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Samsung Electronics workers to strike on July 8-10, union official says

THE LOGO of Samsung Electronics is seen at its office building in Seoul, South Korea, March 23, 2018. — REUTERS

SEOUL – A workers’ union at Samsung Electronics in South Korea has called a strike for July 8-10, a union official said on Tuesday, as it steps up industrial action against the country’s most valuable company.

The union is determining how many workers will join the strike, the official told Reuters by telephone.

Son Woo-mok, leader of the union, said late on Monday that the union wants a more transparent system for bonuses and time off, and wants the company to treat it as an equal partner.

Samsung declined to comment on the union’s strike plan.

Its share price was unaffected, rising 0.1% in morning trade versus a 0.7% decline in the benchmark price index. .KS11

Union membership increased rapidly after Samsung in 2020 pledged to stop discouraging the growth of organised labour.

The strike itself is unlikely to have a major impact on chip output as most production at the world’s biggest memory chipmaker is automated, two analysts told Reuters.

But any impact will ultimately depend on how many people that operate chip plants participate and for how long, said senior researcher Kim Yang-Paeng at the Korea Institute for Industrial Economics and Trade.

“Chip production cannot proceed with replacement workers” if people who operate the automated machines walked out for a long time “because of the specificity and expertise of the work,” Kim said.

Last month, workers en masse took annual leave on the same day in what was effectively the union’s first industrial action. At the time, Samsung said there was no impact on production or business activity. Those striking were mainly employed at inner-city offices rather than at manufacturing sites, analysts said.

“This planned strike marks a turning point in Samsung’s history of non-union management. This could be seen as a drop in employee loyalty at Samsung … caused by wages and disappointing compensation compared to Samsung’s rivals,” a Seoul-based analyst said on Tuesday, declining to be identified as details of the strike were unknown. – Reuters

US Supreme Court rules Trump has broad immunity from prosecution

REUTERS

WASHINGTON – The US Supreme Court ruled on Monday that Donald Trump cannot be prosecuted for actions that were within his constitutional powers as president in a landmark decision recognizing for the first time any form of presidential immunity from prosecution.

The justices, in a 6-3 ruling authored by Chief Justice John Roberts, threw out a lower court’s decision that had rejected Mr. Trump’s claim of immunity from federal criminal charges involving his efforts to undo his 2020 election loss to Joe Biden. The six conservative justices were in the majority, while its three liberal members dissented.

Mr. Trump is the Republican candidate challenging Mr. Biden, a Democrat, in the Nov. 5 US election in a 2020 rematch. The Supreme Court’s slow handling of the case and its decision to return key questions about the scope of Mr. Trump’s immunity to the trial judge to resolve make it improbable he will be tried before the election on these charges brought by Special Counsel Jack Smith.

“We conclude that under our constitutional structure of separated powers, the nature of presidential power requires that a former president have some immunity from criminal prosecution for official acts during his tenure in office,” Mr. Roberts wrote.

Immunity for former presidents is “absolute” with respect to their “core constitutional powers,” Mr. Roberts wrote, and a former president has “at least a presumptive immunity” for “acts within the outer perimeter of his official responsibility,” meaning prosecutors face a high legal bar to overcome that presumption.

In remarks at the White House, Mr. Biden called the ruling “a dangerous precedent” because the power of the presidency will no longer be constrained by the law.

“This nation was founded on the principle that there are no kings in America … no one is above the law, not even the president of the United States,” added Mr. Biden, speaking hours after one of his campaign officials said the ruling makes it easier for Mr. Trump “to pursue a path to dictatorship.”

The ruling could scuttle parts of the special counsel’s case as US District Judge Tanya Chutkan mulls the breadth of Mr. Trump’s immunity.

In recognizing broad immunity for Mr. Trump, Mr. Roberts cited the need for a president to “execute the duties of his office fearlessly and fairly” without the threat of prosecution.

“As for a president’s unofficial acts,” Mr. Roberts added, “there is no immunity.”

Mr. Trump hailed the ruling in a social media post, writing: “BIG WIN FOR OUR CONSTITUTION AND DEMOCRACY. PROUD TO BE AN AMERICAN!”

Mr. Trump, 78, is the first former US president to be criminally prosecuted and the first former president convicted of a crime. Mr. Smith’s election subversion charges embody one of the four criminal cases Mr. Trump has faced.

The court analyzed four categories of conduct contained in the indictment. They are: his discussions with US Justice Department officials following the election; his alleged pressure on then-Vice President Mike Pence to block congressional certification of Mr. Biden’s win; his alleged role in assembling fake pro-Trump electors to be used in the certification process; and his conduct related to the Jan. 6, 2021, attack on the US Capitol by his supporters.

The outcome gave Mr. Trump much of what he sought but stopped short of allowing absolute immunity for all official acts, as his lawyers had advocated. Instead the court specified that actions within the president’s “exclusive sphere of constitutional authority” enjoy such a shield, while those taken outside his exclusive powers are only “presumptively immune.”

