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Training the next generation

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I remember my father asking me to check the whole family in for our flight to New York — I was only 18 years old.  He gave me the passports and tickets and told me to handle them. I survived. We often think we must always take the lead even in the most basic of tasks, but sometimes it is better to let the young ones take over and maybe make a few mistakes but learn the process anyway.

Today, children are exposed to buying flights online, talking to a chat bot on customer service, and just accepting the new way of checking in at airport kiosks, tagging your own luggage, and not getting any meals during the flight itself. (Oh, how I miss those days when service was key and probably cost half the price of an airline ticket. With slashed travel prices, they have slashed the service as well. Today’s consumer is unfazed by the quality of service rendered by providers because they did not experience luxe of yesteryears. How sad!)

More than just training them on travel procedures, we must train the young in critical thinking and thinking on your feet. So, we must throw them into situations that require fast thinking, and that needs a lot of judgment calls. This is not all learned in school, but in the school of life. You need to be sharpened by various hard situations and be responsible for your decisions. Not all decisions will be good, and that is a possibility one must accept. Good or bad, you made a decision.

This is why we need to train our next generation by letting them go. Let them decide, let them fall if they must — and then help them as they pick themselves up. Just like bicycles that have training wheels. We like to be in control, let’s face it. But sometimes that breeds indecisive children and scared junior staff who cannot decide because it might cost money or time and sometimes, both.

It must be a conscious effort for managers and CEOs to look for their successors. While corporate books insist on that, family corporations do not subscribe to such a move — so, the patriarch or matriarch rules until he or she croaks. For the sustainability of the business, or even an advocacy, we must learn to let go and the next in line must be willing to take over, slowly but surely.

I was just watching a feature on the Adani family of India where all the sons and nephews were asked to take on roles for every management process (Sales, Marketing, COO, etc.) and concurrently also take charge of a sector (airports, ports, etc.). No wonder they are still India’s richest family, with a fourth of India’s GDP in their hands. They also look at government priorities and dance their business to the current tunes of the administration. But clearly, they have thought of succession.

In advocacies or NGOs, we must also share our vision and just cause with our colleagues so that it does not remain stuck with the founder/s. We must encourage the younger members to rise up and be our leaders while we can still guide them to avoid mission drift or to avoid repeating past mistakes. Let us not think that we are the only ones who can do a special task of seeing a project through. Sometimes, it is good to say “let the chips fall where they may” and just leave it to the juniors in training.

Have you found your successor yet? Sometimes, we are the biggest hurdle — we refuse to let go and no candidate will be good enough for us. We are also a hurdle if we want to be in total control of the results all the time.

The way I think about it is this: you could just croak one day and life will go on. What steps can we take to better lose control with consent? Here are some suggestions:

1. Take them along to your meetings. Let them experience how you make decisions, given facts and conditions as discussed at the meetings.

2. Introduce them to your principals and associates. Give them their own name and title to empower them in dealing with others.

3. Let them decide on the minor stuff first, then the big decisions later. They can surely handle it their way even if it seems longer and less practical.

4. Find out what makes them happy. Talk to them about the future they want to see and what will make them happy. It may not be the same motivation as yours.

As we approach our golden years, we must make a conscious effort to train the next generation and let them lead or manage with their own style — but mindful of our corporate and family values. So, I cannot over-emphasize that value formation is key and that culture must be felt for it to be maintained and preserved. Corporate and family culture is the key to sustainability of any endeavor, business, or even in an advocacy or non-profit.

Be mindful that they start small and humble. In the case of family corporations, let them first learn at someone else’s company, not yours. Let them be humbled by working for others first, before becoming the Child Of Owner or COO. They should work elsewhere to also take back some lessons we cannot give them but that they can apply in our company.

In NGOs, let them think of their own pet project you will support. That will give them the confidence to see things through because they “own” the cause or project. Passing down a cause may not work well and may not stick well with the young.

Look for your successor and pass on the values, not the bad habits. Pass on the culture, not your personality.

