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You wanna be on top? The model life

By Joseph L. Garcia, Senior Reporter

FORGET parents and lovers. Who really guides you with how to live your life are the models smiling from your screens, or looming at you from billboards larger than life. They’re not actually telling you anything, but the clothes they wear, and the yogurt they’re not actually eating presents you with a picture of how a life should be lived. What they’re showing isn’t always particularly true, or realistic, but it’s always good to reach for a star.

Models (most of them uniformly sized and quite tall) were all at Dr. Wine in Makati’s Poblacion for a brand and socials night on Aug. 6. Their ringleader, Diego Harmuch, Chief Executive Officer and founder of Luminary Model Management, Inc., was dressed in a suit and told BusinessWorld what it’s like to live that life.

The modeling agency started scouting in 2020 but was officially launched in 2021. Since then, their models’ faces and bodies have graced the pages and covers of international magazines, and store windows of global fast-fashion brands.

GETTING THERE
Mr. Harmuch told us the steps to getting hired as a model.

First you get scouted, or you get referred, or you can apply to a modeling agency, or you can attend an open casting (they’ve just finished one: 86 aspirants came in, only two women got the job). If they like your profile, they schedule an interview. Then, they arrange a photoshoot so they can fill up your comp card: like a calling card for models, but aside from biographical data, it contains the model’s measurements and pictures. These include full-body and half-body shots, close-ups, and snapshots. “What closes the job are the snapshots; clean shots. You need to see how the models really are when they have no makeup, and they are not produced,” said Mr. Harmuch. These comp cards are then shown to clients and casting agents.

But what should a model look like? It still depends on the market.

“I remember modeling in the Philippines 10 years ago. The market was very different,” Mr. Harmuch said. Himself possessing a lean frame, the casting agents and brands back then looked for more muscular builds. “It’s (now) much more open. I believe anyone can become a model, as long as they really want to do it,” he said. “And of course, (if) you have the certain measurements that you need to have.”

He gives some examples: a female model would be around 5’6” to 5’7”, but that’s variable (again, it depends; a phrase Mr. Harmuch used a lot in this interview). The shorter girls can do beauty, skin, and clothing campaigns, but, “We have girls who are taller, who are suitable for fashion shows.”

If the model is doing beauty campaigns, they have to have great skin. For other areas, it’s a lot more nebulous: “You need to fit the clothes very well,” he said. “The clothes have to look good on you. You’ve got to have good proportions.” He added, “We look for different faces, now that the market is very open.”

X-FACTOR
Scouting a model might feel a bit like falling in love (though Mr. Harmuch thinks the feelings are different). “I think it’s like an X-factor,” he said. “You see potential. You see raw potential in that person. You see what a person can possibly become.

“You see a person, and you really believe that that person can be a model. You know what I mean? And then it just happens to them,” he said. “That person was born to be a model. Just guide that person properly… put them in the right place.”

Mr. Harmuch had been a model himself, starting at age 14. He took pictures with his cousin, who sent them to a modeling agency. Asked if this was proof that he had always been good-looking, he said, “I mean… that I don’t know. It just happened.”

While head of a modeling agency, he’s also a photographer. Asked what it’s like on the other side of the lens, he said, “There’s a lot more planning. You really have to plan, and know that you are dealing with people’s lives. It’s a bigger responsibility.”

THE MODEL LIFE
We interviewed some of his models: Hazel Xue was studying public relations in Australia and decided to do something a bit more casual and part-time to make money, and still have fun. “When things started to become a little bit more serious, I saw my potential in this industry,” she said. She stands in front of a mirror sometimes to practice posing, or does research on her favorite international models to see how they do it.

Male model Diego (who asked for his last name to be a simple “M”) said about his discovery, “Classic story. I was walking in a mall.” In SM Cherry, in Mandaluyong, of all places. A designer approached him and asked if he was a model. He said no. The designer asked if he wanted to be a model. He said no. “I really had nothing in my plans to be a model,” he said. The designer posted his picture on Facebook, where it was spotted by Mr. Harmuch and his wife.

“I wanted to be a chef,” said Mr. M. “I’m doing this first before that, because I know modeling doesn’t last very long. My true passion is cooking. Modeling became also like a hobby and passion over time.

“I love it. It’s just a world that I was never exposed to,” he said. Mr. M, 21 years old, tried to explain the politics of the Second World War, ending by saying that his European father turned socialist. “They were anti-capitalism; all this, that’s all in my head. This world is new to me.”

ON DIETS AND TRAVELING
Young, good looking, traveling the world (Mr. M had done a show on Milan Fashion Week), and your only tax to enter this world is your face. Life as a model should be easy, but Mr. Harmuch said in a low voice, “Not really.”

“First thing, it’s a 24-hour job. You always have to (fulfill) measurements. You always have to look a certain way. You have to work hard for that,” he said.

Salads and assorted cheese and charcuterie were served as the first course of that evening, as well as foie gras on different kinds of bread. A server, laughing, aware of the models surrounding the table, said that the bread may be left untouched, because of the models’ diets. One (Mr. M, actually), said, “Kakainin ko iyan (I’ll eat that).”

“It’s not easy for you to be doing a diet every day,” said Mr. Harmuch. “To restrict yourself from eating certain things that you want to eat.

“Or being away from your family,” said Mr. Harmuch who recalled leaving home at 18 to model around the world. “Literally not seeing your parents and you’re a very young teenager. Being away from your family — it’s very lonely, actually. Traveling around… it’s hard. There are a lot of struggles, that a lot of people don’t understand. They think you just have to be pretty. There’s hardship,” he said.

