Taiwan president is escalating tensions, China says ahead of key speech

October 9, 2024 | 1:03 pm

Taiwan-Lai Ching-te — TAIWAN’s new president Lai Ching-te waves on stage during the inauguration ceremony outside the Presidential office building in Taipei, Taiwan on May 20, 2024. — REUTERS

BEIJING/TAIPEI – Taiwan President Lai Ching-te is escalating tensions with “sinister intentions”, China’s government said, ahead of a keynote speech Lai will give in Taipei that could set off a Chinese military response.

Lai, who took office in May after winning election in January, is detested by China which calls him a “separatist”. Beijing claims democratically governed Taiwan as its own territory, a view Lai and his government reject.

Responding late on Tuesday to comments Lai gave at the weekend on how it is “impossible” for the People’s Republic of China to become Taiwan’s motherland because Taiwan has older political roots, China’s Taiwan Affairs Office said he was confusing right from wrong.

Lai continues to peddle a theory that the two sides of the Taiwan Strait are two separate countries, it said in a statement.

“Lai Ching-te’s Taiwan independence fallacy is just old wine in a new bottle, and again exposes his obstinate stance on Taiwan independence and his sinister intentions of escalating hostility and confrontation,” it added.

Lai will give his main national day speech on Thursday, which marks the overthrow of the last Chinese dynasty in 1911 and the ushering in of the Republic of China.

The defeated republican government fled to Taiwan in 1949 after losing a civil war with Mao Zedong’s communists. The Republic of China remains Taiwan’s formal name.

Taiwan’s China policy making Mainland Affairs Council said it was an objective fact that since 1949 the People’s Republic of China had never ruled the island.

“The Taiwan Affairs Office’s remarks have made Taiwan’s people see clearly that the Chinese communists regard themselves as the sole legitimate government of China and simply do not allow any room for the survival of the Republic of China,” it said.

China is likely to launch military drills near Taiwan in response to Lai’s speech as a pretext to pressure the island to accept its sovereignty claims, Taiwanese officials say.

CHINESE DRILLS
A U.S. State Department spokesperson said they could not speculate on what China would or would not do.

“However, it is worth emphasising that using routine annual celebrations or public remarks as a pretext or excuse for provocative or coercive measures undermines peace and stability,” the spokesperson said.

China’s defence ministry on Wednesday reiterated its objections to U.S. weapons sales to Taiwan, after the Biden administration approved $567 million in further defence support.

“What needs stressing is that arming Taiwan is encouraging Taiwan independence, and Taiwan independence means war,” the ministry said, echoing previous language it has used.

China’s military operates on an almost daily basis around Taiwan and regularly stages what Taiwan refers to as “joint combat readiness patrols”, most recently on Sunday.

China has also been carrying out a series of other drills in recent weeks, including operations with Russia in the Western Pacific and test firing an intercontinental ballistic missile last month.

Taiwan’s defence ministry told Reuters in a statement that China has been using various reasons to “legitimise its targeted military drills”.

“We continue to monitor and analyse the training dynamics of the Chinese communists around the Taiwan Strait in order to anticipate the situation,” the ministry added.

Lai says only Taiwan’s people can decide their future, and has repeatedly offered talks with Beijing but been rebuffed.

China staged “punishment” war games around Taiwan shortly after Lai’s May inauguration. — Reuters

Nobel prize in physics goes to machine learning pioneers Hopfield and Hinton

October 9, 2024 | 11:57 am

A view of the lettering on the outside of the Nobel Forum in Stockholm, Sweden, Oct. 7, 2024. REUTERS/Tom Little

STOCKHOLM – U.S. scientist John Hopfield and British-Canadian Geoffrey Hinton won the 2024 Nobel Prize in Physics on Tuesday for discoveries and inventions in machine learning that paved the way for the artificial intelligence boom.

Heralded for its revolutionary potential in areas ranging from cutting-edge scientific discovery to more efficient admin, the emerging technology on which the duo worked has also raised fears humankind may soon be outsmarted and outcompeted by its own creation.

Hinton has been widely credited as a godfather of AI and made headlines when he quit his job at Google last year to be able to more easily speak about the dangers of the technology he had pioneered.

“We have no experience of what it’s like to have things smarter than us,” Hinton said over the phone to the Nobel press conference, speaking from a hotel in California.

“It’s going to be wonderful in many respects, in areas like healthcare,” Hinton said. “But we also have to worry about a number of possible bad consequences. Particularly the threat of these things getting out of control.”

Hopfield, 91, a professor emeritus at Princeton University, created an associative memory that can store and reconstruct images and other types of patterns in data.

“When you get systems that are rich enough in complexity and size, they can have properties which you can’t possibly intuit from the elementary particles you put in there,” he said in a press conference convened by Princeton. “You have to say that system contains some new physics.”

He echoed Hinton’s concerns, saying there was something unnerving about the unknown potential and limits of AI.

“One is accustomed to having technologies which are not singularly only good or only bad, but have capabilities in both directions,” he said.

The Royal Swedish Academy of Sciences said it awarded the prize to the two men because they used “tools from physics to develop methods that are the foundation of today’s powerful machine learning” that is “revolutionising science, engineering and daily life.”

The award comes with a prize sum of 11 million Swedish crowns ($1.1 million) which is shared by the two winners.

British-born Hinton, 76, now professor emeritus at the University of Toronto, invented a method that can autonomously find properties in data and carry out tasks such as identifying specific elements in pictures, the academy said.