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP. )

 

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

T-bill yields continue to ease amid rate cut bets

RJ JOQUICO-UNSPLASH

By Aaron Michael C. Sy, Reporter

THE GOVERNMENT on Monday fully awarded Treasury bills (T-bills) as the market awaited further rate cuts by the Philippine central bank.

The Bureau of the Treasury (BTr) raised P20 billion as planned from the T-bills it auctioned off as total bids reached P76.445 billion, almost four times as much as the amount on offer, but lower than P93.257 billion in tenders last week.

The Treasury borrowed P6.5 billion via the 91-day T-bills as tenders for the tenor reached P24.37 billion. The three-month paper was quoted at an average rate of 5.196%, 18.4 basis points (bps) lower than last week. Bids were 5.15% to 5.248%.

The government also fully awarded P6.5 billion in 182-day securities, with bids reaching P26.245 billion. The average rate of the six-month debt was 5.005% to 5.48%, down by 47.5 bps from last week.

The Treasury likewise raised P7 billion via the 364-day debt as demand reached P25.83 billion. The average rate of the one-year debt fell by 9.6 bps to 5.487% from last week, with accepted rates at 5.4% to 5.525%.

At the secondary market before the auction, the 91-, 182- and 364-day T-bills were quoted at 5.2578%, 5.3818% and 5.5599%, based on PHP Bloomberg Valuation Service Reference Rates data from the Treasury.

Investors were aggressive in locking in yields on expectations of further rate cuts by the Bangko Sentral ng Pilipinas (BSP), a trader said in a text message.

T-bill yields continued declining after Finance Secretary Ralph G. Recto said he would support a bigger rate cut at the central bank’s October meeting, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

Mr. Recto, who is also a Monetary Board member, has said the board could afford to slash interest rates further and match the size of the US Federal Reserve’s 50-bp rate cut.

“The Fed reduced by 50 basis points. I think we can also do half a percent,” he told a news briefing last week.

Inflation likely eased to 2.5% in September, he said, the slowest in nearly four years, after rising by 3.3% in the previous month. Mr. Recto said it could settle at 3.4% this year, within the central bank’s 2% to 4% target.

Slowing inflation allowed the central bank to cut the benchmark rate by 25 bps to 6.25% in August, its first rate cut since November 2020, ahead of major central banks including the Fed.

On Tuesday, the Treasury will offer P15 billion in reissued seven-year T-bonds with a remaining life of four years and seven months.

The BTr plans to borrow P145 billion from the domestic market in October — P100 billion in T-bills and P45 billion in T-bonds.

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 economic output this year.

DMCI Holdings to conduct P1.94-B tender offer to acquire Cemex Philippines shares

DMCI Holdings, Inc., through the Consunji group’s private holding company Dacon Corp., will conduct a P1.94-billion mandatory tender offer to acquire the remaining 10.14% of cement producer Cemex Holdings Philippines, Inc. (CHP), which will remain listed. 

Dacon Corp.’s tender offer intends to acquire up to 1.37 billion publicly owned CHP common shares, equivalent to 10.14% ownership, at P1.42 apiece, the cement manufacturer disclosed on Monday. 

The tender offer period will be from the morning of Oct. 23 up to noon of Nov. 21.

The move is part of DMCI’s acquisition of CHP. Under the deal, Dacon has been appointed as the bidder for the mandatory tender offer to acquire the remaining 10.14% of the total issued and outstanding capital stock of CHP.

DMCI, Semirara Mining and Power Corp. (SMPC), and Dacon Corp. announced in April the acquisition of CHP for $305.6 million under a share purchase agreement to expand the conglomerate’s portfolio.

DMCI bought the entire share of Cemex Asia B.V. in Cemex Asian South East Corp. (CASEC), the majority owner of CHP with an 89.96% equity interest. DMCI will acquire a 56.75% stake in CASEC, Dacon will secure 32.12%, and SMPC will purchase the remaining 11.13%. 

