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Crossroads for Philippine monetary policy

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The broadsheets said it all: July inflation overshot target, surged to 4.4% in July. From various angles, the July inflation rate of 4.4% sent jitters to most of the financial markets. Market analysts have been betting on an early cut in the Bangko Sentral ng Pilipinas (BSP) policy rate by at least 25 basis points (bps) in the next monetary policy meeting. Such a view is anchored on the average inflation of 3.5% for the first six months of 2024 against the whole-year target of 2-4%. BSP’s baseline inflation forecasts of 3.3% for this year and 3.2% and 3.3% for 2025 and 2026, respectively, further strengthened the increasingly dovish sentiment about the direction of monetary policy.

And dovish sentiment it was that galvanized this broadsheet’s median estimate of only 4% for the July inflation print. Of the 15 analysts, only five submitted estimates that exceeded the 4% upper inflation target this year with a low of 4.2% and a high of 4.6%. Only one hit the mark.

True, the July inflation rate was the fastest in nine months since it leaped to 4.9% in October 2023. Stripped of any seasonality, however, month-on-month inflation sprinted to 0.6%, the highest since September 2023’s 1.2% except during February 2024 when it hit 0.9%. Annualized, July 2024 inflation easily converts to 7.2%.

No wonder, if the previous weeks’ headlines bannered the confidence of the monetary authorities in cutting the policy rates even ahead of the US Fed, there has been some retreat in the messaging this week. While a rate cut remains on the table for next week, the BSP is “a little bit less likely” to do it. Keeping the rate steady seems to be gaining more ground given the “evolving inflation conditions.” July inflation to the BSP was “slightly worse than expected.”

In case the assessment goes awry, the BSP declared, an off-cycle adjustment is possible. Of course, this is not good for optics because it will show the patience of the BSP was rather too prolonged. Neither is it good for keeping inflation expectations firmly moored.

But we continue to maintain our high regard for both the BSP and monetary policy, especially since July 2022. For monetary policy has succeeded in catching up with the curve, reducing core and headline inflation to within the 2- 4% target starting December 2023 and elevating market confidence in the fight against inflation.

As we indicated in our column in another broadsheet two weeks ago, “it is not correct to suggest that today, the BSP should have eased monetary policy.” And the BSP was right in holding the line despite the preponderance of downside risks to inflation during its June 2024 policy meeting. The Monetary Board was particularly prudent in resisting the sirens’ song to ease early despite the decelerating trend in actual inflation, within-target forecasts and downside risks.

The likelihood of an out-of-target June and July inflation which could eventually dislodge short-term inflation expectations must be within the radar of the BSP. Inflation continues to be driven by the prospects of a lower tariff rate on imported rice, but that took ages to be established. Supply constraints, food in particular, are just too unpredictable while the global dynamics remained too erratic for the BSP to be sanguine about the sustained disinflationary path.

If they eased monetary policy two months ago, that stance would have been proven wrong by the 4.4% July inflation. Yes, the inflation blip of one month does not make a long-term trend but that single point might be enough to affect inflation expectations, disrupt capital inflows and drive the weakness of the peso. They are bad for controlling inflation.

The policy choices of the BSP are quite different from those of the US Fed.

There is an emerging view that the US Fed is behind the curve; it should have started on an easing cycle many months back. Second quarter 2024 real GDP in the US is projected to tip at 2.8% compared to the first quarter’s 1.4%, or double. The US economy expects strong support from higher consumer spending, inventory management, and business investment. But unemployment is now at its highest since 2021 due to the corporate cost-cutting cycle, and it is expected to peak at 5.5%. With declining recruitment, jobless claims are spiking. Net profit margins of S&P 500 firms plummeted to their lowest levels at the end of last year. These labor market indicators convince many that a recession is likely in the US.

With a long lag, a monetary policy reversal of the US Fed is not only urgent, but it should have been done some way back. Instead of a baby step of 25 bps increase, market pulse shows a greater probability for a 50 bps.

