Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 1447

BSP says on track with study and testing of its own digital currency

A token of the virtual currency Bitcoin is seen placed on a monitor that displays binary digits in this illustration picture, December 8, 2017. — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

THE STUDY and testing of a central bank digital currency (CBDC) is on track, with implementation eyed by 2029, a Bangko Sentral ng Pilipinas (BSP) official said.

“We’re already about to conclude proof of concept. This is an innovative payment instrument. In fact, there’s no central bank in the world that has already launched wholesale CBDC, I guess with the exception of the Swiss National Bank,” BSP Deputy Governor Mamerto E. Tangonan said at a briefing on Tuesday.

Mr. Tangonan said they will make sure there will be users of this BSP-issued digital currency before it is launched.

“Otherwise, you create a white elephant,” he added.

In September, the BSP designated Hyperledger Fabric as the distributed ledger technology for Project Agila, its pilot project for CBDCs.

Since 2021, the BSP has been reviewing use cases for wholesale CBDCs.

BSP Governor Eli M. Remolona, Jr. earlier said that the central bank could launch CBDCs within his six-year term, which ends in 2029.

“If after a proof of concept that now brings the literacy and the knowledge of both BSP and the banks to a level that they are ready to launch it, then only such time will we make a decision whether to go or not go,” Mr. Tangonan said.

“This is an entirely new thing, and we have to make sure that we can offer it and operate. It’s a BSP-issued digital currency so we have to make sure we can offer it, maintain it and operate it safely, and that the banks can do likewise and that they have business use cases for it.”

The identified potential uses for CBDCs include liquidity management, securities settlement and cross-border payments, Mr. Tangonan added.

BSP Payments Policy and Development Department Director Bridget Rose M. Mesina-Romero said they have completed the first phase of Project Agila with the selection of Hyperledger Fabric for the project’s sandbox experiments.

The BSP is aiming to assess if the distributed ledger technology can facilitate inter-institution fund transfer across participating financial institutions.

“The goal here is to obtain enhanced knowledge of the CBDC technology… then eventually come up with a baseline assessment to determine the CBDC roadmap moving forward,” she said.

The central bank has completed the first set of the test run, having tested a distributed measuring technology and tokenization of wholesale CBDC, Ms. Mesina-Romero said.

The BSP is studying the functionality and performance of the CBDC, she added.

“One is the functionality criteria. We assess it against our usual currency life cycle. This time, we pattern it to the CBDC life cycle of creation; creating CBDC, issuing CBDC, making inter-institution fund transfers to CBDC, and then finally redemption and retirement.”

“We also assess the criteria of its performance, meaning whether it can facilitate 24/7 transfers, its security on the user interface, because the next phase will govern cybersecurity assessment of the blockchain technology, and finally, the data end-to-end testing among the BSP and financial institutions.”

By the end of the year, the central bank will be able to release the findings of its pilot testing.

“At the end of this project, which will be towards the end of this year, we will be issuing a report containing all of our findings and assessment with respect to our sandbox test experiments,” Ms. Mesina-Romero said.

RETAIL CBDCs?
Mr. Tangonan also said that the central bank is open to studying the possibility of offering retail CBDCs but does not see the need for it just yet.

“Of course, that will always be under consideration, except that we have to be convinced that there is indeed something that a retail CBDC can offer that current digital payments cannot,” he said.

“At present, with how consumers, businesses and the government use digital payments, we see no gap yet. But as you know, the world changes every day, so one day there might be a clear use case for retail CBDC.”

The BSP earlier defined CBDCs as a form of digital money denominated in the national unit of account and are direct liabilities of the central bank.

Wholesale CBDCs may be issued to commercial banks and other financial institutions to settle interbank payments, securities transactions, and cross-border payments, among others, it added.

The International Monetary Fund last year said that CBDCs are crucial in expanding financial inclusion and improving cross-border payments.

DoLE to find jobs for 20,000 displaced POGO workers

A person holds cards near a keyboard, chips, dice and “Online Gambling” words in this illustration picture, June 5, 2020. _ REUTERS/DADO RUVIC/ILLUSTRATION

By Chloe Mari A. Hufana and Justine Irish D. Tabile, Reporter

THE DEPARTMENT of Labor and Employment (DoLE) anticipates over 20,000 Filipino workers will lose their jobs with the closure of Philippine offshore gaming operators (POGOs) by the end of the year.

