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Tomb of unidentified ancient Egyptian pharaoh discovered

The Sphinx at the Giza Pyramids on the outskirts of Cairo, Egypt, Nov. 8, 2015. REUTERS
COMMONS.WIKIMEDIA

Archaeologists have discovered the large limestone burial chamber of an unidentified ancient Egyptian pharaoh near the city of Abydos dating to about 3,600 years ago during a chaotic period in Egypt’s history.

The discovery of the tomb seven meters (23 feet) underground at the ancient necropolis of Anubis Mountain was announced by University of Pennsylvania Museum and Egyptian archaeologists. It marked the second discovery announced this year of a tomb of an ancient Egyptian king.

The burial chamber discovered in January at Abydos, an important city in ancient Egypt located about 10 km (6 miles) from the Nile River, was bare – apparently long ago plundered by grave robbers. The name of the king once buried inside was originally recorded in hieroglyphic texts on plastered brickwork at the chamber’s entrance alongside painted scenes showing the sister goddesses Isis and Nephthys.

“His name was in the inscriptions but does not survive the depredations of ancient tomb robbers. Some candidates include kings named Senaiib and Paentjeni who we know from monuments at Abydos – they ruled in this era – but whose tombs have not been found,” University of Pennsylvania Egyptian archaeology professor Josef Wegner, one of the leaders of the excavation work, said on Thursday.

In addition to the decorated entryway, the burial chamber featured a series of other rooms capped by five-meter (16-foot) high vaults fashioned from mudbrick.

The tomb dates to a time known as the Second Intermediate Period that ran from 1640 BC to 1540 BC and bridged the Middle Kingdom and New Kingdom eras when Egyptian pharaohs were among the most powerful figures in the region.

“The political history of the era is fascinating and not fully understood, a kind of ‘warring states’ period that ultimately gave birth to Egypt’s New Kingdom,” said Wegner, curator of the Penn museum’s Egyptian section.

Among these was the Abydos Dynasty, which was a series of kings who ruled part of Upper Egypt – the southern portion of the Egyptian realm.

“Egypt was fragmented with as many as four rival kingdoms, including the Hyksos of the Nile Delta,” said Wegner. “The Abydos Dynasty was one of these. How it broke apart and then was reunified includes important questions of social, political and technological change.”

The tomb of the unidentified king is built inside the larger tomb complex of an earlier and powerful pharaoh named Neferhotep I. Its architecture shows connections with earlier Middle Kingdom and later Second Intermediate Period royal tombs, Wegner said.

“It seems to be the largest and earliest of the Abydos Dynasty group. There may be others in this same area next to the tomb of Neferhotep I,” Wegner said.

Wegner’s team previously uncovered the tomb of another Abydos Dynasty ruler named Seneb-Kay in 2014.

“The new king’s tomb is likely a predecessor of Seneb-Kay. There are others in the area. Work in royal cemeteries is slow and painstaking, so it takes a while for results,” Wegner said.

The excavations are ongoing.

The Second Intermediate Period began almost a millennium after the construction of the towering Giza pyramids outside Cairo that held the tombs of certain Old Kingdom pharaohs. Many New Kingdom pharaohs were buried in the Valley of the Kings near Luxor, including Tutankhamun – popularly known as King Tut – whose 14th century BC tomb and its full contents were unearthed in 1922.

Egypt’s Ministry of Tourism and Antiquities announced on February 18 that a joint Egyptian-British archaeological team had identified an ancient tomb near Luxor dating to the 15th century BC as that of New Kingdom pharaoh Thutmose II. – Reuters

Musk says $1 trillion in US spending cuts possible without touching services

ELON MUSK — REUTERS

Tech billionaire Elon Musk, who was tapped by U.S. President Donald Trump as his cost-cutting czar, said on Thursday in a Fox News interview that his goal of slashing $1 trillion in federal spending could be achieved without impacting services.

Mr. Musk told Fox News’ “Special Report with Bret Baier” that he was confident his Department of Government Efficiency could find $1 trillion in savings, slimming current total federal spending levels of about $7 trillion down to $6 trillion.

“The government is not efficient, and there is a lot of waste and fraud, so we feel confident that a 15% reduction can be done without affecting any of the critical government services,” Mr. Musk said.

Mr. Musk’s cost-cutting Department of Government Efficiency estimates it has saved U.S. taxpayers $115 billion as of March 24 through a series of actions including workforce reductions, asset sales and contract cancellations.

However, its savings total is unverifiable and its calculations have been riddled with errors and corrections. Budget experts say Mr. Musk cannot reach his target without touching entitlement programs like social security, which Mr. Trump has vowed not to cut. – Reuters

King Charles taken to hospital after cancer treatment ‘bump in the road’

KING CHARLES III —DAN MARSH-FLICKR

Britain’s King Charles spent a brief time under observation in hospital on Thursday after experiencing side effects from treatment for cancer, Buckingham Palace said, with royal sources saying it was just a “minor bump in the road”.

