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As temperatures rise, South Korean farmers experiment with tropical bananas

SEOUL – South Korean farmer Ma Myung-sun had low expectations for the crop of subtropical bananas he planted in a community farm in Seoul, but warmer temperatures due to climate change have produced a welcome surprise in the form of flowers and fruit.

Ma, 73, still has to use a greenhouse for part of the year to shield the plants from South Korea’s cold winters, and is among a growing number of farmers experimenting with crops usually more suited to a warmer climate.

South Korea’s cultivated area of subtropical crops has jumped from about 295 hectares (730 acres) in 2021 to 3,306 hectares in 2023, with 67 banana farms in the south, according to the Rural Development Administration, a state agricultural organisation.”I want to try growing other tropical crops too. So, as you can see here, I have planted these papaya trees as well,” said Ma, pointing to a shrub growing next to the banana trees.

Ma opened up part of his family pear farm to city dwellers in 2006, and as happy as he is about his modest success, he worries about what it means for the climate.

“I feel that the climate crisis has become very serious,” said Ma, who has been a farmer for 25 years.

South Korea lies in the temperate zone and has four distinct seasons, but its climate appears to be getting warmer and wetter throughout the year.

Since 2012, average annual temperature has shown a continuous warming trend, the Korea Meteorological Administration said in a report, noting that the average temperature last year of 13.7 degrees Celsius (57°F) was the highest since its records began in 1973.

Rainfall during last year’s monsoon season was 660.2 mm (26 inches) nationwide, nearly double the 356.7 mm annual average figure.

Kim Kwang-soo, a professor of Agriculture and Life Sciences at Seoul National University, said South Korea’s climate conditions were becoming similar to subtropical regions, so it was vital for farmers to find suitable crop varieties.

Tropical and subtropical fruit are typically expensive in South Korea, meaning consumers should welcome the prospect of cheaper local produce.

“My kids love bananas. So, it would be good if we harvest bananas in this country,” said Kim Ji-youn, who was purchasing imported bananas in a Seoul supermarket. – Reuters

Kamala Harris vice president choice narrows to Walz, Shapiro, sources say

US VICE-PRESIDENT Kamala Harris delivers remarks during a campaign event at West Allis Central High School in West Allis, Wisconsin, US, July 23, 2024. — REUTERS

WASHINGTON – Democratic presidential candidate Kamala Harris has narrowed her search for a vice presidential running mate to two finalists, Governors Tim Walz of Minnesota and Josh Shapiro of Pennsylvania, three sources with knowledge of the matter said.

Ms. Harris, the US vice president, is expected to announce her selection by Tuesday, ahead of her first scheduled public appearance with her running mate that evening at Temple University in Philadelphia.

In a message to supporters late on Monday, Ms. Harris said she had yet to make her decision.

“I know many of you are eager to find out who I will be selecting to join me on the campaign trail, and hopefully in the White House, as my Vice President,” she wrote.

“Though I have not made my decision yet, it is important to me that grassroots supporters – like you – have direct updates about the state of the race,” she said, offering voters a chance to sign up on a link to get news of the announcement first.

The choice of a running mate is one of the most consequential decisions of Harris’ political career, as she hastily pulls together a campaign to challenge Republican presidential nominee Donald Trump and US Senator JD Vance, his vice presidential pick, in the Nov. 5 election. Mr. Vance will also make a campaign stop in South Philadelphia on Tuesday.

Mr. Shapiro, 51, is a rising star of the party with strong approval ratings in Pennsylvania, whose 19 electoral votes makes it a must-win state for both Ms. Harris and Mr. Trump.

A former state attorney general, Mr. Shapiro would add to the ticket’s historical significance; he would be the country’s first Jewish vice president, while Harris is seeking to become the first Black and South Asian American woman elected US president.

Mr. Shapiro’s strong support for Israel could alienate some progressive voters, though it could also appeal to moderate voters and defang Republican efforts to turn the Israel-Gaza war into a wedge issue for Democrats.

Mr. Walz, 60, is a former US Army National Guard member and a former teacher who has raised his profile in recent weeks as an effective advocate for Ms. Harris. He has attacked Trump and Vance as “weird,” a viral insult the Harris campaign has embraced.

A former member of Congress from a Republican-leaning district, Mr. Walz has proven appeal to rural, white voters, though he has also championed progressive policies as governor, such as free school meals and expanded paid worker leave. While Minnesota is a solidly Democratic state, it is close to Wisconsin and Michigan, two crucial battlegrounds.

Speculation had focused on six finalists – four governors, a senator and a cabinet secretary in the Biden administration, all white men with a record of winning over rural, white or independent voters.

