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Contemporary Philippine artists in Art Jakarta

VIOLET WOMEN, Lilac Girls, and Tropical RGB by Kitty Kaburo; Stronghold 2 by Chelsea Theodossis — BRONTË H. LACSAMANA

TWO Philippine galleries participated in the recently held Art Jakarta art fair — The Drawing Room and Vinyl on Vinyl — attracting bigger crowds this year than last.

Speaking about the various Asian galleries that attended, Art Jakarta’s fair director Tom Tandio told the press that “stable regional art markets are rife with opportunities for international collaborations. By bringing together all the key players of this larger art market, we’re able to offer artists and creative minds a platform to hone their creations. It is a show of force of our countries’ importance in the global art world,” he said.

When BusinessWorld visited the two Philippine galleries during the fair’s run early in October, they were swarmed by passersby attracted by the art. Both reported that the foot traffic seemed heavier than last year (an impression later corroborated by Art Jakarta’s official count: 38,368 visitors in 2024, compared to 35,578 visitors in 2023).

THE DRAWING ROOM
At The Drawing Room’s booths hung paintings showing three women’s unique reflections on the world around them.

Nicole Decapia, the gallery’s strategies consultant, said that the goal was to bring in “striking works that might resonate in Jakarta” and that featuring all female artists wasn’t intentional.

One of the artists was Kitty Kaburo, whose colorful paintings are a great example of the kind of striking works the gallery was going for. Her paintings simulate transformations over time by depicting human activity in natural settings. The three pieces she contributed depict a playground in South Korea, its people and surroundings lit up in vibrant colors.

“As a Korean-Filipino artist, she talks about how Korea is slowly becoming a tropical climate due to changes in the environment, leading to a blurring of what is Korean and what is Filipino,” said Ms. Decapia.

Meanwhile, Victoria Montinola’s landscapes show off a classical painterly technique in the portrayal of trees. Her three works achieve both a mundane yet fantastical look due to the subtle use of color and texture.

Placed in a fair which highlights both similarities and resonances among different art practices across Asia, both artists’ works are a mark of “everything blending together in a clear display of talent.”

“The Philippines, Indonesia, and other Asian countries have similar histories, experiences, and stories, from the diaspora to the post-colonial. These connections make this fair very strong,” Ms. Decapia said.

A major draw to The Drawing Room’s booth were two paintings by Chelsea Theodossis. In them, levitating Tetris block-like objects stand out in gravity-defying compositions, creating a surreal still life.

Ms. Theodossis told BusinessWorld that it was common for people to approach her works to try and figure out if it was a mixed-media or installation work, only to find that it was a realistic painting.

“The energy here is high-level,” she said of the art fair. “It’s my first time to come along with my works because I usually just send them over. The first thing I have to say is that I’m Filipino, because we Filipinos look Indonesian!” she said.

She then talked about her art, particularly the importance of giving life to the seemingly ordinary objects that she paints. “I feel that it’s good to live as an artist now because there’s a lot of understanding for different points of view. It’s very joyful,” said Ms. Theodossis.

VINYL ON VINYL
The diverse eye-catching works of five artists who have done well internationally filled the booth of Vinyl on Vinyl.

On its outer wall facing one of the central hallways hung Iyan De Jesus’ dreamlike painting of female faces amid lotus pods and swans, composed of graceful lines and circles.

Inside, pieces by Teo Esguerra displayed a peculiar combination of aerosol paint, acrylic, and cutouts on canvas, achieving a vivid memory-like collage. These were contrasted by Dennis Bato’s striking, monochrome abstraction.

Two returning artists were part of the fun, too.

TRNZ (real name: Terence Eduarte) was the gallery’s sole artist in Art Jakarta last year, and featured animated depictions of warm, childlike scenes — not unlike his two paintings shown in this year’s edition.

Back in 2022, the first year that Vinyl on Vinyl participated in the fair, they featured a Reen Barrera solo show. This time, his return is marked by a large, colorful painting of a patchwork-faced character, with wood-and-resin figurines adding spunk to the booth.

Pia Reyes, one of the gallery’s co-founders, told BusinessWorld that it was the first time they did a group show at Art Jakarta.

“There’s no formula as to what artist will connect [with the fair’s visitors], because all of them have the potential to do so. Dennis Bato’s work is abstract-conceptual while Reen Barrera’s is more figurative, and they’re both a hit here,” she said.

“You never really know, so it’s nice to provide diversity.”

For Vinyl on Vinyl co-director Gaby dela Merced, the bond between Indonesian and Filipino artists and collectors helps a great deal.

