Beatriz Marie D. Cruz

Ayala Land expected to start Taguig terminal project this year — DoTr

TAGUIG CITY Integrated Terminal Exchange — DOTR

REAL ESTATE firm Ayala Land, Inc. (ALI), a subsidiary of Ayala Corp., will likely start the construction of the Taguig City Integrated Terminal Exchange  project within the year, the Department of Transportation (DoTr) said.

“The groundbreaking is within this year; we are just completing some agreements,” Transportation Secretary Jaime J. Bautista told reporters on Aug. 9.

The project, which has been stalled since 2016, is a multimodal passenger terminal aiming to connect passengers to other systems such as the North-South Commuter Railway project, city buses, and other public utility vehicles, data from the Public-Private Partnership (PPP) Center showed.

The project was awarded to the proponent in 2015 and was initially scheduled to be operational by 2020 but encountered several issues.

“The project was already awarded to them (Ayala Land) but encountered delays because the government needs to deliver some conditions precedent,” Mr. Bautista said.

The project, with a contract term of 35 years inclusive of the construction period, had an estimated cost of P5.2 billion at the time of approval, according to the PPP Center.

The DoTr is finalizing the agreement with the Veterans Foundation of the Philippines for the right-of-way, Mr. Bautista said.

“We are just finishing the agreement with the Veterans Foundation of the Philippines, as they own some of the land,” he said. “The OSG (Office of the Solicitor General) did not allow us to buy it from them, so it will be just right-of-way usage.”

According to the PPP Center, the private proponent will handle the project’s design, construction, and financing, as well as its operations and maintenance.

“The concessionaire can also undertake commercial development and collect revenues generated from the same,” it added.

Mr. Bautista said the project is expected to enhance the transportation system as it is also designed to complement the Southeast Metro Manila Expressway (SEMME/C6) project and other government railway projects. — Ashley Erika O. Jose

Supply chain, red tape drive up PHL cosmetic costs — group

By Aubrey Rose A. Inosante, Reporter

PHILIPPINE COSMETIC products remain costly due to supply chain constraints, including high logistics and energy costs, and the need for improved business processes, the Chamber of Cosmetics Industry of the Philippines, Inc. (CCIP) said.

These issues are exacerbated by regulatory red tape, affecting both production costs and market competitiveness, Jenny Rose S. Nuñez, CCIP Executive Vice-President for External Affairs, said in an interview with BusinessWorld on Aug. 13.

“Filipinos see local as the new premium because it’s more expensive. But it gives you some story. It relates to the people that this is a Filipino brand,” Ms. Nuñez said.

CCIP is an organization comprised of over 180 member companies, representing manufacturers, distributors, raw materials suppliers, packaging suppliers, and exporters of cosmetic products.

Ms. Nuñez said locally made cosmetic products are more expensive than those in neighboring countries due to isolated logistics requiring air or sea transport for raw materials, higher energy costs, and reliance on imported materials.

“As an organization, we serve as a linkage to government and industry partners,” CCIP President Christine Michelle P. Reyes said. “We make sure that we extend our reach to local, national, regional, and international organizations because we partner with them in some of the trade shows to help our thriving industry.”

Ms. Reyes said CCIP educates consumers and members on regulations like the Association of Southeast Asian Nations Cosmetics Directive and guidelines from agencies such as the Food and Drug Administration, the Department of Trade and Industry, the Department of Environment and Natural Resources, and the Bureau of Customs.

The beauty and personal care market in the Philippines is projected to generate $6.47 billion in revenue in 2024, with an annual growth rate estimated at 1.32% until 2028.

Among the drivers of growth are public awareness of new product claims, especially sustainability, and the dissemination of information on social media platforms.

“It’s also relevant. Clean beauty. When you say clean, it’s nontoxic and, of course, consumers are becoming more educated on the safety of some ingredients and the harmful effects of chemicals,” Ms. Reyes said.

She added that it presents an opportunity for companies and manufacturers to produce products that are safe, of good quality, and sustainable.

However, CCIP warns against those who practice greenwashing to pass off their products as sustainable.

Ms. Nuñez cited three major challenges that the industry needs to address.

“First, it is innovation. The Philippines is a copycat. When we see trends in Korea, we follow them,” she said, adding that there is a workforce lacking the skillset to support cosmetic innovation.

In addition, the ease of doing business is a concern, with CCIP members worrying about the volume and overlapping permits and requirements for those starting their cosmetic business.

In response, CCIP will conduct two to three days training on Good Manufacturing Practice, in partnership with the Mandaue Chamber of Commerce and Industry, to discuss how to run a cosmetic business.

Meanwhile, Cosmeticon 2024, led by CCIP, will be tailored for starting entrepreneurs or micro, small, and medium enterprises.

This two-day conference will allow attendees to learn how to drive digitalization and sustainability that are currently shaping the cosmetics industry.

Among the topics that can be learned from experts are how to leverage technology to streamline business, navigate the regulatory landscape, develop sustainability practices for a “future-proof” beauty company, and the latest trends in cosmetic formulation.

We Play Here brings live music to schools

ARTHUR MIGUEL live at We Play Here UP Diliman.