At a post-State of the Nation Address (SONA) briefing on Wednesday, Labor Secretary Bienvenido E. Laguesma said around 15,000 are working with POGOs or internet gaming licensees (IGLs) in Metro Manila alone.

He said the number can still rise as this only includes workers from 34 IGLs in Metro Manila.

The department has so far tallied 5,000 workers that would be affected by the total ban in Cavite and Laguna.

“DoLE is not only looking at IGLs because, other than IGLs, there are also authorized providers who render services to IGLs,” Mr. Laguesma said in mixed English and Filipino.

The Philippine Amusement and Gaming Corp. (PAGCOR) has said there are 43 IGLs in the National Capital Region, Cavite, and Laguna.

Mr. Laguesma said DoLE is already “profiling” the affected workers by finding out their skills, current positions, current salaries, and preferred work.

The department is also considering possible interventions, such as referring skilled individuals to job openings or job fairs. For those lacking in-demand skills, DoLE will also provide upskilling programs and job-hunting assistance.

Mr. Laguesma said the majority of the affected workers are “encoders,” who can be referred to firms in the information and communication technology (ICT) and business process outsourcing (BPO) sectors.

He added they are partnering with the Information Technology & Business Process Association of the Philippines to find jobs for affected workers.

“DoLE will always be seriously concerned, even if just one job is lost… Other than job creation, we would also like to emphasize job preservation,” Mr. Laguesma added in mixed English and Filipino.

He said that affected and qualified workers will also be given assistance through the “Tulong Pang-hanapbuhay sa Ating Disadvantaged/Displaced Workers” (TUPAD) program.

In his State of the Nation Address on Monday, President Ferdinand R. Marcos, Jr. ordered a total ban on POGOs, citing these China-centric businesses’ alleged links to money laundering, scams and human trafficking.

PAGCOR was ordered to wind down all POGO operations in the country by the end of this year.

Philippine Chamber of Commerce and Industry (PCCI) Chairman George T. Barcelon said that “not a lot” of Filipino workers will be displaced by the POGO closures since these companies typically hire Chinese nationals.

“Those (Filipinos) that will be displaced are those working in the supply chain. These are companies that supply food or provide services to POGOs,” he told BusinessWorld in mixed English and Filipino.

“So, these are not the POGO workers, as there are not many Filipino POGO workers, because what they (POGOs) are targeting are those who can speak the language of their target market, which is China,” he added.

However, Mr. Barcelon said that job losses could be addressed by DoLE, which is planning to provide training for workers displaced by the POGO closures.

“The significant number of POGO workers being displaced is an indicator of how low the quality of jobs is in the country. The absence of work opportunities (with corresponding wages) has forced these workers to accept jobs in these sectors,” Leonardo A. Lanzona, Jr., an economics professor at the Ateneo de Manila University, told BusinessWorld in a Facebook Messenger chat.

Mr. Lanzona said it may be time for Congress to pass laws, such as unemployment insurance, to help laid-off workers while they are seeking jobs.

“Training programs for these workers may also be another option especially if these are young workers who can adapt to changing work conditions… All of these will require substantial resources,” he said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said other industries such as real estate, employment agencies, transport, and logistics may be affected by the POGO closures.

Despite this, he said the ban is a “good signal” for investors.

“It’s also a signal of good governance since global investors patronize countries that comply with ESG (environmental, social, and governance) standards. Compliance with ESG means/signals good business for the country,” he told BusinessWorld in a Viber message.

Meanwhile, the Federation of Filipino Chinese Chambers of Commerce and Industry, Inc. (FFCCCII) said the POGO ban may help improve the country’s image and its relations with China.

“We support the decision of President Marcos for a total ban on all POGOs by this year,” FFCCCII President Cecilio K. Pedro said in a statement sent on Wednesday.

“It is hoped that this will improve the Philippines’ international public image, enhance peace and order, and help strengthen our country’s bilateral relations with China, as the Chinese government has long requested a total ban on the controversial POGOs,” he added.

