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FKA twigs’ body movement art shakes up Sotheby’s

SOTHEBYS.COM

LONDON — At Sotheby’s in London, a group of people are taking turns to swing their arms, thrust their hips and twist their bodies on the floor, as part of a performance artwork created by British singer-songwriter FKA twigs.

Called “The Eleven,” it is performed by a rotating group of 11 individuals making 11 distinct movements on repeat as a DJ nearby blasts out techno.

FKA twigs, whose real name is Tahliah Barnett, said the moves were choreographed to tackle 11 aspects of living she said were critical to her own well-being, from artistic creation and simplicity to self-awareness and nature.

For the 280-year-old auction house, the performance represents uncharted territory.

Sotheby’s hopes it will help it reach newer audiences and the “next generation of collectors,” Lisa Stevenson, director of contemporary art, said.

By making the movements FKA twigs believes people can reconnect to their lives and bodies and disconnect from distractions such as social media.

“I started doing it myself and it works so I decided to create something here at Sotheby’s everybody could enjoy and hopefully take something away from,” she told Reuters on Friday after the unveiling of the artwork.

She hopes the movements will help visitors reach a state of “Eusexua,” a word she coined to describe a feeling she considers the “pinnacle of human experience.” It is also the name of twigs’ new single released on Friday and a forthcoming album.

“It’s the feeling of dancing all night and losing hours to the beach, it’s the feeling of having a great idea, that moment of complete clarity,” she said.

“The Eleven” is on view at Sotheby’s London until Sept. 26. — Reuters

More central banks exploring the use of digital currencies, research shows

LONDON — A total of 134 countries representing 98% of the global economy are now exploring digital versions of their currencies, with almost half at an advanced stage and pioneers like China, the Bahamas and Nigeria starting to see a pick up in usage.

The research by the US-based Atlantic Council think tank published on Tuesday showed that all G20 nations are now looking into central bank digital currencies (CBDCs) as they are known and that 44 countries in total are piloting them.

That is up from 36 a year ago and is part of a global push by authorities to respond to declining cash usage and the threat to their money-printing powers from the likes of bitcoin and “Big Tech.”

The Atlantic Council’s Josh Lipsky and Ananya Kumar said one of the most noteable developments this year has been the sizable increase in the Bahamas, Jamaica and Nigeria’s CBDCs, the only three countries that have already launched them.

China too, which is running the world’s largest pilot scheme, has seen use of its prototype e-CNY nearly quadruple to 7 trillion yuan ($987 billion) of transactions according to officials.

“There has been a narrative that the countries that have launched CBDCs have seen low or no usage, but in the last months we have seen a real uptake,” Mr. Lipsky said.

“My predication is that the PBoC (People’s Bank of China) will be close to full launch a year from now,” he added.

Other big advances have been the European Central Bank’s launch of a multi-year digital euro pilot and the United States, which has long dragged its feet on a digital dollar, joining a cross-border CBDC project with six other major central banks.

It still lags far behind nearly every other leading bank however Mr. Lipsky highlighted that it is one of the countries where privacy and other concerns about CBDCs are most vocal.

In May, the US House of Representatives passed a bill prohibiting the direct issuance of a “retail” CBDC — the type used by the public. The Senate has not yet acted, but it remains a live issue in the presidential election campaign between Donald Trump and Kamala Harris.

Since Russia’s invasion of Ukraine and the G7 sanctions response, “wholesale” bank-to-bank only CBDC projects have more than doubled in number to 13.

The fastest growing one, codenamed mBridge, connects CBDCs from China, Thailand, the UAE, Hong Kong and Saudi Arabia and is expected to expand to more countries this year.

Russia is unlikely to be one of them but its digital rouble pilot means it is now accepted in the Moscow metro and in some petrol stations. Iran is also working on a digital rial.

“No matter what happens with the US election, the Fed is years behind,” Mr. Lipsky said. — Reuters

Petron raises nearly P17 billion from share offering

PETRON Corp. has completed its follow-on offering and was able to raise P16.8 billion in preferred shares, the Ang-led company announced on Tuesday.