The Philippine case is very different, perhaps the US economy’s antonym. We don’t see the urgency in pulling back the tight monetary lever at this point when the economy expanded by 6.3% for the second quarter of 2024. Unlike in the US with rising unemployment, the latest unemployment rate for June 2024 stood at 3.1%, down from May’s 4.1% and 4.5% a year ago.

Most important, headline inflation has just blipped. There are no indications that the uncertainties on the supply side could recede except for the favorable impact of a reduced rice tariff.

As we stressed in our earlier pieces, part of the reason why the credit market seems weak is the lending banks’ own decision to be procyclical. They were tightening their loan standards at a time when interest rates had been driven up by the BSP’s leading interest rates. Any weakness in the financial markets cannot be entirely attributed to strict money policy because weak capital flows also derive from inflation concerns in the country. The BSP should continue to do its job of promoting price stability and in the process also inspiring confidence among investors and consumers alike.

Given the high output growth, positive developments in the labor market as well as the reported expansion in manufacturing, higher capacity utilization, and sustained improvements in the country’s purchasing managers’ index, the country’s output gap must have remained positive. A vigilant BSP is crucial in safeguarding macroeconomic stability.

It is also wise for the BSP to be mindful of the remaining upside risks coming from higher food prices, transport charges, higher power rates and global fuel prices. In particular, Philippine Statistics Authority data illustrated that the production value of agriculture and fisheries actually dropped by 3.3% in the second quarter due to El Niño. Extending to the third quarter, El Niño could also upset food production during the same period.

If there is anything that could undermine the integrity of inflation targeting and pull back the BSP’s achievement in promoting price stability without causing a recession in the Philippines, it is to adjust monetary policy for reasons other than prices and sustainable growth, in that order. Monetary policy is not about reducing the cost of borrowing to allow governments to borrow cheaply. Monetary policy is not about enabling consumers to borrow from lending institutions to spend on travel and other personal effects, even if that is their own decision to make. Monetary policy is all about ensuring inflation is at appropriate level that both business and households, and even governments, can ignore it because price stability has produced the right costs for goods, services and money for business, households, and governments alike.

All up, we expect the BSP to be more patient in keeping its policy rate steady. We recall Raghuram Rajan, formerly of the IMF and the Reserve Bank of India likening the task of central banks to juggling six balls. For the US Fed, as for the BSP, it is not just interest rates going up or down, it has to monitor and weigh the impact of the exchange rate, long-term yields, short-term yields, and credit growth. And the central bank has to respond to all these and more potential disturbances in the economy. Very few would envy the BSP when it decides on the future path of monetary policy next week.

 

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

Job quality remains an issue as joblessness dips — DoLE

REUTERS

THE Department of Labor and Employment (DoLE) said underemployment remains a concern even with the decline in joblessness, after jobholders who said they are seeking more work rose to 12.1% in June from 9.9% in May.

Labor Secretary Bienvenido E. Laguesma said in a statement on Thursday that the rise in underemployment was due to “seasonal factors,” without elaborating.

DoLE is working with the Trabaho Para sa Bayan Inter-Agency Council, chaired by the National Economic and Development Authority, to implement the national employment masterplan.

“Through strategic partnerships with the private sector and targeted interventions, we aim to transform challenges into opportunities, ensuring that the benefits of economic growth are shared equitably and that no one is left behind,” he added.

Meanwhile, the Federation of Free Workers (FFW) urged the government to improve job quality, including the share of the workforce holding regular-employee status, to ensure economic growth.

“FFW holds that the high percentage in the service sector includes the prohibited ‘labor-only’ contracting and contractual job arrangements which workers (consider) abusive and exploitative,” FFW President Jose G. Matula told BusinessWorld via Viber.

“FFW recognizes the significance of these numbers but remains concerned about the quality and security of jobs, particularly in the services sector,” he added.

Another labor group, Kilusang Mayo Uno, called for better job quality.