FOREIGN WORKERS TOLD TO LEAVE
At the same time, the Bureau of Immigration (BI) wants all foreign workers of POGOs to leave the country in the next two months.

In a statement, BI Commissioner Norman G. Tansingco said all foreign nationals working for POGOs and IGLs, as well as related service providers, will be given 59 days “to wind down their affairs” and exit the country.

He said PAGCOR has provided a list of foreigners working in POGOs and IGLs.

Around 20,000 foreign workers, mostly from China, will be affected by the POGO closures, he added.

Mr. Tansingco said foreign POGO workers who do not leave within the two-month period will be deported.

The BI has deported over 2,300 foreign nationals who were working in “scam hubs” disguised as POGOs.

SteelAsia investing P82B in 5 new steel plants to boost output

STEELASIA Manufacturing Corp. said it plans to invest P82 billion in constructing five new steel plants in the country to increase its annual output by 2.2 million metric tons.

The company aims to help address the Philippines’ reliance on imported steel by boosting local production, SteelAsia said in a statement on Wednesday.

The planned projects include the P18-billion facility in Lemery, Batangas; the P30-billion plant in Candelaria, Quezon; the P8-billion plant in Davao; and two plants in Concepcion, Tarlac, worth P26 billion.

The first three plants are expected to be completed by 2026, while the two plants in Tarlac are projected for completion the following year.

“We are building the mother industry for manufacturing. We are way behind our neighbors, but we will catch up,” said SteelAsia Chairman and Chief Executive Officer Benjamin Yao.

“And as we do so, our mills and steel products will create new manufacturing industries that will result in more jobs, higher-skilled workers, and economic growth, among others,” he added.

He noted that in 2022, the country spent over $3 billion on importing wire rods, billets, sections, and sheet piles — products that the new plants will produce.

“The steel produced by these new plants will be used in infrastructure, construction, and various downstream steel-intensive manufacturing industries,” he added.

SteelAsia currently operates six plants in Batangas, Bulacan, Davao, and Cebu, supplying over 70% of all rebar used in infrastructure, housing, power, industrial, and other business developments in the Philippines.

These six facilities have an annual finished steel capacity of three million metric tons.

Mr. Yao also said that expanding to more locations in the Philippines will help reduce transport costs, enabling the company to offer its products at consistent prices nationwide.

Two weeks ago, President Ferdinand R. Marcos Jr. attended the inauguration of SteelAsia’s plant in Cebu, which is expected to have an annual capacity of one million tons of rebar.

During the inauguration, Mr. Marcos urged the Department of Trade and Industry to update the Philippine steel industry roadmap.

Last April, SteelAsia secured an P8.3-billion loan from the Government Service Insurance System, the Development Bank of the Philippines, and the Philippine Business Bank to support the completion of its plant in Lemery, Batangas.

The same project was endorsed for green lane treatment by the Board of Investment’s One-Stop Action Center for Strategic Investments. — Justine Irish D. Tabile

DoE seeks PSALM extension to prevent P300-B liability for gov’t

PHILSTAR FILE PHOTO

THE DEPARTMENT of Energy (DoE) said the corporate life of Power Sector Assets and Liabilities Management Corp. (PSALM) should be extended to prevent the government from assuming P300 billion in liabilities.

Energy Secretary Raphael P.M. Lotilla said that the government initially expected it would take 25 years to complete the sale of assets and settle the debts of the National Power Corp. (Napocor).

“In order to prevent an increase in rates and in order to prevent government from having to absorb some P300 billion in 2026 when the life of PSALM ends, we will have to extend the corporate life of PSALM, and there has been an agreement in the Congress to go ahead with that,” Mr. Lotilla said in a post-State of the Nation Address discussion on Wednesday.

PSALM was established under Republic Act No. 9136, or the Electric Power Industry Reform Act (EPIRA) of 2001, to lead the privatization of generation and transmission assets of Napocor and National Transmission Corp.

Its corporate life was originally set to expire in June 2026, 25 years after EPIRA’s effectivity. If PSALM is dissolved, all its assets and liabilities would revert to the National Government.