“Not a lot, to be honest,” said Mr. M, when asked about the hardest parts of modeling. “Compared to photographers, and all that. They do all of the work, essentially. You just show up. You don’t really have to prepare. You just prepare yourself.

“I guess the hardest part is keeping your body in shape, and making sure you’re eating healthy, and making sure that everything is as picture-perfect as can be,” he said.

For Ms. Xue, who is “a little bit introverted,” the hardest part was facing people. “Sometimes, when I need to talk to people, I find it to be stressful. But when I open up, and people are so friendly, I find it is easy.”

“Nobody’s job is easy. Everyone is just trying to go through it,” he said. What then, makes it all worth it? “What makes it worth it?” said Mr. Harmuch, repeating our question. “You love it. You have to love it. I think when you really love something, you do it because you love it. It happens to you because it’s supposed to be there, like that. It’s hard to answer this question.”

A BLESSING
Is it worth it when you see your face everywhere, presented larger than life itself? “You have to be very humble when it happens to you. I always tell my models to be very humble. If God blesses you, these things happen to you.”

Former model, photographer, and he who sat on the judges’ panel of America’s Next Top Model Nigel Barker said in the introduction to his book, Models of Influence, “Models have moved us over the years to think and see the world differently. They hold up a mirror to society and show us where we are and where we still have room to grow. What is considered beautiful evolves, but it’s very often through models and fashion that we come to understand beauty in the context of our time, and by extension, within ourselves.”

Mr. Harmuch says, “Modeling is about being your own personality, and becoming more of who you are, so you can be an inspiration for other people.”

Rolling with the facts

Formally introducing ‘Kuya Kim’ Atienza (second from right) as CST Tires Brand Ambassador are (from left) AP Blue Whale Corp. National Sales Manager for Four Wheels Eric Yap, Marketing Manager Christine Roque, and National Sales Manager for Two Wheels Serj Castro. — PHOTO BY KAP MACEDA AGUILA

CST Tires, ‘Kuya Kim’ forge ties for tire info campaign

By Kap Maceda Aguila

AP BLUE WHALE CORP., country distributor of Taiwan-headquartered CST Tires, shared that “road accidents are still the leading cause of death and injuries, especially among younger people, according to the Department of Health.” Even more significant, these numbers are expected to surge as more people own and operate cars and motorcycles.

The hope, it asserted, lies in proper safety education, toward the goal of reducing accidents by “at least 35%” — a figure put forth by the Department of Transportation — by 2028.

Surely an important part of ensuring safety on the road is looking after a vehicle’s tires. “Tires are what connect us to the road, so we have to be very conscious of them, their condition, and even pressure,” declared “Kuya Kim” Atienza, noted “fact-teller” and riding/motoring enthusiast. Mr. Atienza has been conscripted by CST Tires as its brand ambassador — inking a year-long deal to be the face of the brand through its “Know Your Tires” campaign.

The safety awareness effort, which doubles as a marketing push for CST Tires products, will see Mr. Atienza star in a series of short videos aiming to educate motorists and riders alike on the ins and outs of tire safety and ownership.

According to AP Blue Whale Corp. Marketing Manager Christine Roque, Kuya Kim is a perfect fit to achieve this goal because he has long been known as a “credible and relatable” source of information. “Our usual concern is how to explain tire tech to average customers. It might get too technical. Kuya Kim is known to very simply explain even the very technical,” she maintained.

At the recent press conference announcing his appointment as CST Tires brand ambassador, Mr. Atienza shared that the campaign kicks off this month with the release of the first video on the CST Tires Philippines social media platforms. “This campaign will be focused on safety, more than anything. The qualities of CST Tires will come out as we focus on how safe it is to use them,” he said. Mr. Atienza added that, beginning in 2015, he had largely switched to riding his motorcycles or bikes come sun or storm. He stressed the importance of choosing the right tires which enable him to come home to his family safely every day.

“Tires are the most important safety feature in four-wheel and two-wheel vehicles… and they affect safety, braking, handling, steering, and ride quality,” he continued. “Know Your Tire” will delve on “the importance of choosing the right tires, tire maintenance, and tire safety. As we were shooting initially, I saw so many things that ordinary people may not know but can dictate (safety on the road). As much as we could, we tried to explain terms and bits of information to the general public in a very exciting, reachable, and understandable way — and the qualities of CST will come out. My responsibility is to be able to explain in layman’s terms how safe it is to use CST Tires, and explain their quality. Again, the prime concern is safety.”

Replying to a question from “Velocity,” Mr. Atienza said, “You know what I see, especially among motorcycle riders? Lots of them have worn-out tires. They might say they’re too expensive to replace, or that they can’t afford to buy new ones. But the important thing is to invest in quality tires which have the right tread. It’s actually easy to read tires if you know how — like, what do the numbers on the sidewall mean?”

In true Kuya Kim fashion, he bared the origin of the “kamote rider” term — a derisive description of reckless or irresponsible motorcycle riders. It’s not what people usually think; it did not originate as a near homonym of “kamot-ulo” (literally, to scratch one’s head, usually to express ignorance or regret after a traffic incident).

“I used to hear that from my teachers when they admonished students who (didn’t do well or didn’t prepare for class). ‘Go home and plant kamote (sweet potato).’ But this actually originated in American colonial times when our colonizers were the teachers and Filipinos were the students. It was actually a putdown for farmers,” Mr. Atienza narrated.