In addition to Mr. Shapiro and Mr. Walz, contenders included US Senator Mark Kelly of Arizona, Transportation Secretary Pete Buttigieg, Kentucky Governor Andy Beshear and Illinois Governor J.B. Pritzker.

The candidates will be informed on Monday night or Tuesday morning whether they were picked, sources told Reuters. The Harris campaign plans a social media announcement featuring the duo, campaign officials familiar with the arrangements said.

Ms. Harris’ search for a running mate began in earnest two weeks ago, shortly after President Joe Biden withdrew from the race and endorsed her to replace him.

There was no immediate indication that Monday’s market selloff would have an impact on Harris’ announcement timing. Mr. Trump, seeking to capitalize on the downturn, referred to the “Kamala crash” in a post on his social media site, Truth Social.

Over the weekend, Harris met with her vetting team, including former attorney general Eric Holder, whose law firm Covington & Burling LLP scrutinized the finances and background of potential running mates. Holder and his office made in-depth presentations on each of the finalists, according to multiple sources familiar with the process.

Ms. Harris is weighing the decision with her husband, Doug Emhoff, brother-in-law Tony West and a small circle of aides and advisers, the sources said.

 

SEVERAL CITIES, FIVE DAYS

Tuesday afternoon’s rally will kick off a five-day, multiple-city tour of battleground states likely to decide the election.

Ms. Harris and her running mate will hit six cities: Philadelphia, Pennsylvania; Eau Claire, Wisconsin; Detroit, Michigan; Durham, North Carolina; Phoenix, Arizona; and Las Vegas, Nevada.

They will hold rallies in each location along the tour, which will include college campuses, historically Black universities, union halls and restaurants, a campaign official said.

Over the weekend, the Harris campaign launched a program to persuade Republican voters to support the Democrat and showcased endorsements from Republicans including former Trump White House officials Stephanie Grisham and Olivia Troye.

The program – called Republicans for Harris – will hold kickoff events in the battleground states of Arizona, North Carolina and Pennsylvania on Monday.

On Monday, Ms. Harris notched another union endorsement with the hospitality workers union praising her as having a longstanding record of delivering for union workers. – Reuters

Google has an illegal monopoly on search, US judge finds

REUTERS

WASHINGTON – A US judge ruled on Monday that Google violated antitrust law, spending billions of dollars to create an illegal monopoly and become the world’s default search engine, the first big win for federal authorities taking on Big Tech’s market dominance.

The ruling paves the way for a second trial to determine potential fixes, possibly including a breakup of Google parent Alphabet, which would change the landscape of the online advertising world that Google has dominated for years.

It is also a green light to aggressive US antitrust enforcers prosecuting Big Tech, a sector that has been under fire from across the political spectrum.

“The court reaches the following conclusion: Google is a monopolist, and it has acted as one to maintain its monopoly,” US District Judge Amit Mehta, Washington, D.C., wrote. Google controls about 90% of the online search market and 95% on smartphones.

The “remedy” phase could be lengthy, followed by potential appeals to the US Court of Appeals, District of Columbia Circuit and the US Supreme Court. The legal wrangling could play out into next year, or even 2026.

Shares of Alphabet fell 4.5% on Monday amid a broad decline in tech shares as the wider stock market cratered on recession fears. Google advertising was 77% of Alphabet’s total sales in 2023.

Alphabet said it plans to appeal Mr. Mehta’s ruling. “This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” Google said in a statement.

US Attorney General Merrick Garland called the ruling “a historic win for the American people,” adding that “no company – no matter how large or influential – is above the law.”

White House press secretary Karine Jean-Pierre said the “pro-competition ruling is a victory for the American people,” adding that “Americans deserve an internet that is free, fair, and open for competition.”

 

BILLIONS PAID

Mr. Mehta noted that Google had paid $26.3 billion in 2021 alone to ensure that its search engine is the default on smartphones and browsers, and to keep its dominant market share.

“The default is extremely valuable real estate,” Mr. Mehta wrote. “Even if a new entrant were positioned from a quality standpoint to bid for the default when an agreement expires, such a firm could compete only if it were prepared to pay partners upwards of billions of dollars in revenue share and make them whole for any revenue shortfalls resulting from the change.”

He added, “Google, of course, recognizes that losing defaults would dramatically impact its bottom line. For instance, Google has projected that losing the Safari default would result in a significant drop in queries and billions of dollars in lost revenues.”

The ruling is the first major decision in a series of cases taking on alleged monopolies in Big Tech. This case, filed by the Trump administration, went before a judge from September to November of last year.

“A forced divestiture of the search business would sever Alphabet from its largest source of revenue. But even losing its capacity to strike exclusive default agreements could be detrimental for Google,” said Emarketer senior analyst Evelyn Mitchell-Wolf, who said a drawn-out legal process would delay any immediate effects for consumers.

