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PSBank net profit up 18% in 1st half

COMMONS.WIKIMEDIA.ORG

PHILIPPINE SAVINGS Bank’s (PSBank) net income climbed by 18% in the first half amid strong demand for consumer loans and improving asset quality, it said on Monday.

The net profit of the thrift banking arm of Metropolitan Bank & Trust Co. (Metrobank) stood at P2.56 billion at end-June, up from P2.17 billion in the same period last year, it said in a disclosure to the stock exchange.

This translated to an annualized return on equity of 12.5%.

PSBank’s financial statement was unavailable as of press time.

“By prioritizing customer-centricity and a proactive sales approach in our strategy, the bank has seen consistent growth in its core business. Apart from providing top-notch quality service to our patrons, we ensure that the products we offer can pave the way for Filipinos to achieve their financial goals and aspirations. We are hopeful that the positive performance in the first half will be sustained for the rest of the year,” PSBank President Jose Vicente L. Alde said.

The bank’s net interest income grew by 4% year on year to P6.08 billion in the first semester.

Its total operating income, which includes service fees, commissions and other income, stood at P7.74 billion.

On the other hand, PSBank’s operating expenses grew by 5% to P4.62 billion in the period.

The bank’s gross loan portfolio expanded by 10% year on year in the first half.

This growth was mainly driven by an 18% increase in auto loans amid strong vehicle sales in the country, PSBank said.

Even as its loans grew, the bank’s gross nonperforming loan ratio improved to 2.9% at end-June from 3.5% a year ago.

On the funding side, total deposits reached P170 billion.

PSBank’s assets stood at P220 billion at end-June.

Total capital was at P42 billion. The bank’s capital adequacy ratio stood at 24.3%, while its common equity Tier 1 ratio was at 23.2%, both above the regulatory requirements.

PSBank’s shares climbed by five centavos or 0.09% to close at P56.15 apiece on Monday. — A.M.C. Sy

SM Prime’s Q2 income rises to P11.6B, fueled by mall business

SM Prime Holdings, Inc. reported a 16% increase in consolidated net income for the second quarter (Q2), reaching P11.6 billion, up from P10 billion year on year.

This growth was primarily driven by the company’s mall operations, SM Prime said in a statement to the stock exchange on Monday.

The company recorded a 9% rise in consolidated revenue, totaling P34 billion compared to P31.2 billion in the previous year.

The mall segment contributed 58% of total revenue, with rental income climbing 10% to P16.3 billion from P14.9 billion.

SM Prime’s residential business accounted for 29% of consolidated revenue, with earnings up 23% to P10.4 billion, from P8.5 billion in 2023.

For the first half of the year, SM Prime achieved a 13% increase in consolidated net income to P22.1 billion, compared to P19.4 billion previously.

Consolidated revenue for January to June rose by 8% to P64.7 billion from P59.9 billion.

First-half mall rental revenue increased by 9% to P32.1 billion, up from P29.4 billion.

Total mall revenue for the first half reached P37.5 billion, an 8% increase from P34.6 billion in the prior year.

The residential business saw an 8% rise in revenue, totaling P18.9 billion compared to P17.6 billion a year ago, with reservation sales hitting P40.2 billion in the first half.

Additionally, SM Prime’s offices, hotels, and convention centers segments generated P7 billion in revenue for the first six months, marking a 13% increase from P6.2 billion last year. Specifically, the office segment contributed P3.6 billion, while hotels and convention centers generated P3.4 billion.

“SM Prime’s growth in the first half of 2024 remains steady as we realize value from our past expansion projects across our business portfolio. As we celebrate this year our 30th anniversary as a public company, we are determined to continue expanding our core businesses across the Philippines, and introduce innovative and bigger projects in the coming years,” SM Prime President Jeffrey C. Lim said.

“SM Prime remains steadfast in bringing the SM brand closer to more Filipinos through our integrated property developments that promote climate resilience environmental sustainability, and prosperity to all,” he added.

On Monday, SM Prime shares fell by 4.45% or P1.30 to P27.90 per share. — Revin Mikhael D. Ochave

Good governance and laying the groundwork for sustainable growth

PARTYSTOCK-FREEPIK

(First of two parts)

As the world continues to confront many social, economic and environmental issues, this has increased shareholder expectations on long-term value and the impact corporates have on the triple bottom line of people, planet, and profit.