In a stock exchange disclosure, the oil company said it had sold P8.5 billion worth of Series 4D shares and P8.33 billion worth of Series 4E shares.

The shares were offered from Sept. 5 to Sept. 13, consisting of 13 million preferred shares and an oversubscription option of up to four million additional shares, at a share price of P1,000 each.

Petron previously said that the proceeds from the latest offering would be used to redeem the company’s Series 3A preferred shares, refinance maturing obligations, and fund general corporate purposes, including the purchase of crude oil inventory.

The shares are set to be listed on the Philippine Stock Exchange on Sept. 23.

This offering represents the second tranche of Petron’s shelf registration for up to 50 million preferred shares. In the first tranche, the company offered up to 22.5 million preferred shares.

Petron tapped BDO Capital & Investment Corp. as the sole issue manager. Bank of Commerce, BDO Capital, Chinabank Capital Corp., Philippine Commercial Capital, Inc., PNB Capital and Investment Corp., and SB Capital Investment Corp. have been designated as joint lead underwriters and joint bookrunners.

Meanwhile, East West Banking Corp., First Metro Investment Corp., and RCBC Capital Corp. were tapped as the selling agents for the offer. — Sheldeen Joy Talavera

What exactly is financial leasing? The definition, issues, and requisites

MARI HELIN-UNSPLASH

Under Republic Act No. 8556, also known as the Financing Company Act of 1998 (FCA), the term “financial leasing” refers to a mode of extending credit under which the lessor purchases or acquires, at the instance of the lessee, movable or immovable property in consideration of the periodic payment by the lessee of a fixed amount of money over a period of not less than two years during which the lessee has the right to hold and use the leased property.1 Through a financial lease, one can use a property (e.g., equipment or machinery) without having to make an upfront payment.

However, as noted by the Supreme Court in PCI Leasing v. Giraffe-X,2 the FCA does not specify the rights and obligations of the parties to a financial leasing arrangement. This gap in the law has caused issues between parties to such a contract, particularly in determining whether their arrangement is in fact a financial lease.

In PCI Leasing, the Supreme Court ruled that in identifying the real contractual relationship between the parties to a contract purported to be a financial lease, the following should be taken into account:

1. the imperatives of equity;

2. the contractual stipulations in question; and,

3. the actuations of the parties vis-à-vis their contract.3

The Supreme Court has ruled that a contract alleged to be a financial lease may actually be a sale of a movable property on installment4 or a simple loan with security5, among other arrangements. The buyer’s right to buy the leased property at the end of the lease period may also be recognized, even if such option is not expressed in the written contract.6 This is because financing arrangements, which include financial leases, are regulated activities that are not meant to quench only the thirst for profit — they serve a practical and salutary purpose.7

The foregoing discussion shows the difficulties that may arise when dealing with contracts of this nature. Contracts involving the lease of property may not be classified as a financial lease even if captioned as such. Similarly, a contract may be deemed as a financial lease even if called by some other name. This is problematic because only duly licensed financing companies are allowed to extend financial leases. Engaging in financial leasing activities without being authorized to do so will expose the violator to the penalties of a fine and/or imprisonment, as provided under the FCA.8

In a recent opinion9, the Securities and Exchange Commission (SEC) clarified a feature that must be present for a transaction to be considered a financial lease. According to the SEC, there must be a trilateral relationship where the financial lessee is obligated to make periodic payments denominated as lease rentals that enable the financial lessor to recover the purchase price of the equipment that had been paid to the supplier thereof. From this, the following requirements may be inferred:

1. there must be three parties (i.e., the lessor, the lessee, and the supplier);

2. the financial lease must be preceded by a purchase and sale contract covering the property which becomes the subject matter of the financial lease; and,

3. the lessee must pay lease rentals to the lessor, which must be a financing company.

