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More measures coming to reduce temporary residents, Canadian minister says

Image via Aaron Davis/CC BY-SA 4.0/Wikimedia Commons

TORONTO – Canada’s government is preparing to unveil a suite of measures to clamp down on temporary immigration and has no plans to follow through right now on a broad program offering status to undocumented residents, the country’s immigration minister told Reuters.

“The era of uncapped programs to come into this country is quickly coming to an end. This is a big shift. You can’t just slam on the brakes and expect it to stop immediately,” Marc Miller said in an interview with Reuters on Thursday.

Canada has long prided itself on welcoming newcomers, and the current Liberal government has overseen a dramatic increase in the influx of new residents, especially temporary ones, as many employers struggled to fill vacancies coming out of the pandemic.

But over the past year the tide has shifted: Immigrants are being blamed for a worsening housing situation along with an affordability crisis in the country. Critics have accused the federal government of bringing in too many people.

A Leger poll conducted in July found 60% of respondents said there are too many immigrants coming to Canada.

“I’m not naive enough to think Canada is immune to the waves of anti-immigrant sentiment. … Canadians want a system that is not out of control,” Mr. Miller said in a phone interview.

Canadians “want a system that makes sense. And they want one that still has a lot of welcoming aspects we’ve been proud of, but it’s got to make sense,” Mr. Miller said, predicting immigration would be “a top issue, if not the top issue, in the next election,” expected to take place in late 2025.

 

‘BACKDOOR ENTRY’

The Canadian government has already outlined some measures. In January it announced a two-year cap on international students – an area of Canada’s immigration system that got “overheated” and was not meant to be “a backdoor entry into Canada,” Mr. Miller said.

In March the immigration minister announced Canada’s first-ever cap on temporary immigration. Canada wants to reduce temporary residents to 5% of the total population over the next three years from 6.2% in 2023. That would be a cut of about 20% from Canada’s 2.5 million temporary residents in 2023.

But in its recent monetary policy report, the Bank of Canada expressed doubts that the government could meet its temporary residents goal, noting that non-permanent residents made up 6.8% of the country’s population as of April and that “the share is expected to continue rising over the near-term.”

The bank is right to say achieving this goal is a challenge, but it is a “reasonable” one given the suite of measures Canada plans to announce over the next several weeks, Miller said.

Miller would not give details but said these measures could include changes to post-graduate work permits and enforcement.

Asked if his government had made a mistake in allowing rapid growth in temporary residents, Miller said, “Every government makes mistakes. I think we are all human.” But “coming out of COVID, in particular, we were facing massive labor shortages.”

 

REFUGEE INFLUX

Meanwhile, Canada is seeing record levels of refugee claims – more than 18,000 in June, according to the Immigration and Refugee Board. This is despite government efforts to deter people by closing the land border to asylum-seekers through a contested bilateral agreement with the United States and by implementing new visa requirements for Mexicans.

Canada cannot dictate how many people file refugee claims but it can make it difficult for asylum-seekers to reach the country. Mr. Miller said the government may impose stricter criteria on temporary resident visas to prevent asylum-seekers from coming.

The government had also previously said it would pursue a regularization program to give status to undocumented residents.

That is not on the table before the election, Mr. Miller said, but he noted there is a possibility of sector-specific programs. – Reuters

Striking US video game actors say AI threatens their jobs

REUTERS

BURBANK, California – Striking video game voice actors and motion-capture performers held their first picket on Thursday in front of Warner Bros. Games and said artificial intelligence was a threat to their professions.

“The models that they’re using have been trained on our voices without our consent at all, with no compensation,” “Persona 5 Tactica” voice actor and video game strike captain, Leeanna Albanese, told Reuters on the picket line.

Video game voice actors and motion-capture performers called a strike last week over failed labor contract negotiations focused on AI-related protections for workers.

This marks the latest strike in Hollywood after union writers and actors marched on the picket lines last year with AI also being a major concern.

“I think when you remove the human element from any interactive project, whether it be a video game or TV show, an animated series, a movie, and you put AI in replacement for the human element, we can tell! I’m a gamer, I’m a digester of this content,” British “Call Of Duty: Modern Warfare & Warzone” actor Jeff Leach said.

The decision to strike follows months of negotiations with major videogame companies including Activision Productions, Electronic Arts, Epic Games, Take-Two Interactive, Disney Character Voices and Warner Bros Discovery’s WB Games.

However, major video game publishers including Electronic Arts and Take-Two will likely stave off a big hit from the strike due to their in-house studios and the lengthy development cycles for games, analysts have said.

The strike also brings with it a larger call to action across Hollywood as people in the industry advocate for a law that can protect them from AI risks as well.