In an interview with this writer, AP Blue Whale Corp. National Sales Manager for Four Wheels Eric Yap averred that CST Tires promise value for money, as they are priced more affordably than many mainstream competitors. Here in the country, it’s an established tire marque for vans, 4×4 vehicles, and light commercial trucks, he maintained.

Despite its relatively affordable pricing, the company, according to AP Blue Whale Corp. Product and Technical Director Jaybee Atanacio, has its own R&D (research and development) and production facilities that assure its quality and development arc toward innovation. Cheng Shin Rubber Ind. Co. Ltd. (or Cheng Shin Tire) employs more than 20,000 people and is, incidentally, the largest bicycle tire manufacturer in the world. It boasts a daily tire manufacturing capacity of 300,000 units for motorcycles and bikes, 10,500 tires for trucks and buses, and 26,000 for passenger cars — with production facilities in Thailand, Indonesia, Vietnam, Taiwan, India, and China. With a global footprint in 157 countries, CST has tech centers in Changua, Taiwan; Xiamen, China; Noorddammerweg in the Netherlands; and Atlanta, Georgia in the US.

T-bill, bond rates may go up before BSP meeting

RJ JOQUICO-UNSPLASH

RATES of Treasury bills (T-bills) and Treasury bonds (T-bonds) to be auctioned off this week may climb as investors await the Bangko Sentral ng Pilipinas’ (BSP) policy meeting.

The Bureau of the Treasury (BTr) will auction off P20 billion in T-bills on Monday, or P6.5 billion each in 91- and 182-day papers and P7 billion in 364-day debt.

On Tuesday, the government will offer P30 billion in reissued 20-year T-bonds with a remaining life of six years and 11 months.

Yields on the T-bills and T-bonds on offer this week could track the week-on-week increase in secondary market rates, which came on the back of faster July inflation and in anticipation of the BSP’s review, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

A trader said in an e-mail that the T-bonds on offer this week could fetch yields ranging from 6.10% to 6.15% as the market widely expects the Monetary Board to begin its easing cycle on Thursday.

At the secondary market on Friday, the rates of the 91-day, 182- day, and 364-day T-bills went up by 5.58 basis points (bps), 4.13 bps, and 3.46 bps week on week to end at 5.8429%, 6.1056%, and 6.1977%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data published on the Philippine Dealing System’s website.

The 20-year bond’s rate inched up by 0.01 bp week on week to 6.1163%, while the seven-year debt, the tenor closest to the remaining life of the papers on offer this week, increased by 0.67 bp to yield 6.3206%.

Headline inflation accelerated to a nine-month high of 4.4% in July from 3.7% in June, the Philippine Statistics Authority reported last week. This was slower than the 4.7% print in the same month a year ago and was within the BSP’s 4%-4.8% forecast.

However, this was the fastest in nine months or since the 4.9% clip in October 2023 and also marked the first time since November that inflation exceeded the BSP’s 2-4% annual target.

The Monetary Board is now “a little bit less likely” to cut rates at its Aug. 15 policy meeting following the worse-than-expected July inflation print, BSP Governor Eli M. Remolona, Jr. said after the data release.

The Monetary Board has kept its policy rate at an over 17-year high of 6.5% since October 2023 following cumulative hikes worth 450 bps.

A BusinessWorld poll conducted last week showed that nine out of 16 analysts surveyed expect the Monetary Board to deliver a 25-bp rate cut at Thursday’s review.

This would bring the target reverse repurchase rate to 6.25% and would be the first reduction in benchmark borrowing costs since November 2020, or during the coronavirus pandemic.

The BTr wants to raise P220 billion from the domestic market this month, or P80 billion through T-bills and P140 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product for this year. — A.M.C. Sy

Ayala Land sticks to current landbank, focuses on utilization

AYALA Land, Inc. (ALI) will not expand its land bank — the total land it owns or controls for future development — but will concentrate on maximizing the utilization of its existing properties, a company official said.

“We’ve made a deliberate decision not to acquire additional land unless it’s a very special parcel, and we know where those parcels are, but they’re not yet up for sale,” ALI Chief Finance Officer Augusto D. Bengzon said in a media briefing last week.

Mr. Bengzon said that ALI had 11,300 hectares of land bank as of the end of 2023.

“We do think that we will be utilizing around 800 hectares a year, so over the next five years, that’s about 4,000 hectares,” he said.

During the same briefing, ALI President and Chief Executive Officer Anna Ma. Margarita Bautista-Dy said the company will launch new districts within the company’s existing estates.

“We will be focusing not so much on the launching of new estates but on launching new districts within existing estates. We want to really use the land bank in our existing estates as opposed to keep launching new ones,” she said.

“We want to make sure that our estates really come to life. It helps if we focus our capital and efforts on making the most out of the estates that we have, and in the process, create more value in our existing estates,” she added.

Ms. Dy said that ALI has earmarked P7 billion in capital expenditure (capex) budget over the next two to three years for the reinvention of its leisure and hospitality business.

ALI Head of Leasing and Hospitality Mariana Zobel de Ayala said that 900 hotel rooms are under construction in support of the company’s target to build 4,000 new rooms over the next five years.

“What’s particularly exciting is we’re hopeful about growth in international travel. I think there’s a projection that foreign arrivals will double in the next few years. We are going to be rolling out a number of new products targeted at that foreign travel,” she said.

Mr. Bengzon also noted that ALI’s planned capital expenditure of P100 billion for this year is approaching its pre-pandemic level of P108 billion.