The 76-year-old king has been undergoing treatment since he was diagnosed with an unspecified form of cancer in February last year following tests after a corrective procedure for an enlarged prostate.

The palace said he had returned to his home Clarence House, and that as a precaution his engagements for Friday would be rescheduled. His wife, Queen Camilla, had not accompanied him to hospital.

“His majesty was due to receive credentials from the ambassadors of three different nations this afternoon. Tomorrow, he was due to undertake four public engagements in Birmingham and is greatly disappointed to be missing them on this occasion,” a palace spokesperson said.

“He very much hopes that they can be rescheduled in due course and offers his deepest apologies to all those who had worked so hard to make the planned visit possible.”

The palace declined to give any details of the side effects. But a royal source described Thursday’s setback as no more than the “most minor bump in the road that’s very much heading in the right direction” and that it was not uncommon with medical treatments.

The king’s recovery was continuing in a very positive direction and that he was in good form, and was continuing to work and make calls from his study, the source said.

His state visit to Italy next month along with the queen was expected to go ahead as planned, and no other health update is anticipated.

Charles’ initial cancer diagnosis came as a shock less than 18 months into his reign.

However, royal aides have been upbeat about his health since and while his diary is carefully managed, he has returned to a busy schedule of work.

Renowned as a workaholic who often worked until late on his official papers, Camilla and other family members have said he needed to be encouraged to slow down.

The royal source said the king’s medical team were fully involved in discussions over his schedule, saying reactions to treatment could be unpredictable.

The king’s illness has coincided with that of his daughter-in-law Kate, 43, the wife of his elder son Prince William, who also has undergone treatment for cancer.

She said in January she was now in remission and has gradually been returning to duties. – Reuters

Philippines’ trade deficit narrows to $3.15 bln in Feb

A view of the Manila International Container Terminal. — COURTESY OF ICTSI

MANILA – The Philippines’ trade deficit fell to its lowest level in nearly four years in February as exports sustained their recent growth, although at a slower pace, and imports declined, preliminary official data showed on Friday.

The Philippine Statistics Authority said the trade gap narrowed to $3.15 billion in February, the smallest since June 2021. January’s deficit was slightly revised to $5.12 billion from the previously reported $5.08 billion.

In February, exports increased 3.9% to $6.2 billion, slower than the previous month’s 6.3% rise. Imports fell 1.8% from a year earlier to $9.4 billion, compared with the previous month’s 11.2% growth.

The economy expanded an annual 5.2% in the final three months of 2024, the same pace as in the previous quarter but below market expectations. The government will release first-quarter growth figures on May 8. – Reuters

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SEC lowers public float for some IPOs

BW FILE PHOTO

By Revin Mikhael D. Ochave, Reporter

THE SECURITIES and Exchange Commission (SEC) is allowing an initial public float of 15% for some companies seeking to go public, but subject to “strict” criteria.

“After thorough discussions with the Philippine Stock Exchange (PSE), the SEC has allowed, by way of exemptive relief, an initial public float of 15%, subject to strict criteria,” the corporate regulator said in a statement on Thursday.

However, the SEC said it “remained firm” on the 20% minimum public float requirement for companies planning to conduct an initial public offering (IPO), “especially given the value of higher public ownership to market depth and efficiency.”

Under its Memorandum Circular No. 13 issued in 2017, the SEC raised the minimum public ownership (MPO) requirement for IPO-bound companies to 20% from the previous 10%.

The SEC said that companies may apply exemptive relief from this rule “provided they bridge any gap from the 20% standard within less than 24 months from the listing date and only as deemed necessary by the commission.”

“This covers listing applications already filed with and accepted by the SEC and the PSE,” it said.

As of March 25, the SEC and PSE have not received any application for regulatory relief from potential IPO applicants.

The SEC issued the statement after the PSE President and Chief Executive Officer (CEO) Ramon S. Monzon last week said the regulator agreed to lower the public float requirement to encourage more IPOs.

Lowering the public float requirement could help pave the way for the long-awaited IPO of GCash, controlled by Globe Fintech Innovations (Mynt).

News reports previously quoted Globe Telecom, Inc. President and CEO and Mynt Chairman Ernest Cu as saying that the GCash IPO will partly depend on regulators agreeing to reduce the public float to 10-15% for bigger offerings.

On Thursday, the SEC reiterated that the 20% MPO requirement for IPO-bound companies “plays a crucial role in improving price discovery and reducing opportunities for price manipulation.”

“The float requirement also seeks to reduce ownership concentration and encourage good corporate governance, ultimately  capital market,” it added.