“The jobs created by the Marcos Jr. administration are of low quality and temporary. The majority of these jobs are in construction, wholesale and retail trade, and food service. Notably, there has been a reduction in agricultural jobs,” Secretary-General Jerome M. Adonis said in a statement.

Mr. Adonis called for the government to implement a liveable minimum wage, which it estimated at P1,200 per day.

“It should also develop a genuine program for creating long-term regular jobs that align with the goals of national development,” he said.

“Workers should assert these demands through various means: forming unions, engaging in dialogue, and staging widespread protests to advance their call,” Mr. Adonis added.

The unemployment rate in June dipped to 3.1%, the lowest in two decades, the Philippine Statistics Authority said on Wednesday.

Jobless numbers amounted to about 1.62 million in June, against 2.11 million in May.

The employment rate was 96.9% in June, equivalent to about 50.28 million individuals holding jobs, compared to 95.5% in May, equivalent to 48.87 million people.

The Labor Force Survey found that the service sector remained the top employer, with 58.7% of the workforce employed in the industry, followed by agriculture with 21.1% and industry with 20.2%.

“The labor market continues to demonstrate remarkable strength and resilience… This positive trend is driven by robust economic growth, particularly in construction; wholesale and retail trade; repair of motor vehicles and motorcycles; and accommodation and food service activities sectors,” Mr. Laguesma added. — Chloe Mari A. Hufana

How each segment contributed to Q2 2024 GDP

THE PHILIPPINE ECONOMY expanded faster than expected in the second quarter, as higher government spending and investments offset “anemic” household consumption, government data showed. Read the full story.

How each segment contributed to Q2 2024 GDP

Dominion Holdings books lower net earnings in the second quarter

DOMINION HOLDINGS, Inc. (DHI) saw its net income decline by 12.45% year on year in the second quarter due to lower interest earnings.

The company’s net profit stood at P58.62 million in the three months ended June, down from P66.95 million in the same period last year, its financial statement showed.

This brought its net earnings for the first half to P134.48 million, up by 7.34% from P125.28 million a year ago, “as it benefited from the high interest rate environment as well as the reversal of provisions for probable losses on bond investments, which matured in the second quarter of 2024,” it said in a disclosure to the stock exchange. This translated to a return on equity of 5.66% and a return on assets of 5.65%.

Interest income declined by 21.96% to P67.49 million in the second quarter from P86.49 million a year ago, its quarterly report showed.

The company’s investment portfolio declined by 67.51% to P1.98 billion at end-June from P6.09 billion.

Total assets likewise fell by 47.97% year on year to P3.26 billion at end-June from P6.27 billion due to a cash dividend declaration worth P3.2 billion. — AMCS

JG Summit says cybersecurity investigation underway

GOKONGWEI-LED conglomerate JG Summit Holdings, Inc. on Thursday said it is actively working with cybersecurity experts and partners to investigate an alleged ransomware attack.

“Our business units continue to operate normally. We are working closely with our cybersecurity experts and partners to proactively investigate and assess the situation,” JG Summit Holdings Inc. said in an e-mailed statement.

The company said it was “aware of circulating reports of a possible cybersecurity attack” and has activated all response protocols and enhanced security measures to ensure data protection.

Deep Web Konek has reported that the cyberattack targeted over 40,000 computers in JG Summit’s network and encrypted a total of 300 gigabytes of data.

The attackers gave JG Summit Holdings seven days to respond.

The cybersecurity group said the ransom note expressed the attacker’s frustration with JG Summit’s “lack of communication.”

In the note, the attackers said they are prepared to carry out additional attacks including further encryption, data shredding, and the use of secure delete functions to ensure no recovery is possible if their demands are not met.

“We take this matter very seriously. We recognize that many organizations have faced similar challenges in the current cybersecurity landscape,” JG Summit Holdings said.