“We’re almost there. Pre-pandemic, we peaked at about P108 billion in capex spending. In terms of the activity on the ground, I think by many metrics, we’ve exceeded pre-pandemic levels. Construction activity-wise, I guess that will follow our launches, as well as the leasing pipeline that we’ve set out for ourselves,” he said.

Meanwhile, Ms. Dy said the growth of the company’s residential business will come from the premium segment.

“There will be continuous demand from the premium segment. The onus is on us to come up with products that will really cater to the requirements of that segment and will be able to compete and offer something different from other competitors,” she said.

For the first half, ALI saw a 15% increase in its net income to P13.1 billion as consolidated revenue rose by 28% to P84.3 billion. 

ALI shares were last traded on August 9 at P30 per share. — Revin Mikhael D. Ochave

Doing the laundry? There’s an app for that

If you are using Midea’s new Luna washing machines

WHAT better way is there to launch a new washing machine than by doing a bit of laundry?

As Midea launched their newest line of washing machines, the Luna, on Aug. 6, at their Makati showroom, Anna Marie Alejandro, General Manager of Concepcion Midea, Inc., Philippines, placed a full load of laundry in one of the machines, setting the timer for an hour with her phone. After a series of activities at the launch, the machine beeped to show that it was done with the load — not only had it been washed, it had also been dried in that span of time.

With the Luna’s One Touch Fuzzy Logic feature, users are assured of a user-friendly experience, eliminating the hassle of complicated programming. The machine is able to detect the right water to laundry ratio for every load, and, with its Turbo Wash feature, offers a 40% reduction in washing time.

A HealthGuard feature, which works together with Auto Clean and Steam Care, makes sure that the washing machine’s inner and outer drums are sterilized to avoid secondary contamination and can function with greater washing performance. This also helps clean clothes better. “This is what we’re proud of,” said Ms. Alejandro in an interview.

More importantly, the washing machines can be controlled with an app on a smartphone (meaning you can do chores long-distance).

The line has both front load and top load machines.

The Luna Inverter Series Front Load Combo Washing Machine costs about P51,000, with Ms. Alejandro estimating that they cost 25% to 30% less than Korean and Japanese competitors with similar features. Midea is a brand from China, and is one of the world’s largest manufacturers, especially for microwave ovens.

Its sheer size and manufacturing capabilities are the reasons for the relatively low prices. “Midea manufactures its own products, from the smallest material,” she said. “Midea is the biggest global manufacturer,” pointing out that some of the microwave oven parts of their competitors come from them. “That’s why when it comes to pricing the product, it’s not about sacrificing the quality. It’s because we’re efficient.”

The lower prices, then, allow for more accessibility to Filipino customers: “We’re opening opportunities for Filipinos to upgrade their appliances,” said Ms. Alejandro. — Joseph L. Garcia

Enhanced ownership packages on select Lexus models this month

PHOTO BY KAP MACEDA AGUILA

LEXUS MANILA bundles select models with enhanced ownership packages in a campaign that runs until Aug. 31.

First among the included nameplates is the Lexus UX 300e, priced from P3.838 million. The all-electric SUV is said to “seamlessly blend eco-friendliness with unparalleled luxury.” Sleek and aerodynamic, the UX 300e is equipped with a “cutting-edge” electric powertrain and a host of modern amenities. Its driver-centric cockpit gets Sashiko leather seats, and the vehicle boasts the Lexus Safety Sense suite that includes advanced features like a pre-collision system, adaptive high beam system, lane departure alert, lane tracing assist, and dynamic cruise control.

Meanwhile, the RZ 450e, starting from P5.228 million, is Lexus’ first fully electric model, and is “technologically advanced,” positioned as blending innovation and luxury. It has a futuristic cockpit “designed to create a seamless connection between driver and vehicle,” while its advanced electric powertrain is complemented by a suite of safety features.

Priced from P10.508 million, the LS 500 Premier is the brand’s flagship sedan that offers “exceptional comfort, performance, and safety, with an interior crafted by Takumi masters using razor-thin haku metal foil and Nishijin weaving techniques.” A powerful 23-speaker Mark Levinson sound system completes a luxurious package.

For more information, visit the Lexus Manila showroom in Bonifacio Global City or download the MyLexus App available for both Android and iOS users to receive live updates and to access other premium services.

Are we witnessing a paradigm shift in industrial policy or are the Plaza Accords rebalancing architecture in our future?

PEXELS-KAROLINA GRABOWSKA

A combination global crisis: the climate change crisis, the new geopolitical realignment and conflicts disrupting global trade, and the revolution in renewables technology are proving to be a benign testing ground for an industrial policy away from the liberal free trade ideology dominant since the Thatcher-Reagan revolution in the 1980s.

The view that nationalist-protectionist industrial program, exemplified by countries behind the socialist wall, will lag behind the market economies has become established in many people’s minds. F. Fukuyama wrote The End of History as the death anthem of the polar challenge of the central planned economies.

Forty years later, a new and more assertive champion of the old mercantilist heresy has arisen to challenge the neo-liberal hegemon. Mercantilism reminiscent of the old days, and about which Adam Smith raged against, is alive and seemingly thriving. This new champion, Red China, had become not just the second largest economy in the world but is showing designs of toppling the top hegemon in the world. This emergence has shifted from labor-intensive to technological sophistication (semiconductors, supercomputers, EVs, and batteries), which promises to fuel even greater progress in the future. The big difference is that its dynamism is anchored in a very vigorous domestic market economy unlike the old central planning. More interestingly, it had transitioned from the defuse industrial policy delivered by currency undervaluation to the massive direct fiscal subsidy to select industries. The result has been spectacular.

