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Castrol distributor holds 2024 Reignite Event

North Trend Marketing Corp. (NTM), the master distributor of Castrol in the Philippines, held its 2024 Reignite Event at Manila Hotel last July 6, 2024.

The event was attended by Castrol executives, NTM Executives, partners, stakeholders and Castrol Key Opinion Leaders. The event aims to reintroduce Castrol’s new branding, from packaging to its future plans.

The program kicked off with the opening remarks of Chief Operating Officer Ronald Ang. His opening remarks focused on the importance of overseeing change, and discussed certain external factors that might affect the growth of business. He also tackled the reason for the need to change and be ready for any circumstances. He also emphasized that Castrol will always look for long-term solutions and always move forward not only on the innovation of the products but also improve commitment towards partners with what Castrol offers.

The program proper began with the launching of Castrol Reignite. This was conducted by the Growth Unit Manager of Castrol Asia Pacific, Marlina Kamaruddin. She started with featuring the milestones of Castrol for the past 125 years and what Castrol changed for the lives of our community. She also covered the top facts about Castrol like the involvement of the brand to the space industry. She is also proud that Castrol is now serving over 150 countries around the world. Another thing that Marlina was proud of is that Castrol is touching 200,000,000 customers all over the world.

Next presenter was Castrol Vice-President for Castrol Asia Pacific Mike Zhi Qiang Zhang. His presentation tackled the long-term strategic success which they oversee an opportunity for Castrol product lines. He emphasized that by 2040, engine oil will still be one of the major important factors for a vehicle, an increase on Marine market services with a forecast of 2% per annum growth. He also discussed that Castrol is now boosting its effort for industrial by an expected growth of 3% per annum by 2030. Lastly, he ensured that Castrol is matching new technologies by putting renewable energy to its effort.

The program moved to PH Market Liason for Castrol Allan Cinco. He defined some changes with Castrol. First is a fresh and modern branding of Castrol, which is congruent to the changing needs of Castrol customers; a little change on the tone but not a stranger to Land, Sea, Air and Space challenges. Allan ended his presentation by a statement of Forward to a Stronger partnership. Castrol will help its commercial customers with their sustainability goals related to energy, waste and water, accelerating progress, onward, upward and forward with Castrol.

Final presenter for 2024 Reignite event was the Sales Director for Castrol-NTM, Grace Lao-Torrejas. Her discussion focused on the connection of Gen Z to the market as they make up 27% of the workforce. Also, Ms. Lao-Torrejas centered the discussion on the usage of Gen Z of social media, in which the Philippines ranked first with the highest social media usage rate of 60%. As a future customer, they are highly opinionated with high likelihood of “cancel culture” if brand issues are not properly attended. Ms. Lao-Torrejas also shared that Asian Gen Z, despite their objection, are forgiving and might support the brand again so long as the brand’s promise is lived by. The presentation concluded on Castrol being equipped on these changes in the market and is ready to move forward.

 

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Mondelēz International and industry experts tackle responsible marketing to kids

(L-R) Nutrition Officer II from the Nutrition Policy and Planning Division at the National Nutrition Council Kristian Jebsen Bandong, David & Golyat President and Ad Standards Council Vice-President of External Affairs Vice-President Mike David, Philippine Association of National Advertisers (PANA) Vice-President Chrissy Roa, Center for Peace Education’s Dr. Gail Reyes Galang, and Mondelēz International’s Managing Director in the Philippines Aleli Arcilla shared insights on crafting age-appropriate and responsible marketing during the “Responsible Marketing to Children” session last July 5.

Amid growing concerns over the impact of advertising on children, industry leaders including global snacks company Mondelēz International took proactive steps to support and redefine ethical standards in children’s marketing during the educational session, “Responsible Marketing to Children” last July 5, 2024.

Hosted with adobo Magazine and joined by the National Nutrition Council, Philippine Association of National Advertisers (PANA), the Ad Standards Council (ASC), Center for Peace Education, and KMC Solutions, the session seeks to spark discourse on ethical marketing to children and explore strategies for crafting age-appropriate and responsible marketing campaigns that resonate with families while safeguarding their best interests and well-being.

“We should all be advocates for our children, then we can be advocates for the products we are trying to sell,” said Center for Peace Education’s Dr. Gail Reyes Galang. She also suggested seeking insights from parents or child experts to ensure ethical marketing practices aimed at children.