This sentiment has also underscored the key role of governance in fostering economic growth, social inclusion and environmental stewardship. Strengthening corporate governance (CG) is vital to building an environment of trust, transparency and accountability crucial to a more sustainable business.

Good governance rests on the principles of fairness, accountability, and integrity. As a cornerstone of the Environmental, Social, and Governance (ESG) framework and often referred to as the economic pillar, good governance reflects how boards of directors and management match the interests of shareholders, especially minority shareholders, the company’s customers, value chains, and the community.

WHY GOVERNANCE WORKS
A good CG framework adds value to the company as it enhances investor confidence and helps mitigate risks.

CG has been pushed to the top of the agenda in the aftermath of many financial, health, and economic crises as investors become more engaged with companies on how they are run and how they impact stakeholders.

There is evidence of how better CG is paying off for investors. Take for instance the case of Japan. In a recent article published by Bloomberg, the country’s government urged companies to strengthen their focus on shareholders for nearly a decade. This was further pushed after the Tokyo Stock Exchange started telling company executives to hike returns for shareholders. Today, Japanese firms are returning more value to shareholders and increasing the number of women directors among other notable efforts.

Dividends from Japanese firms more than doubled to ¥19 trillion in the financial year to March 2023, from around ¥8 trillion 10 years ago, according to data compiled by Okasan Securities in the Bloomberg report. The dividend payout ratio has also increased to 36% from around 26% during the same period. Share buybacks, as a means to return value to shareholders, also registered a five-fold increase from a decade ago.

There is also increasing board diversity as Japanese firms have added more women to the board with women now holding 17% of board seats in Japanese companies from 2.3% a decade prior, Bloomberg reported.

The independent view is important as this helps manage the equitable treatment of all stakeholders and potential conflicts of interest that may be disadvantageous to the interests of minority shareholders.

Let us look at a local example.

In SM’s case, the appointment of an independent director as Chairman of the Board in 2023 was a first in its history. This speaks volumes about the company’s desire to uphold the highest standards of CG by going beyond mere compliance. Independent judgment and independent leadership remain fundamental parts of the principles of CG.

SM’s Board is composed of nine highly qualified directors, five of whom are independent directors. Out of the five independent directors, two are female. CG standards prescribe at least 30% of boards to be comprised of independent directors; current regulatory requirement prescribes at least 20%. SM’s current Board is already beyond minimum compliance relative to these standards. With the fifth independent director, SM’s independent director Board composition is at a higher level of compliance as the company adheres to the best practices in CG.

On top of this, SM’s Related Party Transactions Committee is composed entirely of independent directors with the right to review any transactions or related relationships in the group. Deals are reviewed by this committee and recent deals have had both auditors review alongside independent fairness opinions by third party firms recommended by the Securities and Exchange Commission or the Philippine Stock Exchange. SM’s Audit, Corporate Governance and Risk Management Committees are also composed entirely of independent directors.

INVESTING IN THE TRUST CURRENCY
The foundation of a good relationship is trust.

In business, it matters that the stakeholders — employees, customers, investors, tenants, suppliers, depositors, and others — trust the governance and leadership of the company to foster confidence in the company’s direction and decisions.

Why is it important to invest in the “trust” currency?

Good CG ensures that there is equitable treatment of and engagement with stakeholders — all shareholders, including minority shareholders, are treated fairly and equitably. This likewise promotes long-term performance and sustainability by aligning the interests of all shareholders with business resilience and continuity.

Based on investor feedback from SM’s non-deal roadshows, investors from Asia, Europe, and the US prefer to invest in markets with a better governance structure and track record.

A study on the Impact of ESG performance on firm value and profitability by Mahmut Aydogmus published in the Borsa Istanbul Review in 2022 indicated that the ESG combined score has a positive and highly significant relationship with firm value. Social and Governance scores have significant positive relationships with firm value too. This means shareholders, investors, creditors, governments, and other stakeholders expect the firms to do more on ESG. When they meet and exceed these expectations, the market most likely rewards them.

Well-governed companies often attract huge investment premiums, gain access to cheaper debt, and outperform their peers, according to a study by the International Finance Corp. in 2006. A commitment to good CG — well-defined shareholder rights, a solid control environment, high levels of transparency and disclosure, and an empowered board of directors — draw both investors and lenders, and attract premium valuations.

