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Atlas Mining says first-half income jumped to P2.07B

ATLAS Consolidated Mining and Development Corp. on Monday reported a net income of P2.07 billion for the first half amid higher metal prices and better ore production.

In a disclosure to the local bourse, the company reported that its net income more than doubled compared to the P803 million for the same period last year.

Atlas Mining said that its first-half revenues increased by 23% to P12.48 billion from P10.13 billion a year ago.

The company’s subsidiary, Carmen Copper Corp., recorded increases in gold and copper production and shipments in the six months to June.

Carmen Copper’s gold production went up by 37% to 17,711 ounces from the previous year’s 12,925 ounces.

Copper output, on the other hand, increased by 6% to 45.19 million pounds from 42.93 million pounds a year ago.

Copper prices rose by 5% to $4.13 per pound compared to $3.95 per pound in 2023.

The gold price increased by 14.42% to $2,216 per ounce from $1,937 per ounce in the same period last year.

The company said that it had shipped 44.74 million pounds of copper during the period, 6% higher than the 42.37 million pounds in 2023.

It also noted that it had shipped 16,565 ounces of gold, a 37% increase from 12,112 ounces a year ago. — A.H. Halili

Sustainability Leadership: An emerging country perspective

UPKLYAK-FREEPIK

“A sustainability leader is someone who inspires and supports action towards a better world.”

— University of Cambridge Institute for Sustainability Leadership

Why do we need sustainability leadership now?

As the Philippines races to become a rapidly growing economy in the Asia-Pacific region despite continuing geopolitical tensions and human development challenges, there is a need for leaders across the private, public and civil society spaces at all levels to practice sustainability leadership.

With my continuing engagement with Stanford University’s Distinguished Careers Institute, I have had the privilege of working with Bill Barnett, a business and environmental sustainability expert, and Pamela Matson, an inter-disciplinary sustainability scientist. Their insights are key in this piece.

5 KEY POINTS OF SUSTAINABILITY LEADERSHIP

Sustainability leadership from an emerging country perspective entails five key points:

1. The definition of sustainability must be reframed.

Matson defined sustainability as “a realization that our ability to prosper now and in the future requires increased attention not just to economic and social progress but also to conserving Earth’s life support systems: the fundamental environmental processes and natural resources on which our hopes for prosperity depend.”

From a “global south” perspective, we have heard pushback on this idea, with some saying that economic and social progress (the people) must be prioritized rather than the environment (planet). The harshest critics even go to the extent of questioning why developing countries need to share the burden of protecting the environment when their share of pollution is relatively small compared to the developed markets. This is not to mention the fact that these nations are late entrants in their human development journeys.

In the Philippine milieu, “wicked” challenges, such as income inequality and social injustice, remain and the ideals of political reform, national cohesion, and moral/spiritual renewal seem to be elusive. Sustainability leaders include these in their broader agenda.

2. Leadership is critical in the context of this reframed definition.

In the Philippines, while there may be companies with sustainability practices driven by either their own meaningful and significant initiatives from within or their global sustainability policies (with the latter mainly driven by global/regional headquarters), some organizations are struggling to incorporate sustainability as part of their business strategy. Worse, a few others may even resort to having sustainability programs for its sheer public relations value. As a case in point, some businesses appoint CSOs (Chief Sustainability Officers) which either add significant value or create necessary “optics.” A few other enterprises may have significant knowledge gaps that impede their entry into this relatively white space, and some have a narrow view (e.g., purely environmental without consideration for promoting the social good) that severely restricts their capacity to create real broad-based impact for all their stakeholders.

That is why leadership is critical to ensure that a company’s sustainability policy and practice leads to the actions that result in sustainable development for the benefit of all its stakeholders.

3. Clarity on outcome: shared prosperity.

Upgrading an existing sustainability function or establishing one requires clarity on the organizational outcomes hoped to be achieved.

According to Matson, it is inclusive social well-being. Over at the Management Association of the Philippines (MAP), Shared Prosperity, as embodied in a Covenant, may well be the outcome that we seek. A movement called Diwa-Kapwa, led by some MAP members, CEOs, and human resources leaders, actively champions organizations that place people first. As a result, extraordinary performance is generated by these companies. Shared Prosperity for all stakeholders naturally follows.

4. Sustainability Leadership must focus on technical, behavioral, and moral dimensions.

Organizations with developed sustainability functions design and implement relevant sustainability solutions that are an integral part of their business strategy. These solutions seek to address a particular social, economic, or environmental problem that is in the company’s radar. According to Barnett, it is critical that in the crafting of these solutions, technical, behavioral, and moral lenses must be adopted.

There is a tendency to view it solely from a technical point of view. Innovative solutions are arrived at by applying science and using new knowledge. Some notable examples include electric vehicles, the green revolution in the 20th century, and removing the ozone depleting chlorofluorocarbons (CFCs). With the advent of game-changing solutions, we must also be vigilant for any unintended consequences.

From a behavioral perspective, the sustainability challenges faced have been the result of organizational and individual behaviors in the past that did not serve the common good. Policies and practices that promote positive behaviors must be implemented to ensure that sustainable development becomes a reality with the help of the citizenry and all sectors involved. Take the case of Manila’s Pasig River — factories in the past have dumped waste into this river (organizational behavior) and some informal settlers may have utilized the river and its tributaries as their personal cesspools (individual behavior). Future sustainable solutions need to drive new positive behaviors.