“From the start of our gallery, we’d already been exhibiting Indonesian artists, so we enjoy bringing our Filipino artists here for a change,” she said. “If you go to fairs like Hong Kong, Singapore, or Korea, it’s more international because there’s a lot [of art] from the West. Our advantage here is the homegrown feeling, the unique flavor that comes from us relating with each other.” — Brontë H. Lacsamana

Gov’t fully awards bonds amid strong demand

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THE GOVERNMENT made a full award of the Treasury bonds (T-bonds) it offered on Tuesday amid robust demand and as rates were in line with secondary market levels amid expectations that the Bangko Sentral ng Pilipinas (BSP) will cut borrowing rates further at its meeting this week.

The Bureau of the Treasury (BTr) raised P15 billion as planned via the reissued 10-year bonds it auctioned off on Tuesday as total bids reached P40.876 billion, or almost three times the amount on offer.

This brought the total outstanding volume for the series to P205 billion, the Treasury said in a statement.

The bonds, which have a remaining life of six years and nine months, were awarded at an average rate of 5.69%. Accepted yields ranged from 5.65% to 5.7%.

The average rate of the reissued papers was 55 basis points (bps) higher than the 5.13% fetched for the bonds when they were last awarded on Nov. 9, 2021. This was also 169 bps above the 4% coupon rate for the issue.

Still, this was 1.4 bps lower than the 5.704% fetched for the seven-year bond, the tenor closest to the remaining life of the T-bonds on offer, and 5.53 bps below the 5.7453% quoted for the same bond series at the secondary market before Tuesday’s auction, based on PHP Bloomberg Valuation Service Reference Rates data provided by the BTr.

The government made a full award of its T-bond offer as the average yield fetched for the issue was aligned with prevailing secondary market rates, the Treasury said.

The BTr’s offer was met with strong demand as expected as the bond on offer is “relatively illiquid,” a trader said in a text message.

The Treasury fully awarded its offering as rates were slightly below comparable secondary market levels as the market expects the BSP to reduce borrowing costs at its policy meeting on Wednesday following slower-than-expected headline inflation last month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The BSP will likely cut benchmark interest rates by 25 bps for a second straight meeting on Wednesday to continue its easing cycle amid an improving inflation outlook, analysts said.

A BusinessWorld poll conducted last week showed that 16 out of 19 analysts expect the Monetary Board to reduce borrowing costs by 25 bps at its policy meeting on Oct. 16 to bring the target reverse repurchase rate to 6%.

On the other hand, two analysts expect the BSP to cut by a bigger 50 bps this week, while one sees the Monetary Board keeping rates unchanged.

The BSP kicked off its easing cycle with a 25-bp cut in August, marking the first time it reduced borrowing costs in nearly four years.

BSP Governor Eli M. Remolona, Jr. earlier said they could deliver a 25-bp rate cut at each of their October and December meetings, which would bring the policy rate to 5.75% by yearend.

Philippine headline inflation sharply slowed to 1.9% year on year in September from 3.3% in August and 6.1% a year ago.

This was below the central bank’s 2%-2.8% forecast for the month and was also the slowest print in over four years or since the 1.6% in May 2020.

For the first nine months, inflation averaged 3.4%, matching the central bank’s full-year forecast and also falling within its 2-4% annual target.

The BTr is looking to raise P145 billion from the domestic market this month, or P100 billion via Treasury bills and P45 billion through T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product this year. — A.M.C. Sy

Bloomberry refinances P72-B loan

BLOOMBERRY.PH

RAZON-LED Bloomberry Resorts Corp. has refinanced a P72-billion loan to enhance financial stability and preserve cash.

Bloomberry subsidiaries Bloomberry Resorts and Hotels, Inc. (BRHI), as borrower, and Sureste Properties, Inc. (SPI), as surety and third-party security provider, signed a P72-billion syndicated refinancing facility with a group of banks on Tuesday, the listed integrated resort operator said in an e-mailed statement.

The new loan facility replaces the existing P73.5-billion syndicated term loan facility obtained in 2018 and the P20-billion additional term loan facility that BRHI obtained in December 2020.

“We view this refinancing as a positive development that will allow the company to lighten its debt service and preserve cash as Solaire Resort North ramps up, improve the company’s bottom line, and ultimately ensure the consistent return of capital to our shareholders in the coming years,” Bloomberry Chairman and Chief Executive Officer Enrique K. Razon, Jr. said.

Bloomberry’s updated loan is priced at a spread that is 75 basis points lower than the previous facilities and gives the option to fix the interest rate within the next 12 months.

The feature will allow the company to benefit from further interest rate cuts that are expected to be implemented in the coming months.

The banks involved in the refinancing loan include BDO Unibank, Inc., Bank of the Philippine Islands, China Banking Corp., and Philippine National Bank.

BDO Capital served as lead arranger and sole bookrunner, while BDO Unibank, Inc. – Trust and Investments Group is the security trustee, facility agent, and paying agent.

Bloomberry’s integrated resort portfolio includes Solaire Resort Entertainment City, Solaire Resort North in Quezon City, and Jeju Sun Hotel & Casino (Jeju City) in Korea.

