Home Blog Page 1568

UnionBank targets ‘better’ net income this year

BW FILE PHOTO

UNION BANK of the Philippines, Inc. (UnionBank) targets to post a higher net income this year as it expects continued growth in its consumer lending business.

The Aboitiz-led bank is also looking to tap the bond market this year to refinance its maturing debt, depending on market conditions.

“The bank targets for net income in 2025 to be better than prior year. We are optimistic that the strong trend in our underlying drivers (e.g. new credit card acquisitions, customer growth, expansion of net interest margin and fee-based income) will continue,” UnionBank said in an e-mail last week.

It also expects its operating expenses and credit costs to stabilize this year, it added.

“Overall, our performance should improve quarter on quarter as the year progresses,” UnionBank said.

The listed bank’s attributable net income rose by 31.5% year on year to P11.93 billion in 2024.

In the first quarter, UnionBank booked a net income of P1.43 billion, down from the year prior due to one-time tax-related write-offs from a subsidiary and front-loaded non-recurring costs, it reported on Monday.

The decline in the bank’s first-quarter net profit came even as its revenues climbed by 8.4% year on year to P19.4 billion in the period amid continued growth in its consumer business.

UnionBank booked a net interest income of P15.39 billion in the first quarter, with interest earnings at P20.79 billion and interest expenses at P5.4 billion. Non-interest income was at P4.05 billion.

It said that consumer loans now account for 62% of its total loan portfolio, with credit cards, personal loans, and teachers’ loans showing the fastest growth. Its retail client base was at 17.6 million, it added.

Meanwhile, UnionBank could tap the onshore and offshore bond markets this year to refinance its maturing obligations, it added.

“While the bank’s liquidity position remains very sufficient, in order to maintain a healthy mix of term funding in its liability portfolio, the bank is considering the refinancing of its peso and dollar bond maturities this year but subject to market pricing, conditions and opportunities,” UnionBank said.

“The bank aims to optimize and diversify funding instruments and costs via a mix of deposits, bills payable and term funding, while at all times ensuring compliance with regulatory requirements and ratios.”

UnionBank’s board of directors in February approved the issuance of $800 million in papers out of its euro medium-term note (MTN) program and P30 billion in bonds from its expanded peso fundraising program. It has not set a timeline for the issuances.

The bank’s $2-billion euro MTN program was established in November 2017 and updated in 2020. The unissued balance of the program stands at $1.2 billion.

In February, the bank’s board also approved the expansion of its peso bond program to P100 billion from P50 billion previously.

UnionBank shares dropped by 15 centavos or 0.46% to close at P32.30 each on Wednesday. — Aaron Michael C. Sy

ACEN seeks partners for offshore wind projects

ACEN, the listed energy platform of the Ayala group, currently holds 7 GW of attributable renewable energy capacity across operational, under-construction, and committed projects. — INSUNG YOON-UNSPLASH

AYALA-LED ACEN Corp. is actively seeking partners with technical expertise to support the development of offshore wind projects in the Philippines, its president said.

“We will need partners for those because we don’t have the expertise. So, if and when we do offshore wind projects, we will have to do it with a strategic/technical partner,” ACEN President and Chief Executive Officer Eric T. Francia told reporters last week.

While the company is exploring the technology, Mr. Francia said it would probably take more than five years before the company “can be comfortable getting to financial investment decisions.”

“We’re also exploring potential partnerships as our route to market. We will not only depend on our own organic projects but we’re also looking at whether we can partner in the offshore wind space to be able to participate earlier than we otherwise would have,” he said.

Data from the Department of Energy (DoE) showed that the company has a planned offshore wind power project spanning Bataan, Cavite, and Batangas, with a target installed capacity of 1,248 megawatts (MW) under its subsidiary GigaWind 5, Inc.

ACEN also holds service contracts to develop an offshore wind farm in Cagayan with a capacity of 1,024 MW under Giga Ace 12, Inc., and another 1,024 MW in Batangas under Giga Ace 7, Inc.

To date, the government has awarded a total of 92 offshore wind service contracts with a potential capacity of around 69 gigawatts (GW).