The moral lens could not be underestimated as well. Effective sustainability solutions require effective governance, which I believe is already gaining traction in a lot of areas in government. But there is room to further grow. If some provincial or local government units wish to drive a higher level of direct investment, the proverbial “red tape” must be eliminated and the ease of doing business must be embedded.

5. Sustainability Leadership incorporates management excellence.

Leaders drive for results, outcomes, and completion of deliverables. But this is not enough. To enable long-term success, sustainability leaders equally push for the development of institutional capabilities of the organization that they are a part of. Capabilities include having a vision, competent and committed people, a culture of excellence, a forward-looking innovative mindset, openness to game-changing technologies, agile organizations, and efficient routines and workflows. While we have usually placed this under the bucket of management excellence, McKinsey goes to the extent of calling it “organizational superpowers.”

QUO VADIS?
Certainly, the world will be a better place with sustainability leaders around. In the Philippines, they could catapult the country into a steeper growth trajectory.

 

Dr. Ramon “Mon” B. Segismundo is a member of the Management Association of the Philippines’ Shared Prosperity Committee. He is a 2023-2024 fellow of Stanford University’s Distinguished Careers Institute. He holds a Doctorate in Business Administration from Singapore Management University. He is CEO of Singapore-based OneHRX.

map@map.org.ph

rbsegismundo@onehrx.com

Gov’t fully awards T-bills amid robust demand

BW FILE PHOTO

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday even as rates continued to inch up as it saw strong demand from the market, with investors looking to lock in high yields before the Bangko Sentral ng Pilipinas (BSP) and US Federal Reserve start their respective monetary easing cycles.

The Bureau of the Treasury (BTr) raised P20 billion as planned from the T-bills it auctioned off on Monday as total bids reached P47.372 billion, or more than twice the amount on offer.

Broken down, the BTr borrowed P6.5 billion as programmed from the 91-day T-bills as tenders for the tenor reached P14.86 billion. The three-month papers were quoted at an average rate of 5.743%, 2.6 basis points (bps) above the 5.717% seen last week. Accepted rates ranged from 5.724% to 5.755%.

The government likewise made a full P6.5-billion award of the 182-day securities as bids for the tenor reached P15.01 billion. The average rate for the six-month T-bill stood at 5.991%, up by 1.3 bps from the 5.978% fetched last week, with accepted rates at 5.98% to 5.998%.

Lastly, the Treasury raised the planned P7 billion via the 364-day debt papers as demand totaled P17.502 billion. The average rate of the one-year debt inched up by 0.9 bp to 6.081% from the 6.072% quoted for the tenor last week. Accepted yields were from 6.05% to 6.095%.

At the secondary market before the auction, the 91-, 182-, and 364-day T-bills were quoted at 5.7355%, 6.0223%, and 6.1053%, respectively, based on PHP Bloomberg Valuation Service (BVAL) Reference Rates data provided by the Treasury.

T-bill yields rose in line with market expectations as investors continued to price in potential rate cuts from the BSP, a trader said in a phone interview.

“Treasury bill average auction yields were again slightly higher week on week, similar to the weekly rise in the comparable PHP BVAL yields,… as investors lock in longer-term tenors ahead of a possible 25-bp policy rate cut as early as August and another 25-bp cut by the fourth quarter, as reiterated by local monetary authorities, and also amid more dovish signals by some Fed officials recently,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

BSP Governor Eli M. Remolona, Jr. last month said the central bank may deliver its first rate cut in over three years at the Monetary Board’s Aug. 15 review — the only policy meeting scheduled this quarter — as they expect inflation to continue easing this semester.

The Monetary Board could slash borrowing costs by 25 bps this quarter and by another 25 bps in the fourth quarter, he added.

The BSP last month kept its policy rate at a 17-year high of 6.5% for a sixth straight meeting after raising interest rates by 450 bps from May 2022 to October 2023 to help tame red-hot inflation.

Mr. Remolona also said the better-than-expected June inflation print gives policy makers “a bit more scope for easing” in their August meeting.

Headline inflation eased to 3.7% in June from 3.9% in May. This was within the BSP’s 3.4-4.2% forecast for the month, and also marked the seventh straight month that inflation settled within the central bank’s 2-4% annual target.

For the first six months, the consumer price index averaged 3.5%, slightly faster than the BSP’s 3.3% full-year forecast.

Meanwhile, top Federal Reserve officials last week said the US central bank is “closer” to cutting interest rates given inflation’s improved trajectory and a labor market in better balance, remarks that set the stage for a first reduction in borrowing costs in September, Reuters reported.

Fed Governor Christopher Waller and New York Fed President John Williams both noted the shortening horizon toward looser monetary policy, with Mr. Waller highlighting it in a speech at the Kansas City Fed and Mr. Williams voicing it in a Wall Street Journal interview.

Separately, Richmond Fed President Thomas Barkin said he is “very encouraged” that declines in inflation had begun to broaden. “I’d like to see that continue,” he told a business group in Maryland.

The remarks are the latest in a rush of commentary from top US central bank officials — including Fed Chair Jerome H. Powell — to note their increased confidence that the disinflationary trend that began last year is continuing, despite a short-lived bump in inflation earlier this year.