According to a McKinsey survey in 2023, about 85% of the chief investment officers they surveyed said that ESG is an important factor in their investment decisions. A significant majority are prepared to pay a premium for companies that show a clear link between their ESG efforts and financial performance.

 

Amando “Say” M. Tetangco, Jr. has served as the first independent director chairman of the Board of SM Investments Corp. since 2023. He is also the vice-chairman of SM Prime Holdings, Inc., and is an independent director of other companies. Prior to joining SM, Mr. Tetangco was a career central banker for over four decades.  He eventually assumed the post of governor of the Bangko Sentral ng Pilipinas and chairman of the Monetary Board, serving two consecutive six-year terms from July 2005 to July 2017.

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Regal Entertainment matriarch ‘Mother’ Lily Monteverde, 84

COURTESY OF THE FILM DEVELOPMENT COUNCIL OF THE PHILIPPINES

FILM producer Lily Monteverde, known by most people as “Mother Lily” due to her role as the matriarch of the Regal Entertainment showbiz family, died on Sunday, Aug. 4. She passed a few weeks’ shy of her 85th birthday on Aug. 19.

The production company confirmed the passing of its founder in a statement made by her family. Described as “a true visionary and cornerstone of the movie industry,” the Monteverdes mentioned how their matriarch provided opportunities to Filipino filmmakers.

“Throughout her years she has not only been a mother to her children but also the ‘Mother’ to so many generations of Filipino filmmakers who have helped define what Philippine cinema is today,” they said in the statement. No cause of death was disclosed.

The family went on to say that Mother Lily was “not merely a matriarch and the face of Regal films, but a true mother to artists and workers who had the chance to know her beyond the confines of work.”

Her husband of more than 60 years, Leonardo “Remy” Monteverde, died on July 29 and was laid to rest the day before her passing.

Mrs. Monteverde founded Regal Films in 1962, beginning first as a distributor of American and European movies. Since then, the company has produced thousands of local films that have left an indelible mark on the Philippine movie industry, from cheap quickies, to blockbusters, to critically acclaimed titles. These include Sister Stella L, Manila By Night, Scorpio Nights, Temptation Island, Underage, the Mano Po trilogy, and the Shake, Rattle, & Roll horror franchise.

“She has helped so many and will never be forgotten,” Senator Grace Poe-Llamanzares said in a Facebook post. Her parents, the late Philippine cinema icons Fernando Poe, Jr. and Susan Roces, were friends with Mrs. Monteverde, who was also her godmother.

“She was, and will always be, a Titan in the Philippine movie industry,” said Ms. Poe-Llamanzares.

Veteran filmmaker and Film Development Council of the Philippines chairperson Jose Javier “Joey” Reyes credited the matriarch for his career, since she was the one who had first hired him as a screenwriter in 1979.

“I find peace with the thought that hers is a legacy that can never be ignored or forgotten because if it were not for Lily Monteverde — if it were not for this Mother — the shape of Philippine cinema would not have been what it is today,” Mr. Reyes said in a Facebook post.

He added that the loss is “eased by the thought that she is now with her partner in life, Father Remy, as they walk together to that place in eternity where they can be finally together.”

The Monteverde family also said in their statement that they are at peace knowing that their parents “remain together where there is no space or time.” Mr. and Mrs. Monteverde are survived by their children Winston, Sherida, Roselle, Dondon, and Goldwin, and their grandchildren.

The wake and memorial service are ongoing until Aug. 9 at 38 Valencia Events Place, New Manila, Quezon City, with a daily mass at 7 p.m. Interment is scheduled for Aug. 10 at the Heritage Park in Taguig. — B.H. Lacsamana

Highlands residential dev’ts highlight 40% open space

SM Prime Holdings, Inc. subsidiary Highlands Prime, Inc. said it has unveiled multiple residential projects within its residential and recreational leisure estate to meet the increasing demand for open spaces in community living.

These projects include the Highlands Residences, Trealva at Midlands West, Primrose Parks, and Horizon Terraces Garden Villas Scottsdale, all located within the 1,500-hectare Tagaytay Highlands, Lennie Mendoza, the company’s senior vice-president, said in an e-mailed statement last week.

“Tagaytay Highlands’ residential and recreational spaces will be complemented by commercial, service, and recreational amenities, fostering a vibrant, sustainable, and holistic environment,” she said.

Its main enclaves include The Highlands, The Midlands, and The Greenlands and Midlands West.