“There’s not a larger national law to protect us, so the NO FAKES Act is basically legislation with the goal of protecting our identities, protecting our personhood on a national scale as opposed to on a state level,” Albanese said.

The NO FAKES Act, a bipartisan bill in Congress which would make it illegal to make an AI replica of someone’s likeness and voice without their permission, has gained support from the SAG-AFTRA performers union, the Motion Picture Association, The Recording Academy and Disney.

From Grammy-winning artist Taylor Swift to Vice President Kamala Harris, who is running in the 2024 presidential election, leaders in entertainment and beyond say deep fakes created from AI are a pressing policy matter.

“Everybody in this country needs protection from the abusive use of AI,” Duncan Crabtree-Ireland, the national executive director and chief negotiator of SAG-AFTRA told Reuters at the picket line. – Reuters

Inflation likely rose in July — poll

A vendor gives change to a customer who bought vegetables at a stall in Quezon City, July 14, 2024. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Luisa Maria Jacinta C. Jocson, Reporter

HEADLINE INFLATION likely accelerated in July but remained within the central bank’s 2-4% target range, analysts said.

A BusinessWorld poll of 15 analysts this week yielded a median estimate of 4% for the consumer price index (CPI) in July. This matches the lower end of the 4%-4.8% forecast of the Bangko Sentral ng Pilipinas (BSP). 

July inflation could be faster than 3.7% in June but slower than 4.7% a year earlier.

Analysts’ July inflation rate estimates

July could also mark the eighth straight month that inflation settled within the BSP’s 2-4% target.

The Philippine Statistics Authority (PSA) is set to release inflation data on Tuesday (Aug. 6).

BSP Governor Eli M. Remolona, Jr. told reporters late on Wednesday that inflation should have peaked in July, based on central bank projections.

Finance Secretary Ralph G. Recto separately said July inflation was expected to have accelerated though still within target.

“Coming from a low base, inflation will be higher, but still within target (2-4%),” he told reporters late Tuesday.

However, Mr. Remolona noted that the full impact of Super Typhoon Carina and the southwest monsoon would not yet be reflected in the July print.

“It won’t affect the July number. Usually, the effects come with a lag so it may not even affect August in terms of the aggregate CPI basket.”

Mr. Recto likewise said July inflation would be spared from the impact of typhoon losses. “Most likely, the impact will be seen in August. It won’t be in July.”

The latest data from the Agriculture department showed that agricultural damage due to the typhoon and southwest monsoon had hit P1.21 billion as of July 31. Rice was the most affected crop, accounting for more than half of the damage.

RISING FOOD PRICES
On the other hand, HSBC economist for ASEAN (Association of Southeast Asian Nations) Aris D. Dacanay said there could be a “slight uptick” in food prices due to the typhoon’s impact on logistical costs.

Sarah Tan, an economist from Moody’s Analytics, said the immediate impact of the storm might not register yet in July but could still potentially stoke inflation.

“However, given that the typhoon destroyed crop harvests in agricultural provinces like Pampanga, where the agricultural damage reportedly totaled more than P300 million, the impact on food supply could add price pressures in the coming months,” she said in an e-mail.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said inflation likely accelerated to 4.6% due to higher prices of some food items, particularly vegetables, fruits and condiments.

Price pressures will also come from higher electricity rates, analysts said.

“Headline inflation may have also jumped month on month due to the steep increase in Metro Manila’s electricity rates after being deliberately kept low in June,” Mr. Dacanay said.

In July, Manila Electric Co. raised rates by P2.1496 per kilowatt-hour (kWh) to bring the overall rate for a typical household to P11.6012 per kWh.

“For July, higher electricity rates, elevated agricultural commodity prices and increased domestic oil costs drove inflation, and this was partially offset by lower rice and fruit prices, as well as the peso’s appreciation,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in an e-mail.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the stronger peso and the rollback in fuel prices could have offset inflationary pressures during the month.

Pump price adjustments stood at a net increase of P1.30 a liter for gasoline for the month of July. Diesel and kerosene had a net decrease of P0.90 and P1.70, respectively, per liter.

The potential breach of July inflation would be temporary, Mr. Roces said.

“Despite the recent typhoon’s possible, albeit transitory, impact on food prices, inflation is expected to return to target in August due to favorable base effects,” he said.

“Inflation is still expected to immediately return to within the 2-4% target band once base effects fade and then ease to the range of 2-3% once the lower tariff rates on rice eventually begin to bring rice prices down,” Mr. Dacanay added.