The court found Mr. Trump was absolutely immune for conversations with Justice Department officials. Mr. Trump is also “presumptively immune” regarding his interactions with Mr. Pence, it decided, but returned that and the two other categories to lower courts to determine whether Trump has immunity.

The ruling marked the first time since the nation’s 18th century founding that the Supreme Court has declared that former presidents may be shielded from criminal charges in any instance. The court’s conservative majority includes three justices Mr. Trump appointed.

The court decided the case on the last day of its term.

 

‘PRESIDENT IS NOW A KING’

Justice Sonia Sotomayor, joined by fellow liberal Justices Elena Kagan and Ketanji Brown Jackson, delivered a sharply worded dissent, saying the ruling effectively creates a “law-free zone around the president.”

“When he uses his official powers in any way, under the majority’s reasoning, he now will be insulated from criminal prosecution. Orders the Navy’s Seal Team 6 to assassinate a political rival? Immune. Organizes a military coup to hold onto power? Immune. Takes a bribe in exchange for a pardon? Immune. Immune, immune, immune,” Ms. Sotomayor wrote.

“In every use of official power, the president is now a king above the law,” Ms. Sotomayor added.

Mr. Trump’s trial had been scheduled to start on March 4 before the delays over the immunity issue. Now, no trial date is set. Trump made his immunity claim to the trial judge in October, meaning the issue has been litigated for about nine months.

 

‘THUMB ON THE SCALE’

UCLA School of Law professor Rick Hasen, a critic of Mr. Trump’s efforts to overturn his election defeat, said: “The Supreme Court has put out a fact-intensive test on the boundaries of the president’s immunity – with a huge thumb on the scale favoring the president’s immunity – in a way that will surely push this case past the election.”

“Sorting out the court’s opinion and how it applies is going to take a while,” Georgetown University law professor Erica Hashimoto added. “No chance of a pre-election trial.”

The Supreme Court made two other rulings this year beneficial to Mr. Trump. In March, it reinstated Trump to the presidential primary ballot in Colorado. And last week, it raised the legal bar for prosecutors pursuing obstruction charges in Smith’s election subversion case against Trump and defendants involved in the Capitol attack.

In the special counsel’s August 2023 indictment, Mr. Trump was charged with conspiring to defraud the United States, corruptly obstructing an official proceeding and conspiring to do so, and conspiring against the right of Americans to vote. He has pleaded not guilty.

Ms. Sotomayor wrote on Monday: “Relying on little more than its own misguided wisdom about the need for bold and unhesitating action by the president, the court gives former President Trump all the immunity he asked for and more.”

In a separate case brought in New York state court, Mr. Trump was found guilty by a jury in Manhattan on May 30 on 34 counts of falsifying documents to cover up hush money paid to a porn star to avoid a sex scandal before the 2016 election. Trump also faces criminal charges in two other cases. He has pleaded not guilty in those and called all the cases against him politically motivated.

Not since its landmark Bush v. Gore decision, which handed the disputed 2000 US election to Republican George W. Bush over Democrat Al Gore, has the Supreme Court played such an integral role in a presidential race.

If Mr. Trump regains the presidency, he could try to force an end to the prosecution or potentially pardon himself for any federal crimes. – Reuters

 

Amazon sidesteps carbon offset standard Bezos helped fund

REUTERS

Amazon has become the first company to sidestep a global standard for verifying carbon offsets that was developed by a non-profit funded largely by the US technology conglomerate’s founder and executive chair, Jeff Bezos.

Amazon is backing the development of a new standard that could allow the online retailer and cloud-computing provider to overcome a dearth of supply for quality-labeled offsets, enabling it to meet its target of cutting its greenhouse-gas emissions to zero on a net basis by 2040. Critics worry that the move could lead to market confusion and a compromise in the standards of carbon offsets.

Companies under pressure to curb their emissions can buy credits from developers of projects that absorb carbon, such as through reforestation. The market for offsets has remained small due to a limited number of projects that can verify their climate benefits.

Amazon told Reuters it has completed work on Abacus, a framework for verifying the quality of carbon offsets in reforestation and agroforestry. Amazon developed the standard with carbon registry Verra as an alternative to one developed by the Integrity Council for the Voluntary Carbon Market (ICVCM), the world’s biggest grouping of private sector and environmental groups dedicated to validating carbon offsets. Verra first announced it was developing the label with Amazon and its Abacus working group in 2022.

Mr. Bezos, through his $10-billion Earth Fund that he set up to tackle climate change, is one of ICVCM’s biggest donors, having plowed at least $11 million into ICVCM and sister organization Voluntary Carbon Markets Integrity Initiative since their 2021 launch.

Jamey Mulligan, Amazon’s head of carbon neutralization, said in an interview that the company evaluated and supported ICVCM’s work, but that it wanted a more ambitious standard.

“We want to ensure that every credit investment has a real, conservatively quantified and verified impact on emissions,” Mr. Mulligan said. He declined to comment on whether Mr. Bezos was involved in Amazon’s decision.