Kristian Jebsen Bandong, Nutrition Officer II from the Nutrition Policy and Planning Division at the National Nutrition Council, shared the government’s initiatives on regulating advertising and marketing, including developing the Philippine Nutrient Profile Model which they plan to use for several purposes such as regulating treats and alcoholic beverage marketing and implementing front-of-pack nutrient-specific warning labels.

Aleli Arcilla, Mondelēz International’s Managing Director in the Philippines, shares insights from the company’s State of Snacking report, a global consumer snack trends study examining the evolving trends of snacking globally.

Meanwhile, Mondelēz International explored the ethical imperatives in today’s market, emphasizing the delicate balance between business objectives and safeguarding family and children’s well-being. Aleli Arcilla, Mondelēz International’s Managing Director in the Philippines, also revealed the company’s industry-leading efforts and advocacy for well-being, Mindful Snacking.

“We believe it is the gatekeepers — the parents or the guardians — who should make the decision on what food their children should consume,” Arcilla emphasized. “To grow our business means growing it the right way by being responsible in our marketing and encouraging other companies to do the same,” she emphasized.

At the same time, Miko David, President of David & Golyat and Vice-President of External Affairs at the Ad Standards Council, discussed how the organization regulates marketing to children through its regulatory guidelines.

The esteemed experts also opened up to the possibility of reviving and improving the Philippines’ Responsible Advertising to Children pledge, which was signed in 2014. This pledge aims to formalize the minimum standards for advertising to children, to protect their wellbeing. Mondelēz International is one of the companies that signed this pledge.

“Through this discussion, we are advancing significantly toward our goal. By fostering collaboration in designing marketing strategies for families, we envision a world where businesses thrive alongside the well-being of our consumers,” said Arcilla. 

 

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Kinetix Lab launches ‘Strong is Beautiful’ campaign: Strong women, strong community

Strong Women, Strong Community

Strong women unite for a day of exercise and camaraderie at Kinetix Lab One Ayala

Neither inclement weather nor the dreadful traffic on the Metro did anything to discourage the participants of the “Strong is Beautiful” Campaign Launch, which took place on July 22, 2024 at Kinetix Lab One Ayala. Registration started at around 1 p.m. and the event, which was hosted by Liza Guillion, began at 2 p.m. The event gathered a diverse group of empowered women who celebrated strength, fitness, and self-love.

Host Liza Guillion with Kinetix Lab’s Regional Manager of the South Coach Nelson Ancheta

Liza extended a warm welcome to all attendees and proceeded to present Coach Nelson Ancheta, Kinetix Lab’s Regional Director, who provided a brief overview of Kinetix Lab. Coach Nelson emphasized that Kinetix Lab is deeply committed to the training methods and concept of strength and conditioning. Furthermore, he emphasized the importance of strength and conditioning training for women and men alike, as it is crucial for developing and maintaining physical strength in both the present and the future. Coach Nelson concluded by emphasizing that Kinetix Lab is the best gym to start your fitness journey due to its top-notch coaches, best equipment, and recovery services.

“Strong is Beautiful“ seeks to redefine beauty standards and encourage women to prioritize their physical and mental health. Kinetix Lab thinks that strength is more than simply physical skills; it also includes inner resilience and confidence. To exemplify this uplifting message, Kinetix Lab chose five influential and inspiring women to be the faces of the campaign and were introduced during the event:

Kinetix Lab’s Strong is Beautiful Campaign Faces Janina Manipol, KC Leyco, Kai Honasan-Del Rio and Max Eigenmann

Max Eigenmann: a celebrated actress known for her versatility and dedication to fitness.

Janina Manipol: a lifestyle content creator who promotes a healthy and balanced lifestyle.

Angeline Rodriguez: a talented writer who uses her words to entertain and inspire.

KC Leyco: a fashion stylist who exudes confidence and style.

Kai Honasan-Del Rio: a gifted musician who embodies strength and artistry.

These women exemplify strength in every aspect and also find pleasure from engaging in strength and conditioning training as part of their physical fitness regimen. One of the female coaches of Kinetix Lab, Coach Jules Pajaron, talked about the “Strong is Beautiful” membership packages:

Conquer PCOS Membership — A comprehensive training program tailored for women with PCOS, focusing on mitigating symptoms related to hormonal imbalance through targeted exercises

Fit & Fierce Weight Loss Membership — A training program crafted for women seeking effective weight loss and body fat reduction

The Strong Moms Membership — A program for mothers who want to build strength, vitality, and healthy lifestyle changes to keep up with physical demands of parenting.