The SEC said it is committed to keeping the capital market “fair, transparent and efficient.”

“While the commission welcomes new listings, it upholds stringent regulatory standards that safeguard the integrity and long-term stability of the Philippine capital market and the broader economy,” it said.

Sought for expert comment, AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said this new rule would help entice larger companies to push through with their IPO plans.

“We believe that this new rule would incentivize bigger companies to go public, especially if they have been putting off their offerings because of market conditions,” he said in a Viber message.

“If you would notice, we have only been getting smaller IPOs in recent years because the market has not been liquid enough to absorb large offerings,” he added.

On the other hand, COL Financial Group, Inc. Chief Equity Strategist April Lynn C. Lee-Tan said in a Viber message that the move might be detrimental for the companies planning their respective IPOs.

“Raising the float to 20% in two years max might be viewed negatively though by companies because there’s a risk that market conditions remain weak and the share price could be lower than IPO price by then,” she said.

“However, if you don’t need to sell as many shares, there’s a better chance you can sell your stocks at a higher valuation, for companies planning to do an IPO,” she added.

Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said the SEC’s statement that it remains firm on the 20% MPO would encourage firms to comply with the rule.

“But from what I see, the SEC is also open to provide such relief to pave way for some large companies to move forward with their planned IPOs, subject to assessment and adherence to criteria provided,” she said in a Viber message.

The PSE is anticipating six IPOs this year. However, the local bourse has yet to have its first public listing this year.

Several companies are expected to launch their IPOs this year including water concessionaire Maynilad Water Services, Inc. and Cebu-based fuel retailer Top Line Business Development Corp.

Gov’t sets P735-billion local borrowing in Q2

A worker inspects peso bills inside a money changer in Manila. — REUTERS

THE NATIONAL GOVERNMENT is looking to borrow P735 billion from the domestic market in the second quarter, the Bureau of the Treasury (BTr) said on Thursday.

In a notice on its website, the BTr said it seeks to raise P325 billion from Treasury bills (T-bills) and P410 billion via Treasury bonds (T-bonds) in the April-to-June period.

The domestic borrowing plan for the second quarter is 16.85% higher than the P629-billion program for the first quarter. It is also 3.23% up from the P712 billion raised in January to March this year.

In April, the government plans to borrow P245 billion domestically, consisting of P125 billion in T-bills and P120 billion in T-bonds.

The government will hold auctions for T-bills on March 31, April 7, 14, 21, and 28. It will try to raise P8 billion via the 91- and 182-day tenors, and P9 billion from 364-day T-bills every week.

The Treasury will offer P30 billion worth of five-year T-bonds on April 2, seven-year T-bonds on April 8, 10-year T-bonds on April 15, and 15-year T-bonds on April 22.

The T-bond auction was moved to April 2 since April 1 was declared a holiday in observance of Eid’l Fitr or the Feast of Ramadan.

In May, the BTr will seek to raise P260 billion — P100 billion via T-bills and P160 billion via T-bonds. T-bill auctions are scheduled for April 28, May 5, 12, 19, and 26.

It will borrow P8 billion via the 91- and 182-day tenors and P9 billion via the 364-day T-bills every week.

For the long-term debt, the government will offer P30 billion each in five-year T-bonds on April 29, seven-year debt paper on May 6, 10-year T-bond on May 20, and 15-year notes on May 27.

It will also borrow a combined P40 billion via three-year and 20-year bonds on May 13.

For June, the Treasury seeks to borrow P230 billion from the domestic market, comprised of P100 billion from T-bills and P130 billion from T-bonds.

It will seek to raise P8 billion each via 91-day and 182-day T-bills, and P9 billion via 364-day T-bills at the auctions on June 2, 9, 16 and 23.

For T-bonds, the Treasury will sell P30 billion each in five-year debt paper on June 3, seven-year T-bonds on June 10, and 10-year bonds on June 17.

The government will also offer an aggregate amount of P40 billion from three-year and 25-year bonds on June 24.

A trader said in a text message that the target amount for the second quarter was expected as the BTr is looking to add more long-term debt to its portfolio.

“The BTr will look to extend duration/lengthen its maturity profile. [The amount was] pretty much the same issue size as the past quarter and the same mix too,” the trader said.

Meanwhile, the strong demand for T-bills seen in the first quarter may have prompted the Treasury to offer more short-term papers, the trader added.

The BTr upsized the award for seven T-bill auctions out of the 12 auctions in the January-to-March period.

The trader said that yields for tenors shorter than five years could continue to ease, while longer-dated bonds could steadily go higher based on the current trajectory of policy rates and inflation.

Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. has signaled 50 to 75 basis points (bps) in rate cuts this year.