Based on the opinion, a contract that involves two parties only will not be considered a financial lease, regardless of the provisions stipulated. Thus, if the manufacturer/supplier leases a property it owns directly to its customers, such a transaction is not a financial lease and the manufacturer/supplier will not need to have a license as a financing company. That’s because, 1.) there are only two parties; 2.) the financial lease is not preceded by a purchase and sale contract covering the property which is the subject matter of the financial lease; and, 3.) the lessee pays rentals directly to the manufacturer/supplier, not to a financing company. This clarification is beneficial to manufacturers, suppliers, and similar entities who want to offer a lease arrangement to their customers directly, i.e., without the intervention of a financing company.

Although non-binding by nature, the opinion sets forth a simplified interpretation of Section 3(d) of the FCA and provides guidance on when lease agreements can be entered into without being licensed as a financing company — an interpretation that appears to be consistent with the law and jurisprudence on this matter.

1 FCA, Section 3(d).

2 G.R. No. 142618, 527 SCRA 405, 415 (2007).

3 Id. at 416.

4 BA Finance Corp. v. Court of Appeals, G.R. No. 105190, 228 SCRA 530 (1993).

5 Cebu Contractors Consortium v. Court of Appeals, G.R. No. 107199, 407 SCRA 154 (2003).

6 PCI Leasing, 527 SCRA at 423.

7 Id. at 420-421.

8 FCA, Section 14.

9 SEC Opinion No. 24-13; Re: Financing Company Act of 1998, as amended; Financial Leasing (2024).

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

 

Ralph Christian P. Rosales is an associate of the Corporate and Special Projects Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW)

rprosales@accralaw.com

Hong Kong youth carry forward city’s 145-year-old Fire Dragon Dance

DISCOVERHONGKONG.COM

HONG KONG — Young people took to the streets of Hong Kong on Monday for the emblematic Tai Hang Fire Dragon Dance hoping to bring a new generation to the 145-year-old tradition.

Each year during the Mid-Autumn Festival, more than 300 male performers parade a 67-meter-long dragon festooned with incense sticks through the alleys and narrow streets of Hong Kong island’s Tai Hang district watched by throngs of people.

But in recent years, the dance’s appeal has dwindled despite the city government designating it as intangible cultural heritage.

So this year, members of the Tai Hang Fire Dragon Dance Youth League composed of 100 children and young people took part in a smaller version of the dance alongside the male dancers of the main performance. Their version featured a “little fire dragon” illuminated by 10,000 LED lights.

Cheung Kwok-ho, 52, acting Commander in Chief of the Tai Hang Fire Dragon Dance, told Reuters he had set up the little fire dragon because he wanted to pass on the tradition.

“I hope the children will know the fire dragon earlier and join our fire dragon team when they are very young,” Mr. Cheung said.

In the past, women were not permitted to touch the Great Dragon’s body during the dance as it was considered unlucky.

However, the Youth League offers women the chance to take part.

Sonija Chan, 23, a Dragon Ball Dancer of the Youth League, told Reuters that since she was three-years-old, she had grown up watching all the males in her family, including her uncle, grandfather, and father, perform the Dragon Dance.

“Even though we still can’t touch the Great Dragon, I’m very happy and lucky to be able to participate in it,” Ms. Chan said.

“We need to pass it on to let others know about our hard work, our sweat, and our happiness.”

Another Youth League member, Rollen Lau, 12, told Reuters that it also helped him to “learn more about team spirit” and “understand more about the history of Tai Hang.” — Reuters

Philippines still leads East and Southeast Asia in women’s representation in government

The Philippines ranks 71st among 193 United Nations (UN) member states in the 2024 Women’s Power Index by think tank Council on Foreign Relations. This index measures women’s representation in government, focusing on the numerical presence of women rather than their impact or policy preferences. In a scale ranging from 0 to 100 (where a score of 100 represents women having at least 50% representation in all levels of government), the Philippines achieved a score of 29.8, leading in the region.