More Fed policy makers have suggested they are getting increasingly comfortable that the pace of price increases is more firmly on track back down to 2%, after higher-than-expected readings earlier in the year.

Mr. Powell also said that inflation readings over the second quarter of this year “add somewhat to confidence” on its downward path, suggesting a start of an easing cycle may not be far off.

On Tuesday, the BTr will offer P25 billion in reissued 20-year Treasury bonds (T-bonds) with a remaining life of 19 years and 10 months.

The Treasury wants to raise P215 billion from the domestic market this month, or P100 billion through T-bills and P115 billion via 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 for this year. — AMCS with Reuters

The post-pandemic cosplay boom

IT IS common nowadays to see people wearing costumes of animated characters, superheroes, and video game characters in and around malls and convention centers. These people, called cosplayers (from the short form of “costume play”), range from hobbyists and animé enthusiasts to professional hosts and performers.

While the word cosplay was coined in Japan in 1984, referring to a niche in Japanese pop culture, it has quickly spread to other parts of Asia and even the Western world. In the Philippines, it has been around since the 2000s.

Following the COVID-19 pandemic, a plethora of mall events, pop-up markets, and fan conventions have been regularly held by multiple organizers, all catering to an apparent boom in fan culture.

THE NORMALIZATION OF FAN CULTURE
“When we first started organizing events in 2005, we knew there was a big market, but we didn’t expect to be overwhelmed by the growth we see now,” said Bryan Uy, an organizer at Ozine Events, in an interview with BusinessWorld at the sidelines of their pre-Tanabata Festival in Ayala Malls Manila Bay.

Ozine Events is the company behind local animé and cosplay conventions such as Ozine Fest and Otaku Expo, the latter of which will be held from Aug. 31 to Sept. 1 in SM Megamall.

While fan culture has existed for a while, Mr. Uy recalled the boom that occurred in the pandemic. He mentioned the game Genshin Impact and the animé series Spy x Family as examples of media that were major hits at that time.

“When we brought back our events after the lockdowns, we thought it would be the same people attending but just a bit more. Nagulat kami na ang daming nag-post na debut nila sa event namin (We were surprised to see posts online saying their cosplay debuts were at our events),” he said.

His brother Dennis and he started Ozine in 2005, one of the few animé magazines created in the 2000s when interest in animé was not yet mainstream. The company eventually expanded to include events.

These days, the Otaku Expo Tanabata Festival easily attracts thousands of Filipino cosplayers and otakus — “a person having an intense or obsessive interest especially in the fields of animé and manga,” according to the Merriam-Webster dictionary. Last year’s iteration at SM Megamall’s Megatrade Hall saw 170 artists put up tables selling their works and merchandise, causing Ozine to expand the event to three halls instead of the original two to accommodate the crowd.

“Halatang excited lahat lumabas at magpunta ulit sa events pagkatapos ng pandemic (It was obvious that everyone was excited to go out and go to events again after the pandemic),” said Mr. Uy.

Justin Daniel, a cosplay hobbyist who specializes in military-themed characters, is one of those who started dressing up post-pandemic, in 2022. He explained that many of them began going to events because of the new friendships built on shared interests online.

“I attend plenty of cosplay events,” he told BusinessWorld via Messenger. “As long as they’re within Metro Manila, I commute my way there.”

He is one of many cosplayers who attended both Ozine’s pre-Tanabata Festival in Ayala Malls Manila Bay and Cosplay.ph’s Animé and Cosplay Expo in Mall of Asia’s SMX Convention Center, held in the same weekend of July 20 and 21 (the two venues are just two kilometers away from each other).

“More and more people are comfortable with this hobby and what’s fun is we make new friends along the way,” Mr. Daniel added.

PASSION AND PROFIT
Ozine’s Mr. Uy said they organize free mall events and themed cosplay conventions throughout the year — pop idol, ’90s retro, school-themed, Halloween, circus-themed — to cater to many niches.

“Depending on the venue and sponsors, we get around 40 to 60 sellers,” he said. As an artist himself, he observed that entrepreneurs are getting younger and smarter. “I’m happy they sell their art so well at a young age, to the point that my own booth at our events can barely even reach their sales.”

With Ozine’s 20th anniversary coming up next year, he said that fans can expect bigger and better versions of the usual, like mall events, cosplay competitions, auctions, and even band contests. Malls now approach them to hold their events at their venues, knowing the crowds and business these bring.

“For us, when we see people having fun, we also feel the joy all over again. If you’re always thinking about making money, it won’t grow and it won’t work. We do this because we’re passionate,” Mr. Uy said.

Aire Xie, a cosplayer since 2012, started out as a hobbyist until her friends urged her to make money from her photoshoots and prints. Since 2023, she has been setting up booths at conventions, including AcadArena’s CONQuest, Cosplay.ph’s Cosplay Mania, and Ozine’s Otaku Expo.

In an online interview with BusinessWorld, she admitted that cosplay is expensive — the cost of a costume ranges from a minimum of P3,000 to five digits at the professional level — making it a privilege to do.

“Cosplayers were already kind of accepted before the pandemic, but it was not something you would see regularly in malls. Now, it’s more common to see people [walking] around in wigs and costumes for fun, and for professional cosplayers to be paid to do hosting and performing gigs,” she said.

With social media and streaming platforms now the norm, people are more aware and appreciative of animé, video games, superheroes, comics, and, of course, cosplay.

This has made the market more competitive, though it also provides opportunities to turn the hobby into a career, according to Ms. Xie. She cited celebrities like Myrtle Sarrosa as well as cosplayers who left their daytime jobs to pursue their hobby full-time, like Charess and Kitz Cua.

“There’s a lot of hype now. Cosplay is seen as cool,” she said. — Brontë H. Lacsamana

CEB adds Japan routes; ALI confirms talks for AirSWIFT

CEBUPACIFICAIR

CEBU PACIFIC (CEB) continues its international route expansion after launching its flight to Osaka from Cebu, the budget carrier announced on Monday.

“With Japan being a top-of-mind destination for many Filipino travelers, the new route will surely give them the opportunity to visit one of the country’s dynamic cities. We also hope that this launch can encourage more travelers from Japan to explore the beauty of the Philippines,” Cebu Pacific President and Chief Commercial Officer Alexander G. Lao said in a media release on Monday.

Cebu Pacific, operated by Cebu Air, Inc., will start offering flights to Osaka from Cebu on Oct. 15, four times a week: Tuesday, Thursday, Saturday, and Sunday. The budget carrier also flies between Narita and Cebu.

With the addition of the Cebu-Osaka route, the budget carrier is further strengthening its frequencies to Japan.

Currently, Cebu Pacific offers daily flights to Manila-Fukuoka-Manila; Manila-Nagoya-Manila; and Manila-Osaka-Manila; and twice daily between Manila and Narita, and Manila and Osaka. The carrier also operates four times weekly between Clark and Narita.

To date, Cebu Pacific offers flights to 35 domestic and 25 international destinations in Asia, Australia, and the Middle East.

Earlier this month, the budget carrier announced that it would order up to 152 A321 New Engine Option (NEO) aircraft valued at P1.4 trillion from European planemaker Airbus, marking the largest aircraft order in the Philippines.

The company’s aircraft order, which is anticipated to start arriving by 2028, is expected to boost its operations as it is also considering adding new routes and increasing its frequencies.

In a regulatory filing on Monday, Cebu Air said it is exploring possible partnerships with Ayala Land, Inc. (ALI), but noted that nothing has been agreed upon to date.

“Cebu Pacific is always on the lookout for opportunities to grow and expand its network, including partnerships with other parties,” Cebu Air said.

On Monday, The Philippine Star reported that Cebu Pacific is in talks to acquire AirSWIFT Transport, Inc., formerly Island Transvoyager, Inc., a unit of Ayala Land, Inc.

“We confirm that Ayala Land is exploring opportunities with Cebu Pacific to improve our offerings. Should this discussion result in an agreement, then the proper public disclosures will be made,” Ayala Land said in a Viber message. — Ashley Erika O. Jose

Biden finally shows true leadership in passing the torch

RAWPIXEL

JOSEPH ROBINETTE BIDEN, Jr., the 46th president of the United States, stepped out of the 2024 election so the Democratic Party could try to ensure in the four short months between now and November that Donald Trump doesn’t become the 47th.

And in a shambolic, dangerous political era in which Trump, shrouded in a haze of faux patriotism and strength, has vaulted anarchy, venom, and gibberish onto the global stage, Biden’s act of selflessness and grit is welcome — and, in its own way, epic.

It also opens the door to the creation of a Democratic ticket that could inject new life and energy into a campaign that has lost momentum and enthusiasm to Republicans in the weeks since Biden’s disastrous debate performance and an assassination attempt on Trump upended expectations about the race. The odds, polls, political, and financial machinations and an endorsement from the president favor Vice-President Kamala Harris to assume Biden’s mantle.

If it is Harris, her savvy and strategic selection of a running mate will be crucial. She could tilt toward any number of viable and capable Democrats. Governor Josh Shapiro of Pennsylvania comes to mind. So do Governor Gretchen Whitmer of Michigan and Senator Mark Kelly of Arizona. If Harris fancies something dramatic and seismic, amid complaints about national partisan divides, she could do the unexpected and select former Representative Liz Cheney of Wyoming as her running mate. Imagine that: A former prosecutor and the principled Republican leader of Congress’ Jan. 6 hearings taking on Trump, a twice-impeached convicted felon and sexual predator who is untethered by a sense of public duty or rationality.

This should have happened in a more orderly fashion, and Biden could have set the wheels in motion a year ago. As it turned out, it took his humiliating debate belly flop in June to reveal him publicly as too diminished to continue campaigning. It also took weeks of arm-twisting by leading members of the Democratic Party, and courageous public statements from a handful of others, to persuade Biden to finally step aside.

But he did step aside. In the grander scheme of things, three weeks may not seem like such a long time. There’s another valuable lesson here. The Democratic Party’s leaders have shown they are more willing to do the right thing — seeking the ouster of a sitting president as their standard-bearer — than the Republican Party’s leadership, which has acquiesced and caved to Trump at every turn over the last nine years, no matter how unlawful or heinous his transgressions.

Party leaders usually reflect their voters, however. Survivors in both parties spend a lot of time reading the needs and sentiments of their constituents. Only so much steel and righteousness can be expected of them if their voters want something else. Still, Democrats such as Representatives Nancy Pelosi and Hakeem Jeffries and Senator Chuck Schumer emerge from this historic moment as infinitely more responsible and mature than Republican weathervanes and cowards such as Senator Minority Leader Mitch McConnell and House Speaker Mike Johnson.

During the Republican National Convention in Milwaukee last week, GOP stars and onetime Trump critics such as former United Nations Ambassador Nikki Haley and Governor Ron DeSantis of Florida took center stage at the Fiserv Forum to enthusiastically kiss Trump’s ring. And Trump, looking down from his box seat like a Roman emperor at the Colosseum, soaked up those and other demonstrations of amnesia and fealty, knowing they would compel other Republicans to bend the knee.

Democratic voters want something else, and enough pressure was brought to bear on the White House that Biden could no longer ignore it. Voters had repeatedly shown their willingness to support a president who has delivered a booming economy, national security, and a respect for civil society despite a broader lack of enthusiasm for him. They weren’t willing to let him hang on simply because he wanted to hang on — particularly when it was overwhelmingly evident that he couldn’t beat Trump and that his candidacy might torpedo countless other Democrats in down-ballot races.

Republican operatives who had suddenly grown indignant about the prospect of Biden leaving the race have suggested that they would align with Democrats and sue to stop it from happening. Heritage Foundation President Kevin Roberts told me and a gathering of other journalists at a Bloomberg News event in Milwaukee last week that he was offering his perspective on relevant legalities to anyone interested. While it’s unlikely that any legal challenge will gain traction, it’s a measurement of how weakened Biden had become that even Trump supporters wanted him to stay on the ballot.

Biden’s White House advisers have repeatedly noted that the president couldn’t stand down because it would subvert the intentions of voters who cast their ballots for him during the Democratic primaries earlier this year. But those voters hadn’t seen the June debate, and it certainly stunned enough of them to make late winter and spring ballots inexact barometers of their faith in Biden.

Biden, 81, has been in the political arena for 52 years. When he writes, as he did in his letter announcing he was dropping out of the race, that he has a “heartfelt appreciation” for the American people for the “faith and trust” they have placed in him for decades, he means it.

Biden is flawed, just like each and every one of us. He’s also been an honorable public servant who has looked after the country’s interests for a very long time. He’s now capped off his estimable career by passing the torch to others who can offer voters meaningful alternatives to Trump, an unhinged authoritarian and geriatric carny act who shouldn’t be trusted with the powers and responsibilities of the presidency.

Bravo.

BLOOMBERG OPINION

Harvesting the fruits of a deepening international partnership

Photo from pco.gov.ph

In April, the Philippines, the United States, and Japan have recently announced a significant partnership for the development of the Luzon Economic Corridor. The move aims to accelerate investments in critical sectors like railways; modernized ports; clean energy and semiconductor supply chains and deployments; and agribusiness, among others, bringing these high-impact projects into the future.

Unveiled during the historic trilateral summit of President Ferdinand R. Marcos, Jr. with US President Joe Biden and Japanese Prime Minister Fumio Kishida at the White House in Washington, D.C., the planned development of the Luzon Economic Corridor is the latest addition to the Partnership for Global Infrastructure and Investment (PGII) founded by the G7 countries and marks the first such initiative in the Indo-Pacific region.

This, however, was only the continuation of a deepening relationship between the three countries since the start of the Marcos administration. In 2023, the first-ever meeting of the national security advisors (NSAs) of the United States, Japan, and the Philippines took place in Tokyo, with the United States reaffirming its “ironclad alliance commitments” to both countries. All three NSAs agreed to enhanced trilateral cooperation and response capabilities since then.

The joint statement issued by Messrs. Marcos, Biden, and Kishida highlighted the importance of this collaboration, stating, “Our three nations are proud to partner on the first Partnership for Global Infrastructure and Investment corridor in the Indo-Pacific. Today, we are launching the Luzon Economic Corridor, which will support connectivity between Subic Bay, Clark, Manila, and Batangas in the Philippines.”

“The Luzon Corridor is a demonstration of our enhanced economic cooperation, focused on delivering tangible investments across multiple sectors. Japan, the Philippines, and the United States are also partnering to expand cooperation and investments in other areas of the Philippines.”

Furthering the alliance is the US International Development Finance Corp.’s intention to open a regional office in the Philippines to facilitate further investments across the country. Japan, meanwhile, through the Japan International Cooperation Agency (JICA), will continue to support connectivity in the area, including rail and road projects, as they have in the past.

Messrs. Marcos, Biden, and Kishida also emphasized the need for close coordination in dealing with “economic coercion,” aiming to promote enduring, inclusive economic growth and resilience in their countries and the broader Indo-Pacific region.

“We are pursuing economic projects that advance our shared objectives: promoting broad-based and sustainable economic growth, and investing in resilient, reliable, and diversified supply chains,” the joint statement said.

Strengthening Philippines-Japan economic and security relations

Japan has long been an ally to the Philippines particularly in economic, security, and social development through the Philippines-Japan Economic Cooperation Agreement (PJEPA), which entered into force in 2008 and acts as the cornerstone of the bilateral relationship. Notably, the PJEPA is the first and only bilateral economic treaty signed by the Philippines, a symbol of its unique relationship with Japan.

For instance, in 2021, Japan was the Philippines’ second-largest trading partner and its third-largest export market. Japan has also provided Manila with consistent development assistance like concessional loans to finance important infrastructure and capacity-building projects, social safety-net programs, education, agriculture, and science and technology support.