Though he quit Google in 2023 after realising computers could become smarter than people far sooner than he and other experts had expected, Hinton said the company itself acted very responsibly.

Hinton also said he regretted some of his research, but that he acted on the information he had at the time.

“In the same circumstances I would do the same again,” he told the Nobel press conference. “But I am worried that the overall consequence of this might be systems more intelligent than us that eventually take control.”

‘MIND FROM MACHINE’
Asked about the concerns surrounding machine learning and other forms of artificial intelligence, Ellen Moons, chair of the Nobel Committee for Physics, said: “While machine learning has enormous benefits, its rapid development has also raised concerns about our future.

“Collectively, humans carry the responsibility for using this new technology in a safe and ethical way, for the greatest benefit of humankind.”

Hopfield, whose parents were both physicists, said in a video posted online by the Franklin Institute when he won the 2019 Benjamin Franklin Medal in Physics that he had never considered being anything but a scientist or engineer.

“They were the ones that understood the world,” he said. “What fascinates me most is still this question of how mind comes from machine.”

Widely considered the most prestigious award for physicists across the world, the prize was created, along with awards for achievements in science, literature and peace, in the will of Alfred Nobel.

The prizes have been awarded with a few interruptions since 1901, though the Nobel economics honour is a later addition in memory of the Swedish businessman and philanthropist, who had made a fortune from his invention of dynamite.

Outside the sometimes controversial choices for peace and literature, physics often makes the biggest splash among the prizes, with the list of past winners featuring scientific superstars such as Albert Einstein, Niels Bohr and Enrico Fermi.

Last year’s physics prize was awarded to Pierre Agostini, Ferenc Krausz and Anne L’Huillier for their work in creating ultra-short pulses of light that can give a snapshot of changes within atoms, potentially improving the detection of diseases.

Physics is the second Nobel to be awarded this week, after U.S. scientists Victor Ambros and Gary Ruvkun won the medicine prize for their discovery of microRNA and its role in gene regulation, shedding light on how cells specialise. — Reuters

Elon Musk’s X gets OK to resume service in Brazil

October 9, 2024 | 11:51 am

BRASILIA – Brazil’s Supreme Court cleared X to resume service in the country on Tuesday, after the social media platform reversed course and started complying with court rulings billionaire owner Elon Musk had previously vowed to resist.

Supreme Court Justice Alexandre de Moraes, who had been locked in a months-long feud with Musk, gave X the green light to resume operations in Latin America’s largest country effective immediately.

In the decision, Moraes said X had met all the necessary requirements to start operating again in the country.

The platform formerly called Twitter had been suspended in Brazil, one of its largest and most-coveted markets, since late August after not complying with court orders related to hate speech moderation and failing to name a legal representative in the country, as required by law.

Musk, who had denounced the orders as censorship and called Moraes a “dictator,” started to reverse his position in recent weeks, with his social media network blocking accounts flagged by the court, tapping a local representative and paying pending fines.

Moraes, in his Tuesday decision, ruled that Brazil’s telecommunications regulator Anatel must work to allow X to come back online within 24 hours. Users in Brazil were still unable to access the platform as of 7 p.m. local time.

Through its Global Affairs account, X said it was proud to return to Brazil, adding that it “will continue to defend freedom of speech, within the boundaries of the law” in the countries where it operates.

The Brazil dispute was one of a series of recent face-offs between Musk, who views himself as a champion of free speech, and governments including Australia and the United Kingdom seeking to prevent the spread of online misinformation.

Brazil’s communication minister said on Tuesday that X’s decision to pay the fines and comply with court orders was a “victory for the country.”

“We showed the world that here our laws should be respected, by whomever it may be,” Juscelino Filho said in a statement.

JUDICIAL BATTLE
X’s suspension initially came after an individual ruling by Moraes, who has spearheaded a local crusade against perceived attacks on democracy and the political use of disinformation.

His ruling was later unanimously backed by a five-member panel of the Supreme Court and its chief justice.

President Luiz Inacio Lula da Silva also voiced support for the move, saying that people with businesses in Brazil must follow local laws and the world was “not obliged to put up with Musk’s far-right ideology just because he is rich.”

Justices flagged at the time, however, that they would be open to reconsidering the suspension if X complied with rulings. The social media company initially said it would not abide by them because they were “illegal.”

Brazil is X’s sixth-biggest market globally and as of April had about 21.5 million users, according to data platform Statista. During the suspension, many users migrated to rival platforms such as Bluesky and Meta Platforms -owned Threads.

X had legal representation in Brazil until mid-August, when it decided to close its offices in the country due to the orders from the court, which it dubbed “censorship orders,” without naming someone to assume legal responsibilities for the firm locally.

That eventually triggered the suspension, in a judicial battle that also affected another prominent business controlled by Musk, satellite Internet provider Starlink, whose accounts Moraes temporarily froze in order to cover fines imposed on X.

A new X representative, lawyer Rachel de Oliveira Conceicao, was tapped in late September, when X also said it had started to block accounts ordered by the court.

Earlier this month, the firm paid pending fines it had previously disdained, opening the door for reinstatement in the country.

With the suspension, X remained out of service in Brazil during the final month of the country’s municipal elections, which occurred on Sunday.

In many cities, however, including Sao Paulo – Latin America’s largest city – mayoral elections will head to run-offs on Oct. 27. — Reuters

Philippines’ August joblessness eases

October 9, 2024 | 12:35 am

Woman-computer-laptop — TRAN MAU TRI TAM-UNSPLASH

By Chloe Mari A. Hufana, Reporter

UNEMPLOYMENT in the Philippines eased to 4% in August as more female workers got hired in the service sector, the local statistics agency said on Tuesday.