The DoE sees offshore wind playing a transformative role in the Philippines’ target of increasing the renewable energy share in the power mix to 35% by 2030 and 50% by 2040.

ACEN, the listed energy platform of the Ayala group, currently holds 7 GW of attributable renewable energy capacity across operational, under-construction, and committed projects.

The energy company’s presence spans the Philippines, Australia, Vietnam, India, Indonesia, Laos, and the United States.

ACEN is targeting an expansion of its attributable renewables capacity to 20 GW by 2030.

“It is an aggressive goal, though we believe that we have the right elements to succeed. We have a strong balance sheet, robust pipeline, strong partnerships, and a highly energized organization,” Mr. Francia said. — Sheldeen Joy Talavera

Asialink expands into real estate lending

ASIALINK Finance Corp. is now offering real estate loans to individuals and small and medium enterprises (SMEs).

Asialink is offering three real estate products, namely real estate mortgage or Sangla Titulo, loans for the takeout of housing units, and loans for property acquisition of property.

“Our sustained and astronomical growth in the past few years has attracted the flow of foreign funds as well as local financing that now allow us to go into new opportunities such as real estate,” Asialink President and Chief Executive Officer Sam Cariño said in a statement on Thursday.

“The new offering comes after Asialink has entrenched itself in lending to SMEs in their purchase of trucks and other vehicles to grow their business,” the company added.

Sangla Titulo lets businesses borrow up to P20 million and offer property as collateral at an interest rate of as low as 0.8% for a five-year term plus a one-time 5.5% service fee. Loan proceeds can be released within two weeks from the submission of all the required documents.

Meanwhile, for those taking out housing units, Asialink will advance the full payment for the property on behalf of the borrower.

Lastly, Asialink can lend up to P15 million for property acquisition at a rate of 0.9% per month for a repayment period of five years and below and 1% for a 10-year term.

Asialink in January received a $130-million credit facility from the International Finance Corp., the private sector lending arm of the World Bank Group, to increase financing for micro, small, and medium enterprises.

In December last year, it signed an $115-million financing package with the Asian Development Bank to expand its working capital and support SMEs in the Philippines.

Asialink also secured a P4-billion strategic investment from Malaysian equity firm Creador in February last year. — AMCS

Digitel Telecommunications, Inc. to conduct 2025 Annual Meeting of Stockholders via remote communication on May 26

 


Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

Join us on Viber at https://bit.ly/3hv6bLA to get more updates and subscribe to BusinessWorld’s titles and get exclusive content through www.bworld-x.com.

TV5 adapts legacy action drama Totoy Bato

COMIC book hero Totoy Bato, created by comic book artist and film director Carlo J. Caparas, (and brought to life by Fernando Poe, Jr. [FPJ] in a 1970s action film adaptation) will be back in the limelight through a new teleserye, titled Totoy Bato.

“The real challenge is to set this apart from Lumuhod Ka Sa Lupa [another Caparas story that TV5 has just finished adapting into a series]. ‘Yong bida namin doon, kasama ang ibang aktor, tumawid dito (Our lead there, with some of the other actors, are also in this one),” Albert Langitan, director of Totoy Bato, said at a media conference at the TV5 studios in Mandaluyong on April 28.

Lumuhod was a revenge story, while Totoy is a hero’s journey. May konsepto ng paghihiganti, pero nandito rin kung paano ginagampanan ang tungkulin sa komunidad bilang isang bayani (The concept of revenge is here, but also the responsibility of being the hero of a community). It’s very timely,” Mr. Langitan added.

Totoy Bato follows the titular character (played by Kiko Estrada), a defiant protector of his small town of Pook Paraiso. He uses his kamao (fist) and unshakable heart to face powerful enemies. Alongside him are unlikely allies: Emerald Espejo (played by Bea Binene) a childhood friend who leads a secret life; Amber Castillo (played by Cindy Miranda), an ambitious daughter of the rival Castillo family; and Dwayne Perez (played by Diego Loyzaga), another childhood friend-turned-archenemy.