Philippines still leads East and Southeast Asia in women’s representation in government

More Filipino adults using buy now, pay later services

SNOWING-FREEPIK

THE USE of buy now, pay later (BNPL) services among Filipinos as of July rose by 9.6 times since September 2018, with the penetration rate among the highest in Southeast Asia, financial solutions provider UnaCash said on Tuesday.

“It’s quite evident that in the local market, there is a growing appetite for BNPL services, driven by increased e-commerce and a rising preference for convenient financial options. Be it through the online space, or through in-store channels, its developments present significant opportunities for businesses and investors looking to potentially engage with the expansion of the digital economy in the country,” UnaCash Head of Product Erwin G. Ocampo said in a statement.

“Buy now, pay later adoption in the Philippines has surged over the past few years, expanding 9.6 times since 2018, reflecting a strong consumer shift towards flexible payment solutions. There is a stable share of BNPL users at 24.7%, placing it among the top three countries in Southeast Asia,” UnaCash said.

The company’s data showed that there was a 3.3% monthly increase in BNPL users in the country aged 15 and above from September 2018 to July 2024.

“The country’s solid performance in BNPL adoption reflects a growing trend towards financial solutions such as this, primarily driven by increasing digital financial services and consumer demand for flexible payment options,” it said.

Singapore recorded the highest BNPL penetration rate in Southeast Asia at 75.4% in the period as its user base increased by 7.1 times with an average monthly growth rate of 2.8%. It was followed by Vietnam, whose share of BNPL users stood at 24.9%.

Trailing the Philippines were Malaysia with a penetration rate of 10.2%, Thailand (6.0%), Brunei (4.2%), and Cambodia (3.6%).

Meanwhile, the share of point-of-sale (POS) users in the Philippines aged 15 and up stood at 33.1% as of July, surging from the 3.2% share in September 2018.

UnaCash attributed the increase to the rise of mobile commerce and the growing number of POS kiosks in the country.

“POS adoption reflects the country’s increasing digitalization and the widespread use of mobile payment solutions. The development of self-service kiosks and enhanced e-commerce platforms have further contributed to this significant rise,” Mr. Ocampo said.

The Philippines ranked second in the region in terms of POS user share after Indonesia’s 67.5%.

“With the share of POS users of 4.5% in Vietnam, 2.8% in Malaysia, and 1.6% in Singapore, POS markets in these countries are at earlier stages of development, indicating potential for growth,” UnaCash said. — A.M.C. Sy

Eastern Communications plans further expansion

TELECOMMUNICATIONS company and information and communications technology (ICT) solutions provider Eastern Telecommunications Philippines, Inc. (Eastern Communications) is further expanding its footprint and services across the country.

This follows Eastern Communications’ announcement that it is expanding its services to Roxas City, Capiz in the Visayas through its “Via Eastern” initiative, which provides enterprises with digital tools and solutions.

“We are proud to support Roxas City’s vision of becoming a center for business and technology through our ICT solutions by offering business-grade connectivity and digital tools that address the unique needs of the local business landscape,” Eastern Communications Vice-President and Head of Sales Michael S. Castañeda said in a statement on Tuesday.

“As Eastern Communications marks its presence in the area, it plans to extend its services to other cities across Capiz in the future,” the company said.

For the year, the telecommunications provider has allocated P1.15 billion for its capital expenditure (capex) budget to fund its expansion plans.

It said that most of its capex would be used to strengthen the company’s network while also growing its enterprise product offerings. 

Eastern Communications earlier said it was eyeing Iloilo, Davao, Bohol, Boracay, Cagayan de Oro, Bacolod, and Dumaguete as areas for possible sites and business hubs for its commitment to increase its overall footprint.

In 2023, Eastern Communications increased its fiber network to over 9,760 kilometers with a total of 180 nodes in 42 business cities nationwide. — Ashley Erika O. Jose

Dashlabs.ai automates lab diagnostics in clinics with AI

FREEPIK

By Aubrey Rose A. Inosante, Reporter

STARTUP Dashlabs.ai is automating the diagnostic lab process of local clinics using artificial intelligence (AI), resulting in quicker and more accurate results, its top official said.