Two decades (2005-2023) is all it took for Red China to overtake the current hegemon in total exports to the world. The export surge that started out among light labor-intensive goods, toys, and gadgets in the 1980s-1990s, all in keeping with Heckscher-Ohlin paradigm and riding on a massively undervalued yuan, gave China considerable advantage in light manufactures. The undervalued yuan was set in 1994 (CN¥8.28/US$) and stoutly defended but eventually allowed to appreciate 16% to CN¥6.11/US$ to assuage Western restiveness when the consensus was at least 25% devaluation.

China then found another way: the undervalued yuan was replaced by a massive direct fiscal subsidy to a select few industries which would serve a new deeper challenge and a new spur to its hegemonic challenge. Highly sophisticated technical marvels such as EVs, solar panels, and semiconductors delivered on the backs of massive direct fiscal subsidies are now the new face of Chinese exports.  This continued surge led to the deindustrialization of, and destitution in, the American and other western industrial heartlands. The USA became the chief importer from and chief debtor to the world ($35 trillion to date), largely enabled by its privilege of being the issuer of the global medium of exchange. This dominance is understood in the West as a result of heavy subsidies for EV Manufacturing in China (F. Bickenbach, D. Dhse, Rolf Langghammer and Wan-Hsin Liu, 2024).

Studies also show that this exorbitant privilege allows the US per capita income to rise by 17% plus. To counter the privilege, many countries try to become currency manipulators, risking the ire of the US Treasury. Both former US president and now Republican presidential nominee Donald Trump and his choice for vice-president JD Vance have both advocated a weaker dollar during the Plaza Accords.

The mad rush to renewables in transport since the 1990s was first seen as doing the global community a favor in the global warming crisis rather than as an assault on industrial hegemony. But the deindustrialization and consequent destitution in the rest of the world could not be ignored indefinitely.

USA RESPONDS: THE INFLATION REDUCTION ACT AND THE SCIENCE AND CHIP ACT
The Inflation Reduction Act represents the largest investment ($369 trillion in August 2022 and up to $3 trillion with private investment channeled over the next decade) towards reducing dependence on China. The USA has committed $53 billion to the Chips and Science Act to reshore US investment in semiconductor research and manufacturing; $39 billion of this is to build, modernize and expand chip fabrication as well as a 25% investment tax credit. Raising the import tariff on semiconductors 100% is a critical part of the come-ons to protect new home-bound investments. As one commentator observed: “The IR Act marked a paradigm shift in green industrial policy for the US, diverging markedly from free-trade neoliberal policies that had enjoyed bipartisan congressional support since the Reagan era.” (M. Lyons, “Climate Justice: Friendshoring, China’s Supremacy and America’s IR Act,” www.lowyinstitute.org/the-interpreter/climate-justice-friendshoring-china-s-supremacy-america-s-ir-act )

Before this, programs to improve industrial competitiveness and reduce the trade deficit were poohpoohed as “industrial policy,” a rather pejorative term in the lexicon of the liberal free trade circles in the USA.

China is beginning in a big way to assault the Western dominance in the EV car market; it has accounted for 80% of solar manufacturing and 60% of wind and battery production. China’s dominance and control of critical mineral production looms large and threatening. The net zero Paris commitment is proving a convenient cover for sideswiping the accepted global trade architecture of the world.

As response, the USA has committed $53 billion. President Joe Biden’s 100% tariff on imported EVs from China was intended to dent China’s unfair trade practices and protect local investment. Although the 100% tariff will be insufficient to keep Chinese EVs out in the low end of the spectrum ($10,000 or less); it will protect the high-end EVs like Tesla and heavier EV truck size bread-and-butter vehicles of US manufacturers.

WESTERN EUROPE RESPONDS
In June 2024, the European Union (EU) responded to this belief by also imposing a tariff of 17.4% to 38.1% against a range of high-tech products from China following the Biden administration’s lead in May 2024 (100% on EVs and 25% on batteries).

Chinese EVs have benefited from massive industrial policy subsidies. The massive home market allows massive economies of scale in production, which contributes to lower costs. The types of support range from below-market credit to state-owned and -operated corporations, rebates, sales tax exemptions, infrastructure subsidies, research and development funds, government procurement bias, and below-market land sales which, in 2023 alone, totaled to $45.3 billion according to the CSIS.

From 2009 to 2023 a total of $230 billion may have been granted as subsidies. This is far higher than industrial subsidies in Western countries as a percentage of GDP (China’s was about 1.73% in 2019 vs. say, South Korea’s 0.67%, Germany’s 0.41%, and the USA’s 0.39% of GDP). Purchase subsidies paid to producers for vehicles made in China not for imports and not to consumers amounted to €4.2 billion in 2022 but ended then. BYD received €1.6 trillion in 2022. The subsidy to CATL alone, the chief battery technology company in China in 2023 reached $809 billion. Regional government subsidies to EV manufacturers are also substantial but quite hidden.

Meanwhile, defenders of the Chinese challenge could point to the fact that EV vehicular subsidies as a percentage of total sales has dropped to 40% from 140% in early years. The average support per vehicle has dropped from $13,800 in 2018 to $4,800 less than the credit going to qualifying vehicles to buyers in the USA which is $7,500, under the Inflation Reduction Act of the USA.