The cast features a roster of veteran actors like Nonie Buencamino, Art Acuña, Mark Anthony Fernandez, Mon Confiado, and Eula Valdez. Completing the lineup are Andrew Muhlach, Billy Villeta, Ivan Padilla, Lester Llansang, Benz Sangalang, and CJ Caparas.

Mr. Estrada told the press that the pressure of evoking the star power of FPJ in the role is inevitable.

“This is a collaborative effort. Our motto is to do simple things extraordinarily well. This is also my first project that has something to do with my lolo (grandfather) Paquito [Diaz],” he said.

The late Mr. Diaz played an antagonist role in the 1977 adaptation of Totoy Bato that starred FPJ. Mr. Estrada explained: “Hindi ako aarte kung hindi dahil sa lolo ko (I wouldn’t be an actor if it weren’t for my grandfather). This is different because it’s our version, but of course we respect where we came from.”

For Peach Caparas, daughter of Carlo J. Caparas, it is an honor for the family to witness “the enthusiasm and dedication of the team” to once again adapt her father’s first-ever fictional hero.

“I think initially they tried to stick to the movies, but they’re incorporating lots of original material from the comics,” she shared.

Ms. Binene, whose role as Totoy’s friend Emerald whom he reconnects with after years apart, said that her bubbly character will be motivated to “seek out the truth” throughout the course of the series.

“Some fight scenes take two or three days to film because we really want to do it well,” she said. “My last teleserye was still pre-pandemic, so it’s a huge blessing to be back after a while.”

It is unclear whether her character will be a love interest for Mr. Estrada’s Totoy, but she told the press to stay tuned to find out.

Meanwhile, Mr. Acuña, who plays the antagonist Don Pedro Perez, said that there is no black and white in Totoy Bato.

“Everybody is fractured here. That’s what we’re going to discover. Tao lang ‘tong mga ‘to (These are all just people),” he explained. “You never know why someone does something good or bad. Sometimes they’re doing an act of kindness because they’re making up for something, for atonement.”

The TV5 action-drama series is produced by MavenPro and Sari Sari Network, Inc., under Studio Viva. 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.

Totoy Bato premieres on TV5 on May 5 at 7:15 p.m., with same-day catch-ups on the Sari Sari Channel at 8 p.m. It will air Mondays to Fridays. — Brontë H. Lacsamana

SM Prime targets to finish Pasay reclamation by yearend

PHILIPPINE STAR FILE PHOTO

LISTED property developer SM Prime Holdings, Inc. is targeting completion of land reclamation for its integrated development in Pasay City by yearend.

“We will complete the sand filling by the end of this year, and then we will start the horizontal development after that,” SM Prime President Jeffrey C. Lim said during a recent media briefing in Pasay City.

“We are finalizing the master plan to allow infrastructure works to begin as soon as possible,” he added.

Mr. Lim said the master plan is expected to be finalized within the first half of this year, while horizontal development will begin in 2027.

“Documentation for titling is in progress, and as planned, with full project handover to the national government and the Pasay City local government unit (LGU) targeted for 2028,” he said.

In a separate briefing, SM Investments Corp. (SMIC) President and Chief Executive Officer Frederic C. Dybuncio said 60% of the land development for the reclamation project had been completed as of last year.

SMIC is the parent company of SM Prime.

The project is a 360-hectare mixed-use development undertaken by SM Prime and the Pasay City LGU. It will be connected to the Mall of Asia Complex.

SM Prime received the notice to proceed with the reclamation project from Pasay City in 2019.

“It will have smart-city and climate-resilient features to enhance livability, improve mobility, and create value that lasts beyond the present generation,” Mr. Lim said.

For the first quarter, SM Prime posted an 11% increase in attributable net profit to P11.7 billion, as total revenue rose by 7% to P32.8 billion on higher rental income, revenue recognition of real estate sales, and other revenue.

SM Prime shares were last traded on April 30, higher by 6.33% or P1.45 at P24.35 apiece. — Revin Mikhael D. Ochave

Fed signals rates will be steady despite bets on looming cuts

FEDERALRESERVE.GOV

US FEDERAL RESERVE policymakers have signaled that short-term interest rates will remain unchanged as they wait for clearer signs that inflation is nearing the US central bank’s 2% goal or until there is a whiff of a deteriorating job market.