In the past four years, federal antitrust regulators have also sued Meta Platforms, Amazon.com and Apple, claiming the companies have illegally maintained monopolies.

Those cases all began under the administration of former President Donald Trump.

Senator Amy Klobuchar, a Democrat who chairs the Senate Judiciary Committee’s antitrust subcommittee, said the fact that the case spanned administrations shows strong bipartisan support for antitrust enforcement.

“It’s a huge victory for the American people that antitrust enforcement is alive and well when it comes to competition,” she said. “Google is a rampant monopolist.”

When it was filed in 2020, the Google search case was the first time in a generation that the US government accused a major corporation of an illegal monopoly. Microsoft settled with the Justice Department in 2004 over claims that it forced its Internet Explorer Web browser on Windows users. – Reuters

World Bank says assessing impact of Bangladesh events on its loan program

REUTERS

WASHINGTON – The World Bank on Monday said it was assessing the impact of events in Bangladesh on its loan program with the country after its Prime Minister Sheikh Hasina resigned and fled.

Mr. Hasina’s exit came after hundreds of people were killed in a crackdown on demonstrations that began as protests against preferential job quotas and swelled into a movement demanding her downfall.

“We mourn the violence and tragic loss of life that has taken place in recent weeks in Bangladesh and hope for a swift and peaceful resolution. We are assessing the impact of the unfolding situation on the World Bank Group program and remain committed to supporting the development aspirations of the people of Bangladesh,” a spokesperson for the bank said.

The World Bank’s board in June approved two projects totaling $900 million to help Bangladesh strengthen fiscal and financial sector policies and improve urban infrastructure to ensure sustainable and climate-resistant growth.

The World Bank was among the first development partners to support Bangladesh following its independence. Since then, the bank has committed about $41 billion in grants and interest-free credits to the disaster-prone country.

The World Bank Group had total commitments in Bangladesh of $2.85 billion in fiscal year 2024, ended June 30, according to the bank’s website. – Reuters

Fed policymakers signal rate cuts ahead, but not recession

WIKIMEDIA.ORG

US central bank policymakers pushed back on Monday against the notion that weaker-than-expected July jobs data means the economy is in recessionary freefall, but also warned that the Federal Reserve will need to cut rates to avoid such an outcome.

Many of the latest job report’s details leave “a little more room for confidence that we’re slowing but not falling off a cliff,” San Francisco Fed President Mary Daly said at an event in Hawaii.

“Our minds are quite open to adjusting the policy rate in coming meetings,” she said. When and by how much will depend on incoming economic data, of which there is a lot before the Fed’s next meeting in mid-September, she said, adding, “it’s extremely important that we not let (the job market) slow so much that it tips itself into a downturn.”

US stocks fell steeply on Monday amid fears the U.S. central bank has waited too long to begin cutting interest rates. Interest-rate futures contracts at the day’s end reflected overwhelming bets that the Fed will start cutting borrowing costs next month with a bigger-than-usual 50-basis-point reduction to its policy rate.

Speaking earlier on Monday, Chicago Federal Reserve President Austan Goolsbee cautioned against taking too much of a signal from the global market sell-off, noting it stemmed in part from the Bank of Japan’s decision last week to raise rates, as well as increasing geopolitical tensions in the Middle East.

“The law doesn’t say anything about the stock market; it’s about the employment and it’s about price stability,” Mr. Goolsbee said in an interview with CNBC, referring to the Fed’s dual goals set by Congress, as he noted how prone financial markets were to volatility.

Nonetheless, Fed policymakers need to be aware of the possibility that markets are signaling a change in the economy’s direction, he said.

“If the market moves give us an indication over a long arc that we’re looking at a deceleration of growth, then we should react to that,” Mr. Goolsbee said. “As you see jobs numbers come in weaker than expected but not looking yet like recession, I do think you want to be forward-looking at where the economy is headed for (in) making the decisions.”

Fresh data on Monday showed that the vast US services sector rebounded from a four-year low last month, with a measure of services employment rising for the first time since January.

The US services data “aligns with our view of an economy in transition rather than one on the brink of collapse,” said Matthew Martin, a US economist at Oxford Economics. “Expectations for aggressive rate cuts in September are overdone.”

 

INTER-MEETING CUT

The Fed kept its benchmark interest rate unchanged in the current 5.25%-5.50% range last week and signaled it was on course to begin cutting rates in September, but that decision was followed by worrying signs the labor market might already have turned.

The number of Americans filing new applications for unemployment benefits increased to an 11-month high while job gains markedly slowed in July and the unemployment rate rose to 4.3%.