The government may have increased its borrowing plan for the second quarter as a safety against risks arising from the Trump administration, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Given the present environment of uncertainty and DisTRUMPTION, borrowing early is sound as upside risks remain that could push inflation and interest rates higher,” Reyes Tacandong & Co. Senior Adviser Jonathan L. Ravelas likewise said in a Viber message.

However, Mr. Ricafort noted that more borrowings could still be required later in the year as some of the large debts incurred at the start of the pandemic have started to mature.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.54 trillion or 5.3% of gross domestic product this year. — A.M.C. Sy

DTI confident PHL will not be affected by US tariffs

A cargo ship full of shipping containers is seen at the port of Oakland as trade tensions escalate over US tariffs in Oakland, California, March 6, 2025. — REUTERS

By Justine Irish D. Tabile and Luisa Maria Jacinta C. Jocson, Reporters

DEPARTMENT of Trade and Industry (DTI) Secretary Ma. Cristina A. Roque on Thursday expressed confidence the Philippines will not be affected by reciprocal tariffs to be imposed by US President Donald J. Trump.

At the same time, the Philippines is seen to experience moderate spillover effects from US tariff policies, the DBS Bank report said.

Mr. Trump is planning to announce on April 2 reciprocal tariffs targeting countries that are responsible for much of the US trade deficit.

“For now, we do not have any information yet, so it is business as usual. But we feel that we will not be affected as we are allies,” Ms. Roque told reporters on Thursday.

“Our trade deficit with them is very minimal, so it is not something that we (should) worry about for now,” she added.

Data from the Tradeline Philippines showed that the total trade between the Philippines and the US reached $20.3 billion last year. The Philippine exports to the US hit $12.1 billion, while imports from the US reached $8.2 billion. This brought the US trade-in-goods balance — the difference between exports and imports — to a $3.9-billion deficit in 2024.

Ms. Roque said that she has already arranged a meeting with her US counterparts to discuss the planned reciprocal tariffs.

According to DBS’ vulnerability heatmap, the overall direct US tariff impact will have moderate spillover risks on the Philippines, as well as Singapore and Indonesia.

“Direct impact from US tariffs is likely to be limited, with Philippines’ contribution to value-add to US imports amongst the smallest versus ASEAN-6 (Association of Southeast Asian Nations) countries, and the size of the bilateral trade surplus (is) moderate versus peers,” according to a report authored by DBS senior economists Chua Han Teng and Radhika Rao.

On the other hand, Thailand, Vietnam and Malaysia are “relatively more vulnerable.”

The DBS report also estimated the potential impact of reciprocal tariffs on gross domestic product (GDP) of ASEAN-6 countries.

“The domestically oriented nature of Indonesia and Philippine economies shields them, limiting the spillover impact to less than 0.3 percentage point.”

In terms of direct impact on growth, DBS estimates the tariffs will only be a “negligible risk” to Philippine economic output.

“While the US is an important trade partner (accounting for 16.6% of the total), exposure to targeted sectors like pharma, and semiconductors, etc. is modest,” it said.

The US is the top destination for Philippine exports. Philippine exports to the US accounted for nearly 17% of total export sales in 2024, while imports from the US were only equivalent to 6.4% of total imports.

However, DBS noted the country’s value-added tax (VAT) rate of 12%, which “leaves the economy open to reciprocal action, albeit the scale is likely to be limited as the weighted average tariff rate on the US is small at 3.3%.”

For the ASEAN-6 region, DBS said economies “face higher direct and indirect risks from tariffs under the current administration.”

“Additionally, in the past six to seven years, the ASEAN-6 region has become more embedded in global supply chains, accompanied by a bigger share in global trade, whilst attracting strong investment interest.”

Mr. Trump’s sweeping tariffs are more “wide-ranging” than the first term, DBS said.

Meanwhile, DBS also flagged the sectors that could possibly be slapped with reciprocal tariffs.

For the Philippines, this includes transportation goods and animal products.

Moving forward, DBS said economies in the region are likely to seek bilateral discussion and concession agreements with the United States.

“A broad range of conciliatory options include diplomatic and other economic steps,” it said, citing bilateral trade agreements and critical mineral agreements.

“Secondly, the region might seek to step up purchases from the US, for instance agricultural inputs, machinery, aircrafts, energy and defense, to balance the trade gaps.”

DBS also called for greater collaboration within the region to soften the blow of tariff moves.

“ASEAN-6 has also maintained a close relationship intra-region, even amid increased foreign direct investment and trade linkages with China over the past decade.”

“Besides trade, strong trade co-operation is also supported by multilateral agreements such as the Regional Comprehensive Economic Partnership trade pact (RCEP) and a potential upgrade to the ASEAN Trade in Goods Agreement (ATIGA), with discussions underway.”