LOCAL and international Warner Music Group artists have had their fair share of concerts throughout the Philippines. This year, the We Play Here series of concerts features many of these artists on school campuses.

The likes of English singer-songwriter Griff, Filipino soloist Arthur Miguel, and Baguio-based band Dilaw headlined the first show in the tour, held on Aug. 23 at the University of the Philippines (UP)-Diliman campus.

From a main stage at the College of Science Amphitheater to live performances on the Wish Bus, and fan engagement booths on the concert grounds, We Play Here’s school tour aims to give Filipino students a chance to enjoy the full live music experience.

“Coming from the success of last year’s event, this year’s We Play Here is bigger and better than ever,” said Warner Music Group in a statement. The tour runs from this year until the next.

For the first stop in UP, the main vocalist of P-pop group SB19, Stell (né Stellvester Ajero), gave a dance-heavy performance filled with songs from his solo EP called “Room.”

BAGUIO ALT-ROCK BAND DILAW
Dilaw made a comeback at the We Play Here stage in UP Diliman, following their first stint in 2023. The band is known for their single “Uhaw (Tayong Lahat)” (roughly translating to “we’re all thirsty”), which went viral last year.

With over three million monthly listeners on Spotify, their latest release is a track titled “Nilalang,” which they fully expect fans to enjoy in concert.

“The students and the youth: they are the zeitgeist. That’s where all the energy is,” said Dilaw’s lead guitarist Leon Altomonte at a press conference before their performance.

“It’s just really nice being on the opposite side of that now, to see kids performing, dancing, or really listening to music. I understand how important that was for me when I was a kid,” he added.

Dilaw Obero, the band’s lead vocalist, explained that even the songwriting process involves their potential listeners, who are mostly young people. He and Vie Dela Rosa, the rhythm guitarist, are the main composers.

“Nagbabatuhan lang kami. Tapos alam namin kung huwag, parang hindi click. Meron kaming parang, ‘when in doubt, get out’,” said Mr. Obero.

(We throw around ideas. Then we know not to continue if it doesn’t click. We have a saying like, ‘when in doubt, get out.’)

The members of Dilaw shared that they hope they make as much of an impact on their young audiences as musicians like original Pilipino music (OPM) band Sandwich and British act Coldplay left with them from their respective concerts.

ENGLISH SINGER-SONGWRITER GRIFF
The international headliner for the first We Play Here stop was Griff (née Sarah Faith Griffiths) in her very first concert in the Philippines. The British-born musician is known for upbeat songs like “vertigo,” “Tears for Fun,” and “Anything,” from her debut album released earlier this year.

Ms. Griffiths, of Jamaican and Chinese heritage, has mixed roots, and told local press in the same press conference about how she has long embraced her complex identity.

“Sometimes you don’t feel Asian enough to be Asian and you don’t feel black enough to be black. I definitely didn’t feel white, growing up in a very white, middle-class area, so I think it just influenced my music,” she said.

“I felt like I could maybe belong in music and create my own safe space.”

Despite the high-energy quality of Griff’s songs, they all reveal a more introspective and emotional nature. Some artists she admires that Filipinos also adore are Beyoncé and Whitney Houston.

For her, speaking different languages and being from different cultures doesn’t matter in the face of music, a “universal experience almost like its very own language, which makes it beautiful.”

“I feel that Filipino fans are really fun and really committed, so I’m excited about performing here, especially to young people,” she added.

FILIPINO SOLOIST ARTHUR MIGUEL
One of the biggest draws in the UP Diliman leg of the school tour was pop musician Arthur Miguel.

Known for hits like “Lihim” and “Ang Wakas,” he said at the pre-concert press conference that his goal as an artist is to “be a voice for those who are unable to speak out.”

“Gusto ko mabigyan ng boses ang mga nakikinig sa akin, iyong mga hindi nasasabi ang nararamdaman nila (I want to give a voice to my listeners who don’t know how to say what they feel),” he explained.

At the concert grounds, he had a special interactive booth inviting concertgoers to share their what-ifs and hugot (emotional) expressions on a wall.

He added that his latest EP is a major example of expressing unsaid emotions. Titled MU, which is short for malabong ugnayan (unclear relations; also a play on the phrase “mutual understanding”), it consists of five songs about situationships.

Given the chance, Mr. Miguel hopes to do a collaboration with another Filipino soloist, Moira dela Torre.

“Imagine Moira and me doing a sad song. That would be so good,” he said. He later added, “Lahat kami ginagalingan namin, lalo na’t inaabangan kami ng mga tao (we all make an effort to perform well, especially since people wait to see us).”

Other up-and-coming artists that graced the stage were indie rock bands Kahel, Letters from June, and Sugarcane, pop soloist Paul Pablo, and Davao hiphop group PLAYERTWO.

For more details on Warner Music Group’s next stops in the school concert series, visit We Play Here’s official social media pages. — B.H. Lacsamana

Treasury bill, bond yields may drop on easing bets

BW FILE PHOTO

RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week are expected to go down after the US Federal Reserve chief signaled that their monetary easing cycle could start as early as next month.