President Ferdinand R. Marcos, Jr. in June signed an executive order that slashed tariffs on rice imports to 15% from 35% until 2028. It is widely expected to bring down the retail price of rice.

Mr. Remolona said the tariff cut would “significantly moderate inflation” in the coming months. “That’s a good thing that will help us ease monetary policy.”

RATE CUT
The BSP chief again signaled cutting rates as early as this month. “I think Aug. 15 is still a possibility. Of course, it will depend on the numbers,” Mr. Remolona said.

He said they could cut possibly by 25 basis points (bps) at their Aug. 15 meeting, and by another 25 bps later in the year. The Monetary Board’s (MB) last two policy meetings for the year are scheduled for Oct. 17 and Dec. 19.

“Less hawkish is the term that we’ve been using. So, it’s still hawkish, which means we will still remain tight, but maybe less tight than before,” Mr. Remolona said.

“It’s a tricky thing because we’re so close to the point where we might be getting to below capacity. We want to reduce demand so that income falls just to the level of capacity of the economy,” he added.

On the other hand, analysts noted that the central bank could keep rates steady amid continued risks.

“Softer-than-expected inflation for July could prompt BSP to pull the trigger when the Monetary Board meets in August, but risks to food inflation and a weak peso could make them lean towards a rate hold,” Ms. Tan said.

“We maintain our expectation that the BSP is unlikely to leapfrog the Fed, keeping the policy rate at 6.5% in August,” she added.

Philippine National Bank economist Alvin Joseph A. Arogo said inflation breaching the target could derail the central bank’s planned rate cuts.

“Although supply side-driven, a breach of the 2-4% target inflation band of the BSP could complicate the timing of the forthcoming easing cycle,” he said in an e-mail.

Mr. Remolona said the BSP would also be taking into consideration the upcoming second-quarter gross domestic product (GDP) data, among other key data points.

The PSA is set to release second-quarter GDP data on Aug. 8.

“A weaker-than-expected second-quarter GDP print will more likely mean that the MB will start easing rather than remaining unchanged as the MB looks to longer-term economic growth prospects amid high borrowing costs,” Mr. Asuncion said.

Metropolitan Bank & Trust Co. Chief Economist Nicholas Antonio T. Mapa said the BSP’s anticipated easing cycle would “stimulate economic growth by encouraging new investments across various sectors.”

“As a result of all this, a potential resurgence in investment momentum is expected to accelerate GDP growth in the medium term, likely pushing it beyond the 6% pace of expansion and possibly even higher,” he said in a Wealth Insights report. “This increased investment activity is anticipated to have both immediate and long-term positive effects on the economy.”

Manufacturing growth slows slightly in July

Workers are seen inside a manufacturing plant in Sto. Tomas, Batangas, March 1, 2023. — PHILIPPINE STAR/KRIZ JOHN ROSALES

MANUFACTURING GROWTH slowed slightly in July amid weaker expansion in production and orders, S&P Global said on Thursday.

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) stood at 51.2 in July, easing from 51.3 in June.

“The latest index reading signaled only a modest improvement in the health of the Filipino manufacturing sector, and one that was the weakest since March (when PMI stood at 50.9 reading),” it said.

Manufacturing Purchasing Managers’ Index (PMI) of select ASEAN economies, July 2024July also marked the 11th straight month of improvement in operating conditions. A PMI reading above 50 signals improvement in operating conditions, while a reading below 50 means the opposite.

Among Association of Southeast Asian Nations (ASEAN) member countries with available data, the Philippines had the third-highest reading in July after Vietnam (54.7) and Thailand (52.8).  Malaysia (49.7), Indonesia (49.3), and Myanmar (48.4) all recorded contractions.

Philippine PMI was also lower than the ASEAN average of 51.6 in July.

“The second half of the year started modestly, with the Filipino manufacturing sector signaling further upticks in output and new orders,” Maryam Baluch, an economist at S&P Global Market Intelligence, said in a report.

“Though in both cases, the rates of increase were weaker than their respective long-run averages, thereby indicating relatively subdued growth across the sector.”

S&P Global said the latest data showed production activity grew at the slowest pace in the last four months due to longer supplier delivery times.

“The incidence of delay was the most pronounced since February as port congestion hampered the timely delivery of inputs,” it said.

On the other hand, demand improved in the Philippine manufacturing sector.

“New orders rose at a rate faster than June’s five-month low. However, firms recorded modest and cooling demand from overseas markets,” S&P Global said.

Despite this, a sustained increase in production requirements allowed manufacturers to boost purchasing activity in July.

“Though the rate of growth softened since the preceding survey period, it was solid overall. Firms remained keen to expand their holdings of finished goods and purchased items. Both pre-and post-production inventories were accumulated at rates stronger than their respective long-run averages,” S&P Global said.