Meanwhile, S&P Global Ratings in a separate report said the Philippines will be less affected by US tariff policies compared with its Asia-Pacific neighbors.

“Australia, Indonesia, New Zealand and the Philippines should be less at risk of US tariffs, as they generally have low import tariffs, no major bilateral goods surplus with the US,” it said.

“As tariffs tend to be levied on goods, trade will be more resilient in economies where a substantial share of exports is of services. This is the case for the Philippines and, especially, India,” it said.

However, the credit rater still noted that the region will face indirect risks from the tariff conflict.

“Slower growth internationally as a result of trade friction and the associated uncertainty will weigh on exports. Also, Asian manufacturers will feel pressure from Chinese manufacturers, as Chinese producers seek alternatives to the US market,” S&P said.

“Despite these external strains, we generally project domestic demand momentum to remain solid, especially in most emerging-market economies. This is important, given the large role that domestic demand plays nowadays in most Asia-Pacific economies.”

S&P Global expects the Philippine economy to grow by 6% this year and 6.1% in 2026, both within the government’s 6-8% target band.

Meanwhile, Foreign Buyers Association of the Philippines (FOBAP) President Robert M. Young said that there may be a “big chance” that the Philippines will not be exempted from the reciprocal tariff due to its tariff rate differential with the US.

“But again, who knows? It’s difficult to read the mind of Trump. However, as I mentioned before, the Philippines should seriously and urgently (and no nonsense) develop and refocus the trade activities and engagement with the other economies,” he said in a Viber message.

“Lesson learned in relying on the US, which is a big mistake,” he added.

PHL financial system remains resilient but faces ‘moderate’ risks

Bangko Sentral ng Pilipinas main office in Manila. — BW FILE PHOTO

THE COUNTRY’S financial sector is seen to remain robust and is well-positioned to absorb shocks, the Bangko Sentral ng Pilipinas (BSP) said, but noted external headwinds that pose risk to the sector.

“The Philippine financial system remains resilient but faces moderate risks that warrant close monitoring,” the BSP said in its latest financial stability report.

“The propagation of global uncertainties, including heightened geopolitical tensions, evolving monetary policies in major economies, and potential shifts in the United States following the outcome of the presidential elections could impact the Philippine economy.”

In the report, the BSP said the banking sector growth will be supported by ample buffers and stable financial markets.

“Banks have high capital buffers and ample liquidity, which would allow the financial system to absorb potential losses and/or support economic activity,” it said.

“Financial markets are stable with no signs of asset price misalignments and high share of domestic investor participation.”

The Philippines’ international reserves are also deemed adequate and can cushion the country from shocks, it added.

Latest data showed the country’s dollar reserves rose by 3.3% month on month to $106.65 billion as of end-February. This was also 4.6% higher than $101.99 billion in the same period a year ago.

“On balance, the banking sector remains healthy as characterized by limited endogenous risks or internal weaknesses,” the central bank said.

“Nonbank financial institutions (NBFIs), although small compared with the size of the Philippine banking system, expose banks to common exposure risk through their shared investments and holdings.”

Credit supply is also seen to remain stable amid improved profitability, robust capital base and ample liquidity.

“Although growth is slower than pre-pandemic levels, the banking system is well-positioned to support the domestic economy, with an expansion in its lending portfolio.”

Bank lending jumped by 12.8% to P13.02 trillion in January, its fastest pace in over two years.

INFLATIONARY PRESSURES
However, the BSP flagged global risks such as inflationary pressures and changing economic policies.

It cited the World Uncertainty Index (WUI) and the Global Economic Policy Uncertainty (GEPU) Index, which have been on an upward trend.

“The cost of production materials (especially in the industrial sector) may accelerate due to supply-chain disruptions amid geopolitical instability and lag-effects of global monetary policy easing.”

Primary risk considerations include disruptions in global supply chains and logistics, the BSP said.

Banks also face asset valuation risks, the BSP said, citing elevated nonperforming loans (NPL) and growth in unsecured consumer loans.

The industry’s NPL loan ratio rose to 3.38% in January from 3.27% in December. This was the highest in two months or since the 3.54% in November.

“Recent global uncertainty stems from concerns on geopolitics and economic policies that affect international trade and investment flows.”

“A ‘macro-market disconnect’ — when macroeconomic risks are not properly priced in by market players — could affect asset valuations and may be subject to severe corrections.”

Capital flight is another risk financial markets could face, it added. Foreign investors account for about 46% of trading in the local bourse.

“Portfolio flows reflect investor risk sentiment and translate to FX (foreign exchange) movements. Portfolio investments are vulnerable to outflows.”

Risks also stem from debt servicing and high “maturity walls,” the central bank said.

“Corporate earnings are reverting to pre-pandemic levels. However, increased leverage and sustained funding mismatches especially in large corporates pose vulnerabilities.”