Rising Star Membership — A training program designed for empowered women who want to achieve work-life balance, who lead active and competitive lifestyles.

Train Like an Athlete Membership — A Phase-Based training program for female athletes designed to optimize performance and recovery by synchronizing training phases with hormonal fluctuations across the menstrual cycle.

After the brief program, attendees including actress Glaiza de Castro, lifestyle content creators Jackie Go, Bianca Santiago-Reinoso, Aliza Apostol-Goco, Samantha Valenciano, makeup artist Jia Achacruz, and the members of the flag football team PH Hurricanes consisting of Nina Juan, Bea Ignacio, Nikki Manalo, Pia Reyes, and Gaby Dela Merced joined the core and mobility group training that was coordinated by the women coaches of Kinetix Lab.

To know more about the “Strong is Beautiful” membership packages, Kinetix Lab is encouraging you to visit either of their branches: UP Town Center, The Podium, and One Ayala to have the opportunity to engage in conversation with one of their coaches. Follow them on Facebook and Instagram or visit their official website at https://kinetixlab.com.ph/.

The event was sponsored by Orly Nail Polish, Naturtint Hair Color, Groove Activewear, and Sip & Chugs Coffee.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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NG debt hits new high of P15.48-T

A Philippines peso note is seen in this picture illustration on June 2, 2017. — REUTERS

By Beatriz Marie D. Cruz, Reporter

THE NATIONAL Government’s (NG) outstanding debt jumped to a fresh high of P15.48 trillion as of end-June, reflecting the impact of the peso depreciation against the US dollar, the Bureau of the Treasury (BTr) said.

Data from the BTr on Tuesday showed that outstanding debt inched up by 0.9% to P15.48 trillion as of end-June from P15.35 trillion as of end-May.

Year on year, the debt stock increased by 9.4% from P14.15 trillion a year ago.

National Government outstanding debtIn a statement, the BTr said that the rise in debt was “due to the net issuance of both domestic and external debt and the effect of peso depreciation.”

“This was partially offset by the impact of third-currency depreciation on the valuation of corresponding debt denominated in those currencies,” it added.

According to the BTr, the peso depreciated by 13.4 centavos to P58.658 per dollar as of end-June from P58.524 per dollar as of end-May.

The bulk or 68.29% of the total debt stock came from domestic sources.

As of end-June, outstanding domestic debt edged up by 1.2% to P10.57 trillion from P10.44 trillion in the previous month. Year on year, it increased by 9% from P9.7 trillion.

“The increase in domestic debt was primarily driven by the P129.89-billion net issuance of government securities and the P0.39-billion effect of peso depreciation on foreign currency-denominated domestic debt,” the Treasury said.

Government securities accounted for nearly all of domestic debt at end-June.

Meanwhile, external debt, which accounted for 31.71% of the total, inched up by 0.1% to P4.91 trillion as of end-June from P4.9 trillion in the previous month.

External debt jumped by 10.5% from P4.45 trillion in June 2023.

“The increment is attributed to P7.95 billion in net availment and the P11.23 billion upward revaluation of US dollar-denominated debt due to peso depreciation. This was partially offset by the P13.56-billion effect of favorable third-currency adjustments,” the BTr said.

External debt was composed of P2.29 trillion in loans and P2.62 trillion in global bonds.

This consisted of P2.22 trillion in US dollar bonds, P217.39 billion in Euro bonds, P62.92 billion in Japanese yen bonds, P58.66 billion in Islamic certificates and P54.77 billion in peso global bonds.

Meanwhile, the NG’s guaranteed obligations dropped by 1.9% to P343.65 billion as of end-June from P350.2 billion as of end-May. It also declined by 7.1% from P369.73 billion in the same period in 2023.

“The decline was primarily driven by the net repayment of both domestic and external guarantees amounting to P5.02 billion and P0.73 billion, respectively,” the BTr said.

“Additionally, the impact of third-currency adjustments against the US dollar amounting to P1.18 billion was able to offset the P0.37-billion increase caused by peso depreciation.”

Security Bank Corp. Chief Economist Robert Dan J. Roces said that the higher debt as of end-June was partly due to the peso’s depreciation against the US dollar, “which inflated the value of foreign-denominated debt.”

“To manage this, the government may need to boost revenue through efficient tax collection and spending and prioritize economic growth to increase its capacity to repay debt,” he said in a Viber message.

