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PHL banks’ regulatory framework favors credit growth, says Fitch

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THE PHILIPPINES’ banking regulatory framework favors credit growth, Fitch Ratings said.

In a report released on Tuesday, the Philippines was given a “bb+” rating for its operating environment (OE) score, which assesses the efficacy of regulatory frameworks.

“Our assessment of the efficacy of APAC (Asia-Pacific) banks’ regulatory framework is aligned broadly with their respective bank operating environment score,” Fitch said.

“Strong regulatory frameworks contribute to higher bank operating environment scores in DMs (developed markets), while weaker frameworks in certain EMs (emerging markets) increase banks’ vulnerability in financial performance, which may weigh on their viability ratings.”

The assessment covers rule calibration, supervision, accounting, governance standards, and creditor rights protection across jurisdictions.

Fitch’s scorecard showed that the Philippines’ regulatory framework favors credit growth, is prone to forbearance, and reflects a lack of progress in Basel III implementation.

Countries that score a ‘ccc’ to ‘bbb’ show “key weaknesses stemming from slow implementation of rules, pro-credit growth nature of macroprudential measures, issues in governance, transparency or enforcement, or a tendency towards greater forbearance.”

“Macroprudential measures have been employed to good effect in most developed markets to address issues prevailing at various times, while four EMs — Indonesia, the Philippines, Sri Lanka and Vietnam — tend towards a pro-growth stance through macroprudential or monetary policy measures,” it said.

It said the Philippines lacks loan-to-value (LTV) caps.

“There are no regulatory caps on residential mortgage LTV limits in the Philippines, nor is there an explicit debt-service ratio requirement for retail borrowers. Instead, the BSP imposes an aggregate limit on the banks’ real-estate exposure at 25% of total exposure, and conducts stress tests periodically to ensure that banks’ loss-absorption capacity is adequate.”

Fitch added that the Philippines only allows the standardized approach (SA) for credit risk or minimal use of internal-ratings-based approach.

“The Philippines’ Basel III framework typically aligns with international standards though implementation timelines for certain provisions have differed slightly. The Philippines is not a member of the Basel committee,” it said. “There has not been any announcement on the timeline for the implementation of the revised Basel III SA rules.”

The report also showed that the Philippines needs to increase focus on environmental, social and governance standards in banking.

“Indonesia and the Philippines have made progress but lack alignment with the Task Force on Climate-related Financial Disclosures or International Sustainability Standards Board standards,” Fitch added. — Luisa Maria Jacinta C. Jocson

What Filipino liberals can learn from the Democratic defeat in the US

RAWPIXEL.COM

(Part 1)

“DUTERTISMO is to the Philippines what Trumpism is to America,” remarks political economist Calixto Chikiamco, underscoring the striking similarities between two populist movements that have reshaped their respective political landscapes. Both Rodrigo Duterte and Donald Trump ascended to power by capitalizing on widespread discontent among voters who felt excluded by the political establishment. Their successes were built not on policy details but on emotionally charged narratives, presenting themselves as anti-elite crusaders who would restore order and accountability to a broken system. As the Philippines faces the specter of the Dutertes’ national comeback in 2025 and 2028, the opposition must confront a fundamental question: How can it challenge the enduring appeal of a populist leader whose legacy continues to resonate with millions?

The parallels between Dutertismo and Trumpism are striking, not just in their appeal to disaffected voters but also in the underlying erosion of democratic norms. Both leaders thrived in environments of deepening social and economic divisions, where traditional political parties failed to adequately address the concerns of marginalized groups. Research consistently shows that populist leaders succeed by exploiting a profound dissatisfaction with the status quo. According to a 2019 study published in The Journal of Politics, populist movements in both Europe and the United States capitalized on voter alienation, which is often driven by perceived economic inequality and a loss of cultural identity. This same dynamic was present in the Philippines when Duterte, like Trump, positioned himself as the antidote to an elite-controlled government that had failed to meet the needs of ordinary citizens.

As Trump’s 2024 victory demonstrated, populist rhetoric thrives in an environment of dissatisfaction. According to historian Joseph Ellis, the appeal of Trumpism was less about policy and more about a visceral reaction to a changing America. “It was a rebellion against elites who had governed for decades without delivering for the people,” Ellis remarked. In the Philippines, Duterte’s rise was similarly a rejection of the political establishment, with his anti-elite stance and tough-on-crime message resonating with voters frustrated by a perceived failure of governance.