Preliminary data from the Philippine Statistics Authority’s (PSA) labor force survey showed the jobless rate fell from 4.7% in July and 4.4% in August last year.

This translated 2.07 million unemployed Filipinos, down by 305,000 from July and by 149,000 from a year earlier.

“A major factor that we saw in August 2024 is that many women participated in the labor force and many of them were absorbed by our labor market,” PSA Undersecretary and National Statistician Claire Dennis S. Mapa told a news briefing in mixed English and Filipino.

About 1.03 million female workers joined the labor force, most of whom worked for more than 40 hours a week, he added.

National Economic and Development Authority Secretary Arsenio M. Balisacan said Filipinos “are in for a potentially better holiday season as the latest labor survey showed promising labor market results.”

He said fast-tracking key infrastructure projects in energy, logistics and physical and digital connectivity is critical to attracting investments in higher-value-added sectors, such as manufacturing and agribusiness, and boosting labor productivity.

“With the government’s continued focus on attracting strategic investments and the timely passage of key reforms, the Philippines is well-positioned to translate its promising macroeconomic fundamentals into long-term prosperity for its workforce and economy,” he added.

The labor force participation rate among female Filipino workers rose to 54.7% from 52.4% in July and 52.9% in August last year. For male workers, the rate dipped to 74.8% from 76.3% a year ago. It was 74.5% in July.

The employment rate in August rose to 96% from 95.3% in July and 95.6% a year ago, equivalent to 49.15 million employed Filipinos.

The employment rate for women rose to 95.3% from 94.8% in July and 95.1% a year earlier. The rate among male workers also rose to 96.5% from 95.6% in July and 96% in August last year.

INCREASED DIGITALIZATION
The entry of contractual workers due to digitalization resulted in more women being hired in August, said Leonardo A. Lanzona, Jr., an economics professor at the Ateneo de Manila University.

“In general, women are concerned with other factors that are not related to compensation,” he said in a Facebook Messenger chat. “Greater engagement in digital labor platforms allowed them to find extra income without leaving home and their children.”

He said more female workers being hired is not seasonal, but a result of growing digitalization and more flexible working hours, often at the expense of lower pay.

“These jobs offer very little protection and tend to be very unstable,” Mr. Lanzona said. “ In reality, people do not prefer these types of jobs but are forced to accept them in the absence of better options.”

“Improving working conditions can only be achieved if more options in the domestic labor markets are available,” he added.

Benjamin B. Velasco, assistant professor at the University of the Philippines School of Labor and Industrial Relations in Diliman, said the lower unemployment and underemployment rates and higher female labor participation are “welcome news.”

“We just need to be aware of two things,” he told BusinessWorld via Messenger chat. “First, the fine print — employed means working for at least one hour in the past week, and second, these positive figures are only episodic or temporary changes.”

He also noted that the female labor force participation rate was higher in June at 55.8% and March at 55.1%. “So definitely, it’s not a long-term trend,” he added, noting that the rate rises and falls slightly, but the long term is at 50%.

“Meaning, half of working-age women do not work and are outside the labor force.”

Job quality slightly improved in August as the underemployment rate dipped to 11.2% from 12.1% in July and 11.7% a year earlier.

This meant 5.48 million Filipinos with jobs were still looking for more work or longer working hours, compared with 5.78 million underemployed workers in July and 5.63 million a year earlier.

“The Employers Confederation of the Philippines (ECoP) has emphasized that while declining unemployment rates are positive, there is a continued need to focus on creating high-quality jobs, especially for sectors like retail and wholesale, which significantly contributed to employment gains,” ECoP Governor Arturo C. Guerrero III told BusinessWorld in a Viber message.

“ECoP also advocates enhancing workers’ skills to meet industry demands, ensuring sustained job growth and economic resilience,” he added.

“Let’s hope that more jobs will open for our countrymen due to the continued decrease in the inflation rate, which will strengthen the income of our businesses and every family,” Finance Secretary Ralph G. Recto said in a statement in mixed English and Filipino.

“The latest monetary policy easing due to the deceleration of inflation will also encourage further growth in consumption and investment that translates to more quality employment for Filipinos. More and better jobs will allow Filipino families to spend more, boosting our economy,” he added.

Mr. Mapa said they expect employment figures to improve further this quarter, as corporate earnings and the economy get boosted by increased consumption.

“The expectation is that people spend more since they will have more money from their 13th month pay,” Mr. Velasco said. “These are seasonal or episodic bumps but unfortunately do not signify a long-term shift in employment.”

“The structure of the economy has not changed so we can’t expect also a qualitative change in employment,” he added.

Federation of Free Workers President Jose Sonny G. Matula in a Viber message said increasing wages is crucial since Filipinos are likely to spend their extra money locally, effectively boosting the economy.

The average Filipino worker worked 40.7 hours a week in August, a slight decline from 41.1% in July and 40.8 hours a year earlier.

The service sector remained the top employer with an employment rate of 63.3%, followed by agriculture at 19.3% and industry at 17.4%.

Bukluran ng Manggagawang Pilipino National President Renecio “Luke” S. Espiritu said precarious working conditions and the absence of security of tenure affect women the most.

“They are the ones left to attend to the household as unpaid reproductive labor, often resorting to unstable sideline jobs or attending to small family retail businesses to cope with rising prices and to add to their partner’s starvation wages,” he said in a Facebook Messenger chat.