“These laboratories and clinics used to take seven to 14 days to process 500 to 1,000 patients,” Weston Coleman Lim, chief executive officer (CEO) at Dashlabs.ai, told BusinessWorld in a videocall on Sept. 13.

“After one year of using Dashlabs to help them facilitate the same bulk operations, it now only takes them 24 to 48 hours,” he added.

The CEO said medical technologists benefit from the software because it does away with manual transcriptions, which is time-consuming and prone to errors.

“Due to the volume of patients, it’s easy to make a mistake,” he said. “You might miss a triglyceride reading or a cholesterol reading, and you think that’s normal.”

An abnormal result is displayed in red text using the Dashlabs.ai software.

The software includes tests like hematology, clinical chemistry, blood count, and uric acid. Radiologists can also remotely retrieve a patient’s X-ray and electrocardiogram results.

“The third party AI model tells us that if it’s abnormal, there’s a risk that a person has lung cancer or tuberculosis,” Mr. Lim said. “We help radiologists screen through X-rays to spot life-threatening diseases. Our role is to help doctors spot these issues.”

Dashlabs.ai, which was founded in 2020, works with more than 200 clinics nationwide, including those in Cebu, Davao, Metro Manila, and some parts of Luzon.

“We work with all kinds of clinics and healthcare partners from sophisticated ones that do work for major business process outsourcing companies for their annual physical exams,” he added.

“During the pandemic, that was the first time the country felt that we were held back by manual processes,” Mr. Lim said.

“We had the machines to handle the volume, but we could not manage information properly,” he added, noting that Dashlabs used to mainly serve airports for travelers and overseas Filipino workers.

Mr. Lim said they realized that there was a bottleneck in the annual physical and preemployment exams of many companies, so they entered this market.

Miguel Carlo S. Gemotra, cofounder and chief commercial officer at Dashlabs.ai, said the company plans to launch this year a free-tier plan for laboratories that are starting out.

Dashlabs.ai offers clinics a monthly base subscription plan at P2,500. This includes features such as patient registration and “cashier,” where payments are linked to a patient and patient records are saved in a database.

The software can also flag abnormal results and generate results in portable document format (PDF). The clinics can then e-mail patients and medical professionals their results. The software can also produce QR (quick response)-coded results.

Some optional add-ons are accounting and ledger, machine integration, and queueing modules, which cost P2,500 to P5,000.

Dashlabs.ai has served 10 million patients nationwide.

China’s best growth target may be none at all

ZHANG KAIYV-UNSPLASH

DISAPPOINTING ECONOMIC news is becoming a reliable indicator in China. Another round of monthly reports point to an economy that isn’t falling apart, but is far softer than officials are comfortable with. The worn — and still very accurate — conclusion is that more stimulus is required to meet targets laid out by President Xi Jinping. The story is starting to feel a bit stale.

Every now and then, however, there is something in the mix worthy of extra attention. That was the case when Xi appeared to water down his commitment to meeting the hallowed goal for growth this year, which is around 5%. The People’s Bank of China (PBoC) then took the rare step of issuing a statement accompanying poor figures on credit. These lines fed speculation that interest rates will be reduced soon, perhaps alongside new measures to crank up the expansion. This would be welcome, though the central bank has a record of extreme caution.

First, the latest batch of data, released on Saturday: Retail sales climbed less than anticipated, industrial production missed estimates, investment was soft, and unemployment inched higher. Monday postmortems called for greater attention from Beijing to address the dour picture, while simultaneously predicting that any response would be unequal to the task. Ocean liners like the Chinese economy, the world’s second largest, don’t just change course immediately.