Why not try the Plaza Accord Agreement solution? The Plaza Accord Countries agreed in 1986-87 to address the imbalance in favor of the raging Japanese economy by forcing a massive appreciation of the Japanese yen. But the world is different now. While China is posing a direct challenge to the USA as a new polar hegemon; Japan was clearly well within the fold of the US hegemon; Japan could be nudged towards an appreciation of its currency (up to 200%) even at the further appreciation cost of a prolonged recession. China has long resisted the drastic appreciation of the Yuan and will refuse a deflationary outcome to prevent social unrest; and, more importantly, its designs on the old hegemonic ranking will suffer. It is not as docile as Japan in the 1980s.

The Plaza Accords rebalancing is not in the cards.

 

Raul V. Fabella is a retired professor of the UP School of Economics, a member of the National Academy of Science and Technology, and an honorary professor of the Asian Institute of Management. He gets his dopamine fix from tending flowers with wife Teena, bicycling, and assiduously, if with little success, courting the guitar.

Elevate secures $5M to launch USD accounts for Filipino freelancers

Elevate, a Y-combinator-backed fintech startup headquartered in London and Dubai, has successfully raised $5 million in financing to expand its operations in the Philippines.

Since 2021, they’ve raised a total of $10 million in equity and debt from investors, including Y Combinator, Goodwater, Global Founders Capital and VSQ.

Elevate’s product launch in the Philippines aims to address the financial challenges faced by Filipino freelancers.

Elevate’s innovative platform is designed to simplify the process for freelancers in the Philippines to receive payments in US dollars (USD). It supports free and fast deposits from US and international employers and popular platforms like Upwork, Fiverr, PayPal, Deel, and Toptal.

For those transferring assets from USD accounts to Philippine-based banks, the platform offers the most competitive foreign exchange (FX) rates in the market. By partnering with multiple large global FX providers integrated with banks in the Philippines, the platform ensures access to the best rates available, making it a cost-effective solution for maximizing earnings.

In addition to facilitating USD transfers, Elevate offers a Mastercard debit card that users can utilize for online spending.

“We are thrilled to bring our innovative financial solutions to the Philippines, a market with a burgeoning freelance community,” said Elevate’s CEO Khalid Keenan. “Our goal is to empower freelancers by providing them with secure, efficient services and the best USD-peso FX rates that address their unique needs.”

A key differentiator for Elevate is its partnership with its sponsor bank, Bangor Savings Bank, a 172-year-old institution in Maine, USA, with over $7 billion in assets. Unlike other electronic money accounts such as Wise and Payoneer, Elevate accounts are insured by the United States’ Federal Deposit Insurance Corp. (FDIC) through Bangor Savings Bank, providing users with the security of knowing their funds are protected up to $250,000 in the event of bank failure. This partnership makes Elevate the only service enabling individuals in countries like the Philippines, Pakistan, and Bangladesh to open FDIC-insured US bank accounts.

“The introduction of FDIC-insured accounts through our sponsor bank, Bangor Savings Bank, is set to revolutionize the financial landscape for Filipino freelancers, offering them unprecedented security and convenience in managing their international earnings,” he added.

Since its launch in early 2024, Elevate has already attracted over 150,000 users globally, highlighting the strong demand for its services among freelancers and remote workers.

With 1.5 million Filipinos registered on online international freelancing platforms and an additional 1.3 million working in BPOs, mostly for US companies, the Philippines is a hot spot for remote work. Notably, in 2023, the Philippines surpassed India, the US, Brazil, and other countries to become the leading country for workers on Deel, a popular remote work platform. The Asia-Pacific region, including the Philippines, has been the fastest-growing area for remote work, alongside EMEA.

Looking ahead, Elevate plans to expand its customer support, content, and compliance teams in the Philippines in the third and fourth quarters of 2024.

The company also anticipates significant demand from other tech-savvy, educated workforces in Indonesia, Malaysia, Vietnam, and Thailand, as remote work continues to offer new opportunities across Southeast Asia.

Davao durian fest highlight of city’s Kadayawan season

BW FILE PHOTO/MAYA M. PADILLO

By Maya M. Padillo, Correspondent

DAVAO CITY — Durian, touted as “the king of fruit,” is in the spotlight this month with multiple varieties on exhibit during the Kadayawan sa Davao Festival.

The 10th Durian Festival, organized by the Department of Agriculture (DA) in Region 11, SM Lanang Premier, and the Durian Industry Association of Davao City, opened on Friday at the north wing of SM Lanang. The varieties on display include D101, puyat, native, arancillo, Montong Obosa, D24, Duyaya, Cob, and Durio Graveolens (Brunei).

Also sharing in the billing are fruits of the region like mangosteen, marang, and rambutan.

Lawyer Genevieve E. Velicaria-Guevarra, assistant secretary for Legislative Affairs at the DA, said durian is the symbol of Davao City’s character and strength.

“We celebrate not only our bountiful harvests but also our shared spirit, heritage, and resilience, as one community,” Ms. Guevarra said.

The Durian Festival runs until Sept. 15.

John Tan, CEO of Eng Seng Food Products (ESFP), a durian exporter, said the industry needs to enhance the crop’s quality to be competitive in the export market.

“We need quality durian before quantity. Lalo na ngayon napansin ko maraming linghod (unripe)… We need to educate the farmers para maka harvest sa tama na panahon. Sayang kasi hundred million ang mawawala dahil linghod, sayang natapon lang. Kasi pag linghod itatapon ’yan (I have noticed that many of the fruit are unripe. The farmers need to be educated when to harvest. Unripe fruit means hundreds of millions of pesos wasted),” Mr. Tan told BusinessWorld.

Mr. Tan said the DA and the Department of Trade and Industry in Region 11 have been conducting training for the farmers.

“We need to improve the quality of our durian. We need quality production of durian for export,” he said.

ESFP was one of the four exporters involved in the inaugural shipment of Davao durian to China in April 2024.

Mr. Tan said the exporters are hoping to start China deliveries next week at a volume of 300 to 400 containers.

Aside from China, he said exporters are targeting Canada and the US, with the Canada target set at about 10 tons of fresh fruit via air freight.

“We need to push for good variety and good quality para maging successful tayo sa (in order to succeed in the) export market,” Mr. Tan said.

New PRC building to rise in Vermosa Estate

AYALA Land, Inc. (ALI) has broken ground for the three-story office building of the Philippine Red Cross (PRC) Cavite Chapter headquarters inside its sixth-largest estate, Vermosa.

Located on Vermosa Boulevard, the PRC headquarters will serve as the primary blood center for the province of Cavite.

The firm said the blood center will allow the PRC to host blood drives and conduct testing and processing of blood, ensuring a steady supply for hospitals and patients.

“Ayala Land’s donation is a testament to our belief in the Philippine Red Cross’ mission to provide a safe and sufficient blood supply to those in need,” ALI Senior Vice-President and Head of Estates Group Christopher B. Maglanoc said in a statement over the weekend.

“We extend our heartfelt gratitude to the PRC for their trust in choosing Vermosa as the home for their new headquarters.”

He said that the partnership shows the organizations’ shared commitment to “making a difference in the lives of our fellow Filipinos” where healthcare services are accessible, and the well-being of citizens is a top priority.

ALI said the Imus branch in Vermosa will have a modern disaster communication center and storage for disaster response equipment. It will also include multipurpose facilities for training and workshops, as well as meeting spaces for support groups and community gatherings.

“This is another step forward for the Red Cross as we extend our blood, health, and welfare services to more people in Cavite and build a stronger Red Cross network in the country,” PRC Chairman and Chief Executive Officer Richard J. Gordon said.

ALI said that while the company donated the land, the construction of the building was funded by Okada Foundation, Inc.

“Our foundation’s main goal is to make and implement projects for health and education. We believe in public and private partnerships to address the needs of our country,” Okada Foundation Inc. President James G. Lorenzana said.

Vermosa is a master-planned Ayala Land estate located between the cities of Imus and Dasmariñas, Cavite featuring settings for active lifestyles.

Its amenities include sports facilities, retail establishments, residential properties, educational and civic institutions, and expansive open spaces. — Aubrey Rose A. Inosante

PHL banks’ net profit up 4% as of June

BW FILE PHOTO

THE PHILIPPINE banking industry’s combined net income rose by 4.08% year on year to P190.21 billion as of end-June amid higher net interest earnings, data from the Bangko Sentral ng Pilipinas (BSP) showed.

The net profit of the banking system increased from P182.76 billion in the comparable year-ago period.

Banks’ net earnings also more than doubled (106.5%) from the P92.11 billion recorded at end-March.

Central bank data showed that the industry’s combined net interest income climbed by 15.5% year on year to P505.83 billion in the first semester from P437.84 billion amid elevated rates.

Broken down, lenders’ interest earnings jumped by 20% to P729.14 billion at end-June from P607.74 billion in the previous year.

Interest expenses stood at P222.69 billion in the period, higher by 31.3% from P169.66 billion a year prior.

Meanwhile, the banking sector’s non-interest income declined by 8.8% to P104.47 billion in the first half from P114.6 billion in the same period a year ago.

This was mainly due to a 66.93% decline in other income to P6.78 billion from P20.5 billion, which was largely driven by the foreign exchange loss of P7.99 billion recorded in the semester, a reversal of the P9.33-billion gain realized a year earlier.

Profits from the sale of other assets likewise dropped by 54.07% to P6.66 billion from P14.5 billion.

For their part, earnings from fees and commissions rose by 10.75% year on year to P77.07 billion from P69.59 billion, while trading income climbed by 38.12% to P13.94 billion from P10.02 billion.

On the other hand, the industry’s non-interest expenses went up by 10.2% to P341.22 billion from P309.73 billion.

Losses on financial assets widened by 28% to P44.9 billion in the first half from P35.09 billion in the year-ago period. Broken down, provisions for credit losses grew by 28.5% to P51.4 billion at end-June from P40 billion, while bad debts written off surged 398% to P1.46 billion from P292.62 million.

The increase in the Philippine banking sector’s net profit in the first semester was likely driven by the continued double-digit growth in lending, which boosted interest earnings, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

“This is brought about by the continued recovery of the economy, with no more COVID restrictions for more than a year already, thereby leading to further recovery of many businesses and industries that translated to greater demand for loans and other banking products and services,” Mr. Ricafort said. 

Outstanding loans of universal and commercial banks rose by 10.1% year on year to P12.09 trillion as of June from P10.99 trillion a year prior, BSP data showed.

Bank lending growth in June was steady from a month ago, which was the fastest since the 10.2% recorded in March 2023.

Mr. Ricafort said that easing global and local bond yields also “led to higher trading income for banks and would continue to lead to more gains amid possible US Federal Reserve and local policy rate cuts expected from 2024-2026.”

TOTAL ASSETS
Meanwhile, separate BSP data showed that the banking industry’s combined assets rose by 12.4% to P26.2 trillion at end-June from P23.3 trillion in the same period a year ago.