Even though the backlog fell for the 13th month in a row, manufacturing firms raised staffing levels in July after seeing a “strong uptick” in new orders. S&P said this was the first increase in employment since April, although it was still “modest overall.”

It said the July data showed costs slightly increased in July even though the rate of input price inflation went up to a five-month high. On the other hand, the pace of the rise in charges slipped to a three-month low.

The effects of Super Typhoon Carina had likely caused disruptions in manufacturing and other business activities in Metro Manila and nearby provinces, said Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort.

Last week, Metro Manila and nearby provinces experienced torrential rains and heavy flooding brought by Carina (international name: Gaemi) and the southwest monsoon.

OUTLOOK
Meanwhile, Ms. Baluch said easing inflation, as seen in the PMI data, could allow the Philippine central bank to begin cutting rates.

“Easing financial conditions should help solidify and strengthen growth in the coming months,” she noted.

“Moreover, sustained expansions in purchasing activity and the renewed uptick in workforce numbers, indicate that goods producers are likely banking on the strengthening of demand conditions in the coming months.”

The Monetary Board has kept its key policy rate at an over 17-year high of 6.5% to tame inflation. Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. signaled a possible rate cut at their Aug. 15 meeting.

Mr. Ricafort said the slower PMI growth “could help support/justify” a 25-basis-point rate cut as early as next week.

S&P Global said manufacturing firms expect production to increase in the next 12 months.

“The Future Output Index, which printed comfortably above the neutral 50 mark in July, indicated optimism regarding the outlook across the sector,” it said.

However, there was a slight dip in the degree of confidence as some firms remained cautious of future demand.

Security Bank Corp. Chief Economist Robert Dan J. Roces noted that manufacturing firms’ cautious optimism is reflected by their hiring activity and inventory accumulation.

“While risks such as global economic conditions and supply chain disruptions persist, the overall outlook for Philippine manufacturing remains positive, with growth expected to continue, albeit at a modest pace, in the coming months,” he said in a Viber message.

Mr. Ricafort said there is a seasonal increase in imports and production in the third quarter in preparation for higher demand in the fourth quarter.

“This would help boost manufacturing/production growth in the coming months,” he said, although business activity might slow during the “ghost month” of August. — Beatriz Marie D. Cruz

Hot money outflows hit $27M in June

United States one-dollar bills are seen in this Nov. 14, 2014 file photo — REUTERS

MORE SHORT-TERM foreign investments flowed out of the Philippines in June, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Transactions on foreign investments registered with the central bank through authorized banks posted a net outflow of $27.26 million.

This was a reversal of the $42.86-million net inflow in May, as well as the $280,000 inflow a year ago.

These foreign portfolio investments are also called “hot money” due to the ease by which these funds enter and leave the economy

BSP data showed gross outflows of hot money jumped by 20.3% to $1.07 billion in June from $889.16 million a year earlier.

“The United States remains to be the top destination of outflows, receiving $597 million (or 55.8%) of total outward remittances,” it said.

Meanwhile, gross inflows climbed by 17.2% to $1.04 billion in June from $889.44 million a year ago.

The top five investor economies during the month were the United Kingdom, the United States, Singapore, Luxembourg and Switzerland, accounting for 86.9% of foreign portfolio investment inflows.

Most of the investments went to peso government securities (52.8%), while the rest were invested in Philippine Stock Exchange-listed securities of holding firms; banks; transportation services; property; and electricity, energy, power and water.

“The (peso) was the weakest this June and this signals the flight-to-safety of foreign investments,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said in a Viber message.

The peso fell to as low as P58.86 against the dollar in June, its worst showing in 20 months. This was also its weakest finish so far since it sank to the P58 level in May.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort also noted that foreign portfolio investments swung to an outflow in June as recent geopolitical tensions increased volatility in the markets.

He cited heightened tensions between the Philippines and China over contested waters, and the Israel-Hamas conflict, among others.

“Risk factors that still contributed to the net foreign selling/outflows recently include the El Niño drought that led to higher local rice prices and weaker peso exchange rate that led to some pickup in inflation,” Mr. Ricafort added.

In the first half of the year, BSP-registered foreign investments yielded a net inflow of $80.84 million, a turnaround from the $804.28-million outflow in the same period in 2023.

Broken down, gross net inflows stood at $7.2 billion, while net outflows amounted to $7.12 billion in the January-June period.