What if the Communist Party’s growth target didn’t matter quite so much? As China’s expansion slowed from the heady clip of the late 1990s and early 2000s, when double-digit advances weren’t uncommon, the objective has become more challenging. The risk is that officials, especially in the provinces, pursue projects of doubtful value, but contribute to meeting the numbers. There has long been suspicion among investors that statistics are massaged to produce the right result. Top leaders, rarely inclined to set radically different goals from year to year, then get to make speeches lauding the performance.

The practice of setting targets is long-standing. Beijing sensibly suspended it in 2020 as the pandemic descended. Gross domestic product eked out a gain of about 2% that year. The 5% target does provide for a small amount of latitude above or below, though it would be a brave cadre who assumed they had a pass. Falling too far below would indicate failure, though coming in above would likely be career enhancing. The consensus among private sector economists is that undershooting is likely. Goldman Sachs Group, Inc., Morgan Stanley, and Citigroup, Inc. are among firms that think something in the high 4% range is realistic.

Toning down the emphasis on 5% would have to come from the very top. Xi appeared to oblige on Thursday, saying that officials should “strive to achieve” the goal. In July, the party’s senior decision-making body demanded the aspiration be “resolutely” met. There’s debate as to whether the linguistic tweak reflects a shift in the underlying approach, but the president doesn’t strike me as a person who wanders off script. Assuming Xi was signaling some tolerance, this is to be applauded. There’s an argument to go further and scrap targets altogether.

Also handy was the PBoC’s dangling of initiatives to put a floor under the expansion. “We will make maintaining price stability and pushing for the mild rebound in prices an important consideration for monetary policy,” the bank said late Friday. All monetary authorities seek stable prices; in China’s case, this means being more attuned to the risks of deflation. Consumer-price increases are hovering a bit above zero.

Beijing also took some modest steps toward addressing the challenges of an aging society and a contracting labor force. The retirement age for men was raised by three years to 63, while women will retire at 55 and 58, depending on their roles. This won’t move the needle on GDP any time soon. The changes will be phased in over more than a decade. But it is a recognition that China has a problem at both ends of the life spectrum: The country is producing fewer kids and folks are living longer. While notable and the first change in the retirement age since 1978, it’s fair to ask whether this step comes too late.

China waited a long time to bury the one-child policy and is now trying to lift the birthrate.

Sometimes edicts work too well. Beginning to recognize that arbitrary GDP targets aren’t sacrosanct is healthy. It has the added advantage of reflecting reality.

BLOOMBERG OPINION

From trash to treasure: Cura Furn makes upcycled furniture

CURA FURN

By Edg Adrian A. Eva

CAVITE CITY-BASED Cura Furn is using upcycled pieces to make furniture to help businesses reduce their carbon footprint.

“I hope there would be more businesses… that would really push upcycled pieces,” Guiliana B. Anastacio, owner and creative head of Cura Furn, said in a video interview.

In Western countries like the US, the threat of “fast furniture” — mass-produced, relatively inexpensive, and easily discarded furniture — is on the rise, the New York Times reported.

The threat of fast furniture, similar to “fast fashion,” could increase waste.

Americans generate at least 12 million tons of furniture waste yearly, a 450% increase from 1960, most of it ending up in landfills, according to a 2018 report from the US Environmental Protection Agency.

The Philippines lacks data on furniture waste, but the country generated 16.63 million metric tons of solid waste in 2020, state auditors said in a 2023 report on the country’s Solid Waste Management Program.

It is expected to reach 19.76 million metric tons by 2030 and 24.5 million metric tons by 2045 despite the enactment of the Ecological Solid Waste Management Act of 2000.

In her fieldwork, Ms. Anastacio has seen the large amount of furniture regularly thrown away by businesses and residents, including pieces that are still in good condition.

“Some people would rather dispose of it rather than keep it,” she said. “I was surprised to know how many furniture pieces are being disposed of every day, every week, and every month.”

Through Cura Furn, Ms. Anastacio is advancing her sustainability advocacy by transforming discarded furniture into new creations.