On Tuesday, Bloomberry shares fell by 0.88% or seven centavos to P7.89 apiece. — Revin Mikhael D. Ochave

Tiny Beautiful Things premiers this November

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“BRING a box of tissues,” an audience member quipped after watching an excerpt of Tiny Beautiful Things: A Play About Life — In Letters.

Presented by The Sandbox Collective, the straight play is set to make its Philippine premiere this November, starring acclaimed actress Iza Calzado in the lead role. Describing the play as a “roller coaster of emotions,” during its press launch, Ms. Calzado promised that it will make audiences laugh, cry, and feel comforted, as the story explores the common threads of human experience through real letters from real people sent to an advice columnist who she plays.

Tiny Beautiful Things is based on the book — which was turned into a play, then turned into a limited TV series — written by Cheryl Strayed (the New York Times bestselling author of Wild) and adapted for the stage by Nia Vardalos (of My Big Fat Greek Wedding fame).

Gawad Buhay awardee Jenny Jamora directs Tiny Beautiful Things. She described the play as a “non-prescriptive map for life.” She told BusinessWorld that audiences will find themselves resonating with the letters, which are brought to life by the characters during the show.

“It allows us to come together in one space — the theater. We come from different places, whether from stressful lives or retirement. We are a community in this one space. Hopefully, we can see one of our stories on stage,” Ms. Jamora said during the press conference last Thursday.

Tiny Beautiful Things will run from Nov. 16 to Dec. 8 at the Power Mac Center Spotlight Black Box Theater in Circuit Makati. Performances are scheduled for Fridays at 8 p.m., and Saturdays and Sundays at 2:30 and 7:30 p.m.

This production also marks the culmination of The Sandbox Collective’s 10th anniversary season, which included productions of The 25th Annual Putnam County Spelling Bee and Little Shop of Horrors.

LETTERS AND ADVICE
Ms. Calzado plays an advice columnist known by the pen name Sugar, who receives letters from various senders seeking advice on their lives.

The letter writers are portrayed by Gabby Padilla, a theater, film, and TV actress last seen in I Love You, You’re Perfect, Now Change; Ketchup Eusebio, making a comeback to the stage after appearing in the Ang Tanging Ina films, the Maalaala Mo Kaya anthologies, Heneral Luna (2016), and Un/Happy For You; Brian Sy, known for his role in Mula sa Buwan; and Regina De Vera, who made her theatrical debut in the US with The Underpants.

“I don’t know if my unorthodox approach is right or wrong. Advice columnists are supposed to position themselves as ‘the ones who know,’ but I am not that person; I am the one who is wrong… but this is who I am,” Iza Calzado said in her portrayal of Sugar during the showcase performance.

Eventually, Sugar and the letter writers will converge in a unified metaphorical space. — Edg Adrian Eva

Central banks remain keen buyers of gold, officials tell bullion conference

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MIAMI — Central banks remain keen buyers of gold to diversify their reserves for financial or strategic reasons, representatives of three central banks told the London Bullion Market Association’s annual conference in Miami on Monday.

Elevated demand for gold from central banks underpinned the price of the non-yielding gold when the global interest rates were high in 2022-2023 and then slowed down with this year’s 28% spot gold price rally. China’s central bank held back on buying gold for a fifth straight month in September.

Despite the gold rally, representatives of central banks of the Czech Republic, Mongolia and Mexico told the conference that having gold in reserves still matters to them, even though each one of them has their own reasoning.

The importance of gold as a secure asset is increasing for Mongolian reserves, Enkhjin Atarbaatar, head of the financial markets department at the Central Bank of Mongolia, told the conference.

For the Czech National Bank (CNB), gold is viewed as a pure diversifier of reserves, Marek Sestak, deputy executive director of the risk management department at the CNB, said.

All three said that they were not currently active in gold derivatives and that London remained the main storage location for their gold as a trading hub, while only Mongolia had limited appetite for repatriation of gold to store it at home.

Global central banks increased purchases for their reserves by 6% to 183 tons in the second quarter, according to the World Gold Council, and are on track to slow buying in full 2024 by 150 tons from 2023. — Reuters

Laguna hydro plant privatization on track for 2025 — PSALM

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STATE-RUN Power Sector Assets and Liabilities Management Corp. (PSALM) is on track for the privatization and turnover of the 796.64-megawatt (MW) Caliraya-Botocan-Kalayaan (CBK) hydroelectric power plant (HEPP) complex in Laguna next year, its president said.

“We’re undergoing a privatization process this year. We hope to have a successful bidding next year,” PSALM President and Chief Executive Officer Dennis Edward A. Dela Serna said during a Senate budget hearing on Tuesday.

Mr. Dela Serna said that the company is targeting to determine the indicative price for the CBK hydropower complex one to two months prior to the bidding.