Meanwhile, DMCI said in a separate disclosure that Dacon will sell a portion of its CHP shares in case the cement company’s public float falls below the 10% minimum threshold after the mandatory tender offer.

“We anticipate that the said sale of the CHP shares by Dacon Corp. would happen within six months after the acquisition of CASEC, which is expected to close by the end of November,” it said.

“DMCI intends to issue 10 million Class B Preferred Shares at P1,000 per share and a par value of P1 per share subject to the shareholders’ approval. This issuance is intended to raise P10 billion to finance DMCI’s acquisition of 56.75% interest in CASEC,” it added. 

Trading of CHP shares was temporarily suspended for one hour following the announcement of the tender offer.

On Monday, CHP stocks fell 8.82% or 15 centavos to P1.55 apiece while DMCI shares dropped 0.86% or ten centavos to P11.50 per share. — Revin Mikhael D. Ochave

TV comedies face hurdles as Hollywood cuts back

LUCILLE BALL and Vivian Vance in a scene from the 1950s TV comedy I Love Lucy.

LOS ANGELES — Looking for laughs? New gut-busting comedies are getting harder to find on today’s television.

After an explosion of shows in the “Peak TV” era, Hollywood studios are reducing the number of series they release. Comedy has taken a bigger hit than drama, industry data show, and producers say a range of challenges has hindered bringing new comedies to the screen.

“In comedy, the bar has never been higher to get things made,” Mike Farah, former CEO of Funny Or Die and now an independent producer, said at a recent Producers Guild of America conference.

Last year’s TV offerings thinned when Hollywood writers and actors went on strike. After production ramped back up, the number of drama series premieres in 2024 rose 25% from a year earlier while comedy premieres fell by 7%, according to data from research firm Luminate. Those numbers may change by the end of the year.

Comedies have been a mainstay of TV since its inception. The Honeymooners and I Love Lucy entertained audiences in the 1950s. Viewers in the 1980s and ’90s were glued to shows such as Seinfeld, Friends, and Cheers.

Earlier this year, Seinfeld creator Jerry Seinfeld lamented the state of television comedy.

“It used to be, you would get home at the end of the day and most people would say, ‘oh Cheers is on. MASH is on. Mary Tyler Moore is on. All in the Family is on,” Mr. Seinfeld told the New Yorker magazine. “You just expected, ‘there’ll be some funny stuff we can watch on TV tonight.’ Well, guess what? Where is it?”

Mr. Seinfeld attributed the change to “the extreme left and PC crap and people worrying so much about offending other people.”

DRAMAS SPEAK TO GLOBAL AUDIENCE
Hollywood writers, producers, agents, and analysts pointed to other factors.

Many cited the rise of social media app TikTok, where people can watch short videos for free to get their comedy fix.

Moreover, today’s streaming services cater to global audiences, and it is harder to turn a comedy into a worldwide hit.

“There’s a wider preference for dramas amongst cross-market audiences on the international level, as comedy tends to be more culturally specific to each region,” said Mark Hoebich, executive vice-president and head of film and TV at Luminate.

As Hollywood endures cutbacks in search of profits, comedy is seen as riskier than other genres, writers and producers said.

“It’s really easy to pitch a plot to somebody. It’s really easy to say ‘and then there’s a murder,’” said Guy Branum, a writer on Emmy-winning comedy Hacks. “But pitching the things that make comedy — tone and voice and character — it’s hard. You have to trust the people to know what they’re doing.”

And as cable television has lost viewers, media companies have cut investments in channels such as Comedy Central, a vital testing ground for new comedy.

Plus, the types of comedy on TV have changed. The FX series The Bear runs for 30 minutes — the traditional run time for a comedy — and has won Emmys in comedy categories. Many see the show, about family dysfunction and the stresses of operating a restaurant, as more of a drama.