The data so far has presented neither of those scenarios to the Fed, and though economists say the real drag from President Donald J. Trump’s aggressive import tariffs lies ahead, there is a great amount of uncertainty over where the policies will end up and the degree and timing of their impact on prices and jobs.

“The cone of possibilities,” as Cleveland Fed President Beth Hammack put it recently, is quite large, and includes the possibility of persistently higher inflation coupled with a slowdown in economic activity that would require the central bank to pick which battle to fight.

That dilemma has not stopped traders from betting that by June a faltering economy will likely move the Fed to resume its rate cuts, ultimately lowering borrowing costs by a full percentage point by the end of this year. They added to those bets on Wednesday after data showed the US economy shrank last quarter and the Fed’s preferred measure of price inflation did not rise at all on a monthly basis in March.

But while economists say such a rate-cutting scenario is not out of the question, they are quick to note that inflation remains elevated, and is likely to worsen at least temporarily as retailers raise prices to cover higher costs from the sharp increase in import levies.

The Personal Consumption Expenditures Price Index excluding volatile food and energy prices, which Fed officials feel maps best to where inflation is headed, eased to 2.6% in March from 3% in February, the data showed.

Longer-term inflation expectations remain largely grounded, but a few Fed policymakers have taken note of a sharp rise in short-term inflation expectations that they worry could set the stage for a resurgence in price pressures.

“The Fed’s in a very tricky spot; you have inflation that is already above target, you have inflation expectations that are, sort of showing that, perhaps they’re becoming a little unhinged,” said Tom Porcelli, chief US economist at PGIM Fixed Income. “And we’re now waiting for the inflation to show up on the back of tariffs. I mean, the Fed is on hold.”

At the same time, Fed policymakers are keenly focused on the potential for tariffs to slow the economy and potentially trigger layoffs, a situation that in the absence of persistent inflation would move them to cut rates, perhaps sharply. That’s not evident so far.

‘PERIOD OF STAGNATION’
The US economy contracted by an annualized 0.3% last quarter in large part because US businesses rushed to buy imported goods ahead of Mr. Trump’s tariffs. The report also showed consumer spending down-shifted from a 4% growth pace last quarter to a still-decent 1.8%, and business investment soared.

The GDP report overall would allow the Fed to continue to characterize economic activity as “solid,” though only in the rear-view mirror, said Gregory Daco, chief economist at EY Parthenon.

“This shock is unlike anything we’ve seen before,” Mr. Daco said. “It’s a massive self-imposed supply shock resulting from policy uncertainty, market volatility, surging tariffs and monetary policy inertia.”

The front-loading of demand in the first quarter, he said, sets the stage for a drop-off in demand this quarter, “a far more troubling phase of the ongoing economic slowdown.”

Or as Pantheon Macro economists wrote, “A period of stagnation now likely lies ahead if the current set of tariffs is maintained, with recession the most likely outcome” if the sweeping import duties Mr. Trump announced on April 2 and then partially paused come into force in July. The Trump administration, which this week eased some tariffs on automakers, says trade talks are ongoing.

On Friday policymakers will get some of the first data on the current quarter, with the Labor Department’s closely watched monthly jobs report expected to show a slowdown in hiring but no change in the 4.2% unemployment rate.

The Fed is nearly universally expected to hold its benchmark overnight interest rate in the current 4.25%-4.5% range at the end of a two-day policy meeting next week.

Futures contracts that settle to the Fed’s policy rate continue to suggest that the rate cuts would resume in June, with a total of four quarter-percentage-point reductions likely. The US central bank cut rates three times last year, for a total of 100 basis points of easing. — Reuters

Eroding democracy without trying

PHILIPPINE STAR/EDD GUMBAN

If the April pre-election survey by Pulse Asia Research, Inc. is a good predictor of the May 12 election for senators, and the likelihood is quite high, we shall have a Philippine Senate very few of us could be proud of. Most of the potential winners are film idols and talk show hosts, while others performed poorly in their earlier tenure in the Senate. Others may not serve their full term because they are impleaded at The Hague for committing crimes against humanity.  With such a composition, we might have a shortage of laws that champion good governance, a strong economy, justice and rule of law, and some sense of decency in the land.