Similarly, Duterte’s 2016 campaign centered around a promise to restore law and order by aggressively cracking down on crime and corruption. According to a survey conducted by the Social Weather Stations (SWS) in 2016, 70% of Filipinos supported Duterte’s anti-drug campaign, despite concerns about extrajudicial killings. This overwhelming support underscores how Duterte’s message resonated emotionally with voters who felt insecure in their daily lives, even as his opponents warned about the dangers of his authoritarian tendencies. The same SWS survey revealed that 54% of respondents believed that the country was on the wrong track, signaling a deep discontent with traditional leadership.

For Filipino liberals, the challenge is not just to oppose the populist rhetoric but to rebuild trust in institutions that have been undermined. The question is: how can the opposition re-establish credibility in a system increasingly dominated by figures who thrive on distrust and division?

The American left’s failure to recover after Trump’s election reveals a fundamental misstep: the inability to adapt to a new political reality. Despite the rise of Trumpism, the Democrats have been slow to understand the depth of the political shift. The party’s traditional strategies — relying on policy debates, media engagement, and the intellectual elite — have fallen flat in an age where emotions, rather than reason, dictate much of the political conversation.

In his analysis of the Democratic defeat, political scientist Thomas Frank argued that the Democrats “did not see that the problem was not just Donald Trump — it was a system that had failed to deliver for large swathes of the population.” In this sense, the Philippines finds itself in a similar predicament. The opposition’s focus on technocratic solutions and traditional political strategies has alienated many voters who feel disconnected from the political process. As Frank’s assessment of the American left suggests, the failure is not just in opposition to populism but in understanding the root causes of the dissatisfaction that fuels it.

THE DISCONNECT BETWEEN ELITE POLITICS AND THE MASSES
One of the central lessons of the American Democratic loss is the profound disconnect between elite politics and the frustrations of the masses. For Filipino liberals, this is a critical point. While many in the political establishment may see the need for economic reforms or policy shifts, these arguments do not resonate with voters who feel excluded from the benefits of globalization, digitalization, and economic liberalization.

In fact, a 2020 study by the Institute for Development and Econometric Analysis found that a significant proportion of Filipinos felt disconnected from the political process, with 56% of respondents saying they trusted the government “only sometimes or never.” This distrust is amplified by the pervasive feeling that traditional politics has failed to deliver real change. The Philippines, like the US, faces a crisis of representation, where many voters believe the political system is rigged in favor of elites who do not understand or care about their struggles.

In the 2016 US election, Hillary Clinton’s campaign failed to connect with key working-class voters in swing states like Michigan, Wisconsin, and Pennsylvania. According to Clinton’s campaign manager Robby Mook, the focus on policy and the technical aspects of governance — while important — was not enough to combat the emotional appeal of Trump’s promise to “drain the swamp” of Washington elites. “The American electorate was hungry for something outside the traditional system, for a message that resonated emotionally,” Mook reflected after the loss.

More recently, the 2024 US presidential election exposed the Democrats’ inability to connect with critical working-class voters, particularly in swing states and traditional Democratic strongholds. While Harris campaigned on a platform of moderation and inclusivity, she struggled to resonate with voters disillusioned by what they perceived as the Biden administration’s failures. According to post-election analysis, Harris’ strategy of courting suburban white voters and distancing herself from progressive policies alienated large segments of the Democratic base, including working-class and minority voters who were instrumental in past victories.

Trump, by contrast, expanded his appeal among historically Democratic demographics, including Black and Latino working-class men. His campaign emphasized a populist critique of the “deep state,” presenting himself as the only candidate capable of delivering real change in a system perceived as corrupt and ineffectual. Analysts observed that Harris’ attempts to position herself as a moderate only reinforced Trump’s narrative of her as an extension of the status quo.

For Filipino liberals, the lesson is clear: simply being the “rational” alternative to populism is insufficient. They must bridge the gap between elite-level rhetoric and the lived experiences of everyday Filipinos. This requires a politics that speaks to the fears, frustrations, and hopes of the broader electorate — one that recognizes the emotional currents that underlie political engagement today.