Jonathan L. Ravelas, senior adviser at Reyes Tacandong & Co., said the higher debt stock could also be attributed to “increased economic recovery efforts (subsidies and infrastructure spending).”

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the higher debt level can be blamed on elevated interest rates.

UNPROGRAMMED APPROPRIATIONS
Meanwhile, Finance Secretary Ralph G. Recto on Tuesday warned against additional borrowings to fund unprogrammed appropriations next year, saying these could raise the country’s debt-to-gross domestic product (GDP) ratio to 61.4% by end of the year, from the targeted 60.3%.

As of the first quarter, the NG’s debt as a share of GDP stood at 60.2%, slightly above the 60% threshold deemed manageable for developing economies.

At a Senate Health and Demography Committee hearing, Mr. Recto said using debt to fund mostly official development assistance (ODA) projects would hike the deficit-to-GDP ratio to 6.4% by end-2024. The government has set the deficit ceiling at 5.6% of GDP this year.

“In effect, we will not hit our medium-term fiscal program, and this may put pressure on our investment grade rating. If we deny (foreign-assisted projects) of funding, the implementation is delayed, and we rack up opportunity costs that will be borne by the public deprived of the convenience such projects bring,” he said.

The Finance chief said the additional borrowings would mean interest payments would rise by P12.7 billion annually.

Projects funded by unprogrammed appropriations include the Davao City By-Pass Construction Project, Samal Island Davao City Connector Project, Panay-Guimaras-Negros Island Bridges, Bataan-Cavite Interlink Bridge Project and the Metro Manila Subway Project among others, according to a DoF statement.

Mr. Recto was defending the Department of Finance’s (DoF) order to withdraw from the idle funds of government-owned and -controlled corporations (GOCCs), which he said was aboveboard.

The DoF had consulted the Commission on Audit, the Governance Commission for GOCCs, and the Office of the Government Corporate Counsel before making the fund transfers, he said.

“But please curate the expenditure program without inflating the unprogrammed appropriations side, because this distorts the country’s fiscal plan,” Mr. Recto urged lawmakers at the hearing. — with John Victor D. Ordoñez

DoF to wait for rate cuts before borrowing abroad

REUTERS

By John Victor D. Ordoñez, Reporter

THE PHILIPPINE government will wait for rate cuts from the US Federal Reserve and Bangko Sentral ng Pilipinas (BSP) before its planned external borrowings next year, according to the Finance chief.

“We’re waiting for the Fed to reduce interest rates, and I think the Philippines, our central bank, will also reduce policy rates,” Finance Secretary Ralph G. Recto told reporters at the Senate when asked about the government’s planned borrowings next year.

For 2025, the National Government set its borrowing program at P2.55 trillion, 0.97% lower than P2.57 trillion this year.

Gross domestic borrowings were set at P2.04 trillion for 2025, while gross external borrowings were set at P507.41 billion.

Mr. Recto told reporters earlier this month that the government is planning on issuing Japanese yen-dominated and US dollar-denominated bonds within the year.

Asked on Tuesday on the plans to issue these bonds, he replied: “We will be starting now.”

The Philippine central bank, which has kept interest rates steady at 6.5% in its past six meetings, earlier flagged a possible 25-basis-point (bp) cut at its meeting on Aug. 15.

The US Federal Reserve is expected to keep interest rates steady at a two-day policy meeting this week, Reuters reported.

“By awaiting potential rate cuts from both the Fed and BSP, the government aims to secure more favorable terms for its international debt issuance,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Vibes message.

“To maintain low interest rates for its substantial domestic borrowing plan, the government could focus on…implementing fiscal consolidation, fostering investor confidence, which can help the country achieve its financing goals while managing debt costs effectively.”

Jonathan L. Ravelas, senior adviser at professional service firm Reyes Tacandong & Co., said in a Viber message that the government should focus on boosting its revenue collection and efficiency to lower debt.

“There should a balance in infrastructure spending to push growth, while reigning the spending of agencies,” he said.

Mr. Recto, who is a member of the central bank’s policy-setting Monetary Board, earlier said the country is on track for a cut in benchmark interest rates this year.

The BSP’s next policy meeting is on Aug. 15.

“In view of the National Government’s limited financial resources, it (government) needs to better manage the country’s debt over the long-term,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Foreign borrowings also need to be reduced and we need to increase local borrowings to manage foreign exchange risks, as a matter of prudence.”