This is a sure-fire formula for increasing further our democratic deficit.

Thus, we might have to deal with the same legislative mill that allowed the violation of the Constitution and various laws that mandated the centrality of people through adequate funding of both public education and public health. It is the same institution that refused to clear the blue ribbon committee report that recommended filing plunder, graft and other criminal and administrative charges against key officials of the previous administration and Pharmally executives. Enormous public money was squandered during the 2020 pandemic by acquiring overpriced, used or soiled medical supplies based solely on a presidential directive that dispensed with public bidding. Many of them were also instrumental in allowing financial stability to be compromised when the Maharlika Investment Fund was established with funds sequestered from state banks and the Bangko Sentral ng Pilipinas.

True, when we examine other surveys on a more modest scale, the results are completely different. We are not at all surprised that in the recent mock elections at the UP College of Law, two former opposition senators came out first. That fiery former audit commissioner, several labor and mass leaders and former cause-oriented party-list representatives completed the magic 12. There was no space for traditional, dynastic and comical politicians.  This result mirrors those in other academic institutions.

Beyond the perverse influence of paid trolls and other false news purveyors, it is not difficult to explain why Filipinos are voting circus characters in Congress and the Executive agencies. Just the other day, both print and broadcast media reported on the hearing conducted by the Senate education committee. The Philippine Statistics Authority shared some data, shocking at the least, showing that in 2024 there were almost 19 million Filipino students who graduated from senior and junior high school who “cannot read and understand a simple story.” This means some 19 million Filipinos are not functionally literate. In fact, at the same Senate hearing, the PSA claimed there were in fact 24.8 million Filipinos, or one out of every four Filipinos, “who have problems understanding a simple story.”

We believe that this situation pre-dated 2024 or even earlier, and in a few years, we don’t think this would be mitigated in a big way. Therefore, these 19 million Filipino students who “cannot read and understand a simple story” will be among our millions of voters a few years from now.

How do we expect these young voters to wrap around the idea that bad budget practices in Congress deny them books and additional classrooms, and that many of them get sick because they lack nutrition? Money is a problem because some of their parents are jobless, while some are looking for more work or additional hours of work. Some of them are not equipped with the skills in demand by industry. The economy is not operating at its peak. The budget for infrastructure as well as digital innovation has been severely trimmed. The narrative gets longer; it’s no longer plain vanilla. Those millions of young voters will be lost.

It would even be a more complex story for our young voters to understand that traditional politicians have been mainly behind the continued inability of the Philippine economy to break through many of our structural problems that impede a more accelerated, more inclusive economic growth in the Philippines. And there is bad political governance, there is bad economic governance, and there is bad social governance. In many previous studies of these governance factors, corruption counts among the political factors, economic freedom among the economic factors and education and health among the social factors. Some of them are caused by these politicians, on others, voters don’t have any idea. 

One can always argue that it is to many politicians’ advantage to maintain the status quo. An informed, thinking electorate will tolerate neither corruption nor incompetence in public service. Such an electorate will demand track record, or experience in crafting laws, or executing them, not in staging shows, doing stunts no matter how awesome, or collecting commissions from pork barrel projects. A history of vote-buying or being part of vicious political dynasties would be anathema.

But then, there could be no other more difficult, more daunting challenge than producing an informed, thinking electorate in this country.

How does one teach creative thinking among our current Filipino students who scored among the weakest in creative thinking in the latest PISA (Programme for International Student Assessment) ranking of students worldwide? They ranked in the same score range as three other bottom dwellers — Albania, Uzbekistan and Morocco. The Philippines’ mean score stood at 14 out of 60 possible points, remotely lower than the OECD (Organization for Economic Cooperation and Development) average of 33. Based on comparative analysis, only around 3% of Filipino students can match the creative thinking abilities of an average student in Singapore!

It is one thing to read and write and do some math, but it is a completely different challenge to think correctly, and think well. Again, Filipino students failed to distinguish themselves in this thought process.