The Bureau of the Treasury (BTr) will auction off P20 billion in T-bills on Tuesday, or P6.5 billion in 91- and 182-day papers and P7 billion in 364-day debt.

On Wednesday, the government will offer P25 billion in reissued 20-year T-bonds with a remaining life of 19 years and nine months.

This week’s T-bill and T-bond auctions were moved due to a holiday on Aug. 26 (Monday) for National Heroes’ Day.

Yields on the T-bills and T-bonds on offer this week could drop to track the week-on-week declines seen in secondary market rates last week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

On Friday, the 91-, 182-, and 364-day T-bills saw their yields go down by 2.56 basis points (bps), 5.93 bps, and 4.51 bps week on week to end at 5.9247%, 6.0559%, and 6.1038%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data as of Aug. 22 published on the Philippine Dealing System’s website. The 20-year bond also dropped by 8.83 bps week on week to fetch 6.1780%.

Philippine financial markets were closed on Aug. 23 for a special non-working holiday in observance of Ninoy Aquino Day.

Secondary market yields were lower last week on expectations of rate cuts from both the Bangko Sentral ng Pilipinas (BSP) and the Fed, Mr. Ricafort said.

Rates went down before Fed Chair Jerome H. Powell’s speech at Jackson Hole symposium on Friday, where he was expected to adopt a dovish stance, a trader said via e-mail.

The trader added that the 20-year bonds to be auctioned off on Wednesday could fetch rates within the 6.20%-6.25% range as “strong demand might spark another rally as the said bond is currently trading on thin volume.”

The BSP on Aug. 15 reduced its target reverse repurchase rate by 25 bps to 6.25%, in line with the expectations of nine out of 16 analysts in a BusinessWorld poll. Prior to the cut, the Monetary Board kept the policy rate at an over 17-year high of 6.5% for six straight meetings following cumulative hikes worth 450 bps between May 2022 and October 2023 to combat elevated inflation.

BSP Governor Eli M. Remolona, Jr. said they could cut rates by another 25 bps within the year. The Monetary Board’s remaining policy-setting meetings this year are on Oct. 17 and Dec. 19.

Meanwhile, Fed Chair Jerome H. Powell on Friday endorsed an imminent start to interest rate cuts, saying further cooling in the job market would be unwelcome and expressing confidence that inflation is within reach of the US central bank’s 2% target, Reuters reported.

“The time has come for policy to adjust,” Mr. Powell said in a highly anticipated speech to the Kansas City Fed’s annual economic conference in Jackson Hole, Wyoming. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

Analysts and financial markets had already widely expected the Fed to deliver its first rate cut at its Sept. 17-18 policy meeting, a view that was cemented after a readout of the central bank’s July meeting said a “vast majority” of policy makers agreed the policy easing likely would begin next month.

Most analysts have forecast the Fed will kick off its policy easing with a quarter-percentage-point rate reduction, the central bank’s usual increment.

Mr. Powell’s new emphasis on protecting the job market raises the chance of a bigger cut, especially if the US government’s jobs report for August, due to be released on Sept. 6, shows further deterioration in what many policy makers have called a still-healthy job market.

With its policy rate currently in the 5.25%-5.5% range, the Fed has “ample room” to reduce borrowing costs to cushion the economy, Mr. Powell said.

Last week, the raised P22.6 billion from the T-bills it auctioned off, higher than the planned P20 billion, as total tenders reached P61.297 billion or more than thrice  the amount on offer. This was also higher than the P52.535 billion in bids seen during the Aug. 12 T-bill auction.

Broken down, the BTr borrowed P6.5 billion as programmed from the 91-day T-bills as tenders for the tenor reached P15.003 billion. The three-month papers were quoted at an average rate of 5.94%, rising by 4 bps from the prior week. Accepted rates ranged from 5.875% to 5.975%.

Meanwhile, the government upsized the award for the 182-day securities to P9.1 billion versus the P6.5-billion plan as bids reached P21.874 billion. The average rate for the six-month T-bill stood at 5.989%, down by 10.4 bps week on week, with accepted rates at 5.95% to 6.035%.

Lastly, the Treasury raised P7 billion as planned via the 364-day debt papers as demand for the tenor totaled P24.42 billion. The average rate of the one-year debt inched down by 3.9 bps to 6.023%, with accepted rates at 6% to 6.04%.

Meanwhile, the reissued 20-year bonds on offer on Wednesday were last auctioned off on June 26, where the BTr raised P30 billion as planned via the papers at an average rate of 6.86%, lower than the 6.875% coupon for the issue.

The Treasury plans to raise P220 billion from the domestic market this month, or P80 billion through T-bills and P140 billion via T-bonds. This week’s auctions are the last two for August.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product for this year. — BMDC with Reuters

How much is my pechay?

PHILIPPINE STAR/MIGUEL DE GUZMAN

For those of us who are vegetable eaters, we may be conscious about the price of upland vegetables, like chop suey ingredients (carrots, sayote, Baguio pechay or wombok and beans), which generally come from Baguio if you are in Manila, and Bansalan if you are from Davao City. You should also consider the prices of upland salad ingredients like lettuce, tomatoes and onions.