Gov’t allots P1.28-T for infrastructure in 2025

Men are seen working at a construction site in Quezon City. — PHILIPPINE STAR/MIGUEL DE GUZMAN

THE NATIONAL Government (NG) is expected to spend P1.28 trillion on infrastructure and capital outlays next year, the Department of Budget and Management said.

Under next year’s Budget of Expenditures and Sources of Financing, infrastructure and other capital outlays are expected to jump by 3.04% from P1.24 trillion this year.

This excludes infrastructure subsidy and equity to government-owned and -controlled corporations (GOCCs) and infrastructure transfers to local government units.

The administration seeks to spend 5-6% of gross domestic product (GDP) on infrastructure annually.

Infrastructure outlays, which refer to appropriations for each infrastructure expense class, are expected to dip to P1.506 trillion next year from P1.51 trillion this year.

Infrastructure disbursements, or the actual payments made for completed projects, are projected to rise by 4.46% to P1.54 trillion next year from P1.47 trillion this year.

The government may be constrained in increasing infrastructure spending due to limited financial resources, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said.

“In view of this, there is a need to focus on priority infrastructure spending that have the greatest benefit to the greatest number of persons and for the whole economy, in view of limited funds, amid the budget deficits,” he said in a Facebook Messenger chat.

The latest data from the DBM showed that infrastructure spending jumped by 21.7% to P472.1 billion in the first five months of the year.

Meanwhile, there are 185 projects worth P9.56 trillion in the pipeline, according to the latest data from the National Economic and Development Authority. The bulk of these projects comes from the Department of Public Works and Highways (DPWH) with 74 and the Department of Transportation (DoTr) with 69.

For next year, the DPWH is seeking P70.7 billion for foreign-assisted projects, while the DoTr seeks P122.6 billion for its projects.

Under the DPWH, P40.33 billion in foreign assistance will be used to construct roads and bridges, P2.8 billion for buildings and P27.57 billion for flood control projects.

For 2025, the NG seeks a total of P215.65 billion in foreign assistance.

These include P132.64 billion from the Japan International Cooperation Agency, P32.47 billion from the Asian Development Bank, and P29.89 billion from the World Bank’s International Bank for Reconstruction and Development.

It also eyes loans from the Asian Infrastructure Investment Bank (P2.88 billion), China (P7.93 billion), Korea’s Economic Development Cooperation Fund (P7.69 billion), and International Fund for Agricultural Development (P906.74 million), among others.

Meanwhile, next year’s climate fund more than doubled (122.93%) to P1.02 trillion from P457.41 billion allocated this year. — B. M. D. Cruz

Philippines a clear laggard in tourism recovery

Tourists onboard a cruise ship are welcomed at a terminal in Manila South Harbor, Feb. 15, 2023. — PHILIPPINE STAR/RUSSELL PALMA

THE PHILIPPINES is still lagging behind its Southeast Asian neighbors in its tourism recovery, as Chinese tourists continue to stay away, Bank of America (BofA) Global Research said.

“The Philippines is lagging considerably behind, with tourist arrivals below 70% of 2019 levels,” it said in a report dated July 29.

Compared with its neighbors, Vietnam’s tourist arrivals have been tracking 105-110% of its 2019 levels, followed by Thailand (slightly above 90%), and Malaysia and Singapore (80-90%).

The latest data from the Department of Tourism (DoT) showed that tourist arrivals hit 3.17 million as of July 10.

This accounts for 41.2% of the department’s 7.7 million target for international visitor arrivals this year, still below pre-pandemic levels of 8.19 million.

So far this year, the bulk or 92.6% of visitor arrivals was foreign tourists, while the remainder was overseas Filipinos. South Korea was the top source of foreign arrivals, accounting for 26% or 824,798 of the total.

This was followed by the United States with 522,667 (16.5%), China with 199,939 (6.3%), Japan with 188,805 (6%) and Australia with 137,391 (4.3%).

The BofA report attributed the Philippines’ “underperformance” to “the muted pace of returning Chinese tourists (still below 20% of 2019 levels), partly reflecting the decline of Philippine offshore gaming operators (POGOs) beginning 2020.”

President Ferdinand R. Marcos, Jr. last week ordered the total ban of all POGO operations in the country, with closures targeted to be completed by yearend.

Meanwhile, the Philippines is also the only country in the region that does not stand to benefit from returning Chinese tourists, according to BofA.