Mr. Bezos could not be reached for comment.

Alphabet, Meta, Microsoft and Salesforce have said they plan to buy up to 20 million metric tons of Abacus-certified credits.

Pedro Martins Barata, co-chair of ICVCM’s panel of experts, said he was worried about development of an alternative standard and that he hoped that Abacus would eventually be folded into ICVCM.

“Otherwise, you get again into a confusing state in the market where each set of companies will find their own standards they want to support and they will say that they’re a particular type of quality,” he said.

Mr. Martins Barata added that ICVCM was reviewing Verra’s methodology for developing carbon offsets from agroforestry and reforestation projects, and that if it approves it this could make the Abacus label compatible with ICVCM’s label.

Kelley Kizzier, director of corporate action and markets at Bezos Earth Fund and a member of ICVCM’s board, said Abacus is complementary rather than competitive to ICVCM. She also declined to comment on Bezos’ role.

“What we need to focus on is generating high-integrity (offsets). There is room for lots of actors to do that,” Ms. Kizzier said.

The label will be available within weeks, Verra said.

 

OFFSET MARKET

The $2-billion market for voluntary carbon offsets has remained small amid concerns by companies and investors that the underlying projects may not curb as many emissions as they claim.

The market accounts for offsetting 300 million metric tons of emissions annually, according to an Environmental Defense Fund analysis of data from financial information provider MSCI. Yet only a fraction of those offsets are verified, with ICVCM’s main quality label, CCP, accounting for 27 million tons.

“My main concern with the strategy remains with the idea that the purchase of these credits somehow ‘neutralizes’ Amazon’s impact. I don’t think it does,” said Gilles Dufrasne, policy lead at environmental non-profit Carbon Market Watch.

Deborah Lawrence, chief scientist at credit ratings firm Calyx Global, welcomed the label’s requirement to make public data on how much carbon the projects store but said it still had questions about Abacus’ ability to ensure the carbon removals are permanent.

“Their permanence position requires further investigation,” she said. “The way it is phrased is giving us pause, but their annual monitoring and making the results public are great ideas and raise the bar.”

Amazon generated 71.3 million tons of carbon dioxide equivalent emissions in 2022, according to its latest sustainability report, of which 54.98 million tons came from its supply chain.

It will take two to three years for projects to qualify for the Abacus label because many rely on trees growing and then developers proving how much carbon they absorb.

Mulligan said Amazon could become one of the biggest carbon-credit buyers, but that it would not use them in place of the company’s efforts to decarbonize its business.

He added that Amazon is currently reviewing more than 70 proposals from developers and expects to restore tens of thousands of hectares of degraded land.

Any developer can apply for the Abacus label provided they meet requirements of Verra’s methodology, which the Abacus working group, a team of scientists, non-governmental organizations and industry specialists helped develop.

Eron Bloomgarden, founder of Emergent, a not-for-profit organization that mobilizes private-sector funding for forest countries, said Abacus would help grow the carbon-offset market.

“The work of ICVCM is important but it’s insufficient for the growth of the market, because what we are trying to do is solve big existential challenges like climate change and biodiversity extinction,” he said. – Reuters

Drugmakers’ appeal to end Zantac cancer lawsuits rebuffed by judge

FREEPIK

A Delaware judge rebuffed a request by GSK and other drugmakers to appeal a ruling allowing more than 70,000 lawsuits claiming that the heartburn drug Zantac caused cancer to go forward.

The ruling by Judge Vivian Medinilla of the Delaware Superior Court means that the drugmakers, which also include Pfizer PFE.N, Sanofi SASY.PA and Boehringer Ingelheim, will have to ask the Delaware Supreme Court directly for permission to appeal. GSK said it already submitted its appeal to that court.

If the state high court declines to take the appeal, it will clear the way for the Zantac lawsuits to go to trial.

“Judge Medinilla resoundingly rejected GSK, Boehringer Ingelheim, Pfizer, and Sanofi’s attempt to end run around the jury system in Delaware,” said Jennifer Moore, a lawyer for the plaintiffs.

GSK in a statement said “the scientific consensus remains that there is no consistent or reliable evidence that ranitidine increases the risk of any cancer.” Ranitidine is the active ingredient in the now discontinued drug.

Lawsuits began piling up after the US Food and Drug Administration in 2020 asked manufacturers to pull the drug off the market over concerns that ranitidine could degrade into a cancer-causing chemical called NDMA over time or when exposed to heat.

The drugmakers say Medinilla should have kept the plaintiffs from introducing expert testimony that Zantac can cause cancer, as a federal judge did in 2022 in about 50,000 claims centralized in Florida.

The plaintiffs’ cases depend on that testimony, and cannot go to trial without it.

Industry groups including the US Chamber of Commerce backed the drugmakers’ appeal in a filing last month, saying letting Medinilla’s ruling stand had relaxed the standards for evidence in the traditionally business-friendly state and threatened to turn it into “a hotbed of products-liability and mass-tort litigation.”