For lowland vegetables or a pinakbet mix, we have squash, pole beans (sitaw), okra, ampalaya and kangkong. These may come from Laguna and other parts of Luzon. But did you know that there may be as much as 12 points to pass before the vegetable reaches your plate?

Because of these 12 touchpoints, 40% of the produce actually wilt or get damaged and, eventually, the second-to-the-last touchpoint may have a recovery of only 60-70% of the initial truckload. Thus, vegetables have already become very expensive upon reaching their destination. One reason is perishability, and another is the multiple stations they have to pass to get to the consumer.

You may think it is simply a supply chain issue. It probably is more complicated than that.

1. Farmers have no financial capacity to buy seeds and fertilizers so they borrow. They don’t have credit history so they borrow from their buyers, like an advance contract.

2. Buyers have the farmers in the palm of their hands because they have extended credit to the producer.

3. Farmers plant the same crops because they don’t know who their final buyer will be, so they join the bandwagon who have buyers in bagsakan or depots.

4. Once they get their money, they pay their loans to the buyers and then zero out and start again. That is a vicious cycle that many farmers experience.

I recently met a group that probably has a solution to this recurring problem. They combined technology and farming knowledge to introduce apps and the use of social media, like Facebook, to talk to farmers and buy their produce. To date, they have helped over 38,000 farmers who can now benefit from direct trade, or at least a four-step process better than the usual 12-step way.

They establish hubs and become the alternative bagsakan or depot and farmers bring their goods to these alternative hubs, instead of the usual public depot. They get better prices and they also are seen by the operators in the flesh, no longer invisible to the wholesale buyer or aggregator. The aggregators call themselves AgroDigital PH and they revolutionized buying of perishable produce, like your pechay or lettuce. They have B2B customers, like a supermarket chain that also has locations around Luzon, for example.

Founders Henry James Sison and Analissa Jardin joined us at a Slow Food event at a culinary school to explain their business concept, which is truly admirable.

Another innovator is Lakal, Inc. — started by Reuben Ravago and Rhoderick “Heaven” Torres — which is also using a model that may revolutionize buying and selling of coffee and other commodities. Lakal will establish hubs, but the difference is that they will store commodities, like coffee and corn, and be the intermediary between buyer and seller. With commodities that can be stored longer (unlike vegetables that are highly perishable), you can wait a few weeks or months for better prices before making a transaction.

Lakal has rules on buying and selling and may be the solution to price fluctuations that subject the farmers to shock and disappointment. Buyer and seller must agree on the price (called farmgate) before the transaction succeeds with Ravago as the intermediary. Again, this will use technology to determine available stocks and market prices, and brokering a sale will be transparent. This is patterned after the Chicago Mercantile Exchange and will soon be launched to help commodity farmers and producers.

Agro Digital PH and Lakal are just two examples of innovative tools, apps and ideas that could help our farmers navigate the supply chain challenges because our country is archipelagic, and cold storage is hard to come by for the common farmer.

I also heard of horror stories of hoarders establishing cold storage facilities, buying all the onions at super low prices, keeping them and waiting for a shortage so they can unleash their inventory at super-high prices. There ought to be a law against these economic saboteurs. Such has been the story of the Philippines for many years now. People with money just cannot moderate or manage their greed, and make fast money because they have the capital to begin with, much to the dismay of the disgruntled food producer.

With technology and people like Ravago and Sison, we hope that things will change albeit slowly but surely. Technology, social consciousness and good values may just save the day.

We salute these technopreneurs, who may be the Department of Agriculture’s allies in making sure our farmers are paid well, can live decently and will be sustainable as SMEs that give us our food.

The next time you buy vegetables, think of where they came from. We need to support the new generation of entrepreneurs who will secure our food supply through technology, so we can have more farmer-entrepreneurs empowered by Sison using technology. And we may have a real commodity exchange using the tools created by Ravago’s group.

These are welcome developments in the area of food security, and we hope that consumers support these innovations, so we do not lose our farmer population and just turn to imports.

Technology and Agriculture — their marriage is key to our food security.

 

Chit U. Juan is co-vice-chair of the Management Association of the Philippines’ Environment Committee. She is also the president of the Philippine Coffee Board, Inc. and Slow Food Manila (www.slowfood.com).

map@map.org.ph

pujuan29@gmail.com

BSP’s Remolona ranks among top central bankers in global report card

BANGKO SENTRAL NG PILIPINAS

THE BANGKO SENTRAL ng Pilipinas’ (BSP) governor’s “A-” rating in a report card for global central bankers places him among the “top-performing” officials in the world and reflects the BSP’s performance in achieving its mandates.

“Philippine central bank governors have been receiving the highest awards in recent years amid effective monetary policy, inflation-targeting, relatively stable exchange rate, all of which help in fulfilling the price stability mandate, as well as financial stability and effective payment systems,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

BSP Governor Eli M. Remolona, Jr. received an “A-” rating from Global Finance magazine’s Central Banker Report Cards, the central bank said in a statement on Monday.