Mr. Lotilla added that a counterparty is needed to rehabilitate the Agus-Pulangi hydropower plants in Mindanao and enhance their capacity.

“Currently, while the installed capacity of Agus is 1,000 megawatts, the dependable capacity is only 600 megawatts,” he said.

“There is potential to rehabilitate it back to 1,000 megawatts, which would produce an additional 400 megawatts for Mindanao and other parts of the country through the Mindanao-Visayas interconnection,” he added.

Finance Secretary Ralph G. Recto has also suggested extending PSALM’s corporate life by another 25 years, as it still has many assets to sell and financial obligations to address.

OUTAGES
Meanwhile, Energy Regulatory Commission (ERC) Chairman and Chief Executive Officer Monalisa C. Dimalanta saw that show cause orders will be issued to 39 generation companies that have exceeded their allowable plant outages.

“Once the explanations are submitted to the commission and we have completed the evaluation of these explanations, we will impose penalties for those that are not justified,” she said.

The reliability index, implemented since 2020, allows the ERC to set maximum limits on planned and unplanned outages per year, varying by generating plant technology.

In 2023, the ERC imposed approximately P60 million in penalties on generation companies for exceeding their outage limits.

The Philippines’ main island grids were placed under red and yellow alerts between April and June due to forced outages or deration of several power plants amid El Niño and elevated temperatures. Just last week, yellow alerts were raised on the Luzon grid for two days. — Sheldeen Joy Talavera

Sneaking vegetables into children’s food

MEGA BIGAY SUSTANSYA graduates strike a pose with Marvin Tiu Lim, Mega Prime Foods, Inc. Chief Growth and Development Officer

How Mega and Reach Out Feed PHL battle against stunting

SINCE the launch of Mega Bigay Sustansya in 2019, Mega Prime Foods, Inc. (the company behind Mega Sardines and Tuna, among others) has fed more than 1,700 schoolchildren more than 370,000 meals.

On July 9, BusinessWorld took a tour of Mega Prime Foods’ factory in Sto. Tomas, Batangas. While we were being shown around, beneficiaries were treated to a graduation ceremony, where awards were given to children who had gained the most weight.

This is a hefty deal: Dawn Marie Cabigon, Founder of Reach Out Feed Philippines (Mega’s partner in the program), said that they used data from the Department of Education (DepEd) to find out where the highest incidence of hunger and growth stunting in the country occurs. Using this data, they reached out to public schools in Quezon, Batangas, Tacloban, Ormoc, and recently, Tawi-Tawi (the kids in Tawi-Tawi are yet to graduate from the program as it will run until July 29). In Tawi-Tawi, where the program has been ongoing for just about a month, they’ve already reduced the number of underweight children from 1.4% to 1.22%, and have increased the number of children gaining normal weight from 0.8% to 10%.

Ms. Cabigon said that one of the things they did was to teach households how to sneak vegetables into their children’s food (she noted that during relief operations, children who disliked vegetables would push them away in their plates). Products they have developed with Mega Prime Foods include fishballs and lumpia (spring rolls) with vegetables incorporated.

Marvin Tiu Lim, Chief Growth and Development Officer of Mega Prime Foods, Inc., told media guests during a group interview that although the number of their program’s beneficiaries have hit the six-digit mark, “That’s such a small fraction of the total population of people who have been stunted. We want to use this as an example, as a platform… to bring awareness that we really need to help. We can’t just do it alone. We’re encouraging other private companies to help us.”

FOCUSING ON SUSTAINABILITY
Aside from their corporate social responsibility program, Mr. Tiu Lim also told us about their sustainability measures at the factory, which include having some areas powered by solar energy, and practicing sustainable fishing methods (like closed fishing seasons from Feb. 15 to Nov. 15, and using appropriately sized nets to only capture adult fish).

The factory is their third, and the newest: they have two others in Zamboanga. The one in Batangas was inaugurated only last year. Combined, their daily yield can go up to three million cans a day.

Speaking again about Mega Bigay Sustansya, he said, “It will not solve world hunger. It will not resolve stunting. But the success is really seeing the kids, seeing the statistics.”