Medinilla wrote on Monday that she had not adopted a different standard from the Florida federal judge, but simply reached a different conclusion about the evidence in the case.

First approved in 1983, Zantac became the world’s best-selling medicine in 1988 and one of the first to top $1 billion in annual sales. It was originally marketed by a forerunner of GSK and later sold successively to other companies.

The vast majority of pending cases are in Delaware. Only one case, against GSK and Boehringer Ingelheim in Illinois, has gone to trial, ending in a victory for the companies last month. – Reuters

‘Roaring Kitty’ lawsuit over GameStop is withdrawn for now

By Mike Mozart from Funny YouTube, USA - GameStop, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=89854717

NEW YORK – Investors in GameStop have for now withdrawn their lawsuit accusing Keith Gill, who is known as “Roaring Kitty” and helped spur the meme stock mania of 2021, of defrauding them through a “pump-and-dump” scheme for the video game retailer.

A proposed class action accusing Mr. Gill of securities fraud was filed on Friday in the Brooklyn, New York, federal court, but voluntarily withdrawn on Monday without explanation. The lawsuit can be refiled, according to the filing.

Lawyers at the Pomerantz law firm, which represents the investors, did not immediately respond to requests for comment.

Investors led by Martin Radev, who lives in the Las Vegas area, said Mr. Gill manipulated GameStop securities between May 13 and June 13 by quietly accumulating large quantities of stock and call options, then dumping some holdings after emerging from a three-year social media hiatus.

They said Mr. Gill’s activities caused GameStop’s share price to gyrate wildly, generating “millions of dollars” in profit for him at their expense.

“Defendant still enjoys celebrity status and commands a following of millions through his social media accounts,” the complaint said. “Accordingly, Defendant was well aware of his ability to manipulate the market for GameStop securities, as well as the benefits he could reap.”

Mr. Gill did not immediately respond to requests for comment on Monday.

On May 12, he posted a cryptic meme on the social media platform X that was widely seen as a bullish signal for GameStop, whose stock he cheer leaded in 2021.

GameStop’s share price more than tripled over the next two days, then gave back nearly all the gains by May 24.

On June 2, Mr. Gill revealed that he owned 5 million GameStop shares and 120,000 call options, and on June 13 revealed he had shed the call options but owned 9 million GameStop shares.

Investors said the truth about Mr. Gill’s investing became known on June 3 when the Wall Street Journal wrote about the timing of his options trades and said the online brokerage E*Trade considered kicking him off its platform.

The meme stock mania was fueled in part by investors stuck at home during the pandemic, and led to a “short squeeze” that caused losses for hedge funds betting stock prices would fall.

On Monday, trading in Chewy shares became volatile after Mr. Gill revealed a 6.6% stake in the pet products retailer. – Reuters

Board approves P35 NCR wage hike

Tailors are at work at a shop in Santa Cruz, Manila. The National Capital Region Wage Board approved a P35 hike in the daily minimum wage. — PHILIPPINE STAR/RYAN BALDEMOR

By Chloe Mari A. Hufana

THE REGIONAL Tripartite Wages and Productivity Board (RTWPB) has approved a P35 minimum wage hike for workers in the National Capital Region (NCR), which will take effect on July 17.

According to Wage Order No. NCR-25, the minimum daily wage for nonagricultural workers in the region will be increased to P645.

For workers in agriculture and service/retail establishments employing 15 workers or fewer, daily wages will be raised to P608 from P573.

Workers in manufacturing establishments regularly employing fewer than 10 will also receive a minimum daily wage of P608.

The RTWPB-NCR approved the order on June 27, but a copy was released only on Monday.

“The wage order is to take effect after 15 days from its publication, or on July 17, 2024 which is exactly a day after the anniversary of the preceding wage order,” the Department of Labor and Employment (DoLE) said in a statement.

A P40 minimum wage increase was implemented in NCR on July 16, 2023.

The DoLE said the new wage rates are about 5.7% higher than the prevailing daily minimum wage rates in the region.

“(The new rates) remain above the latest regional poverty threshold for a family of five. These likewise result in a comparable 5% increase in wage-related benefits covering 13th month pay, service incentive leave, and social security benefits,” it said.

The wage order will directly impact 988,243 minimum wage earners in the capital region, DoLE said.

About 1.7 million full-time wage and salary workers that earn above minimum wage “may also indirectly benefit as a result of upward adjustments at the enterprise level arising from the correction of wage distortion,” it added.

Retail and service establishments with not more than 10 regular workers and enterprises affected by natural calamities or disasters can apply for exemption from the wage hike. Barangay Micro Business Enterprise are also not covered by the minimum wage law.

Employers Confederation of the Philippines (ECoP) Governor Arturo “Butch” C. Guerrero III told BusinessWorld via iMessage that the P35 wage increase is a “relief” for employers.

“This is a relief compared with the P750 wage hike per day the labor groups are recommending to the wage board and with the P150 per day additional to [Senator Juan Miguel F.] Zubiri’s legislated wage increase in the Senate,” he said.