Why is this alarming?

PISA defines creative thinking as “the competence to engage productively in the generation, evaluation and improvement of ideas that can result in original and effective solutions, advances in knowledge and expressions of imagination.” This is all about nation-building, transforming the economy and strengthening the social fabric.

Four aspects were covered, all indicative of future capabilities: written expression, as in crafting public policy; visual expression, as in perceiving key problems of the Philippines; social problem solving, as in how corruption and plunder should be dealt with; and scientific problem solving, as in addressing floods and traffic in Metro Manila.

In 10, 20 or 30 years, these young students will not only grow into our electorate, but they will also constitute the ranks from where political and economic leadership will be recruited through election or appointment. From the givens, it looks like we would need signs and wonders to squeeze blood from stone.

Francis Fukuyama in Identity (2019) argued that the most unexpected big electoral surprises of 2016 were Britain’s vote to leave the European Union and the election of Donald Trump. In both cases, Fukuyama wrote, “voters were concerned with economic issues, particularly those in the working class who had been exposed to job loss and deindustrialization. But just as important was opposition to continued large-scale immigration.” What is at work, to Fukuyama, is the politics of resentment.

Could it be that many of our people who would choose to elect misfits in public office feel that they have no stake in our political and economic mainstream and therefore any candidate who is not their kind should merit no support? 

Accepting ayuda or election bribe money is just a bonus in voting traditional, dynastic and incompetent candidates. They couldn’t care less if the P2,000 that they would receive on the eve of the election is the cost of infrastructure that would never materialize, or public hospital or additional hospital beds that would never be delivered, or better training for teachers that would never happen. “Pera naman natin ’yan” (It’s our money anyway) is not entirely true; whatever we get reduces the nation’s public goods.

Undermining the capacity of the citizenry to choose and choose correctly weakens our ability to achieve prosperity and more inclusive growth. If nothing is done with this state of affairs, either by Congress by a long shot rationalizing our election laws and restoring the primacy of public health and education, or the Supreme Court paving the way for an anti-political dynasty, or declaring as unconstitutional and illegal any attempt by the National Government to defund PhilHealth and reduce the budget for education — then we erode democracy even without trying.

 

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

PLDT unveils Fiber Netflix plan

THE FIBER Netflix plan, including free internet speed boosts and installation services, has been officially launched by PLDT Home.

PLDT executives gave a rundown of the new packages, which combine internet connectivity with a Netflix streaming subscription, at a press event in Makati City on April 30. There are three available variations: Plan 1599, Plan 2499, and Plan 3199.

Roy Victor “Viboy” E. Añonuevo, PLDT Home’s vice-president for fixed broadband products, said at the launch that the packages are convenient in that they allow Filipinos to pay what is usually two different bills in one go.

“It will make our lives easier. Imagine tracking both your Netflix subscription and Fiber plan both at once, and paying them in just one due date,” he explained.

“If you get a standard plan for each, and compare it to our Plan 1599, for example, you get to save more,” Mr. Añonuevo said.

For Patrick Tang, vice-president for acquisition marketing at PLDT Home, the partnership makes “relationships and connections more profound.”

“PLDT firmly believes that the best connections are what brings families, friends, and people together. What better way to do this than with Netflix? When we watch a series or movie that we love or go crazy about, we talk about it all day or all week,” he said.

The three newly launched plans include the Fiber Netflix Plan 1599 which has a Netflix Basic plan and 150Mbps (megabits per second)fiber connection, with 300Mbps speed boost for six months; Fiber Netflix Plan 2499 has a Netflix Standard plan and 500Mbps fiber connection, with 700Mbps speed boost for six months, as well as a Cignal subscription. Finally, Fiber Netflix Plan 3199 has a Netflix Standard plan and 700Mbps fiber connection, with 1Gbps (gigabit per second) speed boost for six months. This also includes a Cignal subscription and a StreamTV device.

All the plans come with free installation services.

Mr. Añonuevo pointed out that these are “updated from existing PLDT plans,” to cater to the busy lifestyle of Filipinos.

“Nowadays, it’s a matter of being able to watch your favorite movie or TV show anytime you want. You can easily pause it and do what you need to do then continue watching later on,” he said.