The data cast doubt on Fed Chair Jerome Powell’s assertion directly after the latest policy meeting that the labor market appeared to be normalizing gradually, which would allow the central bank to take a bit more time before cutting rates to ensure inflation was fully quelled.

Instead, economists and traders honed in on Mr. Powell’s other comments that the Fed would respond if there was an unexpected deterioration in the labor market.

Asked about the possibility of an inter-meeting rate cut, Mr. Goolsbee said “everything is always on the table” from rate increases to cuts as the Fed maintains its focus on employment, inflation and financial stability.

“If the conditions collectively start coming in on the through line that there’s deterioration on any of those parts, we’re going to fix it,” Mr. Goolsbee said.

Inter-meeting cuts are typically reserved for emergencies, however, and so far neither Mr. Goolsbee nor Ms. Daly signaled that’s what they are seeing.

Last week marked a shift in the Fed’s communications to focus on its full employment mandate as much as its price stability mandate, Ms. Daly said, and that shift has sparked a downward move in market-determined borrowing costs like mortgage rates.

“The communication itself is a policy adjustment,” she said. – Reuters

Philippine annual inflation quickens to 4.4% in July

MANILA – Philippine annual inflation quickened in July, reflecting faster pace of increases in food and utility costs, the statistics agency said on Tuesday.

The consumer price index (CPI) rose 4.4% in July, above the previous month’s 3.7%, bringing year-to-date inflation to 3.7% and close to the top of the central bank’s 2.0%-4.0% target range.

Economists polled by Reuters had projected a rate of 4.1% for July, at the bottom end of the central bank’s 4.0% to 4.8% forecast range for that month.

Core inflation, which strips out volatile food and oil prices, eased to 2.9% in July from 3.1% in June, government data showed.

Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona said on Monday that monetary authority could look at cutting rates if price pressures continued to ease.

The BSP, which has kept policy rate steady at 6.5% at its last six meetings, will review the direction of interest rates at its Aug. 15 meeting. It would also have second-quarter gross domestic product data by then.

Separate data on Tuesday showed exports shrank 17.3% in June from a year earlier, while imports contracted 7.5%. That led to a trade deficit of $4.3 billion for June, narrower than the previous month’s revised deficit of $4.7 billion. — Reuters

BingoPlus donates P15 million to worthy causes

Typhoon Carina relief operations conducted by the BingoPlus Foundation.
Comprehensive sports and entertainment platform BingoPlus celebrated BingoPlus Day Cebu Carnival by granting P15 million worth of donations to worthy causes.
The company’s  acts of generosity were driven by its desire to give back to important communities in the country amid trying times.
Out of the P15-million donation, the BingoPlus Foundation gave P10 million to the families and individuals affected by the recent Super-Typhoon Carina.
Given the extreme weather event’s devastating aftermath, the Foundation immediately began relief operations in Metro Manila and several areas in Luzon.

Initially set at P8 million, the donation was bolstered by an additional P2 million at the end of the Cebu Carnival, thanks to a crossover between the BingoPlus Foundation and Cornerstone.

“This is an aspect of the BingoPlus Day Cebu Carnival where we give back to the people,” said Andy Tsui, president of DigiPlus, during a pre-event press conference. “We always try find a balance between having fun and being responsible nation-builders, and this is what we decided on.”
Apart from the quick response to the adverse effects of the recent typhoon, BingoPlus honored its commitment to donate millions to three beneficiaries that were present at the BingPlus Day Cebu Carnival. These were the Department of Social Welfare and Development (DSWD) Area Vocational Rehabilitation Center II; the Philippine Accessible Disability Services, Inc. (PADS); and the Municipality Of Dumanjug, Cebu province.
For the DSWD Area Vocational Rehabilitation Center II, BingoPlus Foundation is providing a PLUS e-Center for Livelihood and Technology, featuring computer sets for digital skills training and printing machines for the application of design skills in tarpaulin and t-shirt printing — an investment of at least P1.5 million. The Foundation aims to expand job opportunities in the digital economy, especially for persons with disabilities (PWDs), as the computers will be equipped with audio software for the benefit of blind trainees. The e-center will further help graduates who, at present, cannot afford computers and internet service for remote work, while the printing machines will help jump-start small business operations. The vocational center currently accommodates 154 trainees.
“On behalf of DSWD, particularly Field Office 7, we are enormously grateful to the BingoPlus Foundation for their most generous donation,” said Juanito C. Cantero, DSWD Assistant Regional Director for Operations for Region VII. “It will boost the confidence of our clients and help them become more productive in the community.”
President Andy Tsui, President Jasper Vicencio, and Vice-President Celeste Jovenir are shown cheering alongside the representatives of PADS as they receive their cheque donation.