“While monthly fluctuations persist, the overall trend suggests improved investor sentiment towards the Philippine economy,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

The BSP expects foreign portfolio investments to yield a net inflow of $3.1 billion in 2024. — Luisa Maria Jacinta C. Jocson

PHL economy likely grew more than 6% in Q2 — Finance chief

A mother and child look to buy school supplies at a stall in Divisoria, Manila. — PHILIPPINE STAR/EDD GUMBAN

THE PHILIPPINE ECONOMY likely grew faster in the second quarter amid better state spending and increased household consumption, the Department of Finance (DoF) said.

“If you’re talking about growth rate for the second quarter, I think we’re pretty optimistic. It will be higher than the first (quarter),” Finance Secretary Ralph G. Recto told reporters on the sidelines of an event late Tuesday.

In the first quarter, gross domestic product (GDP) expanded at a weaker-than-expected 5.7% due to slower consumption and state spending.

Mr. Recto said he is “crossing his fingers” that GDP growth would be above 6%, driven by consumption, government spending and lower inflation.

The government is targeting 6-7% GDP growth this year.

Headline inflation eased to 3.7% in June due to a slower rise in power and transport costs, ending four straight months of acceleration.

Last week, National Economic and Development Authority Secretary Arsenio M. Balisacan said GDP growth in the April-to-June period would likely be near the lower end of the government’s 6-7% target.

The Philippine Statistics Authority is scheduled to release second-quarter GDP growth data on Aug. 8.

Jonathan L. Ravelas, senior adviser at professional service firm Reyes Tacandong & Co., forecasts GDP growth at 6.1% in the second quarter, driven by infrastructure spending and a recovery in private spending.

However, he expects full-year growth to average at 5.8% this year, and 6.3% for 2025.

IBON Foundation Executive Director Jose Enrique A. Africa said state spending growth in the second quarter might be subdued due to debt service.

“The stimulus effect of higher government spending is also diminished to the extent that these are spent on debt service or on imported materials, equipment or contractors for infrastructure projects,” he said in a Viber message.

The National Government’s debt service bill, which refers to state payments on its domestic and foreign debt, rose by 48% to P1.22 trillion in the January-to-May period from P819.53 billion a year ago. — Beatriz Marie D. Cruz

DoE pushes 22 green energy projects for NGCP system impact study

NGCP.PH

THE Department of Energy (DoE) said it endorsed 22 renewable power projects to the National Grid Corp. of the Philippines (NGCP) in June for a system impact study (SIS).

“In June 2024, the DoE issued 22 SIS endorsements to the NGCP which are all new applications,” the department said in a document posted on its website.

Such studies are conducted to determine the adequacy and capability of the grid to accommodate the new connection.

The government aims to increase the share of renewable energy in the country’s power generation mix to 35% by 2030 and 50% by 2040.

Data from the Energy department showed that it has issued SIS endorsements for 13 solar power projects and nine wind power projects.

Among the notable projects is the Terra Solar Project under SP New Energy Corp., which consists of a 3,500-megawatt (MW) solar-power plant and a 4,500-megawatt-hour battery-energy storage system.

The projects also include the 516.10-MW Suncastle Baao Solar Farm Project, 421.97-MW Medellin Solar Power Project, 365.46-MW Cabiao Solar Power Project, 304.06-MW Tinang Tarlac Solar Power Project, 300-MW San Jose Wind Power Project, and the 280-MW GigaWind1 Floating Solar Power Project.

The list also includes the 229-MW San Luis Solar Power Project, 169.55-MW Iguig Solar Power Project, 131.79-MW Calamba Floating Photovoltaic Solar Power Project, 86.74-MW San Marcelino Solar Power Project, 61.31-MW Cabcaben Solar Power Project, and the 67-MW Magat Floating Solar Power Project.

The DoE has also issued SIS endorsements for the 300-MW Botolan Wind Power Project, 300-MW San Jose Wind Power Project, and the 50-MW Mabini Wind Power Project.

The department has also endorsed the Ubay Wind Power Project, Quezon Wind Power Project, Butuan 1 Wind Power Project, Gumaca-Pitogo Wind Power Project, Butuan Wind Power Project, and Palayan-Laur Wind Power Project for the study, all of which have a capacity of 100 MW.

For the first half of the year, the DoE has endorsed a total of 88 power projects, of which three are energy storage systems. — Sheldeen Joy Talavera

MPIC’s dairy expansion may spur investor interest — analysts

REUTERS

By Adrian H. Halili, Reporter

METRO PACIFIC Agro Ventures (MPAV), the agriculture unit of Metro Pacific Investments Corp. (MPIC), is investing in a Bukidnon dairy farm to bolster its dairy operations — a move that analysts expect will stimulate further investment in local dairy production.