He added that people can expect more partnerships where PLDT will strengthen their foray into entertainment, like music and gaming.

“You can expect PLDT to address the entirety of the Filipino digital lifestyle,” Mr. Añonuevo said.

PLDT Home also launched a promo that offers new customers the chance to win a free trip to South Korea and access to the Squid Game: The Experience attraction in Seoul.

New subscribers of Fiber Netflix plans 1599, 2499, and 3199 can get a raffle entry only until May 15. The trip includes round-trip airfare, hotel accommodation, travel allowance and free access to Squid Game: The Experience, for five lucky winners and their plus-ones.

More information on PLDT Home’s Fiber Netflix plans can be found at pldthome.com/fiber-netflix.

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

Japan, China, South Korea, ASEAN to expand currency swap program, Nikkei says

The South Korean won, Chinese yuan and Japanese yen notes are seen with US $100 notes in this picture illustration taken in Seoul, South Korea, Dec. 15, 2015. — REUTERS

TOKYO — Japan, China, South Korea and the Association of Southeast Asian Nations (ASEAN) countries are expected to expand their emergency currency swap program as early as this month to include infectious disease outbreaks and natural disasters, Nikkei Asia reported on Thursday.

A currency swap arrangement known as the Chiang Mai Initiative, created after the 1997-98 Asian financial crisis, exists to support regional financial stability by allowing members to tap currency swap lines to support currencies in need.

The expansion came as some countries faced foreign currency shortages during the COVID pandemic, Nikkei said.

The members of the initiative are likely to agree on the expansion when their representatives meet in Milan, Italy, on Sunday, Nikkei said, adding that the change would likely take effect in May.

The Chiang Mai Initiative pool amounts to $240 billion in foreign exchange reserves, with Japan and China each contributing $76.8 billion, South Korea providing $38.4 billion and the 10 ASEAN members a combined $48 billion. — Reuters

Pacific Online weighs expansion amid PIGO uncertainty

BW FILE PHOTO

LISTED online lottery operator Pacific Online Systems Corp. is rethinking its expansion plans into the online betting games business amid a proposed ban on Philippine inland gaming operators (PIGOs).

“We’re rethinking it if there’s that uncertainty,” Pacific Online Chairman Willy N. Ocier told reporters on Wednesday.

Malacañang said in March that it was still studying whether a ban on PIGOs was necessary. Talks of a potential PIGO ban surfaced due to concerns that it might cause the same issues as Philippine offshore gaming operators, including illegal activities and tax evasion.

Despite this, Mr. Ocier said that Pacific Online’s acquisition of a minority stake in electronic gaming platform software and service provider HHR Philippines, Inc. (HHRPI) is still ongoing.

“We’ll take it slow. It’s a minority interest. It’s ongoing,” he said.

“We wanted to get our feet wet, just to get a feel of it,” he added.

In January, Pacific Online signed an investment agreement to acquire a 37.5% stake in HHRPI for P150 million in a bid to expand its presence in the online gaming business.

HHRPI is a Philippine Amusement and Gaming Corp. (PAGCOR)-licensed software and professional service provider of electronic gaming platforms for land-based and online gaming operators. It is also a holder of a PAGCOR gaming license for online gaming under the brand “Buenas.”

Pacific Online shares were last traded on April 30, closing unchanged at P3.40 per share. — Revin Mikhael D. Ochave

The looming trade war: What US tariffs mean for the Philippines

ALIAKSEI LEPIK-UNSPLASH

THE LATEST World Economic Outlook from the IMF paints a sobering picture of the global economy. Growth projections have been revised downward, with global growth expected to drop to 2.8% in 2025, around half-a-percentage point decline. This is largely attributed to escalating trade tensions, including the sweeping tariffs introduced by President Donald Trump, which have brought effective tariff rates to levels not seen in over a century. It also creates inflation pressures for some countries, notably the US. Unless anchored by credible monetary policymaking by the Fed, the US runs the risk of having both low growth, even a recession, as well as high inflation. In a word — stagflation — a phenomenon familiar to those of us who were around in the 1970s, that had serious spillovers globally, triggering the Latin American and Philippine debt crisis.