One of the company’s major projects involved upcycling hundreds of swivel chairs and stools bought from closed restaurants and business establishments.

They transformed these pieces and sold them all at a reasonable price.

“Imagine 300 or 400 units that could fill a six-wheeler truck,” Ms. Anastacio said in Filipino. “These could have ended up in landfills, but we found homes for them.”

Cura Furn also provides upcycling services, including restoration and redesign, for furniture with a sentimental value.

Their services cover dining sets, buffet tables, hatch cabinets, stools, chairs, sofa sets and more.

But some consumers are reluctant to buy upcycled furniture because they can buy inexpensive pieces made by multinational companies.

“We always say that, for now, upcycling furniture may be a bit more expensive, but it’s more than the price,” she said. “It’s giving life to these discarded pieces.”

Ms. Anastacio hopes that more Filipino homes and businesses would adopt upcycling practices, which would help lower the cost of upcycled products and make them more accessible to more consumers.

This would also encourage major furniture companies to shift away from mass production and adopt upcycling, she added.

BSP eyes changes to external auditor selection rules

BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) is looking to issue a revised framework for the BSP-supervised financial institutions’ (BSFIs) selection of external auditors.

“The BSP considers the external auditing profession as a partner in promoting the safety and soundness of BSFIs,” it said in a draft circular posted on its website.

“In this light, the BSP is issuing the framework for the selection of external auditors of BSFIs pursuant to Section 58 of the Republic Act No. 8791, otherwise known as the ‘General Banking Law of 2000,’ as amended.”

The central bank defined an external auditor as an audit firm, partner or individual/sole practitioner in public practice. External auditors conduct audits and opinions rendered on audited financial statements, it added.

These auditors “contribute to enhancing corporate governance and empowering the public and investors to make informed financial decisions.”

The proposed circular revises the classification system for external auditors to include digital banks.

BSFIs must engage the services of an external auditor that is included in the list of selected external auditors, the BSP said.

“In this respect, a BSFI shall only appoint an external auditor belonging to the same category or from categories higher than the category of the BSFI concerned as provided in this section,” it added.

External auditors will be classified into three categories, namely: Group A (universal and commercial banks, foreign banks and branches or subsidiaries of foreign banks, digital banks and trust departments and trust corporations); Group B (thrift banks, non-bank financial institutions with quasi-banking license, virtual asset providers and credit card issuers/acquirers); and Group C (rural and cooperative banks, non-stock savings and loans associations, pawn shops and remittance and transfer companies, money changers, and foreign exchange dealers).

The classification will be based on the external auditors’ track record and the BSP’s assessment of their eligibility. External auditors must also adhere to the qualification and documentary requirements set by the BSP.

Inclusion in the list of selected external auditors for BSFIs will also be valid for a period of five years or possibly shorter depending on the BSP.

“The Monetary Board may require the BSFI to appoint an external auditor from higher categories as part of the BSP’s supervisory action on the BSFI; or at the expense of the BSFI, require the external auditor to undertake a specific review of a particular aspect of the BSFI’s operations/transactions,” it added.

The central bank may also “deploy its range of supervisory enforcement actions to promote adherence to the requirements outlined in this section and bring about timely corrective actions.”

“The BSP may downgrade the external auditor’s category, shorten the period of validity of inclusion, suspend, or delist the external auditor from the List of Selected External Auditors for BSFIs based on the result of its assessment of the quality of the AFS and compliance with the provisions of this section,” it added.

Under the draft rules, sections of the Manual of Regulations for Banks and Manual of Regulations for Non-Bank Financial Institutions will also be amended.

These include the sections regarding the guidelines on the suspension or delisting of external auditors in the list of selected external auditors.

The draft rules also introduce a section on the disqualification and watch-listing of directors and officers.

In terms of audit engagement and reportorial requirements, the external auditor’s assessment of the continuing compliance with provisions on long association, including rotation of partner, shall also be made available to the BSP upon request. — Luisa Maria Jacinta C. Jocson

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