“I think comedy is going through a little bit of an identity crisis,” said producer Warren Littlefield, who developed classic sitcoms such as Cheers, Seinfeld, and The Golden Girls while he worked as an executive at NBC.

The Bear comes along, and the audience, critics, everyone celebrates it,” Mr. Littlefield said. “Is it a pure comedy? I don’t know if it’s a pure comedy, but it’s damn good television, and I think that’s what that form, a half-hour form, is searching for.”

NETFLIX EXPANDS COMEDIC LINE-UP
Despite the industry-wide contraction, there are several comedy offerings on the TV schedule for this fall and next year.

Abbott Elementary, an Emmy nominee for best comedy, returns to ABC in October. NBC is touting St. Denis Medical, coming in November. CBS is promoting four comedies with the slogan “You’re Laughing at CBS.” Fox already has renewed its new animated comedy, Universal Basic Guys, for a second season.

Netflix, meanwhile, is bringing new shows from comedy luminaries such as A Man on the Inside starring Ted Danson, No Good Deed with Lisa Kudrow, and The Four Seasons featuring Tina Fey and Steve Carell. The streaming platform also offers a wide range of stand-up comedy specials.

Jean Smart, who just won her third Emmy for playing an ambitious stand-up comic on Hacks, said she believed audiences today were seeking darker comedies rather than more light-hearted ones, a change since she starred on Designing Women three decades ago.

“I do think people are craving comedy now more than ever,” Ms. Smart said. “I think people are feeling disheartened by the world a little bit, and who doesn’t want to laugh? It feels good.” — Reuters

8990 Holdings unit signs housing deal with Quezon City government

Quezon City Mayor Ma. Josefina Belmonte (seated, third from left), 8990 Housing Development Corp. Chairman Mariano Martinez, Jr. (seated, second from left), and 8990 Housing Development Corp. President & CEO Anthony Vincent Sotto (seated, leftmost) showcase the signed memorandum of agreement between the Quezon City local government and 8990 Housing & Development Corp.

LISTED property developer 8990 Holdings, Inc.’s subsidiary 8990 Housing Development Corp. has signed a housing deal with the Quezon City government.

The deal will provide 2,699 housing units to Quezon City government employees and informal settler families, 8990 Holdings said in a regulatory filing on Monday.

The housing units will be in 8990’s four-tower Urban Deca Homes Commonwealth project near Batasan Road in Barangay Commonwealth.

The project was formalized with the signing of a memorandum of agreement between 8990 Housing and the Quezon City government on Sept. 28.

The partnership is 8990’s first housing project under a partnership with a local government unit.

For the first half, 8990 Holdings saw a 19% decline in its net income to P3.06 billion from P3.78 billion a year ago.

January-to-June revenue increased by 0.7% to P10.14 billion from P10.07 billion a year ago on higher real estate sales in Metro Manila, Bulacan, and Davao.

8990 Holdings is an affordable housing developer. It is engaged in various projects such as low-cost mass housing units and subdivision lots, medium-rise, and high-rise building housing units.

On Monday, 8990 Holdings shares rose by 3.22% or 29 centavos to P9.30 per share. — Revin Mikhael D. Ochave

OpenAI is shattering Big Tech’s promises of a better world

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AT A RECENT tech industry event, a software engineer approached me and said he was in the middle of looking for a job, and that the next company he worked for needed something special: a mission.

Silicon Valley — and the tech industry more generally — has long maintained an ethos of saving the world. The belief is so prevalent that it was mocked on HBO’s Silicon Valley, in a montage of startup founders all promising to “make the world a better place” with their ultra-niche product or service.

The latest news about OpenAI’s evolution, from nonprofit research lab to investor-friendly, for-profit growth machine, is a stark reminder that the “mission” shtick doesn’t last long in a region awash with money and dominated by incumbents. It’s time that job-hunting engineer and the rest of us become more wary of such feel-good pronouncements.