The company said that safeguarding its data and preserving stakeholder trust are of utmost importance, and it will share updates as needed. — Aubrey Rose A. Inosante

Box-office hero Deadpool could set record at comic-book auction

COMICS.HA.COM
COMICS.HA.COM

LOS ANGELES — Deadpool, the mouthy mercenary producing big box-office sales, may soon set a record at a comic-book auction.

Cover artwork featuring Deadpool’s first appearance in the comics went on sale this week at Heritage Auctions with an asking price of $7.5 million. If it sells at that price, it will be the most valuable comic-book art ever sold.

The penciled artwork was created by writer/artist Rob Liefeld, at age 23, for New Mutants #98, which was released in February 1991.

Mr. Liefeld does not own the artwork. He sold it to a collector 25 years ago, although he said he is thrilled that the character he created is doing so well financially.

“I just keep smiling,” said Mr. Liefeld about the auction.

Ryan Reynolds plays Deadpool in box-office hit Deadpool & Wolverine, a movie from Walt Disney-owned Marvel Studios. The film ranks as the highest-grossing R-rated movie of all time with more than $879 million in global ticket sales.

When New Mutants #98 was released in 1991, the comic book cost $1. Now the original editions have become one of the most sought-after comics for collectors, with issues selling from $350 to $55,000 on eBay.

“Selling artwork was part of the income stream back then,” Mr. Liefeld told Reuters. “I sold this 25 years ago. I have zero regrets.”

Mr. Liefeld created Deadpool as a combination between Spider-Man and G.I. Joe. Immediately after his first appearance, Marvel Comics was flooded with fan mail.

“Marvel contacted me and said, this is the most fan mail we’ve had on a new character in 15 years,” said Mr. Liefeld. “They were flooded with letters, fan letters, which they sent me. And the box that that mail arrived in … I thought I was getting a washer and dryer,” he joked.

The current record holder in comic-book auctions is a copy of Action Comics #1, which features the first appearance of Superman and sold for $6 million earlier in the year, also at Heritage Auctions. — Reuters

Bangladesh isn’t getting its happy ending

AUSTIN CURTIS-UNSPLASH

IT MIGHT look like the replacement of Bangladesh’s long-serving prime minister, Sheikh Hasina, by Nobel laureate Muhammad Yunus is a happy ending for a country that seemed to be inexorably sliding towards authoritarianism. After all, Hasina’s rule had become so paranoid that she even burned political capital on persecuting Yunus, widely feted for his role in rural development in Bangladesh and beyond. But, although Hasina’s exit was overdue, what comes after might wind up being worse.

We should be wary of seeing this as a simple victory for widespread, weeks-long popular protests, sparked by students in Dhaka. As in Egypt late in the Arab Spring, when pro-democracy protests against an elected president actually tipped the country into military rule, the prime mover was in fact an army desperate to protect its privileges. Cairo feels less free and prosperous now than it did a decade ago. Will Dhaka fare any better? Hasina was pushed off-stage relatively swiftly once the military switched sides: After 15 years in power, she was reportedly given 45 minutes to get out of town.

Yunus, while popular, has no political base from which he could challenge the uniforms. The only organized opposition in Bangladesh — again, shades of Egypt here — is on the more Islamist side of the spectrum. With Hasina gone and her party and movement discredited, it seems clear that these are the forces that will make a play for power. The leaders of the student protests understandably reject this possibility. But, as in Cairo in 2013 or Teheran in 1979, the protesters may not completely comprehend the forces they have allied with and unleashed. Hasina’s departure was celebrated by attacks on the homes, businesses and temples of the Hindu minority across the country.

When her rivals in the Bangladesh Nationalist Party last ruled in the 2000s, the country quickly became the source of a worrying amount of cross-border terrorism. After Hasina was elected in 2009, she cracked down on militancy. As a consequence, Bangladesh outperformed on growth, development, and poverty reduction during her tenure. Even Pakistani politicians noted the contrast with the illiberal chaos that has crippled their economy.