Mega Prime Foods is developing new products (we saw packages of ready-to-eat canned tuna dishes, and new sauces; they’re keeping new developments under wraps) and may consider an initial public offering in the future (the company is currently under the control of the Tiu Lim family). “We have plans to IPO in the coming years to share to the public as well,” said Mr. Tiu Lim. — J.L. Garcia

SM Bicutan Tower: A vibrant office and retail hub in Southern Metro Manila

The SM Bicutan Tower offers versatile spaces with office floors, retail areas, and convenient parking for businesses to flourish.

Within the upbeat environment of Southern Metro Manila, SM Bicutan Tower is making its mark as a prominent addition to the broader SM Bicutan Complex in Parañaque City, seamlessly integrating functional office spaces with retail establishments that enhance the area’s appeal for both residents and businesses.

SM Bicutan Tower spans close to 20,000 square meters with seven dedicated office floors, three retail floors, and four parking levels. The layout caters to a diverse range of needs, from corporate offices to retail outlets. Industries such as logistics, business process outsourcing (BPO), and traditional office-based businesses are particularly well-suited to thrive within the dynamic environment of SM Bicutan Tower.

Strategic location and accessibility

SM Bicutan’s flexible floor plans make it ideal for a wide range of office operations such as logistics, business process outsourcing, and traditional offices.

The Complex is centrally located, making it an ideal hub for businesses aiming to optimize operations and expand their reach within Metro Manila and beyond. This prime location offers excellent opportunities for businesses and professionals, positioned to leverage the untapped potential between nearby central business districts. The tower is within a 30-minute drive from Makati City, Bonifacio Global City (BGC) in Taguig City, Alabang in Muntinlupa City, and the Bay Area in Pasay City.

One of the key advantages of SM Bicutan Tower is its close proximity to Ninoy Aquino International Airport (NAIA), making it an attractive location for businesses with international connections and frequent travelers. The Complex also enjoys seamless accessibility through major roads such as the South Luzon Expressway (SLEX), Doña Soledad Avenue, the Bicutan Interchange, and the Metro Manila Skyway.

The vicinity also boasts proximity to educational institutions such as Informatics Computer College, Asian Institute of Computer Studies (AICS), Don Bosco Center of Studies, and Immaculate Heart of Mary College. It is also near hospitals and medical centers like Parañaque Doctors’ Hospital, South Superhighway Medical Center, Ospital ng Parañaque, and Bicutan Medical Center.

Beyond work: A thriving community

Bicutan itself is characterized by a flourishing residential landscape, from high-rise condominiums to gated subdivisions including SMDC Spring Residences, Sun Valley, Better Living, and Marcelo Village. SM Bicutan Tower can be conveniently accessed from these communities through various transportation options, including jeepneys, buses, FX, vans, taxis, and private cars.

Adding to the conveniences is its interconnection with the SM City Bicutan mall, catering to basic and recreational needs with a wide array of dining, shopping options, and a relaxation area with an open-air garden.

The diverse developments around SM Bicutan Tower cater to various lifestyles and preferences, making it a sought-after area for residents and businesses seeking urban convenience with a touch of suburban tranquility. “The office is that one venue that contends with the home as the place where a person spends most of his or her waking hours. So that office better be a conducive place to stay in,” said Alexis Ortiga, SM Offices Business Unit Head.

The development of SM Bicutan Tower is also expected to significantly impact the local economy. The projected influx of businesses and job opportunities is set to generate increased foot traffic in the surrounding retail establishments, benefiting local merchants and boosting commercial activity in the area.

“Our network of sustainable workspaces is nationwide, so that we are conveniently closer to the homes of our tenant-partners’ employees. This keeps families closer together, while answering companies’ needs for hubs of growth, innovation, and workplace synergy,” Mr. Ortiga said.

 

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.

Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com.

SM Supermalls says foot traffic up 21% in Q1, reflecting spending trends

SM SUPERMALLS reported a 21% surge in first-quarter foot traffic, averaging over four million daily visitors, up from 3.3 million in the same period last year.

This increase was driven by higher spending on leisure and dining, the company said in a statement on Wednesday.

“The increase in foot traffic reflects our steadfast commitment to meeting the daily needs and wants of our customers,” SM Supermalls President Steven T. Tan said.