Philippine Chamber of Commerce and Industry (PCCI) Chairman George T. Barcelon in a phone call with BusinessWorld said the P35 wage hike is “very reasonable.”

“[A] P35 increase per day is a win-win [because] this is more affordable for the micro, small, and medium enterprises, for the small business establishment to continue doing their business,” he said. “At the same time, this also indirectly mitigates inflation.”

The Philippines has been battling persistent inflation, as the cost of food, transport and utilities continue to rise.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort warned about second-round inflation effects arising from the wage hike.

“Some pickup in inflation through higher prices of affected goods or services, or the so-called second-round inflation effects, as the wage increase is around +5.7% that could [be] passed by some businesses and industries in terms of higher prices of their products by a similar extent to reflect the increase in labor, production and input costs,” he said in a Viber message to BusinessWorld.

However, he noted some companies might absorb the higher costs, which will result in smaller profit margins.

Mr. Ricafort said the P35 increase in wages would still “somewhat help” workers cope with expenses.

However, labor groups were not happy with the RTWPB-NCR’s order, saying it was not enough to help workers cope with the rising cost of living.

“The P35 wage hike in Metro Manila is not only inadequate but also seems like a tactic to distract workers from their escalating push for a P150 daily wage increase through legislation,” Federation of Free Workers President Jose Sonny G. Matula said in a statement.

“This highly insufficient increase, however, will only strengthen our resolve to pursue a legislated wage hike. The current economic conditions demand a comprehensive solution that addresses the dire financial realities workers face nationwide,” he added.

Trade Union Congress of the Philippines (TUCP) Vice-President Luis Manuel C. Corral said in a statement that the NCR wage board “opted to protect business profits rather than the bigger societal purpose of the wage increase.”

“As TUCP has repeatedly pointed out, the need to elevate the daily wage above the poverty threshold to afford a family of five at least one nutritious meal a day is inextricably linked to addressing the growing problem of stunting Filipino children due to persistent poverty and inequality,” he said.

The National Wage Coalition, which had sought a wage hike of not less than P150, said the P35 wage hike shows a “heartless disregard for the economic crises faced by our workers and families.”

“Our minimum wages do not amount to liveable wages… The P35 increase does not even amount to measly change; it is not even sufficient for a kilo of rice,” it said in a statement.

The NCR wage board had received several wage petitions from labor groups ranging from P597 to P750.

Unity for Wage Increase Now sought a P597 increase in daily wages, while four hospital employee associations and the Pasig Labor Alliance for Democracy and Development sought a P750 hike.

In February, the Senate approved on third and final reading a P100 across-the-board minimum wage increase for workers in the private sector. The House of Representatives has yet to pass similar legislation.

Philippine manufacturing growth slips to 3-month low

A worker uses a microscope at an electronics manufacturing assembly plant in Biñan, Laguna, April 20, 2016. — REUTERS

PHILIPPINE MANUFACTURING activity in June expanded at its slowest pace in three months amid cooling demand, S&P Global said.

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI), which measures the country’s monthly factory performance, stood at 51.3 in June, slightly lower than the 51.9 reading in May.

June was the 10th consecutive month that PMI was above the 50 mark, which signals an improvement in operating conditions from the previous month. A reading below 50 indicates the opposite.

Manufacturing Purchasing Managers’ Index (PMI) of select ASEAN economies, June 2024“While strong improvements in demand trends earlier in the second quarter allowed manufacturing firms to raise their production volumes at a solid and sustained rate in June, the recent cooling in demand conditions could mean weaker upticks in output as we move into the second half of the year,” S&P Global Market Intelligence economist Maryam Baluch said in a report.

The Philippines’ PMI reading was the third fastest among six Association of Southeast Asian Nations (ASEAN) member countries in June and lower than the ASEAN average of 51.7.

The Philippines was behind Vietnam (54.7) and Thailand (51.7), but ahead of Myanmar and Indonesia (50.7). Malaysia saw a slight contraction (49.9) in June.

The headline PMI measures manufacturing conditions through the weighted average of five indices — new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%).

S&P Global said Philippine manufacturers saw solid growth in production in June, the fastest in six months.

However, manufacturing firms saw “a notable cooldown” in growth in new orders. It noted the growth in foreign orders for Filipino-made goods weakened to a three-month low.

Cooling demand allowed manufacturers to address backlogs at the fastest pace in three months, S&P Global said.

It said manufacturing firms increased purchasing activity at the fastest pace since July 2023 in anticipation of rising production volume in the next few months.

“While growth in output fed through to higher purchasing activity, it failed to translate into job creation. The second consecutive month of job shedding reflected the lack of pressure on operating capacity within the sector, as backlogs were depleted sharply,” Ms. Baluch said.

S&P Global noted firms reduced workforce numbers in June due to rising spare capacity.