The tech industry has always been well-suited to grand narratives about changing the world. It’s not just that tech products have altered the way we live and work, but the rapid pace of those changes makes grand claims plausible. It’s easy to wrap broad, aspirational messaging around an abstract product like social media or AI. But over time, the side effects of these services become apparent.

Alphabet, Inc.’s Google was founded with the motto “don’t be evil,” then went on to dominate the online search market, collect egregious levels of personal data, and sideline the members of its AI ethics research teams. Meta Platforms, Inc.’s original mission was to “bring the world closer together,” buts Facebook has allowed misinformation and conspiracy theories to spread, polarizing us and trapping us in “echo chambers,” while Instagram has dented young people’s mental health. Twitter billed itself as a public town square and hub for free speech, but under Elon Musk’s ownership it has amplified extremist views while gutting its trust and safety teams. 

Framing yourself as “mission oriented” has obvious advantages. The halo effect of benevolence attracts plenty of talented scientists and engineers. OpenAI co-founder Ilya Sutskever once wrote in a 2016 e-mail — published during the company’s legal spat with Musk — that the company should only really be “open” with its research in its early days “for recruitment purposes.”

It also appeals to the press, potential investors, and even regulators. Altman has often played up the company’s founding mission in public to generate goodwill. “Our goal is to advance digital intelligence in the way that is most likely to benefit humanity as a whole, unconstrained by a need to generate financial return,” the company’s first, 2015 blog post still says.             

“It was clear early on that they weren’t going to be completely open despite their name,” says Gary Marcus, professor emeritus at New York University and author of Taming Silicon Valley, who told me months before the release of ChatGPT that OpenAI was being too secretive about how it trained its models. “[Altman] gives people what they want to hear, and what they wanted to hear was, ‘We’re in the public interest.’”

In the past week, it’s been reported that OpenAI will soon be pivoting to a more corporate structure, one in which its nonprofit board will be shut down, a cap for investor profit will be removed, and Altman himself will be granted as much as 7% equity in the firm, worth an estimated $6.5 billion. Up until now, Altman has stated that he wouldn’t take equity, stressing OpenAI was meant to broadly benefit society. Meanwhile, leaders like chief technology officer Mira Murati, along with two other key executives, have been leaving.

None of this has stopped the company from doubling down on the “mission” rhetoric. “We remain focused on building AI that benefits everyone, and we’re working with our board to ensure that we’re best positioned to succeed in our mission,” an OpenAI spokesperson told Reuters this week.

BLOOMBERG OPINION

Q2 credit card complaints at 4,161 due to poor service

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CREDIT CARD complaints rose by 45% to 4,161 in the second quarter from a quarter earlier driven mainly by unsatisfactory customer service, data from the Credit Card Association of the Philippines (CCAP) showed.

“Most consumer complaints are related to credit card management and customer service, which underscore the need for the industry to pay closer attention to consumer feedback,” CCAP Executive Director Alex G. Ilagan said in a statement on Monday.

The top credit card-related complaints involved account management, interest rates, fees and charges, and unauthorized online transactions.

The share of account management to total complaints rose to 55.5% in the second quarter from 37.2% a year earlier.

“Account management includes complaints from customers encountering difficulties accessing their accounts, card applications, card activation and cancellation processes, nondelivery or delays in the delivery of the cards or billing statements, as well as release of rebates, promotions and rewards,” CCAP said.

It also includes complaints on issues with updating account or client information, and unposted transactions or payments.

“Paying more attention to customer needs is a positive commitment of our member-card issuers,” Mr. Ilagan said. “While there are always opportunities for improvement, most of the feedback we receive are about credit card management and customer service.”

He added that more consumers are engaging with their credit card issuers to seek better support in managing their accounts, reflecting a growing awareness of credit management.

Mr. Ilagan said CCAP is working on improving processes such as card applications and activation, billing management and the release of rewards and rebates to enhance customer satisfaction.