The CBK hydro facilities are currently under a 25-year build-rehabilitate-operate-transfer and power purchase agreement between independent power producer CBK Power Co. Ltd. and National Power Corp. (NPC), which will expire in 2026.

These facilities include the 39.37-MW Caliraya HEPP in Lumban, the 22.91-MW Botocan HEPP in Majayjay, and the 366-MW Kalayaan I and 368.36-MW Kalayaan II pumped storage power plants in Laguna.

Currently, PSALM has identified six qualified bidders.

As of June, the company has privatized at least 82% of the generation assets, equivalent to 9,026 megawatts.

The remaining assets under PSALM include the CBK hydroelectric complex, the Agus-Pulangi hydroelectric complex, and a coal-fired power plant in Mindanao.

Mr. Dela Serna noted that the Agus-Pulangi facilities are up for rehabilitation. He said that PSALM has received numerous comments on the modality as there are concerns that it may lead to higher rates.

“In this case, the main concern really is the cost of power… We currently give the lowest rates in Mindanao. We can enter into long-term contracts with cooperatives and distribution utilities and assign it to the concessionaire,” he said.

The Agus-Pulangi hydropower complex consists of seven run-of-river hydroelectric power plants located in southern and central Mindanao with a combined installed capacity of 1,001.1 MW.

PSALM was created under Republic Act No. 9136, or the Electric Power Industry Reform Act of 2001, to lead the privatization of generation and transmission assets of the NPC and the National Transmission Corp.

It is also tasked to liquidate the financial obligations and administer the Universal Charge for Missionary Electrification (UCME).

“We have reduced the total financial obligations by 78% from P1.2 trillion in 2023 to P277 billion in June of 2024,” Mr. Dela Serna said.

PSALM’s corporate life is set to expire in June 2026, or 25 years after the effectivity of EPIRA. Should PSALM be dissolved, all its assets and liabilities will revert to the National Government. — Sheldeen Joy Talavera

Another epic adaptation hits the stage

Ballet Manila breathes life into Florante at Laura

By Brontë H. Lacsamana, Reporter

Ballet Review
Florante at Laura
Ballet Manila

MASTERS of dance, music, literature, and stage production are coming together to stage the first-ever ballet adaptation of the 1838 Filipino literary classic Florante at Laura by Francisco “Balagtas” Baltazar.

Helmed by Ballet Manila’s co-artistic associate and Ibong Adarna choreographer Gerardo Francisco, in collaboration with British choreographer Martin Lawrance, the show was already conceptualized before the pandemic. Its world premiere, which finally hit the Aliw Theater stage on Oct. 12, was a joyous celebration of the meeting of creative minds.

Aside from the two dance auteurs, renowned writer and balagtasan expert Professor Michael Coroza came on board to create a libretto, while Pinoy music pioneer and National Artist for Music Ryan Cayabyab took on the challenge of creating the music. His original compositions will be performed live by the Orchestra of the Filipino Youth (OFY) under the baton of his son, Toma Cayabyab.

“Something magical happens when artists come together,” said Lisa Macuja-Elizalde, Ballet Manila’s creative director, before the show on Oct. 12. The production’s premiere coincided with her birthday celebration.

She shared how ecstatic she was when all the artistic virtuosos she invited said yes to the project. Mr. Cayabyab, in particular, last worked with Ballet Manila in 2004 for Mga Kwento ni Lola Basyang, making his comeback composing music with the company all the more memorable.

Ms. Macuja-Elizalde likened him to “a Filipino Tchaikovsky — sweeping, dramatic, powerful, and romantic.”

For Mr. Cayabyab, the project was a daunting one. “It had been quite some time since I wrote a large musical work,” he told the press before the show. “I challenged myself into accepting this, and I hope that it becomes an important legacy for all of us involved in it.”

SHORT REVIEW
BusinessWorld caught the Oct. 13 show, which was attended by a variety of families, friends, ballet and music enthusiasts, and audiences both young and old. Coming from the success of Ballet Manila’s Ibong Adarna adaptation, expectations were high for another renowned Filipino literary adventure.

From the grand overture that OFY played before the curtains lifted, right up to the ending when the audience erupted in applause, the production lived up to the hype. The live music elevated the action-packed narrative, which featured the most important beats found in the old novel. The few children that were in the audience curiously peeked into the orchestra pit before and after the show, entranced by where the music was coming from.

Florante at Laura is a large-scale story, following the duke Florante who is held captive and enslaved by the Turks and how he escapes, with the help of Aladin, to return to his country, Albania. His faceoff with the usurper, Count Adolfo, and reunion with his beloved Laura drive home powerful themes of love and friendship.

Principal dancers Joshua Enciso and Abigail Oliveiro portray the titular Florante and Laura with much emotion and grace, their experience as lead dancers shining in their drama-filled roles. The choreography is striking, the audience able to feel every moment of action, romance, or quiet. The large dance pieces, in particular, manage to consolidate the strong energy of the Ballet Manila’s ensemble of dancers.