“June data also signaled a renewed rise in cost burdens, following a slight decrease in May. The rate of input price inflation was the strongest since February amid reports of raw material shortages, but nonetheless remained softer than the series average,” it said, noting this prompted firms to raise prices.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said manufacturing’s continued expansion is “a bright spot for the economy, as partly reflected by the pickup in both exports and imports in recent months, especially electronics.”

“Lower Fed and local interest rates would help reduce borrowing costs and help spur greater demand for loans by some manufacturers,” Mr. Ricafort said.

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said the government should keep a close eye on factory activity if it posts a decline for the rest of the year.

“Government should look at whether the three-month low was due to elevated electricity prices in the past three months, or whether global firms are starting to look to other economies to deliver on various orders,” he said in a Viber message.

S&P Global said Philippine manufacturers maintained a positive outlook for production in the next 12 months, although weaker than May’s recent high.

“Future expectations also retreated, further alluding to softening sentiment in the outlook. However, inflationary pressures remained in check, despite a renewed rise in operating costs. Relatively soft and subdued upticks in costs and charges could help the sector generate demand in the coming months,” Ms. Baluch said. — Beatriz Marie D. Cruz

BSP may cut by 50 bps in October — BMI

A WEAK PESO may cause the Bangko Sentral ng Pilipinas (BSP) to delay the start of its easing cycle, with a 50-basis-point (bp) cut in October at the earliest, Fitch Solutions’ unit BMI said.

“Given that the peso has come under heavy pressure due to fluctuations in US interest rate expectations, this will act as a constraint to preemptive loosening,” it said in a commentary.

The peso has been trading at the P58-per-dollar range since May, its first time sinking to the level since November 2022.

On Monday, the peso closed at P58.65 against the greenback, weakening by four centavos from its P58.61 finish on Friday.

BMI said currency market volatility is the “biggest barrier” to the BSP beginning its easing cycle.

It noted that the BSP would be “extremely mindful” of any easing because this might affect the peso.

“This feeds into our expectations for the BSP to embark on its first cut only in October at the earliest. The monetary cycles of both the Philippines and the Fed tend to track each other closely,” BMI said.

The Monetary Board is scheduled to hold policy meetings on Aug. 15, Oct. 17 and Dec. 19.

BSP Governor Eli M. Remolona, Jr. has signaled the central bank is on track to cut rates at its Aug. 15 meeting.

“In our view, such an early cut remains out of the question even if price pressures ease substantially,” BMI said.

Mr. Remolona has said the BSP does not need to wait for the Fed before it cuts rates because its monetary decisions are independent of the US central bank.

Markets now expect a 64% chance of the Fed cutting interest rates in September, unchanged from before the data, as well as another cut in December, Reuters reported after the release of better-than-expected US inflation data.

Fed officials earlier signaled monetary easing as late as December and priced in just one rate cut this year.

BMI said it only expects the BSP to cut after the US central bank begins its own easing cycle. It sees the Fed cutting rates by a total of 50 bps this year starting in September, with the BSP expected to follow suit. 

“We are revising our policy rate forecast to incorporate just one 50-bp cut in October at the earliest,” it said.

“In sum, we are expecting a 50 bps worth of cuts in 2024 and another 150 bps in 2025.”

However, BMI still noted the possibility of an earlier cut amid latest signals of the BSP.

“With the governor keeping the door open for monetary loosening in August, this suggests that they are pretty unfazed by weakness in the currency,” it said. “As such, the BSP could very well surprise us with a cut next month if inflationary pressures recede faster than we currently expect.”

June inflation likely settled at 3.9%, according to the median estimate of a BusinessWorld poll of 14 analysts.

If realized, this would match the 3.9% print in May. It would also mark the seventh straight month inflation was within the central bank’s 2-4% target.

The BSP expects full-year inflation to average 3.3%. — Luisa Maria Jacinta C. Jocson

Gov’t urged to prepare for expected surge in rice imports

PHILIPPINE STAR/EDD GUMBAN

THE MARCOS ADMINISTRATION should ensure that the lower tariffs on imported rice will not result in a further decline in rice self-sufficiency, the Philippine Chamber of Agriculture and Food, Inc. (PCAFI) said.

In a letter to President Ferdinand R. Marcos, Jr., PCAFI President Danilo V. Fausto aired the group’s “grave concerns” over the recent issuance of Executive Order No. 62 which slashed tariffs on rice to 15% until 2028.

“The challenge to EO 62 is how to implement it without a further decline in self-sufficiency in this age of climate change and geopolitical disruptions,” he said.

Mr. Fausto said the government should reassure the rice sector by preparing for a surge in rice imports through the Special Rice Safeguard under Republic Act (RA) No. 11203 or the Rice Tariffication Law (RTL).

“This means determining the volume or price triggers, as the case may be, as soon possible. The last administration, ignoring the said mandatory provision, did not even bother to compute for either one,” he said.

Mr. Fausto noted the RTL was implemented by the previous administration to benefit traders, to the detriment of consumers and rice farmers. He also claimed the law decreased the country’s self-sufficiency to 75%-80% from 90%-95%.