“Establishing this strategic beachhead in Mindanao complements our dairy farms in Luzon, bringing us closer to our mission of achieving nationwide food security,” MPAV Chairman Manuel V. Pangilinan said in a statement on Thursday.

MPAV said that its acquisition of Universal Harvester Dairy Farms, Inc. (UHDFI) for more than P700 million is intended to support the Philippines’ dairy demand. The company will acquire 100% ownership of UHDFI.

In 2022, MPAV acquired a stake in The Laguna Creamery, Inc., which owns the brands Carmen’s Best ice cream and Holly’s Milk.

Mr. Pangilinan added that MPAV’s Laguna operations have improved the accessibility of fresh dairy and provided a stable market for dairy farmers.

“With our new investment in Bukidnon Milk Company, we anticipate replicating this success in Mindanao and other regions of the country,” he said.

MPAV President and Chief Executive Officer Juan Victor I. Hernandez said that the investment would enable the company to expand its distribution network.

“This is a significant step for us to achieve our aspiration of becoming a dairy master brand, where we will be providing the Filipino consumer with the full range of dairy products from ice cream, milk, yogurt, cheese, butter, and other milk derivative products,” Mr. Hernandez added.

UHDFI operates under the brand Bukidnon Milk Co., producing dairy products for the Visayas and Mindanao markets. The company also supplies milk for the National Dairy Authority’s (NDA) milk feeding program.

“We believe that MPAV is the right partner to take our vision to the next level. This partnership will not only expand our reach but also enhance the quality and range of dairy products available to Filipino consumers,” UHDFI Founder Milagros Ong-How said.

MPAV said that the completion of the acquisition is still subject to regulatory approval and other closing conditions.

Danilo V. Fausto, president of the industry group Philippine Chamber of Agriculture and Food, Inc., said that the company’s move to expand its dairy business could encourage other companies to invest in the dairy sector.

“But the effect of this will not be immediate. Dairy is a long-term business, so you need to increase your herd, improve your forage and nutrition, and so on before you can start producing milk,” Mr. Fausto said in a phone call.

“We would like to invite more investors to the industry. We’ve been importing 99% of our milk, and we welcome such initiative and investment from multinational companies,” he added.

The Philippines can meet less than 1% of its milk demand through domestic production, with the remainder needing to be imported.

Dairy imports are forecast to increase by 7.3% in 2024 to 2.49 million metric tons of milk equivalent, according to a report by the Food and Agriculture Organization of the United Nations.

AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said that the acquisition would secure the supply for Metro Pacific’s dairy product business, Carmen’s Best.

“We hope more companies will follow MPIC’s lead and invest in the agriculture sector. There are very few companies that invest in this sector in a meaningful way, which is unfortunate because food security is one of the biggest concerns facing the Philippines,” Mr. Garcia said in a Viber message.

Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said that investing in more dairy businesses could help boost local production and, over time, reduce the country’s dependence on imported dairy.

“The main challenge is to produce high quality, affordable local dairy products efficiently and at scale so that they can meet local demand,” Mr. Colet said in a Viber message.

He added that other companies might be hesitant to enter the dairy industry due to the substantial investment required in technology, infrastructure, and logistics.

The NDA aims to increase dairy production to 80 million liters per year by 2028.

MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority share in BusinessWorld through the Philippine Star Group, which it controls.

Cebu Pacific targets Chiang Mai with low-cost strategy

CEBUPACIFICAIR

CEBU PACIFIC said it expects its low-cost pricing strategy to generate a similar market response for Chiang Mai, Thailand, as it did with its Da Nang route in Vietnam.

The budget carrier will be the only airline offering direct flights from Manila to Chiang Mai, Cebu Pacific President and Chief Commercial Officer Alexander G. Lao said during a briefing on Thursday.

The airline will begin operating flights to Chiang Mai three times a week starting Oct. 29.

“We share the anticipation of many Filipino travelers as we prepare to launch the only direct flights between Manila and Chiang Mai,” Mr. Lao said.

In 2023, Cebu Pacific started operating direct Manila-Da Nang flights, with a frequency of three times a week.

“In fact, we were very surprised with the results of Da Nang, and we are actually looking to increase frequencies. I think Filipinos are always looking for newer destinations to explore,” Mr. Lao said.

Cebu Pacific is now hoping that Chiang Mai will yield results similar to those of Da Nang, he said.

“Whenever a low-cost carrier like Cebu Pacific comes in, we offer lower fares, we’re able to stimulate that market normally. So that’s one angle that we look at,” Mr. Lao said.

For the year, the company has initially set a target of 24 million passengers, significantly higher than its 2023 passenger volume.