“Significant reliance on bank funding and the degree of interconnectedness among corporates with Domestic Systemically Important Banks (DSIBs) could amplify risks to the financial sector,” it added.

The BSP said the “interconnectedness of large conglomerates to the banking system may expose the financial system to risks coming from the corporate sector given increasing leverage and funding mismatches.”

The sector also faces emerging risks from financial technology such as artificial intelligence adoption.

“While innovations can enhance efficiency and financial inclusion, the increasing influence of technology also introduces new challenges, such as cybersecurity threats, operational risks, system failures or algorithmic errors, and biases that could undermine regulatory compliance.”

Meanwhile, the BSP noted further monetary easing, which would also bolster the financial system’s growth.

“The transition towards an accommodative interest rate environment could encourage investment in capital-intensive projects, business expansion, and household consumption.”

“Looser financing conditions could pave the way for enhanced credit availability for businesses and consumers to ramp up investments and rebuild savings as buffer to shocks.”

The BSP began its easing cycle in August last year, cutting rates by a total of 75 basis points (bps) by end-2024.

Despite delivering a pause last month, the central bank has said it is still on an easing trajectory. BSP Governor Eli M. Remolona, Jr. has signaled the possibility of a 25-bp cut at the Monetary Board’s meeting on April 10.

“Priority measures could enhance the stability and resilience of the Philippine financial system if aligned with monetary policy and banking supervision,” the BSP said.

It also called for the further enhancement and deepening of capital markets; improvement of reporting frameworks; and development and adoption of macroprudential tools. — Luisa Maria Jacinta C. Jocson

Upgraded auditing amid tech-driven change

our-team | Freepik

By Mhicole A. Moral, Special Features and Content Writer

Decades ago, auditing relied heavily on manual processes, paper trails, and physical records. While effective at the time, this approach was time-consuming and prone to human error. Auditing standards were also less rigorous than they are today, with financial scandals often exposing weaknesses in oversight.

According to Ramil L. Nanola, P&A Grant Thornton’s Audit and Assurance Practice Leader, technology is the primary disruptor in auditing today. Auditing has become more efficient and accurate. Firms are also making significant investments in talent to maintain and improve audit quality.

“Organizations must foster adaptability and embrace disruption. When the COVID-19 pandemic hit, businesses and organizations of all sizes had to integrate technology into their work processes as lockdowns were enforced,” he said. “Older professionals who were accustomed to hard copies of financial statements and manual processes had to adapt.”

Artificial intelligence (AI) and digital tools are now streamlining once-cumbersome tasks. While these advancements improve efficiency, they also present challenges. In particular, the financial burden of modernization is a growing concern, especially for smaller audit firms.

“AI technologies continue to develop and become more efficient. The workforce must adapt and acquire new skills to remain relevant in the changing landscape,” Mr. Nanola said. “At times, auditors must also invest in upgrading their work devices, such as tablets, to handle complex software interfaces effectively.”

More than just numbers

Mr. Nanola emphasized the importance of digital risk management amid technological advancements, noting that the profession must remain vigilant against cyber threats.

“We prioritize equipping our employees with the knowledge to assess and detect fraud and cybersecurity threats,” he said. “To enhance awareness of digitalization risks, we mandate comprehensive cybersecurity training modules.”

According to the industry leader, P&A Grant Thornton has implemented these lessons through gamification.

“To ensure our employees understand these risks while enjoying the learning process, we present training courses through gamification,” the industry leader said. “This initiative has significantly helped our auditors assess cybersecurity measures, evaluate security protocols, and conduct vulnerability assessments.”

Beyond training, audit firms are leveraging advanced tools to uncover fraud and identify risks. P&A Grant Thornton, for instance, employs journal entry testing to verify the authenticity and accuracy of financial transactions.

“We invest in audit tools to detect unusual patterns, including journal entry testing to verify the authenticity, validity, and accuracy of transactions,” Mr. Nanola explained. “We also use IDEA, which helps analyze large data sets; and Data Snipper, which extracts data directly from uploaded documents.”

However, technology alone is not enough, according to Mr. Nanola. The push for digitalization also requires a commitment to continuous education and professional development.

“Auditors must engage in ongoing training and workshops to develop digital skills and maximize the advantages of innovative solutions,” he noted. “It is also crucial that auditors commit to continuous professional development to stay updated on the latest trends and technological advancements in the field, ensuring their skills remain relevant and sharp.”

The auditing profession requires a broader skill set that goes beyond finance, according to the P&A Grant Thornton leader. He said auditors must now collaborate with experts in fields once considered outside their scope.

“Nowadays, I believe it’s important for professionals to interact not only with finance personnel but also with programmers, data engineers, cybersecurity experts, and risk professionals, given how technology is shaping the auditing industry,” he added.