“Our Transport Analysts’ latest data show outbound seats from China to five (out of six) ASEAN (Association of Southeast Asian Nations) countries expanding between the second quarter of 2024 and September/October 2024.”

However, the Philippines’ outbound seats is seen to decline to 46% of 2019 levels.

Tensions between the Philippines and China have been rising in recent months due to the dispute over contested waters in the South China Sea.

The Philippines has also tightened rules for the issuance of tourist visas to Chinese nationals to deter the entry of tourists who end up illegally working in POGOs. Under the rules, Chinese nationals who are applying for temporary visitor’s visas are required to submit Chinese Social Insurance Record Certificates.

The DoT earlier reported that tourism receipts from inbound visitors jumped by 32.8% to P282.17 billion in the first half of the year from P212.47 billion a year ago. 

The World Travel & Tourism Council projected that the travel and tourism sectors’ contribution to the Philippine economy will reach P5.4 trillion this year and up to P9.5 trillion in the next decade.

Separate data from the Philippine Statistics Authority showed the tourism industry’s direct gross value added stood at P2.09 trillion in 2023, equivalent to 8.6% of gross domestic product. — Luisa Maria Jacinta C. Jocson

House to start budget deliberations next week

The House of Representatives is seen at the Batasang Pambansa Complex in Quezon City. — PHILIPPINE STAR/MIGUEL DE GUZMAN

THE HOUSE of Representatives will start hearings on the proposed P6.352-trillion national budget for 2025 next week so it can meet its self-imposed September deadline for third reading approval, a lawmaker said on Tuesday.

The House seeks to send a copy of the approved budget bill to the Senate by October, Majority Leader and Zamboanga City Rep. Manuel Jose M. Dalipe told a news briefing.

Mr. Dalipe said the Development Budget Coordination Committee (DBCC) is scheduled to hold a briefing before the House Committee on Appropriations next week.

The DBCC is composed of Budget Secretary Amenah F. Pangandaman, Socioeconomic Planning Secretary Arsenio M. Balisacan, Finance Secretary Ralph G. Recto, and Special Assistant to the President for Investment and Economic Affairs Frederick D. Go.

“As much as possible we want to work on the deadline and transmit it before the October break,” Mr. Dalipe said. “Because we have to understand that our counterparts in the Senate have to also work on it.”

The Department of Budget and Management (DBM) on Monday submitted to the House its proposed national budget for 2025, which sought to increase allocations to education, infrastructure, and defense sectors.

The P6.352-trillion budget is equivalent to 22.1% of gross domestic product, and 10.1% higher than the P5.768-trillion budget this year.

Meanwhile, Senate President Francis Joseph G. Escudero said the DBCC will hold a briefing before the Senate on Aug. 13.

“We will strive to finish [the budget] before the year ends, including the Bicameral Conference Committee report for the President’s signature,” he told reporters at the Senate in Filipino.

Mr. Dalipe said the House is targeting to approve the budget bill by September, giving the Senate enough time for its own hearings.

“Come the October break, we are expecting our counterparts in the Senate to be ready to deliberate on it,” he said in mixed English and Filipino. “Hopefully, when we all go back in session, they can already discuss it in plenary.”

Arjan P. Aguirre, who teaches political science at the Ateneo de Manila University, said lawmakers are expected to make insertions in the budgets of agencies that “directly affect” the lives of Filipinos, such as Public Works, Education, Health and Agriculture departments.

“Additional funding is expected to be directed to these departments with the purpose of mobilizing governmental resources to support the political machinery of the ruling coalition,” he said in a Facebook Messenger chat.

Michael Henry Ll. Yusingco, a fellow at the Ateneo de Manila University Policy Center, said that the House should ensure that civil society has a chance to “intervene” in the budget deliberations.

“Their primary motivation must be the assurance that the budget passed actually leads to solutions and not to even more problems,” he said in a Facebook Messenger chat.

Even with the budget deliberations, Mr. Dalipe said the House will continue its committee hearings on “important” issues such as inquiries on alleged extrajudicial killings related to the previous administration’s anti-narcotics campaign and crimes linked to Philippine offshore gaming operators. — Kenneth Christiane L. Basilio

PAL seeks $500M for 3 more Airbus A350s

REUTERS

By Ashley Erika O. Jose, Reporter

FLAG CARRIER Philippine Airlines (PAL) said it is in talks with financial institutions to secure approximately $500 million in funding for the acquisition of three additional Airbus aircraft.