Under the law, a special safeguard duty on rice “shall be imposed” in order to protect the Philippine rice industry from sudden or extreme price fluctuations.

This is in accordance with RA 8800, or the Safeguard Measures Act, as well as its implementing rules and regulations, the law stated.

Mr. Fausto said that EO 62 has generated “controversy” due to the non-conduct of “genuine and timely consultations.” He said the National Economic and Development Authority’s (NEDA) insistence that the hearings of the Tariff Commission last year constitute compliance with due process “damages its credibility as a crisis manager.”

He said that the system is flawed as NEDA, which proposed the tariff cuts, has jurisdiction over the designated fact-finding body, the Tariff Commission.

“The sectors are left with no choice but to file a case on the issue of due process. By NEDA’s logic, it can go back to hearings conducted 10 or 20 years ago and insist that the proceedings therein would constitute compliance as long as they involved the same sector,” he said.

“This is dangerous. There will be no more new hearings,” he added.

Raul Q. Montemayor, national manager of the Federation of Free Farmers, told BusinessWorld in a Viber message that the Special Rice Safeguard is “very weak.”

“The additional tariff cannot exceed 1/3 of the applied tariff. In the case of rice, the maximum additional tariff we can apply is 5%, and it can be applied only from the time we breach the trigger up to the end of the year, even if the import surge spills over to the next year,” Mr. Montemayor said.

“What will be more effective are the general safeguards, where there are no limitations on the additional tariff that can be imposed, and which can be put in place from 200 days up to 2 years. But this needs real-time data to determine if there is a surge and that the surge is hurting farmers,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that lower rice import tariffs would mean a 20% discount on imported rice.

“Rice accounts for nearly 9% of the consumer price index (CPI) basket, so imported rice accounts for nearly 1.8% of the CPI basket,” said Mr. Ricafort in a Viber message.

“Thus, lower imported rice tariffs and prices would help reduce headline inflation by about 0.36, on a standalone basis, but more if locally produced rice prices go down as a result of lower prices and tariffs on imported rice,” he added.

“Thus, average inflation towards 3% becoming more feasible, going forward.”

Asked about the imposition of safeguard duties, Mr. Ricafort said that it would “effectively increase the price of imported rice and would help support farmgate palay prices and the incomes of palay farmers.”

Meanwhile, Mr. Fausto also recommended the allocation of more financial resources to help the agricultural sector through “enhanced guarantees for credit and insurance for farmers and millers.”

The government should also create programs to allow local government units to procure agricultural products directly from farmers and cooperatives during “times of surplus or market failure,” he said.

Mr. Fausto said the government should boost the National Food Authority’s (NFA) financial and storage capacity to buy more palay.

He also criticized the EO’s provision that allows the NEDA to review the tariffs on rice every four months.

“NEDA is a very ideological agency. It has a well-known bias against local producers, especially those in agriculture and fisheries,” he said. — J.I.D.Tabile

DoubleDragon’s Sia: 2024 last chance for 8.008% retail bond

LISTED property developer DoubleDragon Corp. (DD) has set the interest rate for its forthcoming 3.5-year retail bond offering at 8.008% per annum.

“I personally believe that 2024 could be the very last year in my entrepreneurial journey that the retail public can participate with a retail bond priced at 8.008% coupon rate given that not only that DD is nearing the blue chip level of balance sheet but also the global high interest cycle is starting to shift to downward interest rate cycle,” DD Chairman Edgar “Injap” J. Sia II said in a statement on Monday.

This retail bond offering represents the initial segment of DD’s shelf-registered debt securities program, which totals up to P10 billion. The offering includes a principal amount of up to P3 billion, with an oversubscription option of up to P3 billion.

DD said the offer period commenced on June 28 and will run until July 10, with listing on the Philippine Dealing & Exchange Corp. scheduled for July 16.

According to its final prospectus dated June 27, the company anticipates generating over P5 billion in net proceeds assuming full exercise of the oversubscription option.

These proceeds are intended to partially finance the redemption of DD’s P9.7-billion fixed-rate bonds issued in July 2017, as well as to cover overhead expenses including working capital requirements.

The 3.5-year retail bond offering has received a “PRS Aaa” rating with a stable outlook from the Philippine Rating Services Corp. (PhilRatings). This rating denotes minimal credit risk, and the stable outlook indicates an expectation of the rating remaining unchanged over the next twelve months.

DD has engaged RCBC Capital Corp., Unicapital, Inc., and Development Bank of the Philippines as joint lead underwriters and bookrunners for the issuance.

“We are glad to tap the peso retail bond market again after over five years. We believe that the pricing of this DD retail bond offering at 8.008% will enable a wide range of people to avail of the good coupon rate for a Triple A-rated retail bond and given the minimum investment size of only P50,000,” Mr. Sia said.

“On top of that, 8 is also believed by many to be an auspicious or ‘swerte’ (lucky) number and having two 8s in the coupon rate could be even more auspicious,” he added.