This also edged up by 2.3% from P25.62 trillion as of May.

Banks’ assets are mainly supported by deposits, loans, and investments. These include cash and due from banks as well as interbank loans receivable (IBL) and reverse repurchase (RRP), net of allowances for credit losses.

The banking sector’s total loan portfolio inclusive of IBL and RRP increased by 12.5% to P13.84 trillion from P12.3 trillion.

Net investments, or financial assets and equity investments in subsidiaries, stood at P7.53 trillion. This was up by 11.2% from P6.77 trillion as of end-June a year ago.

Cash and due from banks dropped by 4.2% to P2.75 trillion from P2.87 trillion.

Net real and other properties acquired went up by 6.9% to P109.4 billion from P102.3 billion year on year.

Meanwhile, the total liabilities of the banking system rose by 12.7% to P23.03 trillion at end-June from P20.43 trillion a year prior. — Luisa Maria Jacinta C. Jocson

Legacy Taiwanese soap store navigates business post-pandemic

YILAN, Taiwan — Soap maker Mei Sheng Tang (Tea Shop) was not spared the brunt of the pandemic’s economic impact. The legacy soap brand — it has been around for six decades — has adapted as it witnessed the evolving landscape of Taiwan’s soap industry, guided by the teachings of its beloved founder.

“Our business is pretty good, but it was affected by the pandemic. We originally had about 10 stores but now there are only three left. [Products] can also be purchased online,” Yu Hui Ling, store manager of Tea Shop told BusinessWorld in an interview in its Yilan store. The business has started to recover and is now at 80% of pre-pandemic sales, including sales from the online store, she said.

However, this is not new as the business had struggled in the past, forcing the factory to close at one point, before it was revitalized by the founder’s grandson.

The Mei Sheng Tang soap factory was co-founded by the late Lin Yicai in 1957, who used his experience selling soap at Taipei’s train station when he went into the production side of the soap business. His own skin problem motivated him to spend seven years in research and development to create an all-natural soap.

Lin Yicai’s grandson, Lin Youan, took over the ailing business and brought it back by combining Three Gorges Biluochun green tea with his grandfather’s pioneering “medicated soap” products. New consumers were then attracted by the all-natural, environment-friendly, healthy tea soaps.

Today, the store’s catalog of soaps can cater to oily, dry, combination, and sensitive skin. Among the different tea soaps sold are black tea, mugwort, lemongrass, fresh citrus, magnolia, jasmine, a pure green tea soap, tea tree, and five-leaf pine soaps, among more.

The best seller is the Royal soap, a moisturizing variant that utilizes a combination of flowers including roses.

Their soaps do not use chemical soap bases or contain alcohol and chemical solvents such as nonylphenol, commonly used for laundry and dish detergent, which are a threat to wildlife.

FACTORY TOURISM
Another source of revenue is tourism, as their branches in the National Center for Traditional Arts in Yilan and the factory in Sanxia District, New Taipei City, open their doors to local and foreign tourists.

A tour lasts about one and a half hours and offers a history lesson on the Mei Sheng Tang enterprise, the history of the soap industry, and a visit to the production line and cultural relics display.

The visit includes activities like molding animal shaped soaps and a game which involves playing with soap strings — which is also done in the brand’s stall in Yilan Park. Children can cut out and make their own soap then use it to wash their hands at home.

“We use the most primitive soap that my ‘grandfather’ made, which is made of oil, water, and alkali,” Ms. Yu said, adding that the activity alone costs 150 Taiwanese dollars.

A FEW NOTES FROM GRANDPA
Ms. Yu, who started working for the store in 2008, rose through the ranks and was entrusted to manage the Yilan store by the elder Mr. Lin despite not being a blood relation. “He let me run the Yilan store and never put pressure on me. He trusted us very much, so we became a family,” she said, praising the founder who passed away a couple of years ago.

She said, the elder Lin was “kind to people” and treated her just like his own biological granddaughter. “I was originally an employee. I have been doing this for 16 years and, and very familiar with the products, and then I become a store manager,” she said.

One thing that she learned from Mr. Lin is “about making soap very seriously” and being an advocate of taking care of the environment with its sought-after soaps.

“With a century of soap-making technology, each piece of soap is a sincere work of the craftsmen, with 10 exclusive soap-making methods and the only floating soap in Taiwan,” the company said, preserving the 10-step soap-making process inherited from the founder.

10 STEPS
The first step requires mixing coconut oil, olive oil, water, and soda ash and boiling the mixture for two days. Workers must sprinkle water at the right time to cool down the mixture.

Then the excess soap alkali must be extracted to reduce the alkali content of the soap, making the soap produced less irritating to the skin.

To add the natural ingredients, the soap is ground into powder and mixed with water, a step which they said requires great care so that the finished product would be smooth and soft. The soap solution is then poured into large boxes. It takes two days for the soap in the boxes to cool off and solidify, said Ms. Yu.

“After cooling, it needs to be cut into large pieces, about 60 to 70 kilograms of soap which can be sliced and cut into [smaller] pieces,” she said.

Next, the cut soap is meticulously arranged on a rack and carefully spaced to facilitate the drying process.

The tenth and final step in the production cycle involves transferring the soap to the drying room for a day to reduce its water content. The dried soap is then ready for packaging.

Mr. Lin’s timeless soap-making method has become a cherished tradition, not only among his family — whether by blood or by bond — but also among consumers worldwide who value craftsmanship. — Aubrey Rose A. Inosante

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