At P&A Grant Thornton, younger audit professionals are assigned to different industries to broaden their expertise. The firm believes a diverse skill set is essential, particularly in data analytics, IT systems, and cybersecurity.

“Ultimately, auditors with a wider range of skills are needed to assist clients in data analytics, IT systems, and cybersecurity,” Mr. Nanola said. “Developing soft skills is also crucial for negotiation and relationship management.”

Key regulatory changes in auditing

Audit professionals are currently preparing for this year’s industry direction as recent changes have disrupted traditional auditing models, particularly due to new regulatory changes.

New and amended standards and interpretations issued by the International Accounting Standards Board (IASB) are now influencing how businesses handle taxes, estimates, and disclosures to ensure greater clarity and consistency in financial statements.

Among the most notable revisions is the amendment to Philippine Accounting Standard (PAS) 12, which addresses deferred tax related to assets and liabilities arising from single transactions. Previously, companies interpreted differently whether they needed to recognize deferred tax on transactions such as leases and decommissioning obligations. The new guidelines now require firms to account for deferred tax on such transactions, ensuring consistency in reporting.

Meanwhile, modifications to PAS 1 and Practice Statement 2 redefine how businesses disclose their accounting policies. Instead of listing significant policies, companies must now focus on material accounting policy information. This adjustment aims to make financial reports clearer and more useful for stakeholders.

Global tax reforms have also influenced local standards, as seen in amendments to PAS 12 addressing the Organization for Economic Co-operation and Development’s (OECD) Pillar Two Model Rules. Large multinational corporations operating in the Philippines will be required to comply with a minimum 15% tax rate, part of an international effort to curb tax avoidance. The amendments provide temporary relief and specific disclosure requirements, helping businesses navigate the transition without undue burden.

Small and medium-sized enterprises (SMEs) are not exempt from these changes. The Philippine Financial Reporting Standards (PFRS) for SMEs has been updated to reflect the OECD tax reforms, ensuring that smaller entities also align with the new global tax rules.

Another change is the revised classification of liabilities as current or noncurrent under the amended PAS 1. Previously, some companies struggled with inconsistent interpretations, leading to discrepancies in financial statements. The new amendment clarifies that a liability’s classification depends on the company’s rights at the reporting date, not management’s expectations about future payments.

In a separate update, businesses using supplier finance arrangements, commonly known as reverse factoring, must now disclose more details under amendments to PAS 7 and PFRS 7. These updates require firms to specify how much of their payables fall under such arrangements, increasing transparency around liquidity risks.

These regulatory updates mean businesses must reassess their financial reporting processes to comply with the new rules. Auditors, in turn, must ensure that financial statements reflect the latest requirements.

“It is critical that auditors learn to adapt to these changes and religiously keep themselves updated on industry-specific regulations, international standards such as ISO 9001 and laws,” said Mr. Nanola.

Auditing’s solid significance in a digital world

macrovector | Freepik

Through the years, the auditing landscape has evolved, adapting to technological advancements that shape new standards within the industry. In the midst of these changes, nonetheless, auditing professionals continue to play a pivotal role in ensuring financial integrity and transparency.

Auditing is among the sectors that have best optimized technology capabilities. According to a report from the global professional services firm KPMG, technology transformed financial and data reporting, analysis, and insights, leading to higher quality and more accurate audits.

Before, the role of audit professionals focused primarily on traditional tasks, which involved paper audits, writing reports, visiting clients and reviewing companies’ accounting reports. At present, technology has significantly advanced financial and auditing management. It now streamlines auditing tasks, extracts data, tracks real-time data, and utilizes data analytics for audit transactions.

More recently, artificial intelligence (AI) has made its way to the auditing industry, further revolutionizing auditing practices and the financial reporting ecosystem. It is now being integrated into audit processes and financial statement analyses. It has been cited for helping analyze large datasets, detect material misstatements, gain more relevant insights, and improve audit accuracy and efficiency.

Automation is also streamlining repetitive tasks and improves audit quality, while audit management platforms enable real-time monitoring, and other big data tools which are designed to simplify data and information.

With digitalized auditing, the role of internal and external auditors expanded to managing control processes, detecting risks, safeguarding data integrity, strengthening cyber resilience — all while ensuring regulatory compliance and adhering to international standards.

“Today, there’s a lot of technology involved,” Regula Tobler, auditor and partner at KPMG Switzerland, was quoted as saying in a media interview. “We can extract the data from client’s systems. The technology — data analytics, to be exact — does a lot of work. We do the analytics and that allows us to really focus on the more critical transactions. Some of that has been outsourced to shared service centers, for example. The job description is very different today. The one thing that hasn’t changed is that we’re still at the client site.”