Meanwhile, the Philippine Accessible Disability Services, Inc. (PADS) will be benefiting from the donation of P2 million for the construction of a PLUS Center for Adaptive Sports and Physical Rehabilitation. Indigent PWDs and recovering patients of stroke, paralysis, and other conditions impacting mobility will receive free rehabilitation services. In partnership with the Mandaue LGU and Colleges of Rehabilitative Sciences in Cebu, doctors and medical specialists will also be able to hone their skills in the center. With the provision of accessible rehabilitation, PWDs will be able to gain employment and achieve social integration as PWD athletes, coaches, and employees in other industries.

In reference to the donation, PADS representative and team captain of the PADS Adaptive Dragon Boat Racing Team, Owen Loceno Paddler, shared, in Cebuano, that his only dream is that what he has received will be received by others twofold.
With BingoPlus Foundation’s donation worth P1.5 million, the Municipality Of Dumanjug will acquire rainwater catchment tanks and clean water filtration systems across 11 barangays. The Foundation aims to enable residents to convert water from natural sources, thus preventing the spread of water-borne diseases at any time, but especially during disasters.
Dr. Reynilee Chrstine Cabilin, Department Head of the Municipal Health Office of Dumanjug, also expressed gratitude to the Foundation for the aid being extended, “We are so grateful for BingoPlus Foundation’s generosity to our municipality. It’s so timely because of the devastation caused by Typhoon Carina. This will help our people tremendously, especially those in the mountainous areas.”
Together with its newest endorser, Kim Chiu, the star-studded and fun-filled event highlighted the blessing of giving back through the BingoPlus Foundation. BingoPlus Day Cebu Carnival was an occasion made for the sole purpose of expressing BingoPlus’ gratitude to all its supporters.
DigiPlus is the fastest-growing digital entertainment company in the country. It operates the country’s leading digital platforms BingoPlus, ArenaPlus, PeryaGame, Tongits+, and BingoPlus Poker, with more to come. BingoPlus is a platform for various forms of entertainment for Filipinos where players can explore tongits, bingo, perya games, and many other game choices to have fun at home. For more information, visit www.bingoplus.com or download the app now from App store and Google Play.

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BSP sees room to keep rates steady

People buy rice at discounted rates at a Kadiwa store in Manila, Aug. 1, 2024. — PHILIPPINE STAR/EDD GUMBAN

By Luisa Maria Jacinta C. Jocson, Reporter

THE PHILIPPINE central bank would probably keep policy settings on hold given “evolving inflation conditions,” Governor Eli M. Remolona, Jr. said on Monday, even as he signaled a less restrictive stance if price pressures continue to ease.

“Evolving inflation conditions show that the BSP (Bangko Sentral ng Pilipinas) can hold its policy settings steady for the time being,” Mr. Remolona said during a Development Budget Coordination Committee (DBCC) briefing before the House Committee on Appropriations on Monday.

“If price pressures continue to ease, it will be possible for the BSP to consider a less restrictive monetary policy stance.”

In June, the BSP kept policy rates unchanged at an over 17-year high of 6.5% for a sixth straight meeting. Mr. Remolona has previously signaled that the central bank is on track to cut rates by August, possibly by 25 basis points.

The Monetary Board’s next rate-setting meeting is on Aug. 15.

Mr. Remolona said lingering supply concerns and geopolitical tensions warrant continued and close monitoring of risks to the inflation outlook.

Headline inflation likely accelerated to 4% in July, according to a BusinessWorld poll of 15 analysts conducted last week, mainly due to high food and electricity prices.

If realized, this could mark the eighth straight month that inflation settled within the BSP’s 2-4% target band.

July inflation data will be released today (Aug. 6).

Mr. Remolona said the balance of risks to the inflation outlook has tilted to the downside mainly due to the recently approved tariff cut on rice imports.

“In the BSP’s latest forecast, the rice tariff reduction will have a very significant downside impact on the inflation trajectory until 2025,” he added.

In June, President Ferdinand R. Marcos, Jr. signed Executive Order No. 62, which slashed tariffs on rice imports to 15% from 35% previously, until 2028.

This is part of a reduced tariff regime for other agricultural products such as pork and corn intended as inflation-containment measures.

Mr. Remolona said the recent order will be “helpful in our efforts to tame inflation.”

“Since August 2023, however, inflation has been dominated by rice prices. If inflation were driven just by demand, there would be a more even distribution of these different components of inflation.”

“Our survey showed that when people worry about higher prices, when we ask them why, over 90% will say it’s because of the price of rice,” he added.

Rice inflation eased to 22.5% in June, marking the third straight month of slower rice inflation. Rice accounted for almost half of overall inflation during the month.

As of Aug. 2, the price of a kilogram of well-milled rice averaged P48-P55 from P41-P49 in the same period a year ago. Regular-milled rice averaged P45-P55 from P37-P44 a year earlier.