“Central bankers have waged war against inflation over the past few years, wielding their primary weapon: higher interest rates,” Global Finance founder and Editorial Director Joseph Giarraputo said in a statement.

“Now, countries around the world are witnessing the tangible results of these efforts, as inflation has dropped significantly,” he added.

The report card evaluates central bank governors across nearly 100 countries and territories. It seeks to “honor those bank leaders whose strategies outperformed their peers through originality, creativity and tenacity.”

The highest rating is an “A+” while the lowest is “F.” Central bank chiefs are assessed for their success in inflation control, currency stability, and interest rate management, among other indicators.

A total of fifteen central bankers were given an “A-” rating, including US Federal Reserve Chairman Jerome H. Powell. It also included central bank governors from Cambodia, Canada, Costa Rica, Dominican Republic, the European Union, Guatemala, Indonesia, Jamaica, Jordan, Mongolia, Norway, Peru and Sweden.

The only three central bankers who achieved an “A+” grade were heads of the monetary authorities of Denmark, India and Switzerland.

Meanwhile, central bank chiefs from seven countries obtained an “A” rating, namely Brazil, Chile, Mauritius, Morocco, South Africa, Sri Lanka and Vietnam.

Global Finance is set to release the full report on Central Bank Governors Report Cards in October.

In June 2023, President Ferdinand R. Marcos, Jr. appointed Mr. Remolona as BSP governor, succeeding Felipe M. Medalla. Mr. Remolona completed his first year in office on July 3.

The BSP chief previously worked at the Federal Reserve Bank of New York and the Bank for International Settlements. — Luisa Maria Jacinta C. Jocson

First Gen expects boost from geothermal assets

LOPEZ-LED First Gen Corp. expects its investments in geothermal assets to enhance its generation portfolio and potentially boost its earnings next year, its president said.

Francis Giles B. Puno, president and chief operating officer of First Gen, said that the company is still “in the green,” but is monitoring the impact of the decline in geothermal prices.

“For geothermal, in particular, the prices are generally lower, and our production is lower simply because our steam… we’re still doing the drilling today. So, the costs are being borne today,” he told reporters on Aug. 14.

“So, it’s a combination of lower price, lower volume, and higher OPEX (operating expenses),” he added.

During the company’s annual stockholders’ meeting, Mr. Puno said that First Gen’s subsidiary, Energy Development Corp. (EDC), is investing about P30 billion “to build 83 megawatts (MW) of new geothermal power plants and four megawatt-hours of battery energy storage system to be commissioned this year.”

In July, EDC officially introduced its 28.9-MW Palayan Binary Geothermal Power Plant in Albay, as part of the expansion of its existing 140-MW Bacon-Manito facility.

For the second half of the year, the company’s attributable net income fell by 7.4% to $154.08 million from $166.44 million in the same period last year.

Gross revenues slightly declined by 0.8% to $1.28 billion due to lower volumes of electricity sold during the first half of the year across all platforms except for the hydro platform. — Sheldeen Joy Talavera

Macklemore cancels Dubai show to protest UAE role in Sudan war

AMERICAN rapper Macklemore said he has canceled his October show in Dubai in protest over the United Arab Emirates’ (UAE) support for Sudan’s paramilitary Rapid Support Forces (RSF), a warring party in the country’s civil war.

“The current situation in Sudan is urgent, horrific and it’s going largely unnoticed globally. I’m following the lead of Sudanese organizers and activists who are trying to be heard,” he wrote in an Instagram post on Saturday explaining his decision to cancel the Oct. 4 concert.

“Until the UAE stops arming and funding the RSF I will not perform there.”

As the UAE’s glitzy political and tourism hub, Dubai frequently hosts international artists and sporting events. Macklemore’s decision to cancel an engagement because of the country’s politics is extremely rare.

Neither the UAE’s foreign ministry nor its global media office immediately responded to Reuters’ request for a response to Macklemore’s decision to cancel.

Sudan’s army has publicly criticized the UAE over its alleged support for the RSF, its rival in the war.

The UAE denies the allegations, though United Nations (UN) experts have said they are credible. The allegations surfaced in a fiery back and forth at the UN security council in June.

The war in Sudan began in April 2023 when competition between the army and the RSF, who had previously shared power after staging a coup, flared into open warfare.

Efforts in pursuit of a ceasefire, including talks ongoing in Switzerland, have not eased the fighting, and half of Sudan’s 50 million population lack food.

Macklemore, a Grammy-winning artist, said in his post that the war between Israel and Hamas in Gaza prompted him to reconsider how he earns money and his ability to use his artistic platform for activism.

“If I take the money, while knowing it doesn’t sit right with my spirit, how am I any different than the politicians I’ve been actively protesting against?” he wrote, urging other artists scheduled to play in Dubai to reconsider.

Macklemore in May released “Hind’s Hall,” a high-profile protest anthem in solidarity with pro-Palestinian activists occupying university campuses in response to the war in Gaza. — Reuters

The Philippine justice system is malfunctioning

ORIGINAL PHOTOS FROM FREEPIK

President Ferdinand Marcos, Jr. remains firm in his stand that he will not allow the International Criminal Court (ICC) to investigate the “war on drugs” of former president Rodrigo Duterte. He maintains that the Philippines can resolve the issue under its “well-functioning justice system.” The episodes below glaringly show the Philippine justice system is malfunctioning badly.