“These three that we ordered are just options. It is for our buffer,” PAL President and Chief Operating Officer Stanley K. Ng told BusinessWorld on Tuesday.

This additional aircraft purchase is on top of the nine A350-1000s planned by the company, Mr. Ng said, adding that, overall, PAL is now ordering 25 aircraft.

“Maybe half a billion [for these three], more or less around that. We are talking to the banks right now for the funding,” Mr. Ng said.

“For the buffer, it will be by 2025,” he said, when asked about the expected arrival of the additional three Airbus A350s.

Deliveries for the nine A350-1000s are scheduled until 2027 and will be operated on nonstop services from Manila to North America, including the East Coast and Canada.

In April, PAL said that it was targeting to purchase 13 A321 New Engine Options (NEOs).

These aircraft will start arriving next year and continue through to 2028, he said.

For 2024, the flag carrier has allocated $450 million, or more than P25 billion, to fund its capital expenditure this year, which includes fleet expansion amid growing demand.

Mr. Ng said the company is optimistic about reaching its expected rise in passenger volume of around 20% by yearend.

Last year, the airline company carried a total of 14.7 million passengers, marking a 58% increase from the 9.3 million passengers recorded in 2022.

Data provided by the company showed that it managed to mount a total of 105,294 flights last year, 35.8% higher than the 77,533 total flights in 2022.

“We have plans in the pipeline for new routes, domestically and in some regions. We are exploring it,” he said.

PAL is also set to operate nonstop Manila-Seattle flights three times a week beginning Oct. 2.

Aside from Seattle, which the company considers a promising market, the airline is also looking to explore more Asian and domestic destinations. However, some long-haul flights it plans to operate will be on hold for now until the arrival of its aircraft order.

Meralco eyes larger nuclear energy deployment

PHILSTAR FILE PHOTO

MANILA Electric Co. (Meralco) is exploring the possibility of deploying both small modular reactors (SMRs) and conventional nuclear reactors to help meet the government’s target of generating 1,200 megawatts (MW) of nuclear energy by 2032, a company official said.

“If the government has this plan to have 1,200 megawatts of nuclear (energy) by 2032, micro-modular (reactor) is not enough. We need to look into SMR and maybe conventional nuclear,” Meralco Executive Vice-President and Chief Operating Officer Ronnie L. Aperocho said during a briefing on Monday.

Under the Clean Energy Scenario of the Department of Energy’s Philippine Energy Plan for 2030-2050, nuclear energy is projected to have an installed capacity of 1,200 MW by 2032, 2,400 MW by 2035, and 4,800 MW by 2050.

“We think that nuclear power plant is part of that infrastructure for us to really address the power problems in the country,” Mr. Aperocho said.

Meralco Chairman and Chief Executive Officer Manuel V. Pangilinan said that the deployment of SMRs and micro-modular reactor (MMRs) might be pushed back from the target.

“It turned out to be more difficult than anticipated…, so the timetable for deployment of SMR or MMR could be moved back as far as 2032, 2035,” he said.

An MMR unit or “nuclear battery” can “safely and reliably” provide up to 45 MW of high-quality heat, delivered into a centralized heat storage unit, according to Meralco.

“One or more MMR nuclear batteries combine their heat in the heat storage unit, from where electric power or superheated steam can be extracted through conventional means to meet a wide range of power requirements, from tens to hundreds of MW,” the power distributor said.

Mr. Aperocho said that the company is seeking to meet “a lot of leading players in the nuclear energy industry” in the United States, Canada, and South Korea to explore partnerships.

Meralco First Vice-President and Head of Networks Froilan J. Savet said that some company officials will travel to Ontario, Canada, to sign a memorandum of understanding (MoU) for sending scholars to study nuclear engineering.

“As part of that trip also, we are going to Illinois to sign an MoU with the University of Illinois because we’re going to send two scholars on nuclear engineering,” he said.

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

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

Razon-led NEPC secures Marcos’ approval for Central Negros franchise

SCOTT GRAHAM-UNSPLASH

NEGROS Electric and Power Corp. (NEPC) has received approval from President Ferdinand R. Marcos, Jr. for its franchise to manage and operate the electricity distribution system in Central Negros, the Razon-led company announced on Tuesday.

“We now have the law. It’s time to walk the talk,” NEPC President and Chief Executive Officer Roel Z. Castro said in a statement.