The company also noted the growing demand for open spaces, with 40% of the total development area of the residential communities allotted to unconfined areas, providing residents with views of Taal Lake and the Highlands’ mountainscape.

It also features areas for trekking, hiking, jogging and a bird sanctuary for bird watchers.

Located in Tagaytay, the development provides residents with proximity to services and support facilities, including hospitals, schools, shopping areas, industrial and technological parks, churches, banks, and gasoline stations. The Highlands Residences is a low-density condominium development that promotes open-air activities.

“Tagaytay Highlands is confident that there will be continued strong interest in its premium themed residential communities as it remains committed to sustaining its vision to be the exclusive leisure property of choice amid the demand for luxury mountain resort living,” the company said.

It was recently awarded a “Safety Seal” by the City Government of Tagaytay for upholding sustainability, safety, and security. — Aubrey Rose A. Inosante

Peso stablecoin may exit regulatory sandbox within one or two months

THE PESO-BASED stablecoin launched by cryptocurrency platform Coins.ph could exit the regulatory sandbox stage earlier than expected in the next month or two amid stable demand, an official said on Monday.

“I don’t think there was a specific time, but we do think that we can exit it quite soon, actually, given the current trend. There wasn’t really a specific amount of time but we’re probably looking at another month or so,” Coins.ph Global Marketing Director Katrina Gonzalez told reporters at an event.

Coins.ph Country Manager Jen Bilango said the adoption of PHPC has been strong and demand has been stable.

“Today is the first monthly report that we will submit to the BSP (Bangko Sentral ng Pilipinas). I think in terms of KPIs (key performance indicators), we’re actually more than 50% there,” she said.

“The reception has been good. Actually, we’re asking BSP if we can expand the sandbox,” Ms. Bilango added.

Coins.ph previously said it aims to have at least 20,000 to 30,000 users of PHPC during the sandbox period.

PHPC is the Philippines’ first regulated peso-pegged stablecoin.

Coins.ph received sandbox approval for its launch from the central bank in May.

Stablecoins are pegged to a fiat currency or commodity to give it a stable value, unlike other cryptocurrencies like Bitcoin or Ethereum, which have volatile prices as they are not backed by assets.

PHPC will remain at a stable value of one-to-one to the peso and is backed by cash and cash equivalents stored in Philippine bank accounts.

Ms. Gonzalez said the BSP’s sandbox restrictions include limits on the volume of PHPC being issued.

Holders of PHPC can use the stablecoin to transfer funds or for payments, she said.

Ms. Bilango added that Coins.ph has already conducted a pilot for cross-border payments from Australia to the Philippines using PHPC.

“We have that case study up and running. We received interest from different corridors in terms of making PHPC available. Obviously, you have the likes of Dubai, Singapore, and the United States using that. So cross-border is really the biggest and most important use case for us,” she said.

PHPC can be used to buy other cryptocurrencies such as Bitcoin and Ethereum, as well as other stablecoins, and for hedging amid market volatility, Ms. Bilango added. — A.M.C. Sy

PSE adds DoubleDragon, DigiPlus to MidCap Index, removes CEB, Shell

BW FILE PHOTO

THE PHILIPPINE STOCK Exchange (PSE) said it will update the companies in the MidCap, financials, industrial, property, services, and mining and oil indices on Aug. 12, but the PSE Index (PSEi) will remain the same.

For the 20-member PSE MidCap Index, DoubleDragon Corp. and DigiPlus Interactive Corp. will be added, while Cebu Air, Inc.  (CEB) and Shell Pilipinas Corp. will be removed, the PSE said in a document on Monday.

The PSE MidCap Index aims at evaluating the performance of midsized companies in the Philippine market.

According to the PSE, a listed company qualifies for inclusion in the sector indices if it is among the top companies in terms of liquidity and has a free float level of at least 20% of its outstanding shares. 

At the same time, the market operator said it also considered other relevant financial criteria as well as eligibility for early inclusion during the index review.

Under the industrial index, Alternergy Holdings Corp., Roxas and Co., Inc., and RFM Corp. will be new inclusions, while Raslag Corp. will be removed.

The property index will include Villar-led VistaREIT, Inc., while D.M. Wenceslao & Associates, Inc. and Ever-Gotesco Resources and Holdings, Inc. will be removed. 