But even if stagflation does not happen, the global uncertainty will exact a heavy toll all around. Even the US dollar and US treasuries have not been exempt. For the first time, it lost value in a crisis, as countries and people lost confidence in the US and the dollar as a safe haven.

The world remains in flux, but it seems less alarming than when Trump said he wanted Powell fired. Nonetheless, we need to wait and see what Donald has to say as the 90-day pause counts down.

The Philippines is not spared from this global turbulence, though its outlook is less worrisome in relative terms, compared with other emerging markets. Coming from a period of strong growth, most forecasts anticipate, at most, a one-percentage-point impact on projected growth, still over 5% in most cases, including the IMF and World Bank. Fitch Ratings has also just affirmed our stable BBB credit rating. This resilience is supported by our lower exposure to trade shocks, reliable earnings from overseas Filipino workers and business process outsourcing, a more favorable treatment under the Trump tariff regime including lower tariffs at 17% and global exemptions of all semiconductors and electronics, a manageable fiscal position, a crisis-tested financial system, adequate foreign exchange reserves and an independent — and if I may say, a most competent — central bank.

Inflation has also been trending downward to 2-3% from the high of 8% in 2023, allowing BSP to lower policy rates by 100 basis points to date. The governor has signaled more easing for the rest of the year as inflation is expected to be within our target range, and will help compensate for the deflationary effects of the trade war. Lower prices of oil, coal, fertilizers, some food imports — a side effect of lower global demand due to tariffs — will support this stance.

We do have to worry about a few things. First, the rules-based global trading system: The trade war challenges the principles that have underpinned international trade for decades. It undermines the predictability and stability that businesses rely on for cross-border transactions. The imposition of tariffs and retaliatory measures disrupts established norms and can lead to a fragmented global trading environment, with deleterious effects on investments and long-term growth and development, as Governor Remolona observed in a recent IMF panel.

Second, this global disorder, unless sorted out soon, primarily between the US and China, can evolve into a somos o no somos world.

As spheres of influence built around security, technology (especially AI) and trade are forcibly made exclusive, the cost of global disruption will be even more elevated and especially challenging for countries like the Philippines, who have deep and multifaceted economic ties with both the US and China.

The desire to contain China by US authorities enjoys bi-partisan support, so we may all be caught in a Thucydides Trap scenario over the medium to long term. Even if the tariffs are rolled back, we shouldn’t expect that things will revert to the pre-Trump status quo.

Allow me to conclude by sharing a few tentative suggestions on how we, as a country and people, might prepare ourselves to cope — and, I dare say, maybe even thrive — during these exciting times.

First, we should build financial resiliency by, for example, sustaining fiscal consolidation, upscaling systemic risk vigilance — including preparing and maintaining a ready crisis management playbook — and ensuring that our foreign exchange reserves remain ample. Second, we should enhance food and energy security. Third, we should strengthen our ties with ASEAN. This includes the aforementioned cooperation in the food and energy sectors where   our neighbors are exporters, as well as advancing financial cooperation (e.g., currency swap arrangements) and pursuing third-party trade negotiations.

Fourth, we should negotiate for compensatory concessions from the US, such as through friend-shoring initiatives or the establishment of a free trade agreement. (We need to remind ourselves what Dr. Kissinger said — It may be dangerous to be America’s enemy, but to be America’s friend is fatal.) Fifth, we should diversify our economic, financial and trade relationships with a broader set of countries and institutions.

Sixth, we should exploit our relative tariff advantage in the US market by attracting investors, especially those already operating in the Philippines, to consider future expansions here. Seventh, we should forge national cohesion, both politically and economically. In particular, economically via public-private collaboration, as we did during the COVID-19 crisis.

 

Romeo L. Bernardo is a member of the Philippine central bank’s Monetary Board (MB). The views expressed here, which he delivered in a speech before the Asia Society on April 30, do not necessarily reflect those of the MB or the Bangko Sentral ng Pilipinas.

globalsourcepartners.com

romeo.lopez.bernardo@gmail.com