“Indeed, there is strong empirical evidence that suggests that rice prices affect inflation expectations to a very large extent. And these inflation expectations lead to second-round effects,” Mr. Remolona said.

Meanwhile, Mr. Remolona said he sees inflation settling within the 2-4% target this year and in 2025, as well as inflation expectations remaining “well-anchored.”

However, he still cited upside risks to this outlook.

“These risks will come from higher domestic prices of food items other than rice, from transport charges, and from electricity rates,” Mr. Remolona said.

National Economic and Development Authority Secretary Arsenio M. Balisacan also cited other factors that could stoke inflation, such as wage adjustments.

“Risks related to inflation, such as potential adjustments in fare, wage, and service utility fees, have the potential to significantly curb spending. It is imperative that we carefully consider these factors in our economic planning and decision-making processes,” he told lawmakers.

Last month, the Regional Tripartite Wages and Productivity Board approved a P35 minimum wage hike for workers in the National Capital Region, which took effect on July 17.

Programs like Pambansang Pabahay Para sa Pilipino Housing (4PH) may also have unintended inflationary impacts, Mr. Balisacan said.

“The projected rapid economic growth, particularly with the implementation of the 4PH program, could lead to upward inflationary pressures and stall economic gains.”

The 4PH is the government’s flagship housing program. The government seeks to build a million housing units yearly under the program until 2028.

Economy on track to outgrow debt — DoF

REUTERS/THOMAS WHITE/ILLUSTRATION

ECONOMIC GROWTH is on track to outpace the rise in the National Government’s (NG) debt, with borrowing costs expected to go down as global central banks cut interest rates, the Department of Finance (DoF) said on Monday.

During the Development Budget Coordination Committee’s (DBCC) briefing before the House Committee on Appropriations, Finance Secretary Ralph G. Recto said the cost of borrowing remains manageable as it is “much lower” than the country’s gross domestic product (GDP) growth.

“In fact, our effective interest rate for next year is only 5.3%, which is very cheap considering that the average term of our debt is 7.5 years. If we remove inflation, our real interest rate is only 2.3%, far lower than our expected real GDP growth of 6.5%, which means we are on track to outgrow our debt,” he said.

A country’s debt is more appropriately measured on the size of its economy as this identifies its capacity to pay its obligations, Mr. Recto said.

“From 60.9% (debt-to-GDP ratio) in 2022, it fell to 60.1% in 2023. And we are determined to continue pushing it below 60% so we have enough buffer in case another crisis hits us,” he said.

According to the Bureau of the Treasury, the debt-to-GDP ratio is expected to inch up to 60.6% by end-2024. It sees the debt-to-GDP ratio falling to 60.4% in 2025, 60.2% in 2026, 58.4% in 2027 and 56.3% in 2028.

“The continuous decline in our debt-to-GDP ratio since the pandemic is one of the reasons why our credit ratings remain high… This means that we not only have the capacity to pay our debts, but we can have more access to cheaper financing,” he said.

The DBCC is targeting 6-7% GDP growth this year and 6.5-7.5% GDP growth in 2025.

As of end-June, the NG’s outstanding debt rose to a fresh high of P15.48 trillion, up 9.4% from a year ago. Debt is expected to reach P16.06 trillion at the end of 2024 and P17.35 trillion by end-2025.

“Mukha mang patuloy na lumalaki ang ating utang ngayon, pero patuloy naman na mas lumalago ang ating ekonomiya. Ibig sabihin, kayang kaya nating bayaran ang ating mga obligasyon (Even if it looks like our debt is growing now, but our economy is also expanding faster. This means we can repay our obligations),” Mr. Recto said.

Mr. Recto said the government is now paying off the “pandemic borrowings” inherited from the previous administration.

“We are now refinancing the large borrowings contracted during the low-interest rate period in 2020 to 2022 with new debts that bear higher interest rates. This is the reason why our interest payments for next year are higher by around 11%,” he said.

For 2025, the NG set its borrowing program at P2.55 trillion, 0.97% lower than this year.

The government is also allotting P2.05 trillion for its debt servicing program next year, up 1.19% from this year. Of this, P848.03 billion will go to interest payments.

Mr. Recto said he expects the growth in interest payments to moderate as central banks begin cutting policy rates.

Last week, the US Federal Reserve kept its key policy rate at the 5.25-5.5% range last week, but could start easing by September.

The Bangko Sentral ng Pilipinas has signaled a potential 25-basis-point cut at its Aug. 15 meeting.

Mr. Recto reiterated that the government’s current debt level is not a cause for concern.

“There is nothing inherently wrong with a country having debt, as long as the money’s used for the right purposes, such as growing the economy, which in turn creates more jobs, increases income and provides more revenues for the government,” he said.