The company noted that food tenants now comprise 30% of mall spaces leased, up from 10% a decade ago, while non-food tenants, including entertainment, occupy 50%.

Other service-related tenants complement the mall offerings.

“SM continues to innovate and elevate customer experiences,” Mr. Tan said.

One of the recent innovations in SM Supermalls properties is the Space & Time Cube+ at S Maison in Pasay City, which features an art museum with 20 themed attractions, including LED tunnels and holographic displays.

Another is the newly launched Cosplay City at SM City Fairview, a hub for the anime community with toy exhibits and anime-themed zones.

SM Mall of Asia also launched the Game Park in November last year, offering a 1,947-square-meter indoor entertainment complex with amenities like a bowling alley, basketball court, e-darts, and an indoor archery range.

SM Supermalls is a unit of listed property developer SM Prime Holdings, Inc.

The company opened SM City Caloocan in May, marking its 86th mall in the country. — Revin Mikhael D. Ochave

Typhoon Carina donations

PRIVATE and public organizations are currently collecting donations for those affected by the heavy rains brought by Typhoon Carina and the monsoon.

Celebrity chef Myke “Tatung” Sarthou is calling for donations of rice, bottled water, and canned goods; as well as manpower to prepare hot meals. Donations can be dropped off at Azadore Restaurant, at 111 Sct. Fernandez cor. Sct. Torillo, Quezon City

Also in Quezon City, the Sangguniang Kabataan (SK) of Barangay UP Campus is calling for donations for families already evacuated to the Pook Dagohoy court. One may call the SK contact number 0985-246-8346 for more details.

Meanwhile, Kadamay is collecting in-kind donations at 12-A Kasiyahan St. at Don Antonio Heights, Brgy. Holy Spirit, Quezon City, with contact number 0907-839-9840. — JLG

Training, grants needed to help small businesses leverage online platforms

OUR TEAM-FREEPIK

By Justine Irish D. Tabile, Reporter

TRAINING and financial assistance are needed to help small businesses leverage new digital platforms for growth, TikTok agency partner Huskee Digital said.

Platforms like TikTok have their own sets of features, algorithms, and user behaviors that many businesses struggle to deal with, Huskee Digital said.

“Many businesses lack the internal expertise to navigate these complexities effectively,” the company said in an e-mail to BusinessWorld.

“Without a deep understanding of how TikTok operates, brands may struggle to create content that resonates with their target audience,” it added.

Small businesses are also being challenged to put in financial investment to capacitate themselves to make use and take advantage of the features offered by digital platforms, it said.

These investments are necessary in purchasing tools and software for content creation and analytics, as well as for hiring new talent or agencies that specialize in TikTok marketing, Huskee Digital said.

“For many businesses, particularly smaller ones, these costs can be prohibitive, and because they already don’t know how the platform works, these investments don’t make a lot of sense to them,” it added.

To address these challenges, both the public and private sectors need to make training and education programs, financial support and grants, and mentorship and consulting services available to small businesses, Huskee Digital said. 

“Both the government and private companies can offer training and workshops to educate small businesses on effective TikTok strategies,” it said.

These workshops should include courses on content creation, managing an online storefront, and understanding the required financial investments.

Financial assistance and grants for small businesses will help them invest in the necessary tools and resources to succeed on platforms like TikTok, Huskee Digital added.

“Public sector initiatives can focus on offering subsidies or low-interest loans for digital transformation projects,” it said.

For the private sector, companies can offer consulting services tailored towards small businesses’ needs, it added.

Huskee Digital is a creator commerce marketing agency that specializes in transforming stories into sales through platforms like TikTok.

Last month, it launched its official training arm called TRENDS, which offers workshops designed to enhance marketing strategies and drive business success on TikTok.

TikTok is now the second largest social media platform in the Philippines is predicted to become the country’s leading marketplace in the next three to four years, Huskee Digital said.

DigiPlus says it’s not subject to POGO, IGL ban after share drop

LISTED digital gaming company DigiPlus Interactive Corp. said it is not covered by the government ban on Philippine offshore gaming operators (POGOs) and internet gaming licensees (IGLs).