The stage was transformed into a unique representation of the Kingdom of Albania thanks to set designer Mio Infante. The geometric set pieces, ranging from castle interiors to dense forests, moved smoothly and evoked both physical spaces as well as the internal conflicts of the characters amid war.

Costumes by Make It Happen, led by Otto Hernandez and Therese Arroyo Hernandez, added to the grand visual aesthetics. Color-coded clothes defined the characters, the Albanian kingdom in blue, the Turks in red, and the usurper’s faction in green. Lighting director John Batalla also did a wonderful job using colors to differentiate moods in the play.

Overall, those who are vaguely familiar with Florante at Laura as a high school requirement will have a newfound appreciation for it. It is fast paced yet elaborate in its beautiful details and emotional beats, making it fairly easy to follow. Mr. Cayabyab’s music stays with the audience, the recurring musical motifs in the show remaining in one’s head even after having left the theater.

A true product of collaboration, it goes to show how putting great creative minds together — be it from music, dance, literature, or stage production — can bring classic material to new audiences.

The final performance on Oct. 19 will be staged at the Aliw Theater, CCP Complex, Pasay City. For tickets, visit ticketworld.com.ph.

CBS on track to reach 2024 earnings target

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CHINABANK Savings, Inc. (CBS), the thrift banking arm of listed China Banking Corp. (Chinabank), has surpassed its loan growth target for the year and expects further expansion amid declining interest rates, which would put it on track to reach its 2024 income goal, its top official said.

“In terms of growth, we’ve actually already hit our year-end target in loans as of October,” CBS President James Christian T. Dee told BusinessWorld on the sidelines of an event on Friday.

Mr. Dee previously said CBS wants its loan portfolio to reach P130 billion by end-2024.

As of end-June, the thrift bank’s net loans grew by 9.39% year on year to P127.28 billion, latest data from the Bangko Sentral ng Pilipinas (BSP) showed.

The growth in its loan book puts the bank on track to reach its P2.15-billion net income target for this year, Mr. Dee said.

“Actually for net income, we’re just right on target. We’re looking forward to some easing in rates to support our final year-end target,” he said.

“Looking toward the next year, we’re generally optimistic because hopefully, with rates stabilizing or easing, we’re looking at even better numbers for 2025,” Mr. Dee added.

CBS booked a net income of P1.001 billion in the first semester, rising by 14.4% from P875 million in the comparable year-ago period, according to its listed parent’s quarterly report.

In 2023, the thrift lender posted a net profit of P1.828 billion.

Mr. Dee earlier said the thrift bank targets to grow its loan portfolio to P151 billion in 2025, backed by expectations of growth in its retail banking segment.

The BSP in August cut benchmark interest rates for the first time in nearly four years, slashing its policy rate by 25 basis points (bps) to 6.25%.

A BusinessWorld poll conducted last week showed that 16 out of 19 analysts expect the Monetary Board to reduce borrowing costs by another 25 bps at its policy meeting on Wednesday (Oct. 16) to bring the target reverse repurchase rate to 6%.

On the other hand, two analysts expect the central bank to cut by a bigger 50 bps this week, while one said the Monetary Board could leave rates unchanged.

BSP Governor Eli M. Remolona, Jr. earlier said they could deliver a 25-bp rate cut at each of their October and December meetings, which would bring the policy rate to 5.75% by yearend.

CBS’ listed parent Chinabank booked an attributable net income of P5.53 billion in the second quarter, down by 4.75% year on year as trading losses multiplied by nearly six times. This brought its net profit for the first semester to P11.44 billion, up by 5.65% year on year.

Chinabank shares went up by P1.80 or 3.02% to end at P61.40 apiece on Tuesday. — Aaron Michael C. Sy

Shakey’s Pizza Asia completes incorporation of US subsidiary

SHAKEYSGROUP.PH

LISTED Shakey’s Pizza Asia Ventures, Inc. (SPAVI) has completed the incorporation of its United States subsidiary in support of the company’s expansion plans.

The fully owned subsidiary is named SPAVI International USA, Inc., SPAVI said in a regulatory filing on Tuesday.

Last month, SPAVI’s board approved the incorporation of SPAVI International USA, which will own and operate stores and franchises, as well as sell the group’s products and brands.

“The incorporated entity will be the group’s platform in its expansion plans in the territory, which will grow systemwide sales, revenues, and bottom line internationally via company-owned and franchised stores in the territory,” SPAVI said.

SPAVI operates brands such as kiosk-based food brand Potato Corner, Peri-Peri Charcoal Chicken and Sauce Bar, Singaporean milk tea brand R&B Milk Tea, and artisanal brand Project Pie.

As of the end of June, the company has 2,351 stores and outlets across its brands.

Recently, SPAVI opened the 2,000th store of its Potato Corner brand in SM Cebu. The company bought Potato Corner in 2022 to strengthen its brand portfolio.