“In our case, we are using debts to spur our stronger economic recovery by investing in more infrastructure and human capital development projects which have the highest multiplier effect on the economy.”

Meanwhile, Mr. Recto said that the country’s budget deficit is also still manageable.

“As a percentage of GDP, our deficit remains very manageable, at 4.5% in the first quarter,” he said.

The government set the budget deficit ceiling for this year at P1.48 trillion or equivalent to 5.6% of GDP. For next year, the budget deficit ceiling is at P1.54 trillion or 5.3% of GDP. — BMDC

Experts: PHL can learn from Malaysia’s tighter social media regulations

A person using a smartphone is seen in front of displayed social media logos in this illustration taken on May 25, 2021. — REUTERS

By Aubrey Rose A. Inosante, Reporter

THE PHILIPPINES could combat the growing number of cybercrimes by following Malaysia’s recent move to require social media platforms to secure regulatory licenses to operate in the country, experts said.

However, there should be safeguards to ensure that regulations for social media networks would not suppress free speech, they added.

Malaysia’s internet regulator is requiring all social media and internet messaging services that have more than eight million users to apply for a license by Jan. 1, 2025. 

“Under the ASEAN (Association of Southeast Asian Nations) ambit, there have already been discussions in terms of how we can protect the consumers on this particular issue. I think the Philippines may want to take a leaf from what Malaysia has done,” Malaysia Ambassador to the Philippines Dato’ Abdul Malik Melvin Castelino bin Anthony told BusinessWorld on the sidelines of an event on July 30.

“Of course, we are very willing to share our knowledge and our process and how we enacted this law,” he added.

The Malaysian ambassador said the law is meant to ensure that cybercrime is not perpetrated in Malaysia, and to protect consumers and companies.

However, he said the law drew mixed reactions back home, raising concerns that it could stifle freedom of expression. “But for us, I think the whole idea is to protect the industry and also the consumers,” he said.

Social media networks that fail to apply for licenses with the Malaysian government by Jan. 1, 2025 would face fines, imprisonment or even suspension.

The Philippines is also trying to combat cybercrime such as financial fraud, scams, child pornography and ransomware.

From January to June this year, the Philippine National Police Anti-Cybercrime Group reported 8,177 cybercrime incidents, down 36.16% from a year ago. The bulk of these cybercrimes involved online selling scams, investment scams and debit or credit card fraud.

“We want to regulate OTTs (Over-the-top media services) and social media. Although, we would like to reiterate that currently, we have a good relationship with social media providers,” Jeffrey Ian C. Dy, undersecretary for Infostructure Management, Cybersecurity, and Upskilling of the Department of Information and Communications Technology (DICT) told BusinessWorld over the phone last week.

He said the DICT has no signed agreement with Meta, YouTube, and TikTok, but has access to their reporting mechanism, which was used when a “deepfake audio” of President Ferdinand R. Marcos, Jr. falsely ordering the military to attack China surfaced.

Mr. Dy said it is the discretion of these platforms to proceed to appropriate action, either tagging it as misleading or subject to removal if it violates the community guidelines.

For other social media platforms like X (formerly Twitter), DICT has no “working relationship” as X does not have an office in the country.

“Due to the lack of regulation, all of these are pakiusap (request). We need to appeal to them based on their community guidelines, most of which are more permissible than our laws,” he said.

For example, Mr. Dy said the Anti-Online Sexual Abuse or Exploitation of Children law requires that pornographic material that involves a child should be automatically blocked.

“In contrast, the evidence is now to prove that you have no negligence and compliance there and the product there on the platform, and then in the internet service provider. Because it is written in the law, it should also be blocked,” he said.

Mr. Dy said there are pending bills that propose regulation, but these should be balanced with the rights and freedoms protected by the Constitution.

“We leave it up to the legislature to define harmful content in a harmful media,” he said.

House Bill No. 129 mandates the authentication of identity before the creation of a social media account, while House Bill No. 8789 criminalizes the creation of fake news.

Surigao del Norte Rep. Robert Ace S. Barbers called on the Philippines to implement a social media policy similar to Malaysia, noting how these outlets have been used to slander people.

“For those who use the social media platforms to destroy someone’s name, someone’s identity, someone’s image, that is not freedom of expression,” he said in a phone call last week.

“[In] my opinion, maybe we should use the Revised Penal Code as our basis. What is the definition of slander? Those are crimes punishable under the Revised Penal Code. If we identify what the law will do, maybe we won’t be far from our existing laws.”

Mr. Barbers said social media users should be made aware of possible penalties that can be imposed for violations.