THE ALICE GUO EPISODE
On Aug. 19, Senator Risa Hontiveros disclosed that, based on information provided to her by the National Bureau of investigation (NBI), Bamban, Tarlac Mayor Alice Guo is out of the country. She was able to leave despite being the subject of an immigration lookout bulletin order (ILBO) due to a high-profile Senate investigation into her alleged involvement in illegal activities traced to a Philippine offshore gaming operator hub and questions about her citizenship and eligibility as municipal mayor.

Miss Guo, said to have faked Philippine citizenship to run for mayor of Bamban, left the country on July 18 reportedly for Denpasar, Indonesia, then proceeded to Kuala Lumpur, Malaysia and subsequently flew to Singapore with her siblings, Sheila Guo and Wesley Guo, on July 21. She returned by ferry to Indonesia on Aug. 18.

She has been since July 18 the subject of an arrest warrant issued by the Senate due to her refusal to face the Senate committee on women, children, family relations and gender equality. The committee is investigating her supposed involvement in the illegal POGO hub that was raided in Bamban where she is the mayor. The NBI having established that Guo’s fingerprints matched those of Chinese citizen Guo Hua Ping, Solicitor General Menardo Guevarra filed on July 29 a quo warranto petition before a Manila court seeking to nullify Alice Guo’s election as mayor of Bamban for her being a Chinese citizen.

On Aug. 12, Ombudsman Samuel Martires ordered the dismissal of Mayor Guo from service for her violation of Philippine laws. The Ombudsman had firmly established that Guo owns a 7.9-hectare property hosting two POGOs — Hongsheng Gaming Technology, Inc. and Zun Yuan Technology, both of which were found to be engaged in human trafficking, torture, and cyber scams including that involving cryptocurrency.

On Aug. 14, Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui, Jr. filed a criminal case for tax evasion against Alice Guo and others. The criminal case stemmed from Guo’s not paying capital gains tax and documentary stamp tax.

THE PASTOR APOLLO QUIBOLOY EPISODE
At around 5:27 a.m. last Saturday morning, Philippine National Police (PNP) Region XI personnel under the command of Police Brigadier General Nicolas Torre III entered the Kingdom of Jesus Christ (KOJC) compound in Buhangin District in Davao City to serve an arrest warrant on KOJC leader Pastor Apollo Quiboloy.

According to the live report by DWPM/TeleRadyo Serbisyo, as many as 2,000 policemen were deployed at KOJC. That is equivalent to two Army battalions or one regiment. Video clips of the operation showed the policemen equipped with basic law enforcement tools — short firearms, batons, radios, body armor, and helmets.

Just the same, Pastor Quiboloy was able to evade arrest. Hundreds of Quiboloy’s followers formed a barricade outside the compound, making it difficult for the policemen to enter. Policemen had to use ladders to get inside. Still, they failed to find their prey.

This is the second time the PNP failed to arrest Quiboloy. On June 11, heavily armed units of the PNP Special Action Force (SAF) and Criminal Investigation and Detection Group (CIDG) operatives barged into several compounds owned by Quiboloy to serve arrest warrants for him and his accomplices, Ingrid Canada, Pauline Canada, Inteng Canada and Jackie Roy. They failed to catch their quarries.

Quiboloy has three standing arrest warrants for child and sexual abuse issued by the Davao City Regional Trial Court and human trafficking issued by a Pasig City court. The cases are non-bailable. The Supreme Court transferred the cases from Davao City, the pastor’s hometown, to Quezon City so that witnesses can testify freely. The arrest warrants are different from the pending arrest warrant issued by the Senate in connection to Quiboloy’s refusal to attend Senate hearings on the sexual abuse allegations that hound him and his church leaders.

THE GERARD BANTAG EPISODE
A manhunt for Gerald Bantag, former director-general of the Bureau of Corrections has been underway since July 2023 but the PNP has yet to catch the fugitive. Bantag is implicated in the brazen murder of radio broadcaster and journalist Percival Mabasa. Mabasa, who went by the name Percy Lapid on his radio show Lapid Fire, had aired allegations of corruption against Bantag on his late-night radio program.

The law enforcement authorities claim to have tracked down Bantag’s whereabouts, but they are taking precautions in arresting the man as he had vowed not to be captured alive. Department of Justice spokesman Mico Clavano said, “We hope to do this in the most peaceful manner.”

Specially trained and heavily armed men were sent to arrest Pastor Quiboloy. When that operation failed, 2,000 men were deployed to catch the elusive religious sect leader. That too failed. To capture an alleged cold-blooded killer, peaceful ploys will be employed.

THE ANDRES BAUTISTA EPISODE
Former Commission on Elections chairman Andres “Andy” Bautista and three executives of the voting machine company Smartmatic were indicted by a US federal grand jury in Florida on Aug. 8 for allegedly taking bribes from Smartmatic, which provided the voting machines for the country’s 2016 elections. The indictment alleges that between 2015 and 2018, the Smartmatic executives caused at least $1 million in bribes to be paid to Bautista.