For the services index, DigiPlus, Pacific Online Systems Corp., and STI Education Systems Holdings, Inc. will be added, while Chelsea Logistics and Infrastructure Holdings Corp. and Premiere Horizon Alliance Corp. will be removed. 

Asia United Bank Corp. will be added to the financials index, while Benguet Corp. “A” and “B” shares will be included in the mining and oil index.

The modifications to the local bourse were finalized after a regular review of the indices covering the July 2023 to June 2024 trading period, the PSE said.

“The index review ensures that market barometers feature the most qualified stocks based on the set criteria,” PSE President and Chief Executive Officer Ramon S. Monzon said. 

No changes were made to the benchmark PSEi, PSE Dividend Yield Index (DivY), or holding firms index.

The PSEi consists of the 30 largest and most active common stocks listed on the local exchange, while the PSE DivY Index includes 20 companies that regularly provide high-yielding dividends.

“The current PSEi members remain to be among the top stocks in terms of market capitalization, liquidity, and free float level,” the PSE said in an e-mailed statement. 

“The review of the composition of the indices was based on the policy on index management,” the PSE said. 

Sought for comment, AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message that the addition or removal from the sectoral indices “has almost no effect.”

“To a certain extent, some funds might track the DivY and Midcap indices, but the flows related to these additions/deletions would be negligible,” he said.

“There would only be an effect if a company is added to the PSEi, since it is the benchmark that is tracked by a lot of fund managers,” he added. — Revin Mikhael D. Ochave

Is Japan ready for a ‘world with interest?’

FREEPIK

JAPAN is on the cusp of a brave new world — one where bank deposits yield 0.1% a year.

OK, that might not sound like a revolution. But in a country where an entire generation has grown up knowing nothing but yields near zero, and mortgage rates that seemed to get cheaper by the year, Mitsubishi UFJ Financial Group, Inc.’s move to raise what it pays savers is exceptional.

It followed the shock rate hike by the Bank of Japan, and considering that the megabank slashed its return on deposits to a mere 0.001% in 2016, it’s easier to see why it matters. That shift is just one example of how Japan is stepping into a place many commentators have dubbed the “world with interest.” Anyone under the age of around 40 has no map to navigate this. If the Bank of Japan (BoJ) can stick to its promise and continue to hike — and in view of its history of choosing the worst possible time to raise rates, that’s a big “if.” Many things in the country are about to change.

The question remains: Is Japan really ready for it?

Initial reactions are concerning. In stark contrast to when the BoJ abandoned negative rates in March and markets shrugged, this time the yen tumbled and stocks panicked as many asked if the economy can handle higher rates. On the ground, things feel different, too, with friends and relatives with floating rate mortgages scrambling to establish when, how, and if their repayments will increase.

The BoJ seems to think those concerns will pass. “An improving economy and the resulting rise in interest rates can be expected to lead to an improvement in household income,” the bank said in April. Governor Kazuo Ueda echoed this in his remarks on July 31, punting question after question of the impact on consumers.

It’s true that on balance, households have far more in deposits than they owe in mortgages and other loans. Japan faces little prospect of a mortgage-rate panic like that seen in the UK during Liz Truss’s short term as prime minister. Multiple protections are in place for existing homeowners, with caps to prevent sudden increases.

However, assets are not distributed equally — older households, who’ve had time to pay down mortgages and build wealth, are net asset rich; younger generations in their 30s and 40s, working families with mortgages and car loans, owe more than they have in the bank, according to data from the Japan Research Institute. That means older and richer households will disproportionately benefit.

Ever since Ueda arrived at the central bank 15 months ago, economists have been debating what the “world with interest” will look like. One hope is that, given that the value of money decreases over time in an interest-positive inflationary environment, consumers will spend more. That would be encouraging given their tendency to save. But Japan is frequently a place where economic textbook theories go to die, and it’s entirely possible that asset-poor young couples, already spooked by inflation, will scrimp and save to afford pricier mortgages instead.

Another thing that has economists excited is the prospect that the rising price of debt will spell a potential end to Japan’s “zombie” companies, unproductive entities artificially kept alive by cheap money. That would mean a rise in bankruptcies among debt-laden small- and mid-sized firms — and perhaps lead to the type of unemployment not seen since the early 2000s. But things are changing here, too: The country is in the throes of a chronic labor shortage, and the death of non-productive companies might instead free up resources to do something more useful.