“We at CCAP will continue to serve as the bridge between consumers and the financial industry, ensuring a balance between customer needs and market realities,” he said. — Aaron Michael C. Sy

DTI identifying priority areas for digitalization partnership with Converge

KABIUR RAHMAN RIYAD-UNSPLASH

THE DEPARTMENT of Trade and Industry (DTI) is set to finalize the priority areas where Converge Information and Communications Technology Solutions, Inc. will expand internet connectivity to aid in the digitalization of micro, small, and medium enterprises (MSMEs).

At the Philippine Chamber of Commerce and Industry’s (PCCI) Media Kapihan on Monday, Trade Undersecretary Blesila A. Lantayona said that the DTI will have a follow-up meeting with Converge on Tuesday to finalize the list.

The meeting comes after the DTI partner signed a memorandum of understanding with Converge on Sept. 10 with the aim of bridging the gap in digital connectivity in far-flung areas.

The partnership aims to provide local MSMEs with high-speed internet connectivity and cost-effective products and services.

Ms. Lantayona said that the DTI initially submitted a list of areas where they believe internet connectivity should be improved.

“We submitted our list of agrarian reform beneficiary areas, which are already in the far-flung areas, and Negosyo Centers, which are not well connected as they are located in areas that are less in terms of internet connection,” she said.

“Converge committed to helping connect these areas. So, we will have a follow-up meeting to finalize the list because what we provided was just an initial list,” she added.

She said that the partnership with Converge is important in connecting the identified less-connected areas or areas with very intermittent internet connection.

During the pandemic, many micro and small businesses closed down as they were not digitalized, according to PCCI Executive Vice-President Ferdinand A. Ferrer.

“We saw a lot of these micro and some of the small businesses fold up just because they are not 100% digitally connected,” said Mr. Ferrer, adding that 50% of the regions in the country remain unconnected.

He said that addressing the digital divide will help the country achieve its goal of becoming a first-world nation.

However, he noted that micro and small enterprises will become targets of fraud and scams once they become connected.

“What our biggest fear at PCCI is that once we connect all these small businesses and microbusinesses, they will be a target of scams,” he said.

Because of this, he said that a program should be put in place to train the micro and small business owners.

“So, this will fall on our capacity building in training them. And PCCI is here. We have 129 local chapters, all active, and we are here to provide support in capacity building,” he said.

“This is so our entrepreneurs and our microbusinesses will not be the target of fraud and scams that come with the territory,” he added. — Justine Irish D. Tabile

The Cure release ‘Alone,’ first new song in 16 years

LONDON — The British band The Cure released their first new music in 16 years on Thursday, the single “Alone,” and confirmed their long-awaited album would come out on Nov. 1.

The melancholic song, almost seven minutes long, is the first track from Songs of a Lost World, The Cure’s 14th studio album. Their last, 4:13 Dream, was released in 2008.

The band had previewed songs from the new album during their Shows of a Lost World tour, opening shows with “Alone.”

“It’s the track that unlocked the record; as soon as we had that piece of music recorded, I knew it was the opening song, and I felt the whole album come into focus,” frontman Robert Smith said in a statement.

“I had been struggling to find the right opening line for the right opening song for a while, working with the simple idea of ‘being alone,’ always in the back of my mind this nagging feeling that I already knew what the opening line should be.”

Mr. Smith added that he had remembered the poem “Dregs” by Ernest Dowson after finishing recording “and that was the moment that I knew the song — and the album — were real.”

“Alone” begins with an over three-minute-long instrumental before Smith starts singing: “This is the end of every song that we sing / The fire burned out to ash and the stars grown dim with tears.”

He goes on to sing about “birds falling out of our skies,” “love falling out of our lives” as well as a “broken-voiced lament to call us home.”

Britain’s NME music publication called the song “epic and emotional” while the Guardian newspaper described it as “majestically wreathed in misery and despair,” giving it four out of five stars.