August factory output drops on electronics, food

October 9, 2024 | 12:34 am

WORKERS at the assembly line of Kinpo Electronics factory in Malvar, Batangas, Aug. 10, 2018. — REUTERS

By Beatriz Marie D. Cruz, Reporter

FACTORY OUTPUT dropped to a four-month low in August due to slower growth in electronics and food manufacturing, according to the Philippine Statistics Authority (PSA).

Preliminary results of the agency’s Monthly Integrated Survey of Selected Industries (MISSI) showed factory production, as measured by the volume of production index (VoPI), slowed to 2.8% year on year from 6.8% in July and 5.6% a year earlier.

This was also the lowest annual growth in the manufacturing sector since 1.4% in April, PSA data showed.

Month on month, the manufacturing sector’s VoPI fell by 0.9% from the 3.9% uptick in July. Stripping out seasonality factors, factory output dropped by 7.6% in August from 10.5% a month earlier.

This brought the average manufacturing output growth for the eight-month period to 1.7%, slower than 5.4% in 2023.

In comparison, S&P Global’s Philippine Manufacturing Purchasing Managers’ Index (PMI) rose to 53.7 in September from 51.2 in August. It was the fastest PMI recorded since 53.8 in June 2022.

A PMI reading above 50 indicates improved operating conditions, while a reading below 50 shows the opposite.

The year-on-year decline in manufacturing was mainly driven by the slower annual increase in the manufacture of food products, with a 0.6% annual increase from 13.1% in the previous month.

Also contributing to the slow growth in factory activity were the slower yearly increases in the manufacture of computer, electronic and optical products at 4.2% from 13.2% in July, and coke and refined petroleum products at 15.5% from 20.4%.

Of the 19 industry divisions, 13 posted year-on-year increases in August, led by coke and refined petroleum products; beverages (12.8% from 12.2%); and computer, electronic and optical products (4.2% from 13.2%).

Meanwhile, six industry divisions posted annual declines, led by the manufacture of basic metals — 3.2% in August from a 9.4% drop in July. Chemical and chemical products fell by 3.6% and other manufacturing and repair and installation of machinery and equipment dropped by 10.3%.

August’s capacity utilization rate, or the extent at which industry resources are used in producing goods, averaged 75.5%, lower than 75.7% in July.

All industry divisions reported capacity utilization rates of more than 60% during the month.

The top three industry divisions with the highest capacity utilization rates were the manufacture of textiles (82.2%), nonmetallic mineral products (82%) and manufacture of machinery and equipment except electrical (82%).

The slow factory activity in August was due to the lagged effects of inflation and supply chain constraints in the past months, Paolo R. Rivera, a research fellow at the Philippine Institute for Development Studies, said in a Viber message.

“Low demand due to inflation can also explain it, as well as the prevailing unemployment at that time, constraining production,” he added.

Inflation has averaged 3.6% as of end-August. Manufacturing slowed in August amid typhoons and the impact of the ghost months on consumer behavior, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

Slower growth in the US and China, two of the Philippines’ major trading partners, also affected factory activity, he added.

The Philippine central bank’s 25-basis-point cut in August, which is expected to be followed by a series of rate cuts this quarter, could help reduce manufacturers’ borrowing and financing costs, Mr. Ricafort said.

BSP Governor Eli M. Remolona, Jr. last week said the Monetary Board could deliver a 25-bp rate cut at its two remaining meetings this year.

WB raises PHL’s 2024, 2025 growth forecasts

October 9, 2024 | 12:33 am

THE World Bank (WB) has raised its economic growth forecasts for the Philippines for this year and in 2025, driven by improved service exports and public investments.

But weak consumption and investment will keep the country’s growth below pre-pandemic levels, it said.

In its East Asia and Pacific Economic Update, the Washington-based multilateral lender now expects the Philippine economy to grow by 6% this year from 5.8%.

The Philippines could become the second-fastest growing economy in Southeast Asia, behind Vietnam (6.1%) and ahead of Cambodia (5.3%), Indonesia (5%), Malaysia (4.9%), Laos (4.1%), Timor-Leste (3%), Thailand (2.4%) and Myanmar (1%).

“Among the larger countries, only Indonesia is expected to grow in 2024 and 2025 above pre-pandemic levels, while growth in Malaysia, the Philippines, Thailand and Vietnam is expected to be below those levels,” the World Bank said.

For 2025, it forecasts Philippine economic output to expand by 6.1% from 5.9% in its April forecast.

The lender’s growth forecasts for the Philippines are at the low end of the government’s target of 6-7% for 2024 and below the 6.5-7.5% goal for next year.

The Philippine economy grew by 6.3% in the second quarter, faster than 5.8% in the previous quarter and 4.3% a year ago. In the first half, growth averaged 6%.

The World Bank said service exports and public investment have supported Philippine economic growth, but consumption and private investment remain weak.

From 2024 to 2026, the lender expects the Philippine economy to grow by an average of 6%, it said in a separate report.

This will be supported by remittances, jobs, slower inflation and external demand. However, weaker growth in China, global economic slowdown and weather disruptions are risks to the outlook.

It also projects the government’s budget deficit to fall to 4.6% of gross domestic product (GDP) by 2026 due to improved state spending. This is slightly below the 4.73% target for the year.

Better revenue collection will be supported by key tax measures, improved tax administration and higher dividends from state-owned corporations, the World Bank said.

The lender also raised this year’s growth forecast for the East Asia-Pacific region to 4.8% from 4.5% in April.

“Most East Asia-Pacific economies are expected to experience robust growth in 2024, supported by private consumption and a positive external environment,” according to the report. In 2025, the region is expected to grow by 4.4% from its previous forecast of 4.3%.

However, domestic demand is expected to moderate in the Philippines, Indonesia and Thailand, while private investment growth remains weak across the region.

“Investment growth has been declining across most countries in the region over the past two decades, with particularly sharp drops in China, Indonesia, Malaysia, and more recently, the Philippines.”

It also noted that the Philippines and Malaysia have kept a conservative fiscal stance due to their higher structural deficit this year.

GREATER POLICY SPACE
The World Bank expects inflation in the region to moderate within target amid stable input costs, tepid demand conditions and easing food inflation pressures. But inflation in Laos and Myanmar will likely stay elevated due to currency pressures.

“The combination of low domestic inflation and declining international interest rates is creating greater space for more supportive monetary policy in the East Asia-Pacific region,” it said, noting that the Philippines, China and Indonesia have adopted an “expansionary” monetary policy stance.

The Bangko Sentral ng Pilipinas (BSP) started its easing cycle in August, reducing the benchmark rate by 25 basis points (bps) to 6.25%.

BSP Governor Eli M. Remolona, Jr. last week signaled the possibility of delivering a 25-bp rate cut at each of the Monetary Board’s remaining meetings this year on Oct. 16 and Dec. 19.

“Cuts in US policy rates have created more space for monetary policy in the region, especially because domestic inflation has also significantly declined and is within target ranges in most countries,” World Bank East Asia and Pacific Chief Economist Aaditya Mattoo told a virtual news briefing on Tuesday.

“Countries in the East Asia and the Pacific Region continue to be an engine of growth for the world economy,” Manuela V. Ferro, vice-president of the World Bank for East Asia and the Pacific, said in a statement.

“However, growth is slowing. To sustain strong growth over the medium term, countries in East Asia and the Pacific must be proactive in modernizing and reforming their economies to navigate changing patterns of trade and technological change.”

Several risks could dampen East Asia-Pacific’s growth outlook, the World Bank said. These include a slowdown in the global economy, as well as the slower-than-expected decline in inflation in advanced economies, which could result in tighter global financial conditions.

Trade restrictions, which might be heightened after the US presidential elections, could also dampen regional growth, according to the lender.

Meanwhile, the World Bank expects the Philippines’ poverty rate to decline to 13.6% this year, before sliding to 11.3% in 2026, according to its latest Macro Poverty Outlook. Its previous forecasts were 12.2% and 9.3% for 2024 and 2026.

The country’s poverty incidence eased to 15.5% in 2023 from 18.1% in 2021, according to the local statistics agency.

“Despite the overall decline, there were provinces with rising poverty, most of which were affected by extreme weather events like El Niño and typhoons,” the World Bank said.

The Philippine government seeks to reduce the poverty incidence to 9% by the end of President Ferdinand R. Marcos, Jr.’s six-year term in 2028. — Beatriz Marie D. Cruz

Four more PHL airports to be privatized next year

October 9, 2024 | 12:32 am

By Ashley Erika O. Jose, Reporter

AT LEAST four more Philippine airports in the countryside are expected to be privatized in 2025, the Department of Transportation (DoTr) said last week.

“For next year, we have Iloilo, Puerto Princesa and Kalibo [airports],” Transportation Undersecretary Roberto C.O. Lim told reporters on the sidelines of an aviation forum. “We have ongoing negotiations with the proponents.”

The agency also expects to launch the competitive tender for the Davao International Airport under a public-private partnership (PPP) program.

Villar-led Prime Asset Ventures, Inc. holds the original proponent status for both P14.7-billion Iloilo International Airport and P10.24-billion Puerto Princesa International Airport, according to the Public-Private Partnership (PPP) Center website.

Meanwhile, Mega7 Construction Corp. has submitted an unsolicited proposal to operate, upgrade and maintain the P3.62-billion Kalibo International Airport.

Mr. Lim said the government expects to award the contract for the operations and maintenance of New Bohol-Panglao International Airport this year. The contract is undergoing a Swiss challenge, which allows other companies to submit alternative proposals that the original proponent can match.

In September, the infrastructure arm of the Aboitiz Group got the contract for the operations and maintenance of the P12.75-billion Laguindingan International Airport in Northern Mindanao.

Aboitiz InfraCapital, Inc. is expected to sign the contract this month, the Transportation department said, adding that the new private operator would take over operations by next year.

The same company also holds the original proponent status for the operations and maintenance of the P4.5-billion Bohol airport.

Aside from the two regional airports, the government has also turned over the operations and maintenance of the country’s main gateway, the Ninoy Aquino International Airport, (NAIA) to San Miguel Corp.-led New NAIA Infrastructure Corp.

The New NAIA venture is composed of San Miguel, RMM Asian Logistics, Inc., RLW Aviation Development, Inc. and Incheon International Airport Corp., the operator of South Korea’s international airport.

The group took over the operations and maintenance of NAIA on Sept. 14 after offering to allocate 82.1% of NAIA revenues to the government.

Transportation Secretary Jaime J. Bautista earlier said one group had expressed interest in Davao International Airport, although the company had not submitted a former proposal.

Mr. Lim said the Transportation department is working with the World Bank, International Finance Corp. and the Asian Development Bank for more PPP projects in 2025, including the Davao, Busuanga, Bacolod, Bicol and General Santos airports.

Rene S. Santiago, former president of the Transportation Science Society of the Philippines, on Tuesday said the state’s decision to privatize these airports ensures better operations and maintenance.

“Privatization transfers large chunks of required investments to the private sector, and assures better maintenance and operations upon completion,” he said in a Viber message. “It is a tacit admission of weak public sector capabilities.”

“In general, I agree with this direction,” Nigel Paul C. Villarete, senior adviser on PPP at Libra Konsult, Inc., said via Viber. “Clearly, this current policy direction of the government is… not propelled by ‘financial’ advantages but rather by the efficiencies that PPPs inject to airport operations and passenger experiences.”

He added that the government should pursue PPP projects through a solicited mode rather than just accepting unsolicited proposals noting that the PPPs would let the government spell out requirements.

“Clearly, this current policy direction of the government is propelled to a big extent by the success of the first one done by the Mactan-Cebu International Airport Authority,” Mr. Villarete said.

The Aboitiz group also manages and operates Mactan-Cebu International Airport after finalizing a deal with Megawide Construction Corp. and GMR Airports International B.V., allowing it to acquire shares in GMR-Megawide Cebu Airport Corp., the company behind the airport.

Mr. Villarete said a private operator managing airports does not guarantee higher passenger volumes.

“If it’s a gateway to tourism destinations, definitely, privately operated airports would certainly help,” he said. They could also make hard to reach but attractive spots in the country more accessible, he added.

Refining a legacy of excellence

October 9, 2024 | 12:31 am

The EY Entrepreneur Of The Year 2024 Philippines has concluded its search for the country’s most visionary leaders shaping opportunities and transforming industries. It is a program of the SGV Foundation, Inc., with co-presenters: the Asian Institute of Management, the Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange.

Barbara G. Tan
President and CEO
A.D. Gothong Manufacturing Corp.

BARBARA “BAMBI” G. TAN, president and chief executive officer (CEO) of A.D. Gothong Manufacturing Corp., (ADGMC) is committed to delivering only top-notch quality. Her drive for excellence and willingness to embrace change have steered her family’s business to new and greater heights. For almost 50 years now, ADGMC has continued to be a key player in the fats and oils industry in the Philippines, especially in Cebu, where “Bambi oil” is a common, indispensable kitchen staple.

But Ms. Tan’s path to entrepreneurship was not one she had initially chosen. It was one that chose her. As the eldest child of ADGMC’s late founder, Albino D. Gothong, she was predestined to play a pivotal role in the family business.

When her father fell ill in 2006, Ms. Tan, a certified public accountant, was called upon to continue his legacy. Graduating magna cum laude with a degree in accountancy from the University of San Carlos, she was more than equipped to rise to the challenge.

Ms. Tan brought a renewed sense of direction to ADGMC. She focused on modernizing the company’s systems and processes, instilling a culture of professionalism while upholding the values of integrity her father had championed. She encouraged the adoption of new approaches and technologies within ADGMC.

The company has continued to support local agriculture and adapted to market trends, such as introducing consumer-friendly sachet packaging (“Tipid Packs”). Operations are also streamlined through vertical integration, ensuring quality control from copra crushing to the final product. Their products are halal-certified, and ADGMC is the first and only Good Manufacturing Practices-certified fats and oils manufacturing plant in Cebu. Additionally, ADGMC has expanded its warehousing and logistics capabilities, meeting customer demands across the Visayas and Mindanao (VisMin) regions more efficiently.

ADGMC’s purpose, as Ms. Tan envisions, is to serve the essential needs of the Filipino people, particularly in the VisMin regions, by providing high-quality oils and baking products, and to support local coconut farmers, thereby contributing to the agricultural sector’s growth. Ms. Tan brings this purpose to life through the company’s operations, producing healthy products that offer value for money without compromising quality.

Ms. Tan defines and measures her company’s success not just through accolades and in financial terms but also through the loyalty of employees and clients. Success is also reflected in how well the company weathers economic challenges, such as fluctuating raw material costs and competitive pressures from the palm oil industry.

Even throughout the coronavirus pandemic in recent years, ADGMC remained resilient. They continued operations and provided housing for employees in need. They let their workers from other affected industries keep their jobs by temporarily letting them work in the manufacturing plant instead.

Ms. Tan ensures that the company’s purpose extends outside the business by engaging in various corporate social responsibility initiatives. Through Ms. Tan’s executive positions in various socio-civic organizations and ADG Group’s Corporate foundation, the Philippine Council for NGO Certification-accredited Alpa Foundation, she supports educational programs, community and religious activities, and environmental stewardship, which extends the company’s positive impact to the supply chain and the broader community.

Ms. Tan secures ADGMC’s long-term viability through a conservative approach to growth that prioritizes quality, sustainability and longevity over aggressive expansion. She ensures that growth does not come at the expense of the company’s values or the well-being of its employees, customers and the community. Her strategy involves focusing operational efficiency rather than growing too quickly.

Like a chef selecting the finest of oils to elevate a dish, Ms. Tan infuses ADGMC with her pure passion for excellence and innovation. She masterfully mixes the rich legacy of her father’s values with modern practices to create a resilient and future-focused enterprise — one that not only nourishes the company but also sustains the community.

The media sponsors are BusinessWorld and ABS-CBN News Channel. The Gold sponsors are SteelAsia Manufacturing Corp., Uratex, and Converge ICT Solutions, Inc. The Silver sponsor is International Container Terminal Services, Inc. The Bronze sponsor is Lausgroup Holdings, Inc. The Banquet sponsors are Robert Blancaflor & Groups, Inc., Bounty Fresh Group Holdings, Inc., Vista Land & Lifescapes, Inc., and Hotel of Asia, Inc.

The winners will be announced on Oct. 23, 2024. The EY Entrepreneur Of The Year 2024 Philippines will represent the country in the World Entrepreneur Of The Year 2025 in Monte Carlo, Monaco in June 2025. The EY Entrepreneur Of The Year program is produced globally by Ernst & Young (EY).

Meralco sees lower generation charge for October

October 9, 2024 | 12:09 am

Meralco electric meters-workers — PHILIPPINE STAR/BOY SANTOS

MANILA Electric Co. (Meralco) expects a reduction in the cost of power procured from suppliers for the October billing cycle, attributed to lower electricity prices in the Wholesale Electricity Spot Market (WESM), a company official said.

“Initial indication shows a possible decrease in the generation charge in the October billing,” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said in a Viber message on Tuesday.

“This is primarily driven by lower WESM charges as prices went down due to reduced demand brought about by cooler temperatures in the September supply month,” he added.

Preliminary data from the Independent Electricity Market Operator of the Philippines (IEMOP) showed that the average power price system-wide declined by 34.7% to P3.88 per kilowatt-hour (kWh) in September from P5.94 per kWh a month earlier.

IEMOP, the operator of the Wholesale Electricity Spot Market, attributed the decline to cooler weather conditions, which reduced demand.

WESM is where energy companies can buy power when their long-term contracted power supply is insufficient for customer needs.

“Also contributing to this is the end of the collection of the deferred May 2024 WESM costs last month,” Mr. Zaldarriaga said.

To recall, the Energy Regulatory Commission directed the staggered collection of charges related to WESM purchases over a four-month period to mitigate the impact of high generation rates.

Last month, Meralco customers saw an increase in their electricity bills due to higher transmission charges.

Overall rate climbed by P0.1543 per kWh to P11.7882 per kWh in September from P11.6339 per kWh in August.

Generation charge, which usually accounts for at least 50% of the monthly electricity bill, went down by P0.1547 per kWh last month.

Transmission charge, on the other hand, rose by P0.2913 per kWh due to higher ancillary service charges following the resumption of commercial operations of the reserve market in August.

Meralco is the main power distributor for Metro Manila and nearby areas, covering 39 cities and 72 municipalities, delivering power to at least 7.6 million customers.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

Ayala Corp. secures $200-M loan from Metrobank

October 9, 2024 | 12:08 am

AYALA Corp. has secured a $200-million senior long-term loan from Ty-led Metropolitan Bank & Trust Company (Metrobank) to fund the expansion of the conglomerate’s investments in “emerging portfolios.”

The loan was signed on Sept. 16 and will be used to support the conglomerate’s financing initiatives for ongoing commitments and investments in technology and payments, health, logistics, and mobility, Ayala Corp. said in an e-mailed statement on Tuesday.

“This loan agreement with Metrobank will support our efforts to sharpen our portfolio and allocate capital to clear business winners. We are glad to partner with Metrobank, an institution that has been working with us for over 30 years, supporting our purpose of building businesses that enable people to thrive,” Ayala Corp. Chief Finance Officer Alberto M. de Larrazabal said.

Metrobank previously provided credit facilities for the Ayala Group’s real estate developments, renewable energy projects, and data centers.

“This deal is a testament of our decades-long support to the Ayala group’s growth aspirations of building businesses that transform industries, challenge the status quo, and bring innovations that contribute to the Philippines’ social and economic development goals, all while being a standard bearer for good corporate governance,” Metrobank Institutional Banking Sector Head Mary Mylene A. Caparas said.

For the first half of the year, Ayala Corp. saw a 21% increase in net income, amounting to P22.3 billion, compared with P18.4 billion in the same period last year.

Revenue for the January-to-June period climbed 10% to P179.94 billion compared with P164.24 billion in 2023.

On Tuesday, Ayala Corp. shares fell 0.41%, or P3, to P737 per share. — Revin Mikhael D. Ochave

Filinvest Land adds fifth mall to portfolio

October 9, 2024 | 12:07 am

LISTED property developer Filinvest Land, Inc. (FLI) expanded its mall portfolio with the recent opening of its fifth mall Filinvest Malls Dumaguete in Negros Oriental.

The opening of Filinvest Malls Dumaguete adds 3,759 square meters (sq.m.) of gross leasable area (GLA) to the property developer’s shopping and dining portfolio in Luzon and Visayas, FLI said in an e-mailed statement on Tuesday.

The new mall, located at Flores Avenue corner E.J. Blanco Street, Dumaguete City, is the second FLI mall in Visayas, joining the IL Corso in Cebu City, which offers 18,049 sq.m. of GLA.

It is located along Dumaguete Bay, offering coastal views and an extensive lineup of local and national brands that cater to the tastes and preferences of Dumagueteños.

“We are excited to become a part of Dumaguete’s rich culture and history and to contribute to its continued progress and development,” Filinvest Malls First Vice-President and Retail Business Unit Head Mitch A. Dumlao said.

“Beyond creating a space where locals and visitors can come together as a community to enjoy shopping, dining, and leisure activities, we aim to boost tourism, create job opportunities, and support local businesses,” he added.

Filinvest Malls Dumaguete features brands such as UCC Cafe Terrace, The Medical City Clinic, Bigby’s, Power Mac Center, Island Souvenirs, Joneco Tech, Salon de Rose, and a Filinvest Land showroom.

The mall also has Executive Optical, Haru Photo Studio, iStore Service Center, Interpace Computer Systems, Kids Paradise, Liquid Flask, Lixx, V Spa, Vinci Aesthetic Clinic, and Watsons.

Some of the food and dining options of Filinvest Malls Dumaguete include Potato Corner, Jamaican Patties, Bongbong’s Piaya & Barquillos, Gong Cha, Japabites, Kettle Corn, Waffle Time, Cantina 13, Yscoop Cafe, Turks, Sans Rival Bistro, Hukad, Mr. Sizzlers Unlimited Rice & Gravy, and Mrs. Breadworth Bakery Café.

Aside from Filinvest Malls Dumaguete and IL Corso, Filinvest Malls also operates Festival Mall in Alabang, Main Square in Bacoor, and Fora in Tagaytay.

FLI shares were unchanged at 81 centavos on Tuesday. — Revin Mikhael D. Ochave

Art Jakarta’s steady growth: a bigger venue, more visitors

October 9, 2024 | 12:07 am

Air-Pasang-by-Iwan-Yusuf-at-Art-Jakarta — AIR PASANG by Iwan Yusuf at Art Jakarta — BRONTË H. LACSAMANA

AS Art Jakarta settled down in its new home at the JIExpo Kemayoran — a large convention space with high ceilings that it moved into last year — the fair expanded in size by 20% by occupying two more halls.

This allowed them to increase the number of exhibitors to 73 from 68 last year, with art galleries coming from all over the world to participate. It also boasted more corporate sponsorships from the likes of financial company UOB Indonesia and stock investing app Bibit-Stockbit, who collaborated with artists to put up elaborate displays.

Art Jakarta was held last weekend, from Oct. 4 to 6.

“We made the right decision with the spacious setting, all within a single compact hall, allowing us and our exhibitors to grow not only in size, but in substance,” said Tom Tandio, fair director of Art Jakarta, in a speech on opening day.

“This enhancement offers an experience at par with other global art events,” he told BusinessWorld later. “And rightly so, because the art markets in Southeast Asia are all growing.”

The biggest downside to this venue would be its location north of central Jakarta, which meant braving traffic jams when coming from the city. This was made worse on the Saturday of the event, as the Indonesian military held a parade that citizens only found out about days before.

ON CULTURE AND CLIMATE
Despite the severe traffic, JIExpo served its purpose as a large-scale venue, the curated Spot section right in the middle being the most notable beneficiary of the expansion. There, Indonesian artists put up giant, striking installations that commented on sociopolitical and environmental realities.

Timoteus Anggawan Kusno’s Dismantling Nostalgia, a 13-plus-foot-tall canvas that collaged prints of romantic rural landscapes of Indonesia (known as mooi indie, or “beautiful Indies”) highlighted how Dutch colonial propaganda became a bedrock of misplaced Indonesian patriotism.

Nearby, former art professor Tisna Sanjaya’s Ganjel was a clear jab at modern politics, made up of a stack of orange binders with sculptures of President Jokowi and his eldest son Gibran Rakabuming Raka atop (the latter is set to become vice-president this year following a change in rules that allow those under 40 to take office). The monument to political nepotism and flawed bureaucracy was surrounded by a handful of grotesque paintings.

On the other end of the central Spot space were angular tree roots holding up a wooden block, a piece by Syaiful Garibaldi named Antara Muara, modeled after traditional stilt houses and made of leftover wood and leather. The work was an homage to mangroves in coastal villages that protect against erosion. Finally, Iwan Yusuf’s Air Pasang presented a chaotic cluster of fishing nets and sea debris strung up above, a recreation of the waste brought to shore by the ocean’s currents.

All four installations were commissioned just for the fair, “evidence of the rich goldmine of artistic expression that Indonesia can offer,” said Mr. Tandio.

“Together, we strive to provide artists and creative minds a unique platform to present their creations and to showcase Indonesia’s growing importance in the regional and international art worlds,” he explained in his opening speech.

COLLABORATION IS KEY
Mr. Tandio told BusinessWorld that showing off local artists at a big platform is not enough. “Collaboration is key,” he said. “We work with other art fairs like in South Korea; we have program exchanges. For the galleries, I introduce Indonesian galleries abroad and foreign galleries here.”

One of Jakarta’s leading galleries, ROH Projects, had several booths showing a variety of works, like Aurora Arazzi’s paper creation that gives the illusion of a bread crust abandoned on a tile, and Yogyakarta-based Eko Nugroho’s stunning monochrome paintings.

In contrast, the most minimalist booth was easily ShanghART Singapore’s. It presented New Forest, a nondescript newspaper stand installation amid the hustle and bustle of the fair, designed by Robert Zhao who represented Singapore at the Venice Biennale this year. It sold printed news posters that reported on a tree stump felled by a monsoon, the product of Mr. Zhao’s research project that followed the decay of the tree trunk via motion camera.

For Mr. Tandio, the increased size of Art Jakarta and consistent quality of works being exhibited show just how much the art market continues to grow. He also pointed out numerical proof of it (though they do not release sales numbers): from 32,000 visitors in 2022, they attracted 35,578 visitors in 2023. Days after the event, Art Jakarta notified BusinessWorld that the 2024 edition saw 38,368 visitors. For the fair, founded in 2009 by Mugi Rekso Abadi (MRA) Media, this “reaffirms its position as Indonesia’s flagship art event.”

“Ultimately, I believe in collaborations to promote art all over Asia,” Mr. Tandio said. “That is why Art Jakarta is an Asian-focused art fair.” — Brontë H. Lacsamana

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