Take, for instance, the political divide in the Philippines during the 2016 presidential election. Despite the elite-driven campaigns of candidates like Mar Roxas, Duterte’s populist rhetoric resonated deeply with the masses. Duterte’s anti-elite, anti-establishment stance — and his promises to address issues such as crime and corruption — appealed to a large swath of voters who felt disenfranchised by decades of governance that seemed disconnected from their needs. His success was not in policy details but in his ability to tap into the anger and frustration of those who felt ignored.

This moment continues to define Filipino politics, and the failure of the opposition to learn from it remains a significant challenge. In the face of Duterte’s enduring popularity, the opposition continues to rely on outdated strategies, assuming that an appeal to reason and policy expertise will win back the electorate. As historian and former senator Butch Abad lamented, “The opposition has been too focused on what it stands against, rather than what it stands for.”

Perhaps the most instructive element of Trumpism, and Dutertismo as well, is the power of emotional resonance in political messaging. Both Trump and Duterte have demonstrated a keen understanding of how to channel popular frustration into a coherent and compelling narrative. In a world where information is mediated through social media platforms, the ability to craft a message that resonates emotionally with voters is perhaps the single most important political skill of our time.

Duterte, for instance, effectively utilized social media to bypass traditional gatekeepers — journalists and editors — building a direct line to his base. During the 2016 election, his viral Facebook posts and divisive rhetoric became central to his appeal, much as Trump’s use of Twitter dominated the political discourse. In both cases, the appeal was not to reason but to raw emotion: fear, anger, and a longing for national rejuvenation.

In the face of Trumpist and Dutertista populism, traditional forms of political engagement — through media outlets, think tanks, or academic institutions — have proven increasingly ineffective. The rise of digital platforms as political battlegrounds has rendered old-school political strategies obsolete. If the opposition is to win the hearts and minds of Filipinos, they must engage on the digital platforms where today’s political battles are fought. Former journalist and communications strategist Inday Espina-Varona observed, “The opposition must meet the people where they are: on social media, not in forums and debates.”

(To be continued.)

 

Jam Magdaleno is a political communications expert and currently heads the communication unit at the Foundation for Economic Freedom.

AI benefits should be obvious to spur adoption — analysts

FREEPIK

PHILIPPINE COMPANIES should use generative artificial intelligence (GenAI) for tasks where its benefits could be measured, justifying it costs, according to industry experts.

Many businesses are still in the experimentation stage for GenAI, Gian Paulo Dela Rama, chief product officer at Sprout Solutions, told the BusinessWorld Forecast 2025 economic forum.

Common use cases include using the platform to answer questions, similar to what ChatGPT does. However, this alone would not convince business leaders to shift to AI, he said.

“What would get your CEO excited is if you can have one employee do the work of 10 people,” Mr. Dela Rama said.

He added that companies are shifting to AI agents, or applications “that do not only speak and chat… but also transact.”

Mr. Dela Rama noted that Sprout Solutions could process the payroll of 15 companies in 30 minutes using an AI agent.

Only 10% of companies have scaled their AI use, according to Boston Consulting Group.

To identify what AI strategy to use, companies should modernize their technology and unify their data, Peter Manquera, president and chief executive officer (CEO) at Microsoft Philippines.

“At least on the enterprise side, that’s proven to be a challenge because the organization has to be quite mature to be able to think about it in a transformational context,” he told the forum.

About 55% of Filipino leaders worry that their organization lacks a plan to implement AI, lower than the 60% regional average, according to a study by Microsoft and LinkedIn.

Pia H. Azarcon, a managing partner at IBM Philippines, said companies could measure AI outcomes by using it for testing, as well as in code and application programming interface development. — Beatriz Marie D. Cruz

BakenPH maps expansion for Dubai and Vietnam

BAKEN LAZADA PAGE

PHILIPPINE startup BakenPH, which specializes in bacon snacks, plans to expand its network across Asia next year, according to its co-founder.

“We hope that by next year, we can be in three [overseas] markets,” BakenPH co-founder Rachel Carrasco said on the sidelines of an event this month. “Right now, that would be in Dubai, Vietnam and hopefully in Hong Kong.”

She noted that their Dubai and Vietnam expansions are in the works, while they are still crafting a plan for Hong Kong.