The Cure, who made their debut in the late 1970s and are known for their post-punk as well as darker melancholic tracks, had long teased a new album, with Mr. Smith revealing the Songs of a Lost World record title in 2022. — Reuters

DMCI Homes to develop 4-ha property in Cebu

CONSUNJI-LED developer DMCI Homes, Inc. plans to expand into Cebu City, investing P20 billion in its first project.

The company plans to develop a four-hectare (ha) property in Barangay Guadalupe, Cebu City, said Dennis O. Yap, DMCI vice-president for project development, in a statement on Monday.

Mr. Yap said Cebu City’s robust economy and growing demand for quality homes make it an ideal location for the company’s expansion.

The company said the decision to enter the Cebu property market follows its ventures in San Juan, Batangas, and Tuba, Benguet over the past year.

“Cebu is a rapidly growing market with great potential,” Mr. Yap said.

DM Consunji, Inc. (DMCI) was part of the Cebu Link Joint Venture, a consortium with Acciona and First Balfour that built the Cebu-Cordova Link Expressway.

Other landmarks built by DMCI in Cebu include SM Cebu, Shangri-La’s Mactan Resort and Spa, the Ayala Life Cebu office building, and Ayala Center Cebu. — Aubrey Rose A. Inosante

The degrowth trend in the west, health parochialism in the Philippines

Canada finally released its second quarter (Q2) 2024 GDP data last week, or almost three months after the end of the quarter. Now we have the full data for the first half (H1), or Q1 and Q2 of the year, of the G7 countries.

I compared the numbers for GDP growth and inflation rate over four years, 2021-2024, of four groups of countries. In Group A are the ASEAN-6, in Group B are the countries of Northeast Asia plus India, in Group C are the G7 member countries, and in Group D are Russia and its neighbors plus Ireland. The results show the following:

1. A significant growth slowdown, even a trend towards degrowth, is emerging in G7 countries. In H1 2024, only the US and France grew above 1%. They also suffered high inflation of 5.9% or higher in 2022, except Japan.

2. Group A and B countries grew at 3% or higher in 2024 except for Thailand and South Korea. They also experienced mild inflation in 2022.

3. Russia’s three neighbors that happen to also be NATO members — Finland, Estonia and Latvia — experienced even deeper degrowth than G7 members. Plus, Finland and Estonia saw double-digit inflation in 2022. Sanctions vs Russia tend to harm those who imposed the sanctions more than Russia itself (see Table 1).

Also, last week saw plenty of GDP revisions upwards by the US. Until about two weeks ago, these were the quarterly growth rates: 3.6%, 1.9%, 1.7%, 0.7% in 2022, and 1.7%, 2.4%, 2.9%, and 3.1% in 2023. Last week, with upward revisions, the growth rates became: 4%, 2.5%, 2.3%, 1.3% in 2022, and 2.3%, 2.8%, 3.2%, and 3.2% in 2023. The significant upward adjustments and revisions in US GDP numbers may be related to the coming Presidential elections next month.

The Philippines and other developing countries should avoid the policies of G7, especially those in Europe that are focused on saving others — the planet, Ukraine, and illegal immigrants — and other such concerns. We should instead focus on saving jobs and the economy from low growth and high poverty.

BTr’s CASH OPERATIONS REPORT
Last week, the Bureau of the Treasury (BTr) released the cash operations report for August 2024. I compared the numbers with those of the same period, January-August, from 2020-2023. Here are some important developments.

1. Revenues are nearly P3 trillion in 2024, almost 50% higher than the P2 trillion in 2021 or just three years ago. Non-tax revenues like remittances by government corporations and financial institutions kicked in high, from P74 billion in 2023 to P200 billion in 2024.

2. The rise in expenditures is mainly due to a rise in national plus local government disbursements, and interest payments for public debt — from P270 billion in 2020 to P509 billion in 2024 or nearly double in just four years. If the current trend in interest payment continues, the full year 2024’s interest payment would be P764 billion, with principal amortization not yet included.

3. It is the first time since 2020 that the deficit has been below P700 billion. Again, this is thanks to the jump in non-tax revenues which significantly raised overall revenues.