Mr. Marcos signed Republic Act No. 12011 on July 26, just before it would have automatically lapsed into law.

The legislation, which originated in the House of Representatives, was introduced by Representatives Joseph Stephen S. Paduano, Jose Francisco B. Benitez, Juliet Marie D. Ferrer, and Greg G. Gasataya.

The bill was approved by the House of Representatives on Feb. 21, amended by the Senate on May 20, and then returned to the House for further concurrence on May 22, before being submitted to the Office of the President.

NEPC is a joint venture between Primelectric Holdings, Inc. and Central Negros Electric Cooperative.

Its franchise covers power services to cities like Bacolod, Silay, Talisay, and Bago, as well as the municipalities of Murcia and Don Salvador Benedicto.

NEPC is a sister company of distribution utility More Electric and Power Corp. (MORE Power), which serves Iloilo City. 

NEPC and MORE Power are units of Primelectric controlled by Enrique K. Razon, Jr.

NEPC said it has allocated an initial capital of P2 billion for a five-year plan “to rehabilitate and modernize the electric infrastructure, aiming to establish a robust distribution system.”

“We seek your continued support and cooperation as we commence the five-year journey of continuous rehabilitation to enhance the system and minimize instances of unscheduled power interruptions,” Mr. Castro said.

NEPC said it will apply for a certificate of public convenience and necessity from the Energy Regulatory Commission to commence commercial operations. — Sheldeen Joy Talavera

Metro Manila office space take-up jumps 125% in first half — Santos Knight Frank

UNSPLASH

THE METRO MANILA office net take-up in the first half of 2024 has already surpassed the full-year performance of 2023, buoyed by return-to-office mandates and office expansion, according to global real estate services firm Santos Knight Frank.

The office sector net absorption of 281,000 square meters (sq.m.) in the first half of 2024 was approximately 125% higher than the full-year take-up of 125,000 sq.m. in 2023.

“Return-to-office mandates and office expansions, supported by offshoring operations, have led to a doubling of demand in the office market,” Santos Knight Frank Chairman and Chief Executive Officer Rick Santos said during a press briefing on Tuesday.

Information technology and business process management sectors and the government led the office transactions during the period.

Occupier Services & Commercial Agency Senior Director Morgan McGilvray reported that Metro Manila had an average rental rate of P1,022, a vacancy rate contracted to 18.9%, and an existing supply of 8.5 million sq.m. in the first half of 2024.

He noted that as the vacancy rate approaches 20%, rental rates tend to soften.

Makati City had the highest asking rent at P1,256, with a 20.7% vacancy rate and a supply of 1.5 million sq.m. during the first half.

Taguig followed with an asking rent of P1,250, a 14.5% vacancy rate, and a supply of 2.3 million sq.m.

“Makati still has the biggest section of prime-grade buildings, and we’re also seeing some of the higher rents for new buildings in Makati that are generally close to EDSA and along Ayala Ave,” Mr. McGilvray said.

Alabang had an average rent of P788, with a 23.8% vacancy rate and 500,000 sq.m. of supply during the period. Quezon City recorded a rent of P823, with a 27.8% vacancy rate and a supply of 1.4 million sq.m.

Ortigas had an average rent of P820, with a 22% vacancy rate and a supply of 1.6 million sq.m.

Meanwhile, the Bay Area had a rent of P972, with a 23.2% vacancy rate and a supply of 1.2 million sq.m.

“The Metro Manila office market remains tenant-favorable, with rents exhibiting marginal decline,” he said.

Mr. McGilvray said the year-to-date completion of around 127,000 sq.m. of office space brings the total Metro Manila supply to 8.5 million sq.m.

There will be 299,000 sq.m. of new office projects completed within the second half of the year, with another 360,000 sq.m. expected from 2025 to 2027.

The firm expects the Philippines to remain one of the most competitive offshoring hubs in the Asia-Pacific (APAC), driven by a young talent pool, affordable operating costs, and a robust supply of office spaces, Mr. Santos said.

In Knight Frank’s five-point comparison of APAC offshoring hubs, the Philippines stands out as the most well-rounded, topping in terms of workforce demographics and scoring well in business costs, skills, growth dynamics, and commercial real estate value.

Mr. McGilvray added that Metro Manila was the third most affordable location in Asia Pacific, with downward rental adjustments in older prime offices bringing down the average prime office occupancy cost to $27.90 per square foot per year. — Aubrey Rose A. Inosante

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