SPAVI saw a 14% drop in its first-half net income to P421 million from P489 million last year due to inflationary challenges.

January-to-June systemwide sales jumped by 14% to P10.1 billion, while operating expenses increased by 36% to P960 million.

On Tuesday, SPAVI shares rose by 1.51% or 14 centavos to P9.42 apiece. — Revin Mikhael D. Ochave

Can Philippine manufacturing ever recover? Trains and automobiles

USERTRMK-FREEPIK

(Part 3)

Thanks to the predominance of food and beverage manufacturing in the domestic market, and the semiconductor and electronic components production in the export market, the Philippines is quite advanced  in the Industrial Revolution (IR) 2.0., the stage at which more techniques went further than simple mechanization of work. During IR 2.0, programs were put in place to improve the quality of output and ensure better management of production. New techniques involved lean manufacturing principles, allocation of resources, just-in-time manufacturing strategies, and more advanced division of labor. Among the many innovative people who brought about these effective strategies and techniques was Frederick Taylor, an American mechanical engineer who studied labor patterns, enabling efficient workplaces and better optimization of the worker’s time.

IR 2.0 saw the introduction of many technological systems.  With all the disadvantages of the inward-looking, import-substitution and ultra-nationalist industrialization that characterized our first attempt at industrialization in the 1950s to the 1970s, that stage at least introduced to our country the many technological systems that were developed during the second industrial revolution. The major feature of that era was the use of electric energy and steel in production industries. In fact, even in transport we saw the so-called tranvia using electricity in transport in the City of Manila.

In IR 2.0, the use of electricity made it possible for many industries to incorporate modern production lines and carry out mass production of goods. Also, this stage was characterized by extensive telegraph and railroad networks which greatly facilitated a faster transportation system. It also allowed faster communication and transfer of information.

In a way, we can say that Philippine transport system deteriorated when the trains going from Manila to Damortis, Pangasinan and to the Bicol region were abandoned. There are great expectations for our first subway system, that will be soon installed with the help of Japanese technology from Quezon City to the Manila International Airport. There is even greater expectation that soon we can emulate Indonesia, which already has a bullet train from Jakarta to Bandung, drastically cutting the time of travel. Recently, House Assistant Minority Leader Johnny Pimentel expressed the hope that Japan could be the logical fallback funding source for the Mindanao Railway Project (MRP) after the Philippine Government backed out from loan negotiations with China. The MRP will significantly decrease logistics costs in this resource-rich, second largest island of the archipelago that can play a key role in our food security programs.

In 1901, Ransom E. Olds established the very first assembly line. He produced Oldsmobile cars which his factory turned out at a rate of 20 units each day. In just one year, the company increased its volume by  500%. Thanks to the much bigger output, the overall pricing of automobiles decreased significantly, giving rise to the first mass market for cars. Then followed the stage of technological diffusion when Henry Ford  adopted the system used by Ransom. It was Ford who was the first to bring about the idea of mass production which, strangely enough, he learned from the meat industry. He cultivated a keen interest in how pigs at a Chicago slaughterhouse would be hung on conveyor belts. There were several butchers and each would perform just part of the work of slaughtering the pigs. Henry then applied these principles in the production of automobiles by modifying how the process used to be carried out.

Before the invention introduced by Henry Ford, the entire automobile would be assembled in only one station. By applying the principles he learned from the conveyor belts and distribution of labor, he created a new system where all vehicles would be produced step by step, on a conveyor belt. This invention made the production of automobiles much faster and more cost effective. It is no wonder that Henry Ford is credited as the Father of automotive mass manufacturing.

To summarize, the differences between IR 1.0 and IR 2.0 are as follows: IR 1.0 depended on water and steam as the main power sources for machines and industrial processes while IR 2.0 used electricity and oil. In the employment of labor, IR 1.0 required more human resources for most industrial processes because there was more demand than supply which meant more people being employed and working for longer hours. IR 2.0 required less labor and more people lost their jobs. At least at the onset of IR 2.0, machines replaced workers, carrying out most of the activities that were formerly accomplished with manual labor.  As economies progressed, however, the higher wages of those who were employed in the more productive manufacturing enterprises led to increased demand for other goods and especially services that absorbed the excess labor.

The next industrial revolution, IR 3.0 was spurred by advances in the electronics industry in the last few decades of the 20th century. This was the era revolving around the so-called Silicon Valleys, first in the Greater Boston area, then in Menlo Park, California. The invention and manufacture of a variety of electronic devices, including transistors and integrated circuits substantially automated machines, which resulted in reduced effort, increased speed, greater accuracy, and even complete replacement of the human agent in some cases.

IR 3.0 is also commonly referred to as the “First Computer Era” because during this period, simple, yet relatively large computers were developed. I still remember the huge computers occupying entire rooms that, as doctoral students, we had to use for our computations at the Harvard School of Economics and that had to be programmed with “punch cards.” These computers had quite good computing power. They eventually led to the development of modern-day machines like laptops and smart phones.