The company issued the statement late Tuesday after its shares fell to as low as P13.80 each before closing unchanged at P14.82 per share.

“DigiPlus is not a POGO or an IGL as defined under Philippine laws,” DigiPlus President Andy Tsui said.

 “As such, local gaming enthusiasts need not worry. Fans of DigiPlus’ products will be glad to know that their top-of-the-line platforms will continue running without interruption, unaffected by the recent presidential announcement,” he added.

 President Ferdinand R. Marcos Jr. announced the ban on all POGOs during his third State of the Nation Address (SONA) on Monday, saying that they have been linked to money laundering and financial scams.

DigiPlus maintained that it is a localized digital gaming company, serving customers based in the Philippines and operating physical branches across the country.

“Local gaming operators like DigiPlus are required to have physical gaming sites within the country before they could set up their digital gaming platforms so all of its clients within the Philippine territory can access their services,” the company said.

The company’s platforms include BingoPlus, ArenaPlus, Perya Game, and BingoPlus Poker.

“DigiPlus is held to a different legal standard not only as a publicly listed company, but also because it had to secure different licenses to be able to operate the traditional bingo, electronic bingo games, electronic gaming services, sports betting, specialty games, and poker. It also must secure gaming system service provider accreditations, and more,” it said.

In 2023, DigiPlus paid P13.1 billion in taxes to the Philippine government, according to the company said. It also reported employing over 2,000 workers and allocating more than P100 million to its corporate social responsibility projects through the BingoPlus Foundation. — Revin Mikhael D. Ochave

Sustainable sake: Tokyo brewer uses music, modern methods to counter climate impact

INSTAGRAM.COM/TOKYOPORTBREWERY

TOKYO — The gentle lilt of a flute fills a cramped second-story space in Tokyo that houses a burbling vat of fermenting sake.

The bacteria in the 670-liter tank will take more than two weeks to turn its contents of rice and water into Japan’s traditional alcoholic drink.

But they are not only alive, they are listening too, said brewer Yoshimi Terasawa, and the type of music coming from a loudspeaker below the tank determines how the spirit will taste.

“The micro-organisms inside are activated by the vibrations, and the taste changes,” said the 63-year-old chief brewer of Tokyo Port Brewing.

Music is among the unconventional techniques Mr. Terasawa is using at the only sake factory in the heart of the capital.

Crammed into a narrow four-story building, the small-batch operation employs methods that promise to help the industry resist the fallout of climate change.

It uses modified machinery and ergonomic processes that consume less energy and labor than a traditional open-air brewery in the countryside.

“Making sake on this kind of smaller scale makes it easier to keep the production environment constant,” said 45-year industry veteran Mr. Terasawa.

The company turns out about 30 kiloliters of sake each year, or enough to fill almost 42,000 720-ml (24-fl-oz) bottles.

But changing consumer tastes and Japan’s ageing population have hit demand, and the government says the number of sake breweries has shrunk two-thirds from its 1970s peak to just over 1,100 now, more than half operating in the red.

Other challenges are a shortage of labor as brewers retire, surging fuel costs, and disruption in rice supply because of global warming.

Mr. Terasawa said his compact brewery offered a model to meet those challenges.

The process starts on a fourth-floor balcony, where he and an employee steam the rice for 70 minutes.

Then they rely on gravity to funnel the rice through apertures in floors and ceilings to a mold-application room on the third floor, before fermentation on the second, using tap water, and finally bottling the sake at ground level.

“In the future, small breweries like this will have a great deal of merit,” Mr. Terasawa added. — Reuters

Will we ever learn to avoid bubbles?

BLOOMBERG

WHEN he took his first space walk, NASA astronaut Reid Wiseman had a revelation.  “I used to think I was scared of heights,” he said. “Now I know I was just scared of gravity.” This summer might be a good time for investors to think about this a little: Gravity has a tendency to work on equity bubbles rather as it does on astronauts before they escape the Earth’s atmosphere. They all come back to earth. From the niche (think the Beanie Baby bubble of the 1990s) to the mainstream (the US housing bubble), the same thing happens over and over again. There’s a great story. Everyone loves the story. Everyone buys. The reality doesn’t quite match the story. The asset class collapses. Up a lot. Down a lot.