Ms. Carrasco co-founded snack and confectionery line BakenPH in 2018, driven by her love for bacon.

She and her friend, co-founder Kelly Parreño, conducted a series of research and design trials, which led them to produce their bestseller, the Real Bacon Crisps.

The startup has since expanded its niche lineup to bacon delicacies such as cookies and bacon jam.

It uses pork from local sources like Tarlac, and also imports from Canada, France and Spain.

“There’s a precise fat meat content ratio that we are looking for, so that is very vital in ensuring that our bacon is crispy,” Ms. Carrasco said.

BakenPH products are available nationwide, and is shipped to other countries like Australia, Malaysia and Singapore.

“We’re really focusing on ensuring that we are growing our off-trade channel,” Ms. Carrasco said, citing their growing presence at retail outlets like groceries where the focus is on convenience and selection.

The company is also looking to enter on-trade channels such as restaurants, hotels and bars, where food and drinks are served and consumed on-site, she added.

“In terms of operations, what we want is to be able to have that full model of what our production supply chain will look like.”

The startup is looking at releasing its new packaging and sizes, as well as new flavors.

It is also looking to incorporate other products like beef and turkey, and experiment with other forms of pork like prosciutto and iberico meat.

Ms. Carrasco cited limits to the country’s regulations for exporting its products.

“In the Philippines, while we are being manufactured here, there are limitations as to where we can go for export, because its pork, so it’s really highly regulated,” she pointed out.

She also hopes for more grants to help Philippine startups, including her, business grow. — Beatriz Marie D. Cruz

Entertainment News (11/27/24)


Daryl Ong performs at CenterPlay

ON Nov. 28, 9 p.m., singer Daryl Ong, known for his popular covers of R&B hit songs, will grace the CenterPlay stage at City of Dreams Manila as the featured artist of the OPM Concert Series. Mr. Ong rose to fame after a his stint as a semifinalist at The Voice of the Philippines Season 2. His performance will alternate with those of DJs, and bands, including Swerve Band and Part 3, from 7 p.m. to 2 a.m. Guests can reserve a seat or a table with consumables starting at P3,000. VIP couch seats for a party of eight are available for P24,000 and VIP Small Tables for a group of four are P12,000, inclusive of consumables.


MAX streaming service now in the Philippines

APART from Malaysia, Thailand, Singapore, Taiwan, and Hong Kong, Max is now live in the Philippines. The platform offers entertainment brands like HBO, Harry Potter, the DC Universe, Cartoon Network, Discovery, TLC, and many more. Specific titles include the HBO Original series Dune: Prophecy, the blockbuster movie Twisters, hit series such as Friends, Harry Potter: Wizards of Baking, and Deadliest Catch, and family favorite My Adventures with Superman. Max is available in the Apple App Store and the Google Play Store.


BTS star Jungkook in Disney+ docuseries

THIS December, BTS global popstar Jungkook returns to Disney+ with his brand-new three-part docuseries Jung Kook: I Am Still, set to debut on Dec. 3. Filmed over an eight-month period, it follows Jungkook as he transitions from being a member of pop group BTS into a successful solo artist in his own right. The series captures Jungkook’s unique artistry as he travels to New York, London, and Seoul to record, perform, and film music videos as part of a whirlwind promotional tour for his debut solo album GOLDEN. It features almost 55 minutes of new content, including performances of songs and interviews with his dancers and other behind-the-scenes footage.


Jose Mari Chan, Jona, and Morisette in concert

NEWPORT World Resorts is putting up the yuletide show Oh Christmas Tree, with Jose Mari Chan and special guests Jona and Morisette. The one-night concert will be held on Dec. 7 at the Newport Performing Arts Theater. Tickets, priced from P1,500 to P8,500, are now available at TicketWorld and SM Tickets outlets.


Solaire Resort offers dinner, concert on New Year’s Eve

FOR Christmas, Solaire Resort in Entertainment City, Parañaque, will have in a dinner with diverse international buffet stations, overflowing beverages, and performances by Lea Salonga, Martin Nievera, and Bituin Escalante under the musical direction of Gerard Salonga. The one-night concert and feast, set for Dec. 31 from 7:30 p.m. onwards, is offering an early bird price of P13,888, available via Solaire Resort’s website.