Hasina could be trusted to keep Bangladesh from descending into a Pakistan-style maelstrom of fanaticism because she viewed Islamists as personal enemies: They collaborated with Pakistani colonizers, and killed her father. Bangladesh’s first prime minister, Mujibur Rahman, was an omnipresent image in his daughter’s now-vanished regime. Mujib, as he is known, is widely respected for leading the Bengalis’ struggle against Punjabi-dominated Pakistan before independence in 1971. The most dangerous aspect of Hasina’s increasingly oppressive grip on power is that, alongside destroying her own legacy, it may have tarnished her father’s beyond repair.

This is not a quarrel about dead history, but about live ideology. Mujib and his movement are associated with the Bengali language and nationalism; his opponents — who staged a coup in the 1970s that killed him and most of his family except for Hasina (and her sister, Rehana, who is with her now in India) — are much closer to the political Islamism that both defines and has derailed the Pakistani project.

None of this exonerates Hasina, who wound up rigging one election too many. Her overthrow should not come as a surprise to anyone paying attention. The problem is that nobody has been paying attention. It’s time for that to change.

India and the West cannot evade responsibility here. New Delhi has tied itself so closely to Hasina in the public imagination that it has ended up being seen not a proponent of democratic values but as a dictator’s primary prop. The West, meanwhile, did little to convince Hasina of the benefits of democratization. As long as labor rights appeared to progress, it didn’t care about the rest of its Bangladesh policy — which, by the end, was being set by a restive and politically influential Bangladeshi diaspora now dominated by those ideologically opposed to Hasina and her father. Mujib’s statues may have been attacked back home, but this echoes actions in the West; soon after her downfall a rowdy group of expatriates barged into Bangladesh’s New York consulate to forcibly remove his portrait from there, as well.

We will pay for these errors. Bangladesh has appeared normal for so long that we have forgotten how dangerous it would be for it to become chaotic. The world’s third-largest Muslim-majority nation has largely avoided sectarianism. That’s thanks partly to the strength of Bengali cultural nationalism. But it’s also because it was born in opposition to Pakistan, an Islamic republic. Half a century ago, following its traumatic independence from Pakistan, it faced such starvation that The Beatles’ George Harrison decided to organize the first superstar charity concert in history. Today, the poverty rate is below 20% and still declining.

Hasina’s party and government took credit for both these achievements. In doing so to justify their vice-like grip on power, they may have convinced Bangladeshis that these are not achievements worth keeping. That would be a tragedy for Bangladesh. And it would be dangerous for India, the West, and the world.

BLOOMBERG OPINION

AmCham firms to join SM J.O.B.S. advocacy

AROUND 800 members of the American Chamber of Commerce of the Philippines (AmCham) are expected to take part in SM Group’s job fairs after the two entities entered into a partnership.

In a statement on Wednesday, AmCham said that the partnership is a result of a memorandum of understanding signed with SM Group’s Jobs Opportunities Building Skills (J.O.B.S.) advocacy.

Under the agreement, 800 AmCham members will participate in SM’s job fairs, and thousands of employees within AmCham’s network will be provided with upskilling opportunities.

“AmCham has always pushed towards upskilling our workforce as we see how crucial it is to the sustainability of business,” AmCham Executive Director Ebb Hinchliffe said.

 “The SM J.O.B.S. advocacy’s two-pronged approach to empowering the Filipino worker is quite an effective way to reach people and provide opportunities nationwide,” he added.

 The partnership will give AmCham companies’ employees opportunities to attend courses like digital marketing for e-commerce, cloud foundation, business analytics, and computer security.

“SM will continue to hold job fairs across the country to match job opportunities with the right skills and talents,” Teresita Sy-Coson, lead of the J.O.B.S. project under the Private Sector Advisory Council, said.

“By providing a venue for employers and potential employees, we are doing our part in pushing job acceleration,” she added. — Justine Irish D. Tabile

Auto Sales (July 2024)

VEHICLE SALES in the Philippines jumped by an annual 6.1% in July, driven by new launches and supply availability, according to an industry report. Read the full story.

Auto Sales (July 2024)

The personalization versus privacy dilemma

The ubiquity of digital platforms and channels such as websites and mobile apps has significantly transformed the landscape of customer interactions. These platforms strive to offer personalized experiences that cater to individual preferences, enhancing user satisfaction and engagement. However, this personalization often comes at the cost of user privacy, creating a complex dilemma: how to balance the need for personalization with the imperative of ensuring customer data security. This personalization versus privacy dilemma is real, particularly in the context of financial services, where the stakes are exceptionally high due to the sensitive nature of the data involved.

Personalization in digital platforms is driven by the need to provide users with relevant and tailored experiences. This is achieved by collecting and analyzing vast amounts of data, including user behavior, preferences, and demographic information. For instance, online banking apps and financial websites use data analytics to offer personalized financial advice, tailored product recommendations, and customized alerts. These personalized services are designed to enhance user experience, foster customer loyalty, and drive business growth. However, the very data that enables this personalization also raises significant privacy concerns.

The collection and use of personal data inherently involve risks. Unauthorized access, data breaches, and misuse of information are prevalent threats in the digital age. In the financial sector, where data include sensitive information such as account numbers, transaction histories, and personal identification details, the implications of a privacy breach are severe. Such breaches can lead to financial loss, identity theft, and a loss of trust in financial institutions.

One prominent example of this dilemma is the 2017 Equifax data breach. Equifax, a leading credit reporting agency, suffered a massive data breach that compromised the personal information of more than 147 million consumers. The breach included sensitive data such as Social Security numbers, birth dates, addresses, and, in some cases, driver’s license numbers. This incident underscored the vulnerability of even the most secure systems and highlighted the devastating consequences of inadequate data protection measures.

In response to such incidents, regulatory bodies have implemented stringent data protection laws to safeguard consumer privacy. The General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the United States are two prominent examples. These regulations mandate that organizations must ensure the confidentiality, integrity, and availability of personal data. They also grant consumers greater control over their data, including the right to access, delete, and restrict the processing of their information.

While these regulations are a step in the right direction, they also present challenges for financial institutions striving to offer personalized services. Compliance with data protection laws requires significant investments in cybersecurity infrastructure, data encryption, and secure data storage solutions. Additionally, organizations must implement robust data governance frameworks to manage consent and ensure transparency in data processing activities. These measures, while essential for protecting privacy, can hinder the seamless delivery of personalized experiences.

One way financial institutions are navigating this dilemma is through the adoption of privacy-enhancing technologies. For example, differential privacy techniques enable organizations to glean insights from data without exposing individual identities. By adding statistical noise to datasets, differential privacy ensures that the privacy of individual users is maintained while still allowing for meaningful analysis. Similarly, federated learning allows for the training of machine learning models on decentralized data, reducing the need to centralize sensitive information.

Another approach is the use of tokenization, which replaces sensitive data elements with unique identification symbols (tokens) that retain the essential information without compromising security. In the context of financial services, tokenization can be used to secure payment information during transactions, ensuring that even if data is intercepted, it cannot be misused.

The financial industry is also leveraging artificial intelligence (AI) and machine learning (ML) to enhance both personalization and privacy. AI algorithms can analyze vast amounts of data to detect patterns and anomalies, helping to identify fraudulent activities in real-time. At the same time, these technologies can be designed to prioritize data minimization, ensuring that only the necessary information is collected and processed.

For instance, some banks are using AI-driven chatbots to provide personalized customer support while adhering to strict privacy standards. These chatbots can handle routine inquiries and transactions without accessing sensitive information, thereby minimizing the risk of data exposure. Additionally, advanced encryption techniques ensure that any data exchanged during these interactions is secure.

Despite these technological advancements, the human element remains crucial in balancing personalization and privacy. Financial institutions must foster a culture of data protection, where employees are trained to handle data responsibly and ethically. Regular audits, risk assessments, and continuous monitoring are essential to ensure that privacy measures keep pace with evolving threats.