4. Financing or borrowing is still at P1.5 trillion in 2024, but at least this is lower than the P2.2 trillion average for 2020 and 2021 (see Table 2).

And now we go back again to the move by the Department of Finance (DoF) to tap the “idle funds” of the Philippine Health Insurance Corp., or PhilHealth, to finance some unprogrammed appropriations, including big infrastructure projects and healthcare worker benefits. I want to reiterate my arguments on why the DoF’s move is correct.

1. Those big unprogrammed appropriations can no longer be accommodated in the programmed appropriations of 2024 because the programmed appropriations are already huge, and the projected budget deficit is already at P1.48 trillion.

2. There are indeed Congressional pork barrel funds in the annual budget. But people forget or deliberately ignore that the budget also contains local governments’ pork barrel done via budget consultations at the regional development councils (RDCs), plus NGOs’ pork via budget consultation by agencies. These spending insertions by local governments and NGOs are incorporated when the Department of Budget and Management (DBM) submits the budget to Congress yearly.

For instance, the Department of Health (DoH) and other agencies consult the Alternative Budget Initiative (ABI), a big NGO network with sectoral clusters, about the agency’s budget. The annual DoH budget consultation with the ABI health cluster is done usually in early February of each year.

3. Tapping PhilHealth’s P90 billion in “idle funds” in 2024 means the government is not borrowing P90 billion, which at the current 5.8% interest rate (10-year bonds) would cost P5.22 billion/year in interest payments alone.

4. The DoF, DBM, and the National Economic and Development Authority (NEDA), which are the departments that comprise the economic team, have a wider overall view of all the agencies and sectors while the health lobbyists have a narrow and parochial view of the budget, which is why they say universal healthcare spending should prevail over many other agencies and sectors.

5. PhilHealth and the health advocates have become addicted to the tax money collected from gamblers (remittances from the Philippine Charity Sweepstakes Office and the Philippine Amusement and Gaming Corp.), smokers and drinkers (tax revenues collected from legal tobacco and alcohol). So much so that when these tax contributions are reallocated to unprogrammed appropriations even for one year, they get angry. Which demonstrates their double talk. They demonize alcohol and tobacco products as being “sin” products and unhealthy, yet they rely too much on taxes from alcohol and tobacco.

So, to help the health advocates become more consistent and avoid double talk, the DoF should proceed with using the extra revenue from gamblers, drinkers, smokers, and vapers to fund more infrastructure and other economic and social programs.

 

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com

PNB to pay property dividends on Oct. 25

BW FILE PHOTO

PHILIPPINE National Bank (PNB) will pay property dividends consisting of its 51% equity stake in PNB Holdings Corp. (PHC) on Oct. 25, it said in a stock exchange filing on Monday.

These are for stockholders who had been issued electronic certificates authorizing registration by the Bureau of Internal Revenue (BIR) as of Aug. 29 and have fully settled their obligations, the lender said.

The dividend distribution will continue once the e-certificates are released by the BIR and all obligations are settled, it added.

The bank hired PNB Capital and Investment Corp. as financial adviser and lead arranger of the sale of at least 9.18% of its stake in PHC.

PNB said its board of directors had approved the distribution date and hiring of PNB Capital in a meeting on Sept. 27.

The property dividend will be distributed at a ratio of 0.156886919 shares of PHC for every PNB share, the bank said in a previous disclosure.

PNB’s board approved the property dividend declaration of up to 239.35 million common shares of PHC with a par value of P100 per share on April 23, 2021, subject to regulatory approvals.

The Securities and Exchange Commission (SEC) approved the property dividend declaration on Dec. 24, 2021.

PNB’s attributable net income fell by 0.07% to P4.95 billion in the second quarter as it set aside higher loan loss provisions. This brought its net income for the first semester to P10.22 billion, up by 4.72% year on year.

Its shares gained 0.54% or 15 centavos to close at P28 apiece. — Aaron Michael C. Sy