Last year, Cebu Pacific flew over 20 million passengers and operated more than 140,000 flights, representing increases of about 41% and 30%, respectively, from the previous year.

“With the new routes and destinations, and also more importantly, more available aircraft that are going to be available in the fourth quarter of this year,” he said.

For 2024, Cebu Pacific expects to receive 17 aircraft, six of which have already arrived at Ninoy Aquino International Airport.

Additionally, the company has agreed to purchase up to 152 Airbus aircraft, with the finalization expected by the third quarter. These aircraft are scheduled to be delivered starting in 2028. — A.E.O. Jose

Metrobank second-quarter income up by 11.4%

METROBANK.COM.PH

METROPOLITAN BANK & Trust Co. (Metrobank) saw its net income rise by 11.44% in the second quarter as it booked higher net interest earnings amid an expanded loan book and elevated rates.

The Ty-led bank’s attributable net income stood at P11.61 billion in the April-to-June period, up from P10.42 billion in the same period last year, according to its financial statement disclosed to the stock exchange on Thursday.

This brought its net profit for the first semester to a record P23.61 billion, rising by 12.95% year on year from P20.898 billion.

Metrobank’s first-half performance was driven by “robust asset expansion, stable margins, well-managed cost growth and healthy asset quality,” it said.

This translated to a return on average equity of 13.27%, up from 12.89% a year prior. Return on average assets also inched up to 1.48% from 1.46%.

“Our strong capital position and robust asset profile continued to support our expanding core businesses despite market challenges. Prospects of easing inflation driven by government efforts could further spur consumer demand,” Metrobank President Fabian S. Dee said.

“We are firmly on track to meet our medium-term growth aspirations as we support various public and private sector initiatives that continue to drive economic growth,” he added.

Metrobank’s net interest income grew by 13.87% to P29.27 billion in the second quarter from P25.71 billion in the same period last year.

The increase was driven by a 17.7% growth in interest earnings amid higher income on loans and receivables and on investment securities, which partly offset a 25.99% increase in interest and finance charges.

The bank’s net interest margin stood at 3.99% at end-June, slightly higher than 3.93% a year prior.

Meanwhile, other operating income fell by 20.01% to P5.45 billion in the second quarter from P6.81 billion a year ago amid lower net trading, securities and foreign exchange gains and despite a slight increase in fee and miscellaneous income.

Metrobank’s operating expenses climbed by 9.61% year on year to P18.39 billion amid higher manpower and transaction-related costs, among others.

Its cost-to-income ratio stood at 52.3% as of end-June.

The bank’s gross loans climbed 14.9% year on year at end-June on the back of a 15.2% increase in commercial loans and a 13.7% expansion in consumer loans.

“Net credit card receivables surged by 21.4%, while auto loans grew by 16.6%, sustaining the growth momentum in the consumer segment,” it said.

Even as it expanded its loan portfolio, Metrobank’s non-performing loan (NPL) ratio improved to 1.66% at end-June from 1.84% a year prior, while NPL cover was at 162.7% “to provide a substantial buffer against any emerging risks.”

Provisions for credit and impairment losses stood at P472 million in the second quarter, 77.68% less than the P2.12 billion set aside in the same period last year.

On the funding side, total deposits grew by 7.8% year on year to P2.4 trillion as of June, with low-cost current and savings account or CASA deposits making up 58% of the total.

This resulted in a loan-to-deposit ratio of 67.90%, up from 63.72% a year ago.

Metrobank’s consolidated assets expanded by 14.5% year on year to P3.3 trillion as of June.

Total equity stood at P355.09 billion.

Its capital adequacy ratio went down to 16.72% as of June from 17.9% a year prior. Its common equity Tier 1 ratio also dropped to 15.87% from 17.06%. Still, both remained well above the minimum levels required by the central bank.

Metrobank’s liquidity coverage ratio stood at a “substantial” 259.9%.

Its shares dropped by 70 centavos or 1.02% to close at P68 apiece on Thursday. — AMCS

MGen eyes LNG deal financial close by September

MERALCO PowerGen Corp. (MGen), the power generation subsidiary of Manila Electric Co. (Meralco), said it expects to finalize the financial arrangements for its liquefied natural gas (LNG) project with Aboitiz Power Corp. (AboitizPower) and San Miguel Global Power Holdings Corp. (SMGP) by September.

“We are expecting that maybe by the end of September,” MGen President and Chief Executive Officer Emmanuel V. Rubio told reporters after a briefing on Monday, noting that they are awaiting approval from the Philippine Competition Commission (PCC).

In March, MGen entered into an investment agreement with AboitizPower’s subsidiary, Therma NatGas Power, holding 60% and 40% stakes, respectively, in Chromite Gas Holdings, Inc.