As the demand for greater audit services increases, so does the need for skilled auditing professionals who enable and adhere to transparency across systems. While digital has permanently marked its spot on auditing, the skills of auditors are deemed as significant as these advancements are. Their expertise allows them to effectively navigate the digital landscape as they interpret data, address risks, and provide expert opinion in audit management.

Auditing, even in other sectors, is equally important and attractive. It goes beyond numbers; it also teaches professionals the knowledge and skills about financial management, tax, and the law — which are all fundamental in business operations.

“Auditing is definitely not going to become so redundant or irrelevant. I don’t see that happening at all,” Peter Leibfried, professor at the University of St. Gallen and director of the Institute for Accounting, Control, and Auditing, said.

As a business of transparency and information, he continued, this profession necessitates human touch and expertise. It needs a lot of emotional intelligence and excellent client relationships to work.

Combined with digital solutions, evolving frameworks, and data-driven approaches, auditors are expected to remain relevant in the following years. Digital auditors are seen to benefit businesses, bringing accuracy, efficiency, and transparency in business operations, particularly in audit management, risk management, and compliance reporting.

“[On what the profession will look like in 10 years], I think it’s going to evolve in a lot of things, including content, ESG (environmental, social, and governance framework), and working with data. You always need people in leadership and positions. Business, [and] the economy, is something that happens between people, not between the random computers or artificial intelligence,” Mr. Leibfried said. — Angela Kiara S. Brillantes

JG Summit income up 10%, boosted by merger gains

JG SUMMIT President and Chief Executive Officer Lance Y. Gokongwei — JGSUMMIT.COM.PH

GOKONGWEI-LED conglomerate JG Summit Holdings, Inc. reported a 10% increase in attributable net income for 2024 to P22 billion, driven by higher revenue and merger-related gains.

“Incorporating non-core items such as mark-to-market and foreign exchange movements, as well as losses from unplanned shutdowns and discontinued operations, net profits closed at P22 billion, 10% higher versus last year,” JG Summit said in a regulatory filing on Thursday.

Core profit rose by 29% to P24.9 billion, reflecting a P7.9-billion gain from the merger of Robinsons Bank Corp. with Bank of the Philippine Islands (BPI), which took effect in January last year.

Revenue grew by 11% to P379.7 billion, driven by strong travel and leisure demand, higher food and beverage sales volumes, and the resumption of petrochemical plant operations following a commercial shutdown in the prior year.

Parent net debt increased by 17% to P66.6 billion due to additional borrowings, including a P17.1-billion capital infusion into JG Summit Olefins Corp. (JGSOC) in the fourth quarter, used to meet maturing obligations and debt covenants.

“We have successfully navigated 2024 with mixed results across our business units and investments. Heading into 2025, our key priority will be to accelerate topline growth across all units, given the expected rebound in consumer sentiment as inflation eases,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said.

Universal Robina Corp. (URC) posted a 4% decline in 2024 net income to P11.7 billion, while revenue rose by 3% to P161.9 billion, supported by strong international business performance.

Robinsons Land Corp. (RLC) recorded flat net income at P12.5 billion, while revenue increased by 3% to P40.1 billion, driven by 14% annual growth in its investment portfolio.

Cebu Air, Inc. reported a 32% drop in 2024 net profit to P5.4 billion due to higher interest expenses related to fleet expansion. However, revenue rose by 18% to P104.9 billion. Passenger volume increased by 18%, supported by a 3% decline in average fares in the latter half of the year.

JG Summit Olefins Corp. saw its net loss widen to P16.5 billion due to challenging market conditions, though revenue rose by 33% to P50.4 billion.

JG Summit said polymer and olefin margins remained under pressure, constraining profitability despite improvements in aromatics, butadiene, and liquefied petroleum gas trading.

JGSOC has been under an indefinite commercial shutdown since January 2025 to mitigate losses amid unfavorable market conditions.

JG Summit’s equity share in Manila Electric Co. (Meralco) increased by 21% to P11.9 billion, driven by higher distribution sales volumes.

Its equity stake in Singapore Land Group saw a 31% increase, supported by improved hotel operations, higher rental rates, and increased occupancy in its property investments.

“We expect initiatives launched in 2024 to gain momentum — URC’s value-for-money offerings, Cebu Pacific’s expanded fleet capacity, and completed RLC projects will drive growth,” Mr. Gokongwei said.

“We are also optimistic about our ecosystem plays and partnerships — GoTyme, our digital banking arm, continues to acquire new accountholders, while DHL Summit Solutions, our supply chain and logistics venture, has expanded to new customers beyond the group,” he added.

JG Summit shares rose 2.33% or 38 centavos to P16.68 apiece on Thursday. — Revin Mikhael D. Ochave