In the end, the personalization versus privacy dilemma is a significant challenge in the digital age, particularly for financial services that handle sensitive customer data. While personalized experiences can enhance customer satisfaction and drive business growth, they must not come at the expense of data security. By leveraging privacy-enhancing technologies, complying with regulatory requirements, and fostering a culture of data protection, financial institutions can navigate this dilemma effectively. The ultimate goal is to strike a balance where customers enjoy tailored experiences while their privacy and data security are uncompromised.

The views and opinions expressed above are those of the author and do not necessarily represent the views of FINEX.

 

Reynaldo C. Lugtu, Jr. is the founder and CEO of Hungry Workhorse, a digital, culture, and customer experience transformation consulting firm. He is a fellow at the US-based Institute for Digital Transformation. He is the chair of the Digital Transformation IT Governance Committee of FINEX Academy. He teaches strategic management and digital transformation in the MBA program of De La Salle University. The author may be e-mailed at rey.lugtu@hungryworkhorse.com

Chelsea reports narrowed losses for Q1, cites sector recovery

CHELSEA Logistics and Infrastructure Holdings Corp. narrowed its first-quarter (Q1) net loss to P148.17 million from a loss of P324.04 million last year, buoyed by a rebound in maritime and logistics operations.

Gross revenue for the three months to March reached P1.78 billion, climbing by 4.1% from P1.71 billion a year ago, the company’s financial statement showed.

Its Q1 gross expense declined to P1.67 billion, lower by 3.5% from P1.73 billion in 2023.

The company attributed the improvement to the resurgence in the passage, chartering, tugboats, and logistics businesses, as well as the increasing vessel activities.

Gross profit for the first quarter reached P304 million, up by 13.9% from P267 million previously.

Cost of sales and services also went up to P1.47 billion from last year’s P1.44 billion.

“The quarter saw a strategic focus on optimizing the fleet through increased availability of vessels, supporting the recovery in passenger volumes and enhancing service capacity across all segments,” Chelsea Logistics said.

The company said it will continue to invest in digital transformation efforts to help improve its service delivery.

“We are confident in our ability to navigate challenges and capitalize on opportunities in the logistics sector,” Chelsea Logistics Chief Financial Officer Ignacia S. Braga IV said. — Ashley Erika O. Jose

BTS member Suga apologizes for drunk driving on e-scooter

COMMONS.WIKIMEDIA.ORG

SEOUL — K-pop star Suga, a member of the boy band supergroup BTS, apologized on Wednesday after police in Seoul, the South Korean capital, fined him and revoked his license for drunk driving while on an electric scooter.

The songwriter and rapper had ridden the scooter for about 500 meters before he tripped when parking on Tuesday night, his label Big Hit Music, which is part of K-pop firm HYBE, said.

Suga failed a breathalyzer test conducted by nearby police and was fined, and his scooter license taken away, the label said, adding that the incident caused no harm to anyone else or property damage.

“I violated the road traffic law because I was comfortable with the idea of being close (to home) and was not aware that you could not use an electric scooter when you are drunk,” Suga wrote in a post on Weverse, a fan platform owned by HYBE.

“I apologize to everyone who has been hurt by my careless and wrong behavior,” added Suga, whose birth name is Min Yoon-gi.

South Korea, which requires a license for use of an electric scooter, can levy penalties for driving while drunk or injuring others.

Police accompanied the singer to his home, Big Hit Music said.

The incident is the latest example of K-pop performers sometimes falling short of their squeaky-clean image.

Since announcing a break from group projects in June 2022, BTS members pursued solo activities before starting military service.

The 31-year-old Suga has been engaged in social service work in order to meet his military duty commitment.

All able-bodied South Korean men aged 18 to 28 must serve for about two years in the military, though some are allowed to work as social service agents as an alternative form of duty. — Reuters