Singer-songwriter syd hartha releases new song

SYD HARTHA, Awit Award-winning artist, has dropped a new song titled “damdamin!” It is about how she embraces the present moment and reconnects with her sense of self while learning to reciprocate love and affirm her right to happiness. Her guitar-driven pop track is co-produced by her frequent collaborator Brian Lotho, with a lighter, more minimalist arrangement than her previous work. The song is out now on all digital music platforms worldwide via Sony Music Entertainment.


A1 Valentine’s Tour adds Bacolod, Cagayan De Oro stops

WITH the intention of reaching a wider audience, British-Norwegian boy band A1 is bringing its Valentine’s Tour to more Filipino fans by adding performances in Bacolod City and Cagayan De Oro City to their Valentine’s Tour in February 2025. The additional shows will be held at the SMX Convention Center, Bacolod City, on Feb. 12, and at The Atrium, Limketkai Center, Cagayan De Oro City on Feb. 13. This is in addition to their shows in Cebu on Feb. 14 and Manila on Feb. 15.

Legazpi Savings Bank eyes double-digit loan growth in next five years

LEGAZPI SAVINGS Bank, Inc. (LSB) is aiming to achieve a double-digit compounded annual loan growth rate over the next five years, it said on Tuesday.

“LSB exemplifies our vision of financial inclusion, reaching out to underserved markets while complementing Bank of the Philippine Islands’ (BPI) broad array of financial services which now extends to teachers across the nation. We are excited to bring LSB’s expertise and BPI’s resources together to help build a better Philippines — one family, one school, one community at a time,” LSB President Jerome B. Minglana said in a statement on Tuesday.

LSB said its loan releases have grown by 50% so far this year.

“LSB is expanding its presence, ensuring broader accessibility to its products and services… Looking ahead, LSB aims to achieve compounded annual growth rate in the double-digits over the next five years, underscoring its dedication to sustained progress and financial inclusion,” it added.

The lender plans to expand its services, offerings, and digital capabilities for the underserved segment. These are in line with its parent lender BPI’s financial inclusion push, it said.

“LSB has always been at the heart of Bicol and nearby provinces, providing accessible and affordable banking solutions to communities that once had no access to financial services. Our mission is to bridge this gap by offering financial products, such as personal loans and deposit accounts, tailored to meet the needs of Filipinos, particularly teachers,” Mr. Minglana said.

LSB was acquired by Robinsons Bank Corp. (RBC) in 2012. It became a BPI subsidiary when the merger between BPI and RBC took effect on Jan. 1.

The bank operates 17 branches and regular branch-lite units (BLUs) with deposit-taking operations as well as 10 limited BLUs with no deposit-taking activities located in 18 provinces.

Its parent BPI’s net income grew by 29.4% to P17.4 billion in the third quarter as its revenues increased.

This brought its nine-month net earnings to P48 billion, 24.3% higher year on year, driven by robust revenue growth and sustained positive operating leverage.

Its shares went up by P1.90 or 1.45% to close at P133 apiece on Tuesday. — A.M.C. Sy

MORE to CREATE

BW FILE PHOTO

On Nov. 11, the President signed and approved the passage of Republic Act (RA) No. 12066, also known as CREATE MORE, into law. MORE stands for Maximize Opportunities for Reinvigorating the Economy while CREATE stands for Corporate Recovery and Tax Incentives for Enterprises. By its very name, the amendments introduced to the Tax Code are meant to entice more investments into the Philippines, by providing improved tax incentives to investors and better measures to ease doing business in the country.

The following are some of the salient features of CREATE MORE:

Reduced 20% Income Tax Rate for Registered Business Enterprise (RBE) under the Enhanced Deduction Regime (EDR). Under the CREATE Act, RBEs availing themselves of the enhanced deduction incentive were allowed to claim additional tax-deductible expenses in relation to their registered projects or activities. Also, their taxable income was subject to the regular 25% corporate income tax rate. To entice investors further, CREATE MORE makes EDR more attractive, by lowering the income tax rate from 25% to 20%.

Additional and increased deductions are granted under the EDR. CREATE MORE improved the EDR by increasing the allowable tax deduction for power expenses from 50% to 100%. Considering the high cost of electricity in the Philippines, this will incentivize businesses which are heavily reliant on power consumption. However, this may unwittingly promote unconscious use of energy regardless of its source.