It isn’t hard to spot a bubble forming. But experienced investors will know it’s very very hard to spot when it might finally come a cropper. That’s partly because it doesn’t really need a catalyst; it doesn’t require political disruption, financial scandal or shifts in monetary policy (although there is plenty of that about, of course). The end, as Societe Generale AG’s Albert Edwards points out, is often remarkably simple: “A reversal in price momentum in an asset class that has risen sharply for a number of years (sucking in huge quantities of loose money) is often sufficient in itself to cause prices to crash.”

When there is no one left to buy or when a few of those who might have already bought become a little nervous, it all comes crashing down. In that sense, you could think of all bubbles as a type of (legal) Ponzi scheme: As new investors become thin on the ground and a few of those already in look to get their money out, the whole thing collapses pretty fast. Gravity can be brutal.

So here we are again. Back in 2022, it rather looked like the US tech bubble had been dealt with in the normal way: Following a sharp rise in interest rates, the Nasdaq 100 was 35% off its highs, for example. Then came ChatGPT and a wave of optimism that brushed rate worries to the side in a rush to embrace the idea that a new world is just around a very close corner.

Since the beginning of 2023, the US tech sector is up over 100% and the S&P by 50%. You can argue that this makes sense. Artificial intelligence (AI) could transform our world (finally some productivity gains and some real growth) and tech earnings really have risen strongly since 2022. But, it’s also true that we have been here before. Those who recall the 1990s will also remember, says Edwards, that the last big tech bubble was fueled by investment in what turned out to be excess capacity. Sure, the story was exciting and, sure, earnings rose. But the story took much longer to play out than expected. and earnings never rose quite enough to justify valuations.

Is that happening again? Of course. You can see the bubble in the concentration of the US market: The tech sector now makes up 35% of the S&P 500. You can see it in valuations: The US market is trading on an end-of-2025 forward price-earnings multiple of 19.8 times, well above historical averages, says SocGen quantitative strategist Andrew Lapthorne. That means  “there is little wiggle room” for any downgrades. And you can see it in expectations. Look at it in terms of the 1990s Information technology revolution and you will get the idea. That revolution “boosted real potential growth by roughly a percentage point for a few years,” say the analysts at BCA, an investment-research firm. Model something similar for AI over a 10-to-20-year time horizon and you see that it is worth somewhere between $3 trillion and $10 trillion to the corporate sector (this isn’t an exact science).

But US growth stocks have already seen a $4.3-trillion rise in market capitalization since 2022 and the market has a whole a rise of $7 trillion. This suggests that “the US equity market is significantly overvalued” — unless we do really see evidence of a huge productivity surge accompanied by “persistently high margins,” says BCA. That might still happen (and those of us wishing to maintain our living standards must hope it does). But even if it does, will it be clear in time to make sure new money keeps pouring into this market this year — and will it really justify the excitable valuations?

There isn’t much short-term certainty in markets — and there is little on the immediate direction of the AI bubble. But there is some long-term clarity: Value stocks underperformed firmly from 2007 to 2020, but over the long term, cheap stocks do win. As the authors of this year’s UBS Global Investment Returns Yearbook say: “We have seen that over the long run companies selling at a low stock price relative to fundamentals — value stocks — have beaten stocks selling at a high stock price relative to fundamentals — growth stocks.”

From 1926 to the end of 2023, the outperformance of value overgrowth was 2.6 percentage points, annualized (12.7% vs. 9.8%) — and that’s despite underperformance pretty much every year in the 21st century. Look to the UK and, albeit with a shorter time frame (1955 to 2023), you see much the same (14.8% vs 9.8%); value investing has paid off. The important thing for investors to remember is that, while it makes long-term sense to always participate in stock markets, you don’t actually need to participate in the bubbles (however tempting). You can simply note them and buy something else: Should the productivity revolution appear, all sectors will benefit. Think of it as Wiseman might: The less far you have to fall, the less frightened you need be of gravity.

BLOOMBERG OPINION

1...1,4461,4471,448...12,771Page 1,447 of 12,771
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube