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Delayed easing to dampen growth — BSP chief

People shop for school supplies and uniforms in Divisoria, Manila, July 6, 2024. — PHILIPPINE STAR/RYAN BALDEMOR

By Luisa Maria Jacinta C. Jocson, Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) said that it should not “wait too long” to begin policy easing as this would dampen economic growth, its top official said.

BSP Governor Eli M. Remolona, Jr. said on Monday that the central bank is trying to “strike a balance” between supply and demand to ensure stable prices.

“At this point, in the last mile, we’re almost there, but we have to be more careful than before. Because there’s a risk we might overdo it. There’s a risk we might cause unnecessary loss of output, and we want to minimize that risk,” he said at the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum.

The BSP has kept policy rates at a 17-year high of 6.5% since October last year. It has raised rates by a cumulative 450 basis points (bps) from May 2022 to October 2023 in order to tame inflation.

The last time the BSP cut rates was in November 2020, when it delivered a 25-bp cut, bringing the key rate to 2% to support economic recovery amid the COVID-19 pandemic.

“When I said that we have to be cautious or we have to be careful, that basically means we have to not wait too long for easing because the longer we wait for easing, the more likely it is that we will cause a loss of output, which we don’t want,”  Mr. Remolona said.

“That’s basically where we stand. We’re not going to raise (rates).”

Gross domestic product (GDP) grew by a weaker-than-expected 5.7% in the first quarter, slower than 6.4% a year ago.

To meet the government’s 6-8% growth target, the GDP expansion should average 6.1% in the next three quarters.

Preliminary second-quarter GDP data will be released on Aug. 8, ahead of the Monetary Board’s next policy review on Aug. 15.

The BSP chief said they are still “on track towards reducing rates” despite risks to the inflation outlook. He earlier said that the central bank can cut by 25 bps in the third quarter, and by another 25 bps in the fourth quarter.

“The 3.7% (inflation) is better than expected, so there’s a bit more scope for easing, possibly in August,” he said.

Headline inflation eased to 3.7% in June from 3.9% in May. This also marked the seventh straight month that inflation settled within the BSP’s 2-4% target range.

Mr. Remolona said recent measures such as Executive Order (EO) No. 62 would help tame prices.

“The nonmonetary measures that the government has put in place, especially EO No. 62, are so helpful, because that will help us get to where we want to go, which is stable prices.”

The executive order, signed by President Ferdinand R. Marcos, Jr. last month, slashed tariffs on rice imports to 15% from 35% previously, until 2028. It is largely expected to bring down retail rice prices and overall inflation.

Mr. Remolona also reiterated that the BSP does not need to wait for the Fed before it begins cutting rates.

“I think the Fed is not the most important data among the numbers that we look at. It affects our exchange rate, as you saw, the exchange rate affects inflation, so that’s factored in, but it’s not a decisive factor,” he said.

PESO WEAKNESS
Meanwhile, Mr. Remolona said that the BSP monitors the peso to ensure it does not “depreciate too sharply,” citing its impact on trade.

“We don’t want too much volatility in the peso. We want the peso to move based on fundamentals. When there’s too much volatility, it’s bad for trade. It’s bad for both imports and exports. So, we want to make the movement of the peso smoother,” he said.

The peso has been trading at the P58-per-dollar range since it first sank to that level in May.

Mr. Remolona again said that the peso’s performance is a case of a “strong dollar” due to safe-haven demand.

“The dollar has become the single most important safe-haven currency. Whenever you have tensions around the world, the dollar is stronger. In fact, even if the uncertainty is in the US, it makes the dollar stronger,” he said, adding that other currencies have also depreciated against the US dollar.

He said that the US Federal Reserve’s latest signals have also impacted recent currency movements.

“The Fed has been saying it’s going to be higher for longer and that has weakened all the other currencies against the US dollar,” he said.

The Fed at its most recent policy meeting in June left interest rates unchanged at 5.25%-to-5.5%, and fresh projections from policy makers showed them dialing back expectations for rate cuts this year from three to just one, Reuters reported.

Financial markets and some policy makers, however, still expect the Fed to deliver two cuts of a quarter-point each by yearend.

RRR CUT
Meanwhile, the BSP governor also reiterated that they plan to lower the reserve requirement ratio (RRR), although the timing has yet to be decided.

“We have one of the highest reserve requirements in the region. It doesn’t make sense to me that we should be more strict. In fact, the ideal number is zero. It’s a matter of timing,” he said.

The BSP has already brought down the RRR for big banks to a single-digit level last year from a high of 20% in 2018.

In June 2023, the BSP slashed the ratio for big banks and nonbank financial institutions with quasi-banking functions by 250 bps to 9.5%.

“We don’t want to bring it down while we’re still at kind of a somewhat tight monetary policy,” he added.

Mr. Remolona earlier said he is seeking to bring down the RRR to as low as 5%.

Government considering Samurai, dollar bonds this year

Banknotes of Japanese yen and US dollar are seen in this illustration picture taken on Sept. 23, 2022. — REUTERS

THE GOVERNMENT is looking to issue Japanese yen-denominated and US dollar-denominated bonds within the year, the Finance chief said.

“I expect both the dollar and possibly Samurai bonds this year. Both are being considered,” Finance Secretary Ralph G. Recto told reporters on the sidelines of the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum.

The government plans to borrow $5 billion this year, of which $2 billion was raised from the issuance of global bonds last May. This leaves $3 billion that has yet to be raised.

“On the Samurai bonds, the first mandate of the Department of Finance and the Treasury is to ensure that if we have to borrow, we borrow at the lowest rate possible,” he said during the forum.

“Yes, we are considering Samurai bonds, but we’re timing the market, taking a look at the best time to do it, if at all we have to do it.”

The Philippines last issued Samurai bonds in April 2022, raising ¥70.1 billion.

Mr. Recto said the timing of the bond issuance will also depend on the US Federal Reserve’s easing path.

“It depends on the Fed or global markets. Once they start reducing the rates, then that will be an opportunity to borrow,” he added.

The Fed has earlier signaled it may push back the start of its easing cycle to December.

The National Government’s outstanding debt rose to a fresh high of P15.35 trillion as of end-May, with external debt accounting for 32% or P4.9 trillion of the total.

REVENUE COLLECTIONS
Meanwhile, Mr. Recto said revenue collections jumped to P2.13 trillion in the first half of the year, 14.5% higher than P1.86 trillion collected in the same period last year.

“With 50% of the revenue target already achieved in the first semester, we are on track to reach the P4.27-trillion revenue program for 2024,” the DoF said in a separate statement.

Preliminary data from the department showed that tax revenues rose by 8.8% to P1.81 trillion as of end-June from P1.67 trillion a year ago.

Bureau of Internal Revenue collections rose by 10.2% to P1.34 trillion in the six-month period. This was already 44% of the BIR’s P3.05-trillion target for the year.

In a separate statement, the Bureau of Customs said collections jumped by 5.22% to P456.04 billion in the January-to-June period.

It also surpassed its P442.62-billion target for the six-month period by 3.03%, the agency said.

The DoF said nontax revenues in the first half expanded by 64.5% to P316.52 billion.

While the DoF said it is not looking to introduce new taxes this year, there are six measures pending in Congress that are expected to generate P42 billion in annual revenues.

These include the Package 4 of Comprehensive Tax Reform Program, which includes an excise tax on pickup trucks, the value-added tax on digital service providers, excise tax on single-use plastics, the mining fiscal regime, the motor vehicle road user’s change, and amendments to the Corporate Recovery and Tax Incentives for Enterprises law.

Tax collections are expected to increase by an average of 11.8% yearly due to digitalization and plugging of leakages in the tax system, Mr. Recto said.

‘DISCONTINUE POGO’
Meanwhile, Mr. Recto said he is willing to recommend the closure of all Philippine offshore gaming operations to President Ferdinand R. Marcos, Jr.

“If they were not doing anything hanky panky, and they’re paying taxes, fine with me. But I think there are many issues surrounding the POGO (Philippine Offshore Gaming Operators) industry,” Mr. Recto told reporters.

“Because of that, I am willing to recommend to the President to discontinue POGOs,” he said in mixed English and Filipino.

The government could lose P20 billion in annual revenues if it decides to ban POGOs, the Philippine Amusement and Gaming Corp. said earlier. — B.M.D.Cruz

PHL told to boost manufacturing jobs to achieve high-income growth

The Philippine economy is likely to grow by 6-7% this year. — PHILIPPINE STAR/BALDEMOR

By Kyle Aristophere T. Atienza, Reporter

ECONOMISTS flagged the declining employment share of the Philippine manufacturing sector, which they said is key to achieving a high-income status and meeting other development goals including bringing down poverty incidence to single digits at a faster rate.

A De La Salle University (DLSU) School of Economics report on Monday showed that most targets under the Philippines’ development plan for 2023 to 2028 will be met later than expected, and noted that the country would struggle to achieve high growth in the long-run in the absence of an industrial policy that has helped its Southeast Asian neighbors’ manufacturing industries climb the value chain.

Most Filipino workers are employed in sectors of “very low productivity,” the report said, adding the manufacturing sector’s employment share is only 8% and is expected to further decrease to 7% by 2030.

“Historically, countries that have achieved high-income status obtained employment shares in manufacturing from about 20-25%, sometimes even higher,” Mariel Monica Sauler, an economics professor at DLSU, said at the report’s launch in Makati City. “Our current manufacturing employment share is just 8%.”

For the Philippines to become an economic powerhouse, it needs to restructure its economy by taking workers out of the agriculture sector through mechanization and by significantly increasing the employment share of its manufacturing base, said Jesus Felipe, director of the Angelo King Institute for Economic and Business Studies at DLSU.

“We desperately need firms with high organizational capabilities and highly productive, that manufacture and export complex products, and that compete in the world economy,” he said during the event.

Mr. Felipe said the declining number of Filipinos leaving the country for job opportunities abroad — a phenomenon linked to an increase in wage rates locally — provides an opportunity for the country to expand its manufacturing base.

According to the report, the number of overseas Filipino workers (OFWs) will further decline to 1.91 million in 2025 from 1.97 million in 2023.

“We think that our wage rates are going to increase. Therefore, the incentive to leave the country declines,” Mr. Felipe said.

Even as the agriculture sector’s employment share has been on a decline, Ms. Sauler said the share of construction and transport and storage sectors, which have “low productivity” and “low wages,” have increased.

This means there are not enough manufacturing jobs locally, she added.

“Our ASEAN (Association of Southeast Asian Nations) neighbors seem to have always understood the importance of the manufacturing sector better than us.”

The economists said the government should shift its focus away from the agriculture sector, which “needs a solution but is not the solution” to the Philippines’ growth woes.

Achieving an upper middle-income status next year would not be possible if the Philippines’ economic expansion would be slower than expected, they said.

BELOW TARGETS
The DLSU report said the Philippine economy will likely hit 5.5-5.6% growth this year, lower than the government’s 6-7% target.

Under the Philippine Development Plan (PDP) 2023-2028, gross domestic product (GDP) annual growth target is set at 6.5-8% until 2028. However, the DLSU report said GDP growth is likely to be “below target until 2028.”

The Philippines is projected to hit its goal of having a gross national income (GNI) per capita of $6,044-$6,571 by 2029, instead of 2028.

According to the World Bank’s latest income classification data, the Philippines remained a lower-middle income country with a GNI per capita of $4,230 in 2023. To become an upper middle-income country, the Philippines now needs to have GNI per capita of $4,516 to $14,005.

Ms. Sauler said that while the Philippines could reach an upper middle-income status as early as this year, its real GDP will grow below the PDP 2023-2028 target rates.

“If we want to expedite development, the structure of the economy will need to change in the direction of industrialization,” she said. “Repeating the industrialization experience of our East Asian neighbors seems impossible but there is no other option.”

Mr. Felipe said the country needs an “industrial policy” centered on the creation of competitive firms that make high-quality products and jobs that require high skills.

While the number of middle-class Filipinos was increasing, Mr. Felipe said a huge chunk of them or 80% of Filipino workers were earning P15,000 per month at most.

“Only 15% of Filipino workers earned above P15,000. This is the reality of the country. This is the distribution of the structural economy from the point of view of output and from the point of view of employment,” he said.

The manufacturing sector accounted for 18% of the Philippine economy last year, while its employment share was only at 7.3%, he noted.

Mr. Felipe said Asian countries that have pursued the path of industrialization have overtaken the Philippines in terms of GNI per capita.

The GNI per capita of the Philippines is still $4,000, which means the country is “among the poorest countries in the world,” he said.

“All our neighbors have systematically, automatically caught up with us and overtaken us,” he said, citing Vietnam, whose GNI per capita was about eight times lower than that of the Philippines in the 1990s.

“Indonesia overtook the Philippines in about 2008 or 2009,” he added. “The same thing happened with China, and the same thing happened with Thailand. Malaysia has always been richer than the Philippines.”

‘UNNECESSARY’
At the same time, the DLSU report estimated the Philippines will only achieve its PDP target of a 3% deficit-to-GDP ratio by 2031, and the debt-to-GDP ratio of 48-53% by 2032.

Pedro Pascual, a member of the economic team of the Angelo King Institute at De La Salle University, said the Marcos administration’s fiscal consolidation plan is both “unnecessary” and ill-suited” in the current situation, which is marked by low GDP growth.

The government needs to run a larger budget deficit to build infrastructure needed to revamp its economy, he said.

Mr. Pascual noted that household spending remains subdued, as seen in the declining number of Filipinos traveling abroad for leisure.

Real wages had not fully recovered in 2023 to the pre-pandemic level due partly to inflation, he said. “They will in 2024 to 2025.”

But inflation should not be a major economic concern for the country since it’s mainly driven by rice prices, Mr. Pascual said, adding that it’s up to the government how it will lessen the country’s dependence on or find alternatives for the commodity.

Rice inflation eased for the straight month in June to 22.5% from 23% a month earlier.

“Overambitious disinflation can create a problem,” he added.

The DLSU report also projected that poverty incidence will likely go down to 8.8-9% only by 2035, instead of 2028.

The unemployment rate will settle within the 4-5% target range by 2028, the report showed.

SSI Group, Inc. to hold virtual annual meeting of stockholders on July 30

 

 

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PHL may exit FATF ‘gray list’ by 2025, BSP says

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By Luisa Maria Jacinta C. Jocson, Reporter

THE PHILIPPINES is unlikely to exit the Financial Action Task Force’s (FATF) “gray list” by October this year, as earlier targeted, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said.

Mr. Remolona said at the Economic Journalists Association of the Philippines-San Miguel Corp. economic forum held on Monday that the BSP is eyeing to exit the FATF’s list of jurisdictions under increased monitoring for “dirty money” risks by January 2025.

“In October, they decide whether we have fulfilled the 18 (action items). Between October and January, they check. January is the exit date,” he said.

“We’ve made very big progress… We’ve officially fulfilled 15 of the 18 (items). These have been classified as largely addressed, and we still have three more action items to work on,” Mr. Remolona added.

President Ferdinand R. Marcos, Jr. earlier this year directed all concerned agencies to work on efforts to exit the list by October.

The FATF in its June update kept the Philippines in its gray list for a third straight year or since June 2021.

It said the Philippines has made “significant” steps in improving its anti-money laundering and counter financing of terrorism (AML/CFT) regime but still needs to address remaining deficiencies.

The country has acted on 15 out of 18 items recommended by the FATF. The remaining three action items include “demonstrating that supervisors are using AML/CFT controls to mitigate risks associated with casino junkets; applying cross-border measures to all main sea/airports including detection of false declarations of currency and confiscation action in line with risk; and demonstrating an increase in the prosecution of TF (terrorism financing) cases in line with risk,” the FATF said.

“We don’t get out of the gray list by October. Once we’ve been told we have largely addressed those three remaining items, there’s an exit process that then ensues,” Mr. Remolona said.

“If that works out, you have to come there in January to check whether what we said is true. If that works out, then we will exit in January,” he said.

Mr. Remolona added that the Philippine Amusement and Gaming Corp. is also working on tightening the monitoring of casino junkets.

Data from Moody’s showed that from 2018 to 2023, the Philippines was among the top five countries in Southeast Asia with money laundering activity events added over the five-year period.

The number of money laundering events added in the Philippines increased by 45% from 2022 to 2023, it said.

In 2002, the FATF blacklisted the Philippines for having no legal anti-money laundering framework. It was removed from the blacklist a year later after the passage of the Anti-Money Laundering Act.

The FATF Plenary, the intergovernmental organization’s decision-making body, usually meets in February, June and October.

DD concludes P10-B bond offering ahead of schedule, plans second tranche

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By Sheldeen Joy Talavera, Reporter

LISTED property developer DoubleDragon Corp. (DD) on Monday said its retail bond offering, aimed at raising up to P10 billion, achieved full subscription five days ahead of schedule.

DoubleDragon is planning to launch another tranche, which will be facilitated “very soon,” the company said in a statement to the stock exchange.

The retail bond offering concluded on July 5, ahead of its original end date of July 10, due to oversubscription.

“We seek the understanding of the investing public for cutting short the DD retail bond offer period due to oversubscription way ahead,” the company said.

The retail bond offering represents the initial segment of DoubleDragon’s shelf-registered debt securities program, totaling up to P10 billion. It includes a base amount of up to P3 billion, with an oversubscription option of up to P3 billion.

“DoubleDragon has not issued any peso retail bond for over five years, and DD is extremely grateful to the unwavering support of the investing public on its return to the retail bond market,” the company said.

DoubleDragon engaged RCBC Capital Corp., Unicapital, Inc., and the Development Bank of the Philippines (DBP) as joint lead underwriters, joint issue managers, and bookrunners for the issuance.

Juan Paolo E. Colet, managing director at Chinabank Capital Corp., said that there is a rising interest among fixed-income investors to secure high interest rates amid expectations of monetary easing.

“The strong demand also reflects investors’ confidence in DoubleDragon’s prospects and, more broadly, the property sector. It likewise helped that the DoubleDragon bonds received the highest credit rating from PhilRatings, thereby reassuring investors of the issuer’s ability to meet its payment obligations,” he said in a Viber message.

“The next issuance might mirror the terms of the current issuance to make it equally appealing, although there is a chance the coupon might be lower since the relevant benchmark rates are starting to decline,” he added.

Seedbox Securities, Inc. Equity Sales Trader Moses Frando warned investors to consider key risks such as economic fluctuations impacting financing, uncertainties in DoubleDragon’s expansion projects like CityMalls and CentralHub, and leasing risks such as tenant issues and regulatory changes.

“Evaluating these risks carefully is crucial before investing in DoubleDragon’s bonds,” Mr. Frando said in a social media message.

At the local bourse on Monday, shares in the company went up by 1.18% to close at P12.04 apiece.

Gov’t fully awards Treasury bill offer even as yields inch higher

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THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday as all tenors’ average rates remained below secondary market levels despite rising slightly from the previous week.

The Bureau of the Treasury (BTr) raised P20 billion as planned from the T-bills it offered on Monday as total bids reached P43.185 billion, or more than twice the amount placed on the auction block.

Broken down, the BTr borrowed P6.5 billion as programmed from the 91-day T-bills as tenders for the tenor reached P14.18 billion. The three-month paper was quoted at an average rate of 5.698%, 1.2 basis points (bps) above the 5.686% seen last week. Accepted rates ranged from 5.65% to 5.724%.

The government likewise made a full P6.5-billion award of the 182-day securities, with bids reaching P15.56 billion. The average rate for the six-month T-bill stood at 5.968%, inching up by 0.9 bp from the 5.959% fetched last week, with accepted rates at 5.92% to 5.995%.

Lastly, the Treasury raised the planned P7 billion via the 364-day debt papers as demand for the tenor totaled P13.445 billion. The average rate of the one-year debt increased by 2.3 bps to 6.073% from the 6.05% quoted last week. Accepted yields were from 6.03% to 6.095%.

At the secondary market before the auction, the 91-, 182-, and 364-day T-bills were quoted at 5.7152%, 5.9669%, and 6.0848%, respectively, based on PHP Bloomberg Valuation (BVAL) Service Reference Rates data provided by the Treasury.

“Treasury bill average auction yields were again slightly higher week-on-week, but still slightly lower and already closer to the comparable short-term PHP BVAL yields, as consistent signals on possible local policy rate cut of 25 bps as early as August and possible 50 bps in rate cuts in 2024 led to some greater investor demand for longer-dated bonds and other fixed-income securities to lock in still relatively higher interest rates before the rate cuts happen,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Secondary market yields mostly went down last week as slower-than-expected June headline inflation strengthened the case for a Bangko Sentral ng Pilipinas (BSP) rate cut as early as August.

Philippine headline inflation rose 3.7% year on year in June, easing from 3.9% in May and 5.4% in the same month a year ago. This was below the 3.9% median estimate in a BusinessWorld poll of 14 analysts.

The June consumer price index (CPI) 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 CPI averaged 3.5%, slightly faster than the central bank’s 3.3% full-year forecast.

The BSP last month kept its policy rate at a 17-year high of 6.5% for a sixth straight meeting.

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

The BSP may slash borrowing costs by 25 bps in the third quarter and by another 25 bps in the fourth quarter, he added.

On Friday, Mr. Remolona said the central bank may kick off its easing cycle by next month even if inflation exceeds the BSP’s 2-4% goal anew in July.

The central bank earlier said the CPI could pick up and overshoot their annual target from May to July amid a low base, but inflation remained below 4% in May and June.

“The awarded T-bill rates moved higher in anticipation ahead of US Federal Reserve Chair Jerome H. Powell’s US congressional testimony this week,” a trader added in an e-mail.

Mr. Powell is scheduled to deliver his semiannual monetary policy report to the US Congress on July 9-10.

On Tuesday, the BTr will offer P30 billion in reissued 20-year Treasury bonds (T-bonds) with a remaining life of seven years and nine days.

The Treasury is targeting to raise P215 billion from the domestic market this month, or P100 billion from 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

Meralco sees generation charge hike for July

MERALCO.COM.PH

MANILA Electric Co. (Meralco) is anticipating an increase in the generation charge this month as it begins to collect the previously deferred estimated payment of P0.77 per kilowatt-hour (kWh).

“We may expect strong pressures for the generation charge to increase this July,” Meralco Vice-President and Head of Utility Economics Lawrence S. Fernandez said in a statement on Monday.

This follows a reduction in June due to an Energy Regulatory Commission (ERC) directive, with charges from the Wholesale Electricity Spot Market (WESM) expected to normalize.

In June, Meralco reduced its rate to P9.4516 per kWh from P11.4139 per kWh in May, reversing an earlier announced hike.

The generation charge decreased by P1.8308 per kWh, contrary to the previously announced increase of P0.3466 per kWh.

Previously, the ERC mandated distribution utilities to stagger the collection of charges related to WESM purchases over a four-month period starting from June to September.

Meralco, along with Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co., and South Premiere Power Corp., deferred the collection of P500 million in generation costs last month to mitigate the impact of higher pass-through charges.

This deferred amount will be recovered from customers over the July-to-September billing cycle.

In addition to the normalization of WESM charges, there will be an impact from the amortization of deferred charges, estimated at 77 centavos per kWh, Mr. Fernandez said.

He noted that WESM charges were affected by red alerts on the Luzon grid early in the June supply month, but expects this impact to be mitigated by reduced demand during the rainy season.

In June, the average WESM price system-wide declined by 25.2% to P6.15 per kWh due to decreased demand, according to the Independent Electricity Market Operator of the Philippines.

Meralco’s majority owner, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

BDO looks to raise at least P5B from sustainability bond issue

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BDO UNIBANK, Inc. is looking to raise at least P5 billion from the sale of 1.5-year peso-denominated ASEAN Sustainability Bonds, it said on Monday.

Proceeds from the notes will be used to finance or refinance eligible assets under the bank’s Sustainable Finance Framework and diversify its funding sources, BDO said in a disclosure to the stock exchange.

This marks its third peso-denominated sustainability bond issue, it added.

The bank has the option to upsize the issuance, it said.

The 1.5-year bonds carry a coupon rate of 6.325% per annum.

BDO is offering the bonds at a minimum investment amount of P500,000 and in increments of P100,000 thereafter.

The offer period began on Monday and is set to run until July 19, unless adjusted by the lender.

The bonds will be issued, settled, and listed on July 24, BDO added.

ING Bank N.V. Manila Branch was tapped as the sole arranger for the issuance. ING Bank is also a selling agent along with BDO.

Meanwhile, BDO Capital & Investment Corp. was appointed the financial advisor for the transaction.

BDO said the Securities and Exchange Commission (SEC) has confirmed that the issuance complies with requirements under the ASEAN Sustainability Bond Standards and the SEC ASEAN Sustainability Bond Circular.

The bank in January raised P63.3 billion from its second offering of ASEAN Sustainability Bonds, above the P5-billion target, amid strong investor demand. The 1.5-year notes carry a coupon of 6.025% per annum.

It also borrowed P52.7 billion from its first ASEAN Sustainability Bond issue in January 2022.

BDO’s net income grew by 12.12% year on year to P18.5 billion in the first quarter as its core businesses remained strong.

Its shares went up by P6.20 or 4.47% to close at P145 each on Monday. — A.M.C. Sy

Marupok A+ gives unique spin on trans struggles

Based on a true story of catfishing, Cinemalaya film looks for mainstream audience

FOCUSING on a transgender woman who falls into a trap in the world of online dating, the queer comedy-thriller Marupok A+ is set to shed light on how transphobia can manifest in modern times.

It follows Janzen Torres (played by EJ Jallorina), a transgender college student who matches with a handsome young man named Theo (played by Royce Cabrera) on a dating app. Though everything appears normal and headed towards romance, she later discovers that she is being catfished — in other words, lured into an online romantic relationship by someone using a fictitious online persona or fake identity — by the twisted ad director Beanie Landridos (played by Maris Racal).

In this film, which is based on true events, the character of Beanie gives a unique insight into the psyche of someone who hates transpeople and will actively undermine them, in this case by catfishing Janzen.

Director Quark Henares said at a July 4 press conference in Makati that doing right by the trans community was a conscious effort on his part.

“I’m a cis-het (straight heterosexual) privileged Filipino, so my lived experience is different,” he said, crediting various consultants for helping with the film’s accuracy. “The love scene, for example, was directed by Rod Singh. We also spoke with the real-life Janzen the whole time, from script to shoot.”

TIMELY LGBTQ+ DISCUSSIONS
As a trans woman herself, motivated by the increased awareness Filipinos have of LGBTQ+ (lesbian, gay, bisexual, trans, queer plus) issues today, Ms. Jallorina said that Marupok A+ was a way to garner support.

“Even outside the community, there are people who want to tell our stories. Importante iyon kasi nagkakaroon kami ng work at hindi lang iilan lang (It’s important because we get to work and not just a few) who are LGBTQ+ performers and actors,” she said.

For Ms. Racal, who plays the antagonist, she had mixed feelings to giving a likeable voice to a terrible person.

“Of course, gusto namin magalit sila sa amin (we want people to get mad at our characters),” she said. “We’re grateful for the crowd at Cinemalaya in 2023 who gave good feedback on our performances.”

BALANCE OF THEMES
While the film is a comedy-thriller, its goals and its message remain simple and reflective of harsh realities, according to Mr. Henares.

“My last movie was in 2015, so when I make one, it really means something,” he said. Reading the 2020 Twitter thread of the real Janzen that the movie was based on flipped a switch in his mind: “I think one of the things that drew me to the story was, bakit nila gagawin iyon (why would they do that)? That’s really what we tried to solve while writing the film.”

He credited the cast with pulling off such tricky material. “There was no question that it would be EJ playing the lead. I think, for Maris, known for wholesome roles, it was great to see her become evil personified.”

Mr. Cabrera’s role, meanwhile, entailed playing cute, and being caught in between the manipulator and the victim. It also gave rise to a growing fanbase among the gay and trans communities.

“I’m thankful for all the support. As an ally, ginagamit namin ang platform na ito para maihayag ng tama ang laban na meron kayo (we’re using this platform to rightly portray the community’s struggles),” he said.

A NEW AUDIENCE
Having filmed the movie in 2020, months after the real Janzen posted her viral Twitter thread, Marupok A+ now finds a large Filipino audience at last. It premiered at the Slamdance Film Festival in the US in early 2023 and opened the Cinemalaya Independent Film Festival in August that year.

“It’s interesting to see how various audiences react to the film. It’s a difficult topic, but even those from other countries can understand the Philippine context and the online context,” said Mr. Henares.

Though four years have passed since the true events of the film took place, the realities that transgender Filipinos face “still remain pressing.”

“I think we have to be accountable for and vigilant of hate crimes. There’s still a lot of work that needs to be done,” he said.

On how the film deals with the pressure of depicting LGBTQ+ issues, Ms. Jallorina told the press that it is just one portrayal of many more up ahead.

“Ayaw namin dalhin ang buong community kasi hindi lang isa ang dapat nagbubuhat. Ang laban ay dapat buong community pa rin (We’re not supposed to represent the whole community because we shouldn’t be the sole bearer of that weight. The fight belongs to all of us).”

Marupok A+ will premiere exclusively in Ayala Malls Cinemas on July 10. — Brontë H. Lacsamana

Is scale the only solution to sustainability?

PHILIPPINE STAR/ WALTER BOLLOZOS

A non-economist, like myself, always wants to see out-of-the-box solutions. Why is our solution so traditional that “economies of scale” is the answer to every agriculture issue?

Let us look at various suggestions that are out-of-the-box:

ON RICE AND VEGETABLES
Did you know that if we ate less rice per person, we could stop importations of the staple grain we all love? I was told that our per capita consumption is 120 kilos per year while Vietnam’s is only 80 kilos/year. That is because Vietnamese eat more vegetables, instead of rice. But Filipinos will say vegetables are expensive. We can choose local varieties, instead of imported lettuce that go into expensive salads. Lettuce also can wilt faster than kangkong, talbos ng kamote, and pechay (swamp cabbage, sweet potato leaves, and Chinese cabbage).

Second, let us not encourage “eat all you can” or “unli rice” in restaurants. It not only causes a propensity to develop diabetes early in life, it also causes obesity. Moderate your rice intake and you will not only be healthier, our country’s dollar reserves will also get a boost from lower imports.

DIRECT TRADE
Pundits will argue that this is just a romantic idea. Letting farmers meet chefs, they claim, is just scratching the surface of “access to markets” but it indeed is a start. When we started talking about Slow Food and traceability, many detractors said the idea would not work. But 10 years later, chefs are going to farms to get their produce, they talk to producers to give their specifications, and both sides are happier after the conversations. Add to that the mandate of corporations now about ESG (environmental, social, and governance) scorecards — every big corporation now wants traceability of their procured ingredients. They now must do direct trade to have traceability and sustainability points. Or pay expensive certifications to ascertain the sources of their ingredients.

BUY LOCAL
With the peso devaluation, it has become more expensive to import anything, from vegetables to rice to coffee. This is why we need to buy closer to point of use —, or simply practice Locavorism. We have been saying this since 2012 when we spoke at a seminar in Coron, Palawan on Sustainable Tourism. Being locavores, we use what is literally in our backyard rather than importing monggo (mung) beans, for example, from China. But I still see imports, even of stones and rocks for gardens — yes we import these bagged landscaping supplies. How crazy is that? Unless these “fillers” are brought into the country to mask other expensive merchandise in the same shipment. Why would we import rocks? Sustainability means buying more local produce and pushing the use of local ingredients.

KNOW YOUR FARMER
If you do not have a chef, you probably cook at home. Have you checked where your produce comes from? Going around farms near your home may be the first thing to do. You may even try backyard gardening to know the source of your pechay or upland kangkong. We egged a writer, Paula Aberasturi, to publish a book, Backyard Gardening, in 2017. It is an easy read and hopefully will be reprinted by Anvil Publishing.

We got hooked on backyard farming during the pandemic because we had the time and we could not visit other suppliers. Up to today, we can harvest various vegetables from our own little patch of land for home use. We got chickens to roam around the farm to give us a week’s supply of organic and free-range eggs. Seasonal fruits are surprises — we have duhat (Java plum), avocado, guavas, and lots of mangoes even if they are the Indian (a.k.a. non-commercial) variety. Bananas and coconuts are available year-round.

BE THE FARMER
I am sure our readers have some funds to spare to start a small 500 sq.m. to 1,000 sq.m. farm. You can start a small garden behind the house or even in your corporate premises where even your security guards know how to grow moringa or malunggay, pechay, and eggplants. There is no reason not to have funds, and resources, to grow your own food.

We are looking to write a guide on sustainability through backyard farming soon. Along with experienced farmers who are also scientists, but not economists, we are writing down the basics of a sustainable farm, a sustainable community, and eventually help a country be self-sufficient at least for basic food and staples (rice is already suggested above).

Entrepreneurs are usually not economists, and economists have a difficult time being entrepreneurs. So the guide to a “non-economist” view must be written by creative people who do not follow the book but make their own playbook, as today’s popular term suggests. It is a playbook created by creatives, not math wizards. Accountants also have a hard time thinking of business plans because of “analysis paralysis,” to borrow a term from another accountant I spoke with from AIM. Entrepreneurs do accounting in a different way. A friend who is an entrepreneur says it another way — “Boundary na ako” (I have reached my “boundary”) referring to a jeepney or taxi driver who has to raise a certain amount after which everything earned is his free to take home. “Boundary” is that hurdle. Entrepreneurs do their own math and after making the “boundary” can even give away stuff for free. Accountants will never allow such vague or blurred computations.

 

Chit U. Juan is co-vice-chair of the Management Association of the Philippines’ Environment Committee. She is also the president of the Philippine Coffee Board, Inc. and Slow Food Manila (www.slowfood.com).

map@map.org.ph

pujuan29@gmail.com

CTA: PAL entitled to P27-M tax credit certificate

BW FILE PHOTO

THE COURT of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue to refund or issue a tax credit certificate to Philippine Airlines, Inc. (PAL), amounting to over P27 million, representing the airlines’ erroneously paid excise tax on its wine and liquor importations for its international flights.

In its decision penned by Associate Justice Corazon G. Ferrer-Flores and released on June 27, the CTA’s Second Division ruled that PAL incorrectly paid excise taxes totaling P27,275,640.48, which is refundable under the National Internal Revenue Code of 1997.

The tribunal said that PAL’s exemption from excise taxes on alcohol and tobacco imports for its transport operations, granted under Presidential Decree No. 1590, remains valid and was not repealed by RA No. 9334.

“[PAL] remains exempt from taxes, duties, royalties, registrations, licenses, and other fees and charges, provided it pays corporate income tax as granted in its franchise agreement; the payment of which shall be in lieu of all other taxes, except VAT, and subject to certain conditions provided in its charter,” it said.

The CTA acknowledged PAL’s compliance with two of the three conditions for excise tax exemption: payment of corporate income tax and importation of supplies for transport operations and related activities.

However, PAL failed to substantiate the third condition regarding the non-availability of locally sourced tobacco products at reasonable quantity, quality, or price.

“Petitioner failed to submit, at the very least, price lists of tobacco products which indicate the local market prices of the said products,” the decision said, explaining why PAL was only eligible for a P27-million refund.

PAL initially sought a P43,667,566.35 refund. — Chloe Mari A. Hufana

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