The Programmable Logic Controller (PLC), which was first built in the 1960s, was one of the landmark inventions that signified automation-using electronics. The integration of electronics hardware into manufacturing systems also created a requirement for software systems to enable these electronic devices, thus fueling the software development market as well. 

In addition to controlling the hardware, the software systems also enabled many management processes such as enterprise resource planning, inventory management, shipping logistics, product flow scheduling and tracking throughout the factory.

The entire industry was further automated with the use of electronics and Information Technology (IT). The automatic processes and software systems have continuously evolved with the advances in the electronics and IT industry since then. The pressure to reduce costs forced many manufacturers, especially those from the US, to move to low-cost countries. The Philippines was one of the beneficiaries of this trend. Some 60% of our exports of manufactured goods are accounted for by semiconductor components and electronic products. This geographical dispersion of manufacturing led to the formation of the concept of Supply Chain Management.

Other electronics that were invented during IR 3.0 were integrated circuit chips, digital logic systems, MOS transistors, as well as their respective derived technologies, such as the internet, computers, digital cellular phones and microprocessors. Simply put, the era of the digital revolution converted the existing analogue world into a modern and digital world. 

IR 2.0 and IR 3.0 can thereby be distinguished from one another as follows: Under IR 2.0, as regards production systems, mechanical machines and aides were mainly used in large-scale production while in IR 3.0, automated systems are utilized in mass production. These systems have the ability to carry out complicated human tasks. In IR 2.0, the game changing invention was the use of electricity in production processes while in IR 3.0, it was the introduction of computers and automation.

In a manner of speaking, we can postulate that the Philippine economy has advanced further in the electronics revolution of IR 3.0, both in the production of goods and in the consumption of the products and services resulting for this third stage of the industrial revolution.  We are a major player in the supply chain of the global electronics industry. Our per capita consumption of smart phones and texting and internet services are among the highest in the world. Unfortunately, we have not done as well to complete IR 2.0 because of the very high costs and insufficient supply of electricity. Vast areas of our archipelago are not yet electrified.

(To be continued.)

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

Arts & Culture (10/16/24)


Fifth Wall Fest celebrates the fusion of art and tech

ON OCT. 19-20, the Fifth Wall Fest returns with a new chapter, hosting the UK’s Alexander Whitley Dance Co. (AWDC) and Otmo, an innovative virtual reality platform that aims to showcase a unique blend of technology and artistry. AWDC, renowned for its pioneering use of technology to reshape dance, will offer hands-on VR sessions where participants can explore the dynamic intersection of physical movement and digital creation. With the support of the British Council, participants will have the chance to engage in an immersive workshop and explore Otmo, merging dance with digital art and technology. “Technology is an extraordinary tool for artists. It expands the possibilities of art and provides new, transformative ways to connect with audiences. At the British Council, we’re always excited to support innovative ways of expression,” said Andrei Nikolai Pamintuan, the British Council’s Head of Arts, in a statement. Sessions for professionals and the public are scheduled accordingly. No dance background required. The Fifth Wall Festival was launched online in 2020 as a home-based dance film festival during the pandemic. It has grown into the Philippines’ premier international movement platform. This year’s festival takes place at the historic residence of Narcisa’ Doña Sisang’ V. Buencamino-de Leon, the former president of LVN Pictures, at 36 Broadway Ave. corner 9th St., New Manila, Quezon City. Tickets are available at https://fifthwall.helixpay.ph.


Louie Cordero, Jordin Isip exhibits at MO_Space

IN his fourth solo show at MO_Space, opening Oct. 19, Louie Cordero continues his obsession with the ornate and the grotesque. A devotee of B movies, horror comics, kitsch, and surrealist art, Mr. Cordero explores skewed images of dread and dark humor in his new work. His paintings will be on display in the exhibit Unknown Memory which will run until Nov. 17. At the same time, Jordan Isip’s works will be featured at MO_Space as well in the exhibit Ten Hour Drawings. Devising a plan to create a 10-hour drawing each week for an entire year, he explores this self-imposed concept, which has ultimately evolved into an extensive meditation and a record of his journey in making art within a structured time commitment. The exhibition showcases the first 33 drawings to illustrate the development of his technique and thought process throughout the year. His works will also run until Nov. 17. MO_Space is located on the 3rd floor of the MOS Design Building on 9th Avenue, Bonifacio Global City, Taguig.