The alleged crime is related to the 2016 Philippine elections and involved the chairman of the Commission on Elections, yet the charges were filed by the Justice department of a foreign government in that country’s court of law. Our own Justice department saw nothing wrong in the business relations between Bautista and Smartmatic.

OTHER EPISODES
I cited in a previous column other episodes that show the broken down condition of country’s justice system.

There is the case of the four policemen who were found guilty of homicide for the killing of Luis Saldana Bonifacio and his son Gabriel during an alleged illegal drug operation.

Kristina Conti of the National Union of Peoples’ Lawyers (NUPL) said no public prosecutor participated actively in the prosecution of the case. NUPL asked for and was granted authority as private prosecutors, trying this case on their own. They built this case without any material assistance from the Justice department, police, or government agencies.

There is also the case of the Internal Affairs Services (IAS) of the Philippine National Police (PNP). The House of Representatives Committee on Human Rights grilled the IAS for not filing criminal charges against policemen involved in “tokhang” operations that resulted in deaths during President Rodrigo Duterte’s “war on drugs.” Republic Act No. 8551 mandates the IAS to investigate and adjudicate administrative cases against erring PNP personnel. IAS Director General Brigido Dulay admitted that the IAS had not filed any charges.

THE CONCLUSION
I can only conclude that President Marcos does not want to throw Rodrigo Duterte under the ICC bus because Tatay Digong might get back at Bongbong by spilling the beans. Philippine politics is replete with stories of political ally falling from grace and hitting back at ungrateful friend.

When Defense Secretary Juan Ponce Enrile fell from grace, he revealed that his ambush was faked to justify President Ferdinand Marcos, Sr. imposing martial law. When Chavit Singson was cast out of the jueteng pot, he identified President Joseph Estrada as the jueteng king himself. When Makati mayoralty aspirant Ernesto Mercado was eased out of the Jejomar Binay political camp, he exposed the sins of the Binays. When Patricia Cruz became estranged from husband Andy Bautista, she bared husband’s hidden wealth.

BBM has many secrets that RRD knows.

 

Oscar P. Lagman, Jr. has been a keen observer of Philippine politics since the early 1950s.

EVs to make up less than 10% of total vehicle sales this year — CAMPI

REUTERS

THE Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) expects that electric vehicles (EVs) will not reach 10% of total vehicle sales in the Philippines this year despite increasing demand, its president said.

EVs have so far captured 4% of the total industry’s sales, CAMPI President Rommel R. Gutierrez said on the sidelines of a press conference last week.

“I think [this will increase], but I don’t think it can reach 10% because sales of internal combustion engine vehicles are really going up,” Mr. Gutierrez told reporters on Aug. 19 in a mix of English and Filipino.

“So I think percentage-wise, not so much, but volume-wise, [the sale of EVs] is really picking up,” he added.

For the first seven months of the year, automotive sales increased by 10.9% to 265,610 units from 239,501 units a year ago.

Meanwhile, CAMPI revised its 2024 target to a record 500,000 units, reflecting a 16.3% increase from the 429,807 units sold in 2023.

Mr. Gutierrez said that the increase in both sales and the launch of EVs can be partly attributed to the expansion of Executive Order (EO) No. 12 to include hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) in the tariff exemption.

“Initially, it covered only pure EVs, but now it includes HEVs, whose sales are actually much higher compared to pure EVs,” he said.

“But we are, of course, cautious because there is a yearly review of the performance, so we really need to match the expectations. So, everybody is pushing, even other brands, led by Toyota, are really bringing in EVs because they see the potential,” he added.

On June 20, President Ferdinand R. Marcos, Jr. signed EO 62, which modified the rates of import duty on various products.

The EO covered the expansion of the reduced Most Favored Nation tariff rates of the products covered under EO No. 12 to other battery EVs, HEVs, PHEVs, and certain parts and components.

The National Economic and Development Board approved in May the expansion of the coverage of EO 12, which temporarily reduces tariffs on EVs to zero until 2028.

Aside from the 34 lines of EVs covered by EO 12, it will now also cover e-motorcycles, e-bicycles, nickel metal hydride accumulator batteries, e-tricycles and quadricycles, HEVs, and PHEV jeepneys or buses. — Justine Irish D. Tabile

Dissecting the popularity of leisure-oriented developments

THE PANDEMIC has highlighted the need for greener, more open spaces. This is a major reason why property firms now offer bigger spaces, whether for condominium or horizontal developments. These projects are classified as upscale and luxury developments based on total contract prices but are among the best-selling projects in the market post-COVID. We expect developers to continue launching similar projects, but the first movers definitely have an advantage.

Colliers Philippines believes that it is imperative for property firms to take advantage of the rising demand for resort-themed projects across the country. For one, these projects are banking on the revival of the Philippine tourism market, which the Marcos administration continues to aggressively promote. The tourism sector remains one of the major job-generating economic sectors of the Philippines, and the government’s emphasis on the sector will substantially benefit developers catering to local and foreign markets.