CREATE MORE also expands the allowable deduction for reinvestment allowance to the tourism industry which was previously limited to the manufacturing industry. Despite its world-renowned beaches and hospitable residents, the Philippines has yet to fully optimize tourism for purposes of economic growth and job creation. This fiscal incentive was made in conjunction with the ongoing infrastructure developments, and towards an investment-led economy instead of a consumer-led economy. However, the period to avail this deduction is limited — it can only be availed of until December 2034.

The EDR under CREATE MORE also provides an additional 50% deduction on expenses relating to exhibitions, trade missions or trade fairs.

CREATE MORE amended the allowable period to claim net operating loss carry-over (NOLCO) under the EDR. It clarified that NOLCO can be claimed as an allowable deduction within five years following the last year of availing of the Income Tax Holiday (ITH) instead of five years immediately following the year of loss. This is reasonable since there would be no income tax benefit if the RBE is availing itself of the ITH when it incurred the loss.

Clarification that the 5% Special Corporate Income Tax (SCIT) is in lieu of all national and local taxes including local fees and charges. CREATE MORE clarifies in the amendments introduced to Section 311 that the benefit of the 5% SCIT by expressly stating that the same is in lieu of local taxes, fees, and charges.

CREATE MORE added Section 294 (F) of the Tax Code which allows a local government unit to impose a local tax against an RBE at a rate not exceeding 2% of gross income, which shall be in lieu of all local taxes, fees, and charges during the ITH or EDR. While a local government unit has yet to pass an ordinance on this, we can anticipate that could cause confusion and varying positions. Nonetheless, it is clear from Section 294(F) that local tax cannot be imposed on RBEs under SCIT.

RBEs may immediately avail themselves of SCIT or EDR upon the start of commercial operations. Instead of availing of ITH first prior to SCIT or EDR, CREATE MORE explicitly provides that RBEs have the option to immediately avail of SCIT or EDR. The elected incentive package, however, is irrevocable. Usually, profits cannot be expected during the first few years of operations. The ITH incentive has no material benefit during the initial stage of the business in such cases. Directly availing of SCIT or EDR may be more appealing to new RBEs.

Flexible work arrangements for employees of RBEs. Post pandemic, businesses recognized the advantages of work from home arrangements. Business models evolved to adopt flexible work arrangements. However, the CREATE Act provided that an Investment Promotions Agency (IPA) administering an economic zone or freeport zone shall exclusively conduct its registered activity within the geographical boundaries of the subject zone or freeport. In effect, this hindered some investors who preferred work from home arrangements. CREATE MORE now introduces an exception in support of a telecommuting program which permits the coverage of not more than 50% of the total workforce, and which shall be subject to the rules and regulations formulated by the IPA. To avoid abuse, CREATE MORE prohibited double registration for purposes of availing of other incentives under special laws.

Establishment of a One-Stop Action Center and Initial Point of Contact for Foreign Investment Leads. CREATE MORE seeks to further improved the ease of doing business in the Philippines by allowing IPAs to have one-stop shops to assist investors in securing the necessary licenses and permits, and in establishing their businesses.

Clarifications on VAT Incentives of Registered Export Enterprise (REE). CREATE MORE also clarified certain provisions in relation to VAT exemption on importations and VAT zero-rating on local purchases of REEs. To recall, during the initial implementation of the CREATE Act, there were issues on the implementation of the VAT incentives considering that these were limited to the sale of goods and services to RBEs which should be directly and exclusively used in the latter’s registered activity. Under CREATE MORE, it is now clarified that the VAT incentives cover importations and local purchases of REEs which are directly attributable to their registered activity including janitorial, security, financial, consultancy, marketing and promotion services, and services rendered for administrative operations such as human resources, legal, and accounting.

In 2021, CREATE was enacted to boost the growth of the national economy towards global competitiveness. However, certain provisions of CREATE and its implementing rules and regulations caused some confusion which resulted in a clamor for MORE. Certainly, with CREATE MORE in place, and if it is optimized and fairly implemented in a manner consistent with its purpose, there are high hopes that MORE investments will be CREATED for the Philippines, for it to attain global competitiveness.

The views and opinions expressed in this article are those of the author. This article is for general information and educational purposes, and is not offered as, and does not constitute, legal advice or legal opinion.