Anino Sa Likod Ng Buwan to return to the stage

JUN ROBLES LANA’s award-winning play-turned-film, Anino sa Likod ng Buwan, will return to the stage after 30 years as a debut production of IdeaFirst Live. To be staged at PETA Theater Center in Quezon City in March 2025, the play stars Kate Alejandrino, Ross Pesigan, and Martin del Rosario, under the direction of Gawad Buhay awardee Tuxqs Rutaquio. Written by Mr. Lana in 1993, it is better known for its 2015 film version. IdeaFirst Live, the new production company set up by Mr. Lana and Elmer Gatchalian, aims to bring illuminating stories to the stage. Tickets to Anino Sa Likod ng Buwan will be made available this October. For more information, stay tuned to IdeaFirst’s social media pages.


Dulaang UP presents Nanay Bangis in November

DULAANG UP will be staging Nanay Bangis, an adaptation of Mother Courage and Her Children by Bertolt Brecht, on Nov. 15 to Dec. 1 at the IBG-KAL Theater, UP Diliman, Quezon City. It is adapted by Rody Vera and directed by J. William Herbert Sigmund Go. Nanay Bangis is the story of Bangis, a mother who loses her children to the conflict between the Moro National Liberation Front and the Philippine army from 1971 to 1981. This period piece challenges the romanticized concept of war as an act of nationalism and valor. Rather, it reveals entangled narratives of survival that define the complexities of war. This DUP CLASSICS’ Brechtian staging brings together returning alumni, now industry professionals, and young emerging talents from the theater program in this collaboration.

European and US bonds show rapid divergence as economic wedge widens

LONDON — A rapid divergence between euro zone and US government bond markets is expected to continue, as an increasingly lackluster European economy adds to the pressure on the European Central Bank (ECB) to quickly cut interest rates.

The closely watched gap between US and German 10-year bond yields has risen to its widest since July at around 183 basis points (bps), as US yields have climbed in recent weeks while the German ones have ticked up only slightly. Yields move inversely to prices.

“We think these market dynamics have further to run,” said Simon Blundell, co-head of European fundamental fixed income at $11.5-trillion asset manager BlackRock, who favors European over US bonds.

While September’s sharp acceleration in US jobs growth highlights the strength of the US economy, euro area business activity contracted unexpectedly last month.

Traders now expect the US Federal Reserve to slow down after a 50-basis-point rate cut in September, but the ECB is this week tipped to deliver its third rate cut since June.

Goldman Sachs said the US-German bond yield gap is likely to rise to 200 bps, a level last seen earlier this year.

“We continue to expect European rates to outperform the US, with data weaker and a central bank less willing to front-load,” the bank’s analysts said in a note.

The widening yield gap is already spilling over to other markets, with the euro falling to its lowest level in around two months as higher returns draw investors towards US bonds, boosting the dollar.

EUROPE SPUTTERS
Germany’s finance ministry last week said Europe’s largest economy would probably contract for a second year running in 2024. Its once-mighty manufacturing sector continues to struggle in the wake of an energy crisis sparked by the Ukraine war.

“The numbers are really not good,” said Michael Weidner, co-head of global fixed income at Lazard Asset Management. “Neither the hard numbers that are reported, nor the soft numbers regarding the outlook and various indicators. They all pretty gloomy, and the mood is even worse.”

France, meanwhile, has pledged to raise taxes and cut spending as it tries to reduce its budget deficit. While many investors see that as necessary, it will weigh on growth in the euro zone’s second largest economy.

Reinout De Bock, head of European rates strategy at UBS, said interest rates could fall as low as 1% in the euro zone next year if growth fails to pick up, and said France’s deficit reduction would act as a drag. A slowdown in China, a key trading partner, is another concern for investors.

In sharp contrast, the blowout September employment report has allayed fears of a sharp US slowdown and caused investors to scrub out bets that the Fed would lower rates by 50 bps for a second meeting running in November.

The Organization for Economic Cooperation and Development in September said it expected the US economy to expand 2.6% this year and 1.6% in 2025, compared to growth rates of 0.7% and 1.3% in the euro zone.

DEEP RATE CUTS
Traders expect the ECB to stop cutting rates late next year at roughly 2%, well above the sub-zero levels that prevailed before the coronavirus pandemic. The ECB’s main rate is currently 3.5%.

Yet Bank of America (BofA) analysts are skeptical that the euro zone economy can sustain 2% interest rates, a level many economists see as “neutral” — one that neither stimulates nor restrains economic activity.

“The world of today does not differ a lot from the world of 2017-2018: private domestic demand remains surprisingly weak,” BofA strategists, led by Ralf Preusser, wrote last week. BofA expects European bond prices to rise.

Not all investors are gloomy about the euro zone’s prospects, as they point to stronger growth in countries such as Spain and Italy.

“The European data is OK and actually, relative to expectations, is perking up,” said Lloyd Harris, head of fixed income at Premier Miton Investors.

Harris said he thinks markets are pricing in too many rate cuts and expects bond yields to tick back up, although by more in the US than in Europe.

“The US is just slightly different in that we’ve got more government expenditure and more willingness to run a larger deficit, and that’s what’s pushing the US economy forward.” — Reuters