This partnership was enhanced even further with the establishment of the Japan-Philippines High-Level Joint Committee on Infrastructure Development and Economic Cooperation in 2017, and again with both countries agreeing to accelerate negotiations on a Reciprocal Access Agreement (RAA) that facilitates procedures and sets guidelines for military forces visiting partner countries for training and joint exercises.

Part of the security cooperation between the two nations include humanitarian assistance and disaster relief. Historically, Japan had been instrumental in the recovery efforts during natural disasters like Super-Typhoon Yolanda (international name: Haiyan) in 2014.

Back then, Japan had sent its largest international emergency relief team to the Philippines, comprising of approximately 1,200 personnel) alongside Self-Defense Force destroyers, transport ships, supply ships, helicopters, and transport aircraft. This cooperation eventually led to the signing of “Terms of Reference” for HA/DR cooperation in February 2023.

Japan has also played a crucial role in peace-building and social-sector development in Mindanao through initiatives like the Japan-Bangsamoro Initiatives for Reconstruction and Development (J-BIRD). Launched in 2006, J-BIRD is a comprehensive initiative aimed at socioeconomic development in Mindanao. Japan’s commitment to providing aid even during times of heightened tension has earned the trust of various actors, including armed rebel organizations.

An example is in 2008 when Western aid organizations withdrew their employees due to the deadlocked peace process with rebel forces at the time, leading to a deterioration in security.

On the other hand, JICA stayed and expanded its staff, winning the confidence of MILF locally. This is one of the reasons that led to the decision to hold the first meeting between the President of the Philippines and the leaders of MILF in Japan in 2014.

Last year, President Marcos and Prime Minister Kishida also announced several economic agreements, including Tokyo’s pledge to provide ¥600 billion in development aid and private-sector investment to the Philippines through the end of fiscal 2023, with the sum aimed at supporting projects that would help the Philippines attain Upper Middle Income Country status by 2025.

Included in the agreements is a loan provided by Japan worth ¥377 billion for the development of the Philippines’ North-South Commuter Railway and its extension. Mr. Kishida also reiterated that they are ready to grant an additional loan for further maintenance and rehabilitation of the Metro Rail Transit Line 3.

Cooperation in agriculture, cybersecurity and people-to-people exchanges are also included in the deals, as well as the promotion of health care-related projects.

As these efforts continue to progress, the partnership between the Philippines and Japan is poised to become even more robust, contributing to the overall stability and prosperity of the Indo-Pacific region. It is an optimistic sign for both countries as the strengthening collaboration of the two nations opens up opportunities that could bear fruit even in the far future. — Bjorn Biel M. Beltran

GoTyme Bank expects deposits to reach P20B

GOTYME BANK expects its deposits to hit over P20 billion by yearend as it plans to launch more loan products and add more kiosks, its top official said.

“We’ll end up with over P20 billion this year,” GoTyme Bank President and Chief Executive Officer Nathaniel D. Clarke told reporters last week.

The Gokongwei-led digital bank last week said it booked P17.3 billion in deposits to date as its customers reached 3.7 million amid an increase in monthly transactions.

Mr. Clarke said Gotyme Bank is looking at launching a quick-response or QR code-based credit card early next year.

He said they will not be launching a physical credit card yet as this kind of product takes more time to develop due to its complexity and with the current credit card interest rate cap currently set at 3%.

Meanwhile, Mr. Clarke said their loan product that was launched through a pilot last year in partnership with early wage access provider PayMongo has been performing “above expectations,” with credit losses being manageable.

The product will exit the pilot phase soon, he said, which will allow GoTyme Bank to approve more loans to merchants. The bank will add bigger partner merchants this semester, he added.

GoTyme Bank is also looking to expand its loan book through new product offerings following their acquisition of SAVii in May, Mr. Clarke said.

SAVii, previously known as Uploan, is a financial technology salary lender with a loan book of over P3 billion.

“I think the bigger growth from a lending perspective though in the next year will come through our shareholders’ acquisition of SAVii,” Mr. Clarke said. “We’re going to be partnering with them to expand salary lending but also expand our payroll account offering because they have about 150 corporates and they serve over half-a-million employees.”

GoTyme Bank is also awaiting regulatory approval to roll out cryptocurrency and equity investment features on its app, he added.

“We have both local and international partners for crypto and shares. We’ve actually already developed the product. We’re just waiting for regulatory approval, so I can’t give a timeline because it’s out of our hands now. It’s ready to go,” Mr. Clarke said.

GoTyme Co-CEO and Chief Commercial Officer Albert Raymund O. Tinio added that the digital bank is looking to roll out 100 more kiosks by the end of the year.

“It’s an expansion outside of supermarket and retail. What we’ve seen is that we’re getting very good traction in office buildings and outside of the Gokongwei ecosystem as well. We’re seeing a lot of excitement and traction in new customers in large office buildings that house business process outsourcing (BPO) workers,” Mr. Clarke added.

The digital bank partnered with Accenture last year and with Concentrix last month, and is set to announce another BPO partnership soon, he said. — AMCS

Manila prime office cost down 3.2% in Q2, 3rd cheapest in APAC

ANDREY ANDREYEV-UNSPLASH

MANILA, which remained the third-cheapest prime office market among 23 cities in the Asia-Pacific (APAC) region in the second quarter (Q2), saw a 3.2% decline in occupancy cost compared with the same period last year, according to real estate consultancy Knight Frank.

The average prime office cost in Manila was $27.93 per square foot for the second quarter, down from $28.28 per square foot in the previous quarter, data from the latest Knight Frank Asia-Pacific Office Markets report showed.

Manila’s decline of 3.2% slightly exceeded the regional average decrease of 3.1% during the period.

Knight Frank: Manila 3<sup>rd</sup> cheapest prime office cost in Asia Pacific in Q2

“The average rents fell in Manila as downward adjustments from older prime projects outweighed rental increases for the period,” the firm said.

Knight Frank noted that Manila saw a vacancy rate of 11% in the second quarter and is expected to experience further rent declines in its 12-month outlook.

Kuala Lumpur ($17.99) was the cheapest, followed by Jakarta ($22.99). Rounding out the bottom six were Phnom Penh ($34.13), Guangzhou ($34.38), and Bengaluru ($36.35). The most expensive were Hong Kong ($154.76), Singapore ($118.93), and Sydney ($97.42).

Meanwhile, APAC’s vacancy rate stabilized at 14.8%, halting an upward trend that had been ongoing since the third quarter of 2022.

The consultancy firm said that Brisbane recorded the highest year-on-year rental growth rate at 8.1%, while Beijing saw the largest drop, falling 11.1% in the second quarter of 2024.

In APAC, prime rents continued to decline, reflecting ongoing challenges impacting the occupier market.

“The downward trend has persisted for two consecutive years. Mainland Chinese cities remain the primary drivers of this decline, with rents there decreasing by 10.8% year on year,” the consultancy firm said.

The firm anticipates that APAC’s prime office sector will remain tenant-favorable in 2024.

“The current trend reflects a business cycle downturn. Major office sectors, such as finance and technology, continue to downsize amid ongoing uncertainty in the business environment,” said Tim Armstrong, global head of occupier strategy and solutions at Knight Frank.

“This selective approach will likely keep demand for office spaces restrained.”

Mr. Armstrong added that lease renewals will remain popular, while companies may also consider consolidating their office spaces due to falling rents, prompting a flight-to-quality move.

The report said that the APAC Grade A office inventory stands at 189 million square meters (sq.m.), with 11.3 million sq.m. of new supply expected in 2024. Knight Frank anticipates a 6% increase in office inventory this year.

“No doubt, occupiers face a slate of competing factors, balancing new office culture and ESG objectives against business considerations,” Mr. Armstrong said.

He noted that despite reduced capital expenditure, occupiers are encouraged to stay aware of the region’s ample supply pipeline to explore quality options and capitalize on current conditions by securing favorable rates.

“Given that new supply is expected to tighten due to high interest rates impacting future construction,” he added. — A.R.A. Inosante

Apple in talks to license more films from Hollywood

FREEPIK/WIKIMEDIA

APPLE, INC. is having discussions about licensing more films from major Hollywood studios as it looks to bolster its Apple TV+ streaming service, people familiar with the matter said.

The iPhone maker has spoken to several of the largest studios about acquiring more programming from their libraries to offer customers both in the US and abroad, said the people, who asked not to be identified discussing private negotiations. A representative for Apple didn’t respond to a request for comment.

While most other streaming services have offered customers a mix of splashy new series and deep libraries of old TV shows and movies, Apple has built its paid streaming service almost entirely around original productions. It has scored a few breakout hits, such as the soccer comedy Ted Lasso and the TV news drama The Morning Show, and last week received 72 Emmy nominations, the most in its history.

But the big hits have been few and far between and many of its original films, such this year’s spy action picture, Argylle, have been duds. Just 11% of US households use Apple TV+, compared with 55% for Netflix, Inc., according to the research firm MoffettNathanson LLC.

Customers are far less likely to cancel a service that they watch more. Netflix, which offers thousands of titles, suffers the lowest rate of cancellation of major streaming video services, according to Antenna, while Apple TV+ is on the higher end.

Apple licensed about 50 movies from Hollywood studios earlier this year in the US, adding classics such as Mean Girls and Titanic. That experiment went well enough that Apple has gone back to many studios for more, either to license those titles internationally or to add more.

Hollywood studios have been waiting for Apple to add more older programs. As Wall Street’s focus has shifted from subscriber growth to profitability, many entertainment giants have embraced such sales as a way to boost their revenue. Companies including Warner Bros. Discovery, Inc. and Walt Disney Co. have become more open to licensing programs to competitors. — Bloomberg

NKS Solar seeks ERC approval for connection facility

NKS Solar One, Inc. is seeking the approval of the Energy Regulatory Commission (ERC) to develop and operate a dedicated point-to-point limited transmission facility to connect its floating solar photovoltaic power plant to the Luzon grid.

NKS Solar One, a joint venture between Blueleaf Energy Philippines and NKS Energy Utilities, Inc., aims to construct a dedicated facility project with an estimated cost of P1.62 billion, the company said in its filing with the ERC.

However, the amount may vary depending on the final cost from the engineering, procurement, and construction contractor.

The company will build a floating solar power project (FSPP) with a capacity of 250 megawatt-peak (MWp), situated in Lake Caliraya and Lake Lumot in Laguna, NKS Solar One said in its filing to the ERC.

It is expected to produce an annual energy output of 350 gigawatt-hours and can provide electricity to up to 200,000 households.

The construction of the floating solar project consists of two phases.

Phase One involves the 162-MWp Caliraya FSPP, while Phase Two focuses on the 88-MWp Lumot FSPP.

The project is targeted for construction to begin in the fourth quarter and is scheduled to come online by the first quarter of 2026.

The dedicated facility project is expected to be completed by January 2026.

NKS Solar One is proposing to connect the Caliraya FSPP to the 230-kilovolt (kV) Lumban Substation of the National Grid Corp. of the Philippines via a six-kilometer double-circuit 230-kV transmission line.

The Lumot FSPP will be connected to the NKS Caliraya Substation via a six-kilometer single-circuit 230-kV transmission line.

NKS said that the dedicated facility project will be exclusively funded by the company and will not impact any regulated charges. 

The connection point modification at the 230 kV NGCP Lumban Substation will be subject to reimbursement by the grid operator, it said.

“Needless to say, the construction of the dedicated facility project is a prerequisite for the testing and commissioning, and ultimately, the commercial operations of the NKS Solar One Project,” the company said. — Sheldeen Joy Talavera

On food inflation, agriculture spending, and last year’s SONA

Yesterday, President Ferdinand R. Marcos, Jr. gave his third State of the Nation Address (SONA) in Congress. As this piece was submitted several hours before the SONA, I will discuss it in the next two columns.

In SONA 2023, the President said that “the biggest problem that we encountered was inflation.” He discussed many measures taken to help address it, from monetary to energy to agriculture policies.

Here are some of the trade and agriculture measures, with numbers, that the President mentioned in his 2023 SONA: 7,000+ KADIWA stores rolled out nationwide; giving away 28,000+ modern agricultural machines; giving away 50+ million sacks of rice seeds, one million sacks of corn seeds, and various vegetable seeds; and 100,000+ coconut saplings planted in nearly 10,000 hectares. All seeds and saplings were modern, hybrid, high quality varieties.

There were also fuel and fertilizer discount vouchers; fertilizer donations from China; 600+ kilometers of additional farm to market roads (FMRs) built; irrigation for 49,000+ hectares of farms; almost 4,000 additional fabrication labs, production and cold storage facilities; and 24,000+ multi-species hatcheries built for fishery production and expansion.

The government also gave away 70,000+ land titles to agrarian reform beneficiaries (ARBs), the release of the new Agrarian Emancipation Act, and some P57 billion in ARB debt was waived.

Those are huge measures by the government to address high inflation. The question is, after a year, have they succeeded in bringing down overall inflation, and particularly food inflation?

Comparing the first halves of 2023 and 2024, it seems that the answer is “yes.” In 2023, the Philippines had the highest overall inflation rate among the major Asian economies, and the highest food inflation. Then the overall inflation declined from 7.2% in 2023 to 3.6% in 2024; food inflation also declined, from 8.8% in 2023 to 5.3% in 2024. “Base effect” has a contributing factor here aside from the government’s considerable agriculture freebies for farmers.

But one emerging trend in many countries, including the Philippines, is that food inflation is higher than overall inflation and that is bad news because it affects the poor more than the middle and upper classes. In 2023-2024, our food inflation rates were higher by 1.6 and 1.7 percentage points than overall inflation.

So, if we compare our situation with, say, Vietnam, we see that their overall inflation rate of 4.1% this year is higher than the Philippines’ 3.6%, but their food inflation is lower by -0.1 percentage point (see the table).

The three largest rice exporters in the world are India, Thailand, and Vietnam. And the three top rice importers in the world are the Philippines, China, and Indonesia (according to statista). This year, India and Indonesia have the highest food inflation rates at 8.7% and 6.3% respectively, while China and Thailand have had contractions of -2.7% and -0.1% respectively in food inflation.

The reduction in the tariff on imported rice will obviously have a positive effect on reducing domestic rice prices, so it was a good move by the economic team. Tax revenues will decline but this will be more than compensated for by the decline in inflation.

I think many of the freebies given away by the government to farmers cooperatives and similar organizations did not translate to lower prices for consumers.

I observed that the government gave away big tractors that cost between P1.5-2 million each to certain farmer cooperatives in rice farming villages and barangays in western Pangasinan. Since the cooperatives had zero capex — they got the tractors for free — they only have to shoulder operating expenses like diesel and the regular maintenance of the machines. Thus, the cooperatives’ tractor rental rate should be lower than private tractor rental. So, if the prevailing private tractor rental rate is P3,200/hectare, the cooperatives’ rental rate should be lower, say, P2,500/hectare. Then the farmers will have larger revenues and savings and can cut the price of their harvest which will benefit the consumers and help reduce food inflation.

From what I heard and observed in those rice farming villages, the cooperatives’ officers (some of whom are non-farmers but rather the neighbors and friends of leaders) would meet and eat in fast food chains whereas before they would meet in public places in the barrio. The tractors’ revenues are not plowed back into the maintenance of the machines but are instead spent somewhere else. Soon the cooperatives’ tractors would be in bad condition.

I propose that the revenues from the tariffs on imported rice and agriculture should be used to either build more, wider and longer, cemented rural roads; or to reduce public debt and reduce the annual interest payment. This is instead of the government buying those expensive machines that benefit coop officers and their friends more than the average farmer and consumer.

 

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com

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