Chromite Gas plans to invest in two gas-fired power plants owned by SMGP: the 1,278-megawatt (MW) Ilijan power plant and a new 1,320-MW combined power facility.

MGen and AboitizPower signed a $3.3-billion landmark deal with SMGP, the power arm of San Miguel Corp., to launch an integrated LNG facility in Batangas.

Together with SMGP, the joint venture company will also invest in an LNG import and regasification terminal owned by Linseed Field Corp.

While awaiting PCC approval, Meralco is on standby for approval from the Energy Regulatory Commission (ERC) for its power supply agreements, which is “critical to the consortium.”

In June, the ERC released an order granting provisional approval to implement Meralco’s contract with South Premiere Power Corp. (SPPC), which won the bidding for the 1,200-MW power supply.

However, of the total, the ERC only allowed 910 MW to be covered, pending the commission’s decision on the 290 MW capacity bound by an earlier contract it previously authorized.

Meralco and SPPC filed a joint motion for partial reconsideration, which has yet to be resolved by the ERC.

SPPC, a subsidiary of SMGP, is the administrator of the natural gas-fired power plant in Ilijan, Batangas.

Meralco’s majority owner, 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

Japan-set Filipino drama tackles the realities of healing from grief

THIS YEAR, Jaime Pacena III’s Kono Basho, an entry to the 20th Cinemalaya Independent Film Festival, is aiming to present the possibilities of connection born from loss — be it that of a family member or of a whole community.

The film, set in the tsunami-stricken city of Rikuzentakata in Japan, is centered on two estranged half-sisters, Filipino anthropologist Ella and Japanese painter Reina, who reunite at their father’s funeral. The two end up forging a bond to heal their personal wounds.

Having an artist residency in Rikuzentakata for months at a time allowed for immersion with an admirable community — one that rose from the 2011 disaster in Japan through heroic rebuilding efforts, said Mr. Pacena, a visual artist whose work spans a wide range of media.

The history and daily life of the people ultimately inspired him to make his feature film debut, he told BusinessWorld in a Zoom interview on July 31. “As an artist I explore different materials and techniques, always documenting the things around me. What I captured [there] inspired me,” he said.

Fellow Filipinos and famed directors Dan Villegas and Antoinette Jadaone showed interest in Mr. Pacena’s idea for Kono Basho back in 2019. Their production company, Project 8 Projects, produced the film along with Mentorque Productions in 2023.

Mr. Pacena added that, with their guidance, he got to harness 13 years’ worth of archival photographs and videos into important themes in the film.

“I also saw that Japan and the Philippines are sisters as well, like the two characters Ella and Reina who have an estrangement. Seeing it that way helped me,” he said.

Actresses Gabby Padilla (known for her recent outstanding role in Gitling) and Arisa Nakano (coming from the acclaimed Perfect Days) took on the challenge of showing a complex, subdued sibling relationship.

For Ms. Padilla, being a sister and having lost their father years ago helped her relate to her character, though she pointed out that Kono Basho explores grief, distance, and an unlikely connection with such restraint.

“I think I find this story about siblings interesting and fascinating, especially in terms of the roles they play and the people they become,” she said in the Zoom interview.

“A lot of the inspiration I drew from are my own experiences. That’s why Ella is memorable and relatable in that she felt displaced, like she doesn’t belong. I feel like the best characters are the ones I see myself in.”

Mr. Pacena revealed that, with the work the two actresses have put in to convey the soul of Kono Basho, he hopes the audiences will not see it as just another beautiful, Japan-situated film.

“All parts and locations are carefully thought of. They all have significance to the 2011 tsunami, and to the characters who find solace and connection,” he explained. “I’m used to things that are not moving, like paintings, so the scenes are made in a way that you can contemplate about it.”

Despite having Japanese director Hirokazu Kore-eda’s humanist dramas Monster and Our Little Sister as major influences, the film’s narrative is ultimately a very Filipino one, the director said.

“I like to make sure that what I do communicates authenticity. It just so happens that the story is set in Japan, but it is still a story about Filipinos.”

Kono Basho opens on Aug. 3 at Ayala Malls Manila Bay as an official Cinemalaya feature-length entry.

The Cinemalaya 2024 film festival will have 10 full-length and 10 short films in competition. The festival will run from Aug. 2 to 11 at Ayala Malls Manila Bay in Parañaque City. Counting the other exhibition films, retrospectives, and premieres, the festival’s lineup this year totals 200 films. For more details including the screening schedules, visit the CCP and Cinemalaya websites and social media pages. — Brontë H. Lacsamana

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