 

Fatima Faye E. Cordova-De Lima is a senior associate of the Tax department of the Angara Abello Concepcion Regala Cruz Law Offices.

fecordova@accralaw.com

(02) 8830-8000

PHL government told to fix infra, mobility bottlenecks

PHILIPPINE STAR/MICHAEL VARCAS

By Sheldeen Joy Talavera, Reporter

THE PHILIPPINES can hit sustainable goals in its infrastructure and mobility sectors by fixing policy and regulatory bottlenecks, industry players said.

“We need to be agile in terms of execution,” Roderick M. Danao, chairman and a senior partner at PwC Philippines, told the BusinessWorld Forecast 2025 economic forum on Tuesday. “We need to fix the bottlenecks, and we need to ensure that we move forward fast.”

He said investors want “predictability” in policies and the ease of doing business. The government must also show “political will” in achieving goals, he added.

“We need political will. We need to make it happen, otherwise, we will not achieve our long-term sustainable goals,” he said.

For the mobility sector, the Philippines needs a consistent framework for electric vehicle (EV) charging stations, according to Jaime Alfonzo Zobel de Ayala, chief executive officer at AC Mobility Holdings, Inc.

“There’s going to be charging stations with a lot of different formats, and making sure there’s consistency in how we’re managing safety regulations across is quite important,” he said.

He added that there is a need for “a little bit more clarity on standardization” between charging stations.

AC Mobility, the mobility solution arm of the Ayala group, boasts 111 EV charging points across 50 sites.

Jean-Baptiste Dreanic, deputy general manager at ENGIE Services Philippines, said sustainable energy is critical for infrastructure developments.

“Today, there are some ease of doing business and tax incentives in place, which is very promising. We need to continue to do those initiatives,” he said.

ENGIE Services Philippines is a unit of the French utility company ENGIE, which operates in 31 countries. The company provides sustainable energy solutions including district cooling systems and integrated facility management services to commercial and industrial clients.

The Philippine unit has 19 megawatts-peak (MWp) of renewable energy projects via business-to-business transactions in operation or under construction. It also has large-scale renewable energy projects with a capacity of 300 MWp.

Locad seeks to go to Middle East

GOLOCAD.COM

LOCAD, a startup that offers end-to-end logistics and warehousing solutions, has raised $9 million (P531 million) in Pre-Series B funding that it plans to use to develop artificial intelligence (AI)-driven technologies as it expands overseas.

The round was co-led by Global Ventures and existing investor Reefknot Investments, it said in a statement. Other participating investors were Sumitomo Equity Ventures and existing investors Antler Elevate, Febe Ventures and JG Summit Holdings, Inc.

The new funding would fast-track Locad’s international expansion, starting with the United Arab Emirates and Saudi Arabia this quarter as part of its ‘Grow Global, Go Local’ strategy for brands, it said.

It will also use the fund to enhance its AI-driven smart logistics capabilities. “Locad is on a mission to build the supply chain infrastructure of modern commerce connecting brands to consumers in growth markets with a global cloud supply chain as-a-service,” it added.

Locad allows brands to connect all sales channels in e-commerce and retail to a single pool of inventory and a smart logistics network, managed through its Control Tower orchestration platform that provides real time visibility, analytics, and AI-enhanced workflow automation.

“With the global expansion of our network and our recently launched Locad Borderless trade solutions, we are excited to help Philippine brands expand their distribution in international markets,” Constantin Robertz, chief executive officer and co-founder at Locad, said in the statement.

Through Locad, e-commerce brands with a cloud supply chain can boost their omnichannel business and automatically store, pack, ship and track orders across their business-to-consumer and business-to-business distribution channels.

Retail and e-commerce sales channels such as Shopify, Shopee, Amazon and TikTok are linked to a single pool of inventory and smart logistics network, managed through Locad’s Control Tower orchestration platform, making real-time visibility, analytics and AI-enhanced workflow automation possible.

The company also provides a geographically distributed warehousing infrastructure that lets brands stock their products closer to customers, cutting delivery costs and time.

Locad started in the Philippines in October 2020, and the country remains one of its major markets with six fulfillment centers across Metro Manila, South Luzon, the Visayas and Mindanao, it said. It supports more than 300 consumer brands in Southeast Asia and Australia.

“We are confident that Locad’s global expansion… will create exceptional value for brands aiming to grow overseas,” Reefknot Investments Managing Director Marc Dragon said.

Kaya Founders Founding Managing Partner Paulo Campos III, one of Locad’s early investors, added that the startup’s milestone highlights the potential of local businesses.

“Locad’s journey from launch in the Philippines four years ago to first regional and now global expansion demonstrates the opportunities for PH startups to go global,” he said. — Almira Louise S. Martinez

How PSEi member stocks performed — November 26, 2024

Here’s a quick glance at how PSEi stocks fared on Tuesday, November 26, 2024.


AIRINC: Manila ranks 113th in list of top cities for workers

Manila fell a notch to 113th out of 150 cities in the 2024 Global 150 Cities Index by the human resources consulting firm Associates for International Research, Inc. (AIRINC). The index ranks cities based on available financial and lifestyle benefits. The rankings consider how appealing each city is to live in based on local salary levels, tax rates, living costs, and living conditions. The Philippine capital placed 101st in financial rank and 116th in lifestyle rank. Among cities in the East and Southeast Asian region, Manila remained the second lowest, only ahead of Jakarta.

AIRINC: Manila ranks 113<sup>th</sup> in list of top cities for workers

Senate approves P6.352-trillion national budget

BW FILE PHOTO

THE SENATE on Tuesday approved its version of the government’s proposed P6.352-trillion national budget next year, with senators prioritizing funding for the Education, Health and Defense departments.

By a vote of 17 for, none against, and one abstaining, senators approved their bill outlining the government’s spending plan for 2025, the core of which is House Bill No. 10800. All budget proposals by law originate with the House.

Senator and Finance Committee Chairperson Mary Grace Natividad S. Poe-Llamanzares said the spending priorities included education, health, and livelihood programs.

At Tuesday’s plenary session, Senators proposed no amendments to the budget bill, after having earlier in the day passed it on second reading.

President Ferdinand R. Marcos, Jr. had certified the proposed 2025 national budget as urgent, which allowed Congress to do away with the three-day interval between bill readings.

In her speech before the bill’s approval late Tuesday, Ms. Poe said the Senate’s budget bill increased the funding for Health department’s cancer control and assistance program, and direct funding to the University of the Philippines Genome Center to conduct studies on disease outbreaks. She did not specify the amount added.

The spending plan also includes additional funding for mobile laboratories, hospital equipment, ambulances, and the construction of hospitals.

In the Senate committee report on the budget bill, the Department of Health and its agencies are to receive an allocation of P277.996 billion, up 28% hike from the P217.388 billion proposed by the Budget department.

Senators voted for more funding for free higher education programs at state universities and colleges as well as subsidies for college students from low-income households. The spending plan also includes funding for smart TVs in public school classrooms next year.

“This is to fulfill education’s role as the great equalizer for all to ensure our scholars are those who are truly in need,” she said.

Senators also agreed to set engineering standards and a cap on overhead expenses in building new classrooms, which was set at 0.5% of construction cost.

Last year, the Education department failed to meet its target of building 6,379 classrooms, completing only 3,600.

The Department of Education (DepEd) was allotted P751.68 billion next year, while state colleges and universities were granted P117.97 billion, according to the Senate Finance committee report on the budget bill.

Senators also agreed to raise the monthly pension for poor senior citizen beneficiaries to P1,000 per month from P500.

Ms. Poe said the spending plan will include increased funding for post-harvest facilities and the Department of Agriculture’s Agricultural Competitive Enhancement Fund (ACEF lending program), which supports fisheries and farm production.

The proposed P6.325-trillion budget, as approved by the Senate finance committee, earmarked P255.99 billion for the Department of National Defense.

The committee report also includes a P933.14-billion budget for the Department of Public Works and Highways, including P320 billion for flood control projects.

Ms. Poe’s office did not immediately reply to a request for a third reading copy and breakdown of the Senate’s budget bill.

The House approved the 2025 general appropriations bill in September. It was transmitted to the Senate on Oct. 25.

Legislators are set to harmonize both chambers’ versions of the budget in Bicameral Conference Committee before ratifying it and submitting it to the Palace for the President’s signature. — John Victor D. Ordoñez