The optimistic take is that the labor shortage means there might not be a better time to set out on a different path. Ueda was bullish in his view that, during the period that mortgage caps keep higher repayments at bay, wages will continue to increase — meaning homeowners will be better off by the time larger repayments roll around. The bank is increasingly confident in its “virtuous cycle” of price hikes and wages increases, believing, as Ueda outlined in May, that the tight labor market and the jolt from inflation has changed firms’ habits permanently.

It seems certain that these changes will work to further break down the cocoon that has sheltered a generation, creating a nation where, in return for flat prices and wages, unemployment and all its downstream social problems were largely warded off.

But things are changing anyway, regardless of what Ueda does. The old social compact is fracturing among a new generation with different attitudes toward risk-taking and company loyalty, and the labor crisis encouraging more workers to jump between firms. A return to the world with interest will almost certainly mean an increase in the bifurcation of haves and have-nots. The government will need to be ready with policies to cushion the blow, and direct spending in the most productive ways. That task will be made trickier when it can no longer rely on cheap cash to finance its debt.

The ultra easy-money policy of previous BoJ Governor Haruhiko Kuroda was frequently seen as a gamble, a jolt that would wake Japan from its slumber. But this new world feels as risky as anything he ever did. It might shock Japan in new and unexpected ways — whether the country is ready or not.

BLOOMBERG OPINION

Sports and music tourism will soon represent a $1.5-trillion economy

FORMULA ONE (F1) has been surging in popularity with younger generations ever since Netflix, Inc. premiered its Drive to Survive docuseries, in 2019; a full 30% of F1 fans attributed their interest in the sport to the show. In 2023 the average race weekend had more than 270,000 in-person spectators, up from 195,000 in 2019.

IF YOU’VE lost track of how many people in your orbit have recently posted pictures of themselves at a Formula One (F1) race or Taylor Swift concert, chances are you’re not alone. According to new research from Collinson International Ltd., which owns Priority Pass and LoungeKey airport lounges around the world, sports and music tourism are growing at unprecedented rates and are forecast to represent a $1.5-trillion industry by 2032.

Sports tourism represents the overwhelming majority of that figure. Valued at $564.7 billion in 2023, it’s expected to skyrocket to $1.33 trillion in the next eight years. Music tourism, meanwhile, is projected to contribute an additional $13.8 billion, more than doubling its current valuation of $6.6 billion.

For the purposes of its report, published on July 29, Collinson defined travelers as anyone who flew to an event, whether internationally or within their own country. Of 8,537 surveyed travelers from 17 countries, more than four in five (83%) have flown to a sporting event while 71% have boarded a plane for a concert in the past three years, or plan to in the next 12 months.

Collinson used those results to model how the industry has expanded and may continue to do so — assuming linear growth in spite of history-making events such as Ms. Swift’s Eras Tour or the first Summer Olympics in eight years to allow in-person spectators, which are currently underway in Paris.

“People are placing high value on experiences over objects,” says Christopher Ross, president of Collinson International EMEA. “If you are going to a sports or music event, the experience does not just start when you walk into the stadium. It’s the planning, travel itself and excitement.”

About 83% of people traveling for events are heading to soccer matches, basketball games, the Olympics, F1 races, or tennis tournaments — the five most popular sporting events in descending order. In a world where streaming networks have created easily accessible pathways to fandom, Mr. Ross says, “the ability to become a global fan has become much more of a reality.”

Soccer captured 69% of the survey’s sports-goers, who said they’d recently traveled to a live match or had plans to do so in the next year. That includes those who were among the more than 1 million fans in Qatar for the 2022 FIFA World Cup but not those who plan to attend the next World Cup, in 2026.

Formula One, meanwhile, has been surging in popularity with younger generations ever since Netflix, Inc. premiered its Drive to Survive docuseries, in 2019; a full 30% of F1 fans attributed their interest in the sport to the show. In 2023 the average race weekend had more than 270,000 in-person spectators, up from 195,000 in 2019.

It’s not just that more people are interested in the sport; ticket prices are also on the rise. Tickets for races in the United Kingdom this summer have reached £600 ($765) for prime “grandstand” seats, with general admission often costing more than £400 per person — up from about £300 just two years ago — prompting British driver Lewis Hamilton to publicly criticize the rising price tag.

To Mr. Ross’ point, those tickets are just one aspect of the sports tourism economy, which also includes hotel stays, restaurant meals, taxi rides, merchandise and other expenses. Collinson data show that 77% of travelers arrive one or two days before a concert or competition, and some 80% will stay one to three days after. Sports tourists spend the most, with 51% exceeding $500 per trip per person on flights and other expenses, not including the event tickets.

Take Las Vegas, which hosted an F1 Grand Prix race in November 2023. The event brought $1.5 billion in economic impact to the city, 50% more than the Super Bowl would raise just three months later. “It’s a younger demographic,” Mr. Ross says of F1 fans, who are among the most likely to add extra expenses to their sports trips. “It seems counterintuitive, because you would think they have less disposable income,” Mr. Ross adds.

That doesn’t diminish the effect of other events. The Paris Summer Olympics, while less of an international tourism juggernaut than expected, are still attracting enough tourists to send Airbnb bookings up 133% from the same period last year. International tourists have been expected to pay around $5,000 for hotel stays, airfare and event ticket costs. And sports fans, Collinson says, are willing to spend in airports too — which is of note to the company. Over half of sports fans, its research shows, spend $500 or more in the airport alone; those aged 25-34 are the highest spenders, with a third of them spending in excess of $1,000 while waiting for their flights to board.

On the music front, Collinson cites major events including Rock in Rio, Coachella and Taylor Swift’s Eras Tour as tourism drivers. But the latter is an unprecedented anomaly. Swift fans have driven 45% year-over-year increases in airfare sales to destinations such as Milan and Munich during concert dates, according to United Airlines Holdings, Inc., and the tour resulted in larger booking spikes for Paris’ top-tier hotels than even the Olympics.

For those in the hospitality industry, the question now is how to cash in on the trend. Marriott International used the Eras Tour as an opportunity to earn new members for its Bonvoy loyalty program, promising free tickets via raffles. By contrast Auberge Resorts Collection, which has 27 five-star resorts from Italy to Hawaii, is teaming with Mercedes-Benz to create a new concert series starting in October, with live performances so far featuring Kate Hudson, Maren Morris, and LeAnn Rimes. At Tennessee’s iconic Blackberry Farm Resort, which has its own concert hall on-site, the events lineup includes performances by Kacey Musgraves, Emmylou and Friends, and Noah Kahan in the coming months, with general access tickets typically starting at $1,000 per person. — Bloomberg

Reytech taps skills of OFWs to address market demand

BATANGAS-BASED Reytech Construction & Development Corp. said it is leveraging the skills set and industry practices of returning overseas Filipino workers (OFWs) to pool manpower in the growing local construction market.

“Many OFWs gain extensive experience in engineering projects abroad, often working with advanced technologies and methodologies,” Reytech Founder and Chairman Hector S. Reyes said in an e-mailed statement last week.

The company has dedicated a portion of its workforce to OFWs with expertise in relevant fields such as mechanical, electrical, civil, or software engineering, most of whom were referred by current employees, Mr. Reyes said.

He added that skilled migrant workers’ insights could contribute to the booming construction industry by “building and delivering quality construction.”

“If they were given a chance to find a good company, I know they would rather stay and work here in the Philippines instead of tolerating unfavorable contracts and labor conditions all while being away from family,” Mr. Reyes said.

He said Filipinos remain a top choice for employers abroad for their dedication, reliability, adaptability, and proficiency in English, which is a competitive advantage.

The Department of Migrant Workers said 2,330,720 OFWs were deployed in 2023, surpassing pre-pandemic numbers and hitting an all-time high since 1969.

The Philippine construction industry is forecasted to grow at an annual rate of 9.6% until 2025, reaching a total value of $8.4 billion by the end of the forecast period. This growth follows a projected increase of 21.2% between 2020 and 2023, according to business management consultant group YCP Solidiance. — Aubrey Rose A. Inosante

BSP launches online academy for financial literacy

BW FILE PHOTO

THE BANGKO SENTRAL ng Pilipinas (BSP) has launched the BSP e-Learning Academy (BELA), which aims to help Filipinos improve their financial literacy.

“BELA offers a free and interactive platform for learning, breaking down traditional barriers and making education accessible to all,” BSP Managing Director Charina B. De Vera-Yap said at a briefing on Monday.

It offers modules that cover financial planning, budgeting, saving and debt management.

The BSP is also working on modules on the basics of investing, fraud prevention, consumer protection, and personal equity and retirement account, among others.

Students will be able to connect with financial education partners and interact with instructors through fora via messaging or video conferencing, among other media.

The platform is set to be launched soon, the BSP said.

Meanwhile, the central bank also announced other financial education programs and initiatives.

On Monday, the BSP signed a memorandum of agreement with the Department of Social Welfare and Development (DSWD) and BDO Foundation. In 2020, the central bank already collaborated with the DSWD to create a financial consumer protection module for Pantawid Pamilyang Pilipino Program (4Ps).

“This year, we are expanding efforts to include DSWD employees and local social welfare officers. By equipping our public servants with essential financial knowledge and skills, we aim to enhance their ability to serve the nation and contribute to a prosperous future,” Ms. De Vera-Yap said.

The BSP is also enhancing its current partnership with the Bureau of Fisheries and Aquatic Resources and Agricultural Credit Policy Council, along with the BDO Foundation, on their program that created “innovative financial education games” that seek to boost the financial literacy of agri-workers. The central bank is expanding this partnership to include the entire Department of Agriculture to reach more farmers and fisherfolk, she added.

It has also signed a memorandum of understanding with the Credit Card Association of the Philippines to promote the responsible use of credit. — Luisa Maria Jacinta C. Jocson

Cebu Pacific receives 3 aircraft; restructuring plan gets SEC nod

CEBUPACIFICAIR.COM

By Ashley Erika O. Jose, Reporter

CEBU PACIFIC (CEB) has received three more aircraft, representing more than half of its projected aircraft deliveries for the year, the budget carrier said on Monday.

“Our continuous fleet expansion efforts underscore our commitment to provide safe, affordable, and accessible flights,” Cebu Pacific President and Chief Commercial Officer Alexander G. Lao said in a statement.

The airline said three Airbus jets arrived at the Ninoy Aquino International Airport, including one A330neo, one A320neo, and one A320ceo, representing more than half of its expected 17 aircraft deliveries this year.

“As the demand for air travel continues to rise, we are confident that we will be able to cater to more passengers looking to connect with other people or discover new destinations with Cebu Pacific,” Mr. Lao said.

Airbus’s new-engine option aircraft promise significantly improved fuel efficiency and can use sustainable aviation fuel (SAF). Currently, all Airbus aircraft are certified to operate with an SAF blend of up to 50%.

Cebu Pacific hopes to adopt SAF across its network by 2030.

To date, Cebu Pacific operates a diversified fleet with a total of nine Airbus A330s, 39 Airbus A320s, 22 Airbus A321s, and 15 ATR turboprop aircraft.

Last month, the company announced that it would order up to 152 A321neos worth P1.4 trillion or $24 billion, which is touted as the largest aircraft order in the country.

Separately on Monday, Cebu Air, Inc., the budget carrier’s operator, said that the Securities and Exchange Commission (SEC) has approved the company’s restructuring plan.

On July 17, Cebu Air’s board of directors greenlit the company’s proposal to pursue an equity restructuring of its deficit in 2023.

The company proposed to use its additional paid-in capital of P20.66 billion to clear its deficit amounting to P16.27 billion, leaving it with a capital of P4.39 billion.

“The equity restructuring will not involve a change in the par value of CEB’s shares, nor will it require an infusion of any additional paid-in capital; neither will the equity restructuring result in any change in the number of CEB’s issued, outstanding, or listed shares,” the company told the stock exchange.

For market watchers, this move signifies the company’s intention to improve its balance sheet, allowing it to be attractive to investors.

“This may be aimed at cleaning up its balance sheet ahead of potential fundraising for its massive expansion plan,” Chinabank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce described the proposal as a “significant financial maneuver.”

“CEB aims to clean up its balance sheet. This move can make the company more attractive to investors by presenting a healthier financial position,” he said.

Mr. Arce said that while the restructuring plan does not directly fund its aircraft purchase, it will position Cebu Pacific to potentially raise funds through other means, such as equity or debt, or by simply “improving its financial health and credibility.”

“Cebu Pacific’s decision to restructure now is likely aimed at strengthening its financial position in preparation for significant future investments,” Seedbox Securities, Inc. equity trader Jayniel Carl S. Manuel likewise said in an e-mail.

Mr. Manuel said the restructuring would give the company more flexibility in managing its “substantial commitments.”

“A more stable financial outlook can boost investor confidence, potentially leading to an improved stock price and easier access to capital markets for future funding needs,” Mr. Arce said.

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