For 2024, DD anticipates surpassing P100 billion in total equity for the first time.

The company also expects a strengthened balance sheet following the upcoming listing of its hotel subsidiary, Hotel101 Global Pte. Ltd., on the Nasdaq Stock Exchange in the United States.

Hotel101 Global will trade on Nasdaq under the ticker symbol “HBNB” following its execution of a binding definitive merger agreement with special purpose acquisition company JVSPAC Acquisition Corp.

Last year, DD saw a 23.25% increase in its consolidated net income to P15.93 billion as consolidated revenue climbed by 75% to P24.74 billion.

DD shares declined by 1.65% or 20 centavos, closing at P11.90 per share on Monday. — Revin Mikhael D. Ochave

CREC, SMC power arm to boost solar capacity with 153.5-MW plant in Bataan

CREC.COM.PH

CITICORE Renewable Energy Corp. (CREC) has formed a joint venture with SMC Global Light and Power Corp. (SGLP), the power arm of San Miguel Corp. (SMC), to build a 153.5-megawatt (MW) solar power plant in Mariveles, Bataan, the Saavedra-led solar power company said on Monday.

CREC and SGLP recently signed an investment and shareholders agreement to jointly develop, construct, and operate a solar power plant, the company said in a regulatory filing.

“The joint venture will add approximately 76.75MW to the company’s attributable solar energy capacity,” CREC said.

“The parties shall collaborate and cooperate in the financing, construction, ownership, operation, and maintenance of the plant through the subscription to a special purpose entity,” it added.

SGLP, a wholly owned subsidiary of San Miguel Global Power Holdings Corp., the power arm of San Miguel Corp., intends to participate in a special purpose entity (SPE) for the project, subject to several conditions.

These conditions include: incorporation of the SPE; completion of CREC’s due diligence on the SPE within 10 days after its incorporation; transfer of the solar energy operating contract from SGLP to the SPE with consent from the Energy department; CREC’s subscription to the SPE; and execution of energy supply contracts, sublease agreements, and engineering, procurement, and construction contracts with the SPE.

Upon satisfaction of these conditions, both parties will subscribe to the SPE, with CREC initially owning 49% and SGLP owning 51% of the total issued and subscribed capital stock.

During the construction phase, CREC will subscribe to additional shares, resulting in an equal 50:50 ownership between the two companies.

Last month, CREC listed its P5.3-billion initial public offering consisting of 1.79 billion common shares, with a 10% overallotment option of up to 178.57-million secondary common shares at P2.70 apiece.

CREC aims to add one gigawatt (GW) of solar energy capacity annually to the Philippines energy mix, focusing on ready-to-build or under construction projects over the next five years, aiming for a total of around 5 GW by 2028.

First Metro Investment Corp. Head of Research Cristina S. Ulang said that the joint venture aligns closely with SMC’s strategy to pursue additional joint ventures.

“Risk sharing is becoming more a feature of SMC’s renewable energy expansion strategy,” she said via Viber.

Regarding CREC, Ms. Ulang said that the joint venture “lightens up the capitalization and risk burden for them too.”

“They both have the technology and benefit from tech know-how sharing and capabilities,” she added.

At the local bourse on Monday, CREC shares in the company closed at P2.69 each. — Sheldeen Joy Talavera

MPTC, Singapore’s GIC forge $1-B deal for Indonesian toll stake

FREEPIK

METRO Pacific Tollways Corp. (MPTC) announced on Monday a “strategic investment cooperation” with its subsidiaries — PT Margautama Nusantara (MUN) and PT Metro Pacific Tollways Indonesia Services (MPTIS) — and its partner Singapore’s GIC Pte. Ltd. to acquire a 35% stake valued at approximately $1 billion in Jasamarga Transjawa Tol (JTT), a subsidiary of PT Jasa Marga (Persero) Tbk, Indonesia’s state-owned toll road operator.

“JTT is a network of 13 toll roads in the provinces of West Java, Central Java, and East Java,” MPTC said in a statement.

“The combined 676-kilometer long road is considered Indonesia’s crown jewel that allows the efficient flow of 850,000 vehicles daily across Indonesia’s economic powerhouse of Java Island,” it added.

MPTC also said the addition of JTT toll roads is expected to further boost its portfolio to 1,130 kilometers connecting various economic zones in the Philippines and Indonesia.

“This deal fortifies MPTC’s goal to expand in Southeast Asia and enhance our infrastructure portfolio. This expansion in Indonesia aligns well with our commitment to improve our regional presence in toll road operations,” said Rogelio L. Singson, MPTC president and chief executive officer.

In 2023, GIC acquired a 33% stake in MPTC’s MUN for $209.9 million. Consequently, MPTC ownership in MUN decreased to 60.3%, although it retains the majority share. MPTC concurrently collaborated with GIC in the joint bidding process for JTT.

MPTC is the tollway unit of Metro Pacific Investments Corp., one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — A.E.O. Jose

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