Leisure-themed developments also benefit from improving connectivity. Major projects in the Cavite-Laguna-Batangas (Calaba) corridor, for instance, are taking advantage of improving access from Metro Manila to Southern Luzon. Hordes of people visit their favorite destinations in the south during weekends and holidays, and the ease of travel has been facilitated by the completion of major public projects, including those connecting cities from north to south Luzon.

IMPROVING CONNECTIVITY AND LEISURE-ORIENTED PROJECTS
The leisure sector stands to benefit from the new and upcoming infrastructure projects. From the modernization and expansion of airports to the upgrading of roads, particularly those that lead to new and exciting tourism spots, Colliers believes that these joint infrastructure implementation efforts between the government and private sector players should help the government accommodate more international tourists and entice long-haul and high-spending ones, especially now that the Philippines intends to attract 7.7 million foreign visitors this year and 12 million in 2028.

The foreign visitors should eventually be enticed to invest in the country, adding a layer of demand to the already strong upscale and luxury markets.

RISING DEMAND POST-COVID
Developers have been taking advantage of the rising demand for resort or leisure-oriented properties outside Metro Manila. These projects were already popular pre-COVID, but the pandemic only highlighted the need for these leisure-themed residential enclaves. Among the developers with leisure-centric properties outside Metro Manila are Brittany Corp., DMCI Homes, Inc., Rockwell Land, Inc., Megaworld Corp., Ayala Land, Inc., Robinsons Land Corp., Cebu Landmasters, Inc., Torre Lorenzo Development Corp., AboitizLand, Inc., Costa del Hamilo, Inc., Landco, Inc., and Damosa Land, Inc., with projects located in Cebu, Davao, Bohol, Palawan, Cavite, and Batangas. These projects remain popular, and Colliers encourages developers to further assess launching similar projects.

COLLIERS SURVEY RESULTS POINT TO THRIVING POPULARITY
A recent Colliers webinar poll showed that Palawan was the most preferred destination of our respondents (45%), followed by Boracay (17%) and Cebu (16%). Both Palawan and Boracay have been awarded as the third and fourth best islands to travel to, according to the Travel + Leisure Luxury Awards Asia Pacific 2024.

Colliers believes that hotel operators should remain active in capturing demand from domestic tourists who are enticed by impulse travel, as well as foreign visitors. Property firms should explore building either hotels or leisure-centric residential enclaves in popular destinations across the Philippines. Among the developers with leisure presence in Palawan are Brittany Corp., Megaworld Corp., Ayala Land, and Sta. Lucia Land.

Meanwhile, among the developers with resort-themed developments in Boracay, Cebu, and Davao are Brittany Corp., Robinsons Land Corp., Rockwell Land, Torre Lorenzo Development Corp., AppleOne Properties, Inc., Ayala Land, Damosa Land, Inc., and Cebu Landmasters.

Colliers believes that the leisure sector will also likely benefit from the new and upcoming public infrastructure projects of the government. The modernization and expansion of airports such as Panglao, Laguindingan, Zamboanga, Ninoy Aquino International Airport (NAIA), and the New Manila International Airport, as well as the development of new roads to emerging tourist destinations, will likely entice more long-haul and high-spending tourists. This should also support the Department of Tourism’s goal of attaining 7.7 million foreign arrivals in 2024 and 12 million in 2028.

Results of our Q2 2024 Residential Survey showed that about 28% of our respondents chose beachfront properties as their next residential investment. Developers have been taking advantage of the rising demand for resort or leisure-oriented properties outside Metro Manila. In our view, these projects will likely remain popular, especially among investors looking for greener and more open spaces. Colliers data showed that these projects have take-up rates of between 40% and 100%, with average prices per square meter ranging from P214,000 to as much as P590,000 ($3,800 to $10,500) as of end-2023.

Among the developers offering resort-themed developments are Brittany Corp., Ayala Land, Rockwell Land, Robinsons Land, Torre Lorenzo Development Corp., Sta. Lucia Land, and DMCI Homes, dispersed across Batangas, Cavite, and Cebu. In our view, the recovery of the country’s travel and tourism sector will also likely lift the demand for these projects.

PHL HOSPITALITY AND FOSTERING INCLUSIVE GROWTH
Colliers believes that public-private partnerships should not just focus on infrastructure development. Greater emphasis should also be provided in propping up the tourism sector and in making sure that it benefits all stakeholders — from hotel owners and operators to retailers of souvenir items. Over the past few years, we have seen the expansion and modernization of airports in Clark and Cebu, and there will be more in the pipeline — New Manila International Airport in Bulacan and the rehabilitation and expansion of the existing NAIA. With tourism as one of the major job-generating sectors of the Philippine economy, there’s so much on the line. That’s why greater public and private participation is needed in buoying the sector, ensuring that public projects are completed as scheduled, and promoting sustainable and inclusive economic growth across the Philippines.

Further growth of Philippine tourism is a win-win for developers and property investors.

 

Joey Roi Bondoc is the director and head of Research of Colliers Philippines.

joey.bondoc@colliers.com

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