Sam V. Jacoba, founding president of the National Association of Data Protection Officers, said the country can learn a lot from this approach by Malaysia.

“It is a welcome development as for the longest time, social media platforms have been sidestepping their accountability on the content posted and proliferated on their platforms,” Mr. Jacoba told BusinessWorld via Viber message on July 29.

More than 80 million Filipinos have social accounts, and they are often vulnerable to misinformation, disinformation, and foreign malign influence, he said.

“Perhaps, they are more focused on generating more revenues than securing the digital lives of their users. Just benchmark their investments in sales and marketing activities versus their investments in data and content protection,” he said.

Mr. Jacoba even suggested that the Philippines could compel owners to allocate a portion of their net revenues, like 20% in fighting cyber criminals and scammers on their platforms.

BusinessWorld sought comments from social media platforms Meta, X, and TikTok but has not received replies as of press time.

BSP eyes use of QR code for transport payments

Commuters purchase their tickets at the LRT Antipolo Station. — PHILIPPINE STAR/ WALTER BOLLOZOS

THE BANGKO SENTRAL ng Pilipinas (BSP) is proposing to identify strategic use cases for its national QR code standard such as for transportation payments.

In a draft circular, the BSP said it is seeking to introduce the payment use cases involving QR Ph for sectors such as transportation “which shall be serviced by payment service providers (PSPs) without fees, including interbank charges, or free of charge to end-users.”

New sections are to be added to the Manual of Regulations for Payment Systems to include strategic payment use cases.

The BSP defined strategic payment use cases as those that “support the achievement of the objectives outlined in national development plans and strategies.”

These also have a “particular focus on enhancing financial inclusion and modernizing key sectors of the national economy, which ultimately foster sustainable economic growth of the country.”

For a payment use case to be considered strategic, the BSP will also consider its impact, accessibility and inclusivity.

“Strategic payment use cases shall be interoperable, consistent with the principles under the Section 201 on the National Retail Payment System (NRPS) framework and created independently and separately from existing payment use cases.”

“Interoperable payment use cases, which have already been established under the NRPS framework and are currently operating, cannot be converted into a strategic payment use case,” it added.

The strategic payment use cases shall also be offered to end-users without fees, including interbank charges, or free of charge, the BSP added.

Under the draft circular, the central bank said that payment service providers must ensure that QR-enabled payments be “accorded appropriate treatment in the determination of applicable fees.”

“PSPs offering interoperable QR-enabled payment services for strategic payment use cases… such as but not limited to the use of the national QR code standard for payments in the transportation sector, must provide these services without fees, including interbank charges, or free of charge to end users.

“PSPs shall ensure that the threats and vulnerabilities arising from their QR-enabled payment and financial services are identified, measured, monitored, and controlled accordingly,” it added.

QR Ph is the country’s QR code standard based on the Europay-Mastercard-VISA (EMV) standard, a global standard for secure payments.

The share of online payments in the total volume of monthly retail transactions rose to 52.8% in 2023 from 42.1% a year earlier. This surpassed the BSP’s target of digitializing 50% of payments by end-2023.

The central bank is targeting to achieve a 60-70% share of digital payments over total retail payments volume by 2028, in line with the Philippine Development Plan. — Luisa Maria Jacinta C. Jocson

MPTC acquires gov’t stake in NLEX, boosts ownership to 73.39%

METRO PACIFIC Tollways Corp. (MPTC) has acquired the government’s 2.61% stake in NLEX Corp. for P2.5 billion, increasing its total ownership of the toll road to 73.39%, the company announced on Monday.

This acquisition aligns with the government’s strategy to divest assets for revenue generation, MPTC said in a statement.

“We recognize that we, too, are in public service under a private entity. Our commitment is to provide efficient, safe, and convenient travel to our motoring public, as well as connect people and transform communities,” MPTC President and Chief Executive Officer Rogelio L. Singson said.

According to NLEX Corp.’s website, MPTC, through MPT North Corp., owns 70.78% of NLEX; BDO Unibank, Inc. holds 11.7%; Global Fund Holdings has 3.9%; Egis Investments Partners Philippines, Inc. has 10.16%; and the government holds 3.46%.

In June, the Department of Finance announced plans to dispose of P2.5 billion worth of assets, including the government’s 3.46% stake in NLEX Corp., which is part of MPTC.

The transaction was finalized on Friday, Aug. 2, MPTC said, adding that this move would not only support the government’s effort to secure funds but also affirm the company’s commitment to providing a safer and more efficient road network.

Aside from NLEX, the government, through the Bases Conversion and Development Authority, had previously indicated its willingness to sell its 50% stake in the Subic-Clark-Tarlac Expressway to MPTC for at least P20 billion.

MPTC is the tollways unit of Metro Pacific Investments Corp., one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

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