Home Blog Page 1745

P95-billion Pasig River Expressway project to proceed, San Miguel chief says

SAN MIGUEL Corp. (SMC) is proceeding with its P95-billion Pasig River Expressway (PAREX) project, its top official said on Monday.

“We cannot [withdraw],” San Miguel President and Chief Executive Officer Ramon S. Ang told reporters. “We are addressing the concerns, but it is currently on hold.”

In March, Mr. Ang said the company would abandon the project — a 19.37-kilometer six-lane, all elevated expressway that traverses Pasig River — amid public opposition given its impact on the environment.

The project is expected to provide an alternative and faster link to Metro Manila’s largest business districts such as the Makati Business District, Ortigas Center and Bonifacio Global City.

Critics have said the project could compromise the river’s functionality, cause air pollution and affect heritage structures and sites.

Last week, the Toll Regulatory Board (TRB) said San Miguel had not officially terminated the project.

The TRB said it could not terminate the project, adding that there are monetary consequences under the supplementary toll operation agreement if the government ends it.

In 2023, the Environment department said it would study the project’s environmental impacts.

The TRB said its study on the PAREX project was on hold after SMC in March said it would abandon the project. — Ashley Erika O. Jose

Director, cartoonist, erstwhile National Artist Carlo J. Caparas, 80

FACEBOOK.COM/PCAPARAS93

NO ONE else did schlock quite like he did. Carlo Magno Jose Caparas, billed as Carlo J. Caparas in his work in cinema, has died. He was 80 years old.

The news was confirmed through a Facebook post by his daughter, Peach Caparas, on May 26. The post was an ode to her father titled, “Sa Bawat Tipa ng Makinilya” (For every stroke of the typewriter’s keyboard). There, she detailed some of the intellectual properties that have sprung from him: “Panday, Pieta, Elias Paniki, Bakekang, Totoy Bato.”

Born in 1944 to a working-class background, Mr. Caparas took a series of odd jobs, culminating in a stint as a security guard at a publishing house. His night shift gave him the time to entertain himself by reading, until a stray bullet during a company strike struggle forced him to take a leave. The pause led to the publishing of his first comic, called “Citadel,” published in Superstar magazine.

One of his most popular comics, “Ang Panday,” was adapted to film in 1980, starring Fernando Poe, Jr., later dubbed The King (of Philippine cinema). While Mr. Caparas already had a string of films to his name thanks to his Golden Lion Films International production outfit, also adaptations of his work in comics, Panday was a sure hit with all who were involved. To this day, the comic series is still being adapted, fostering a formidable franchise.

In the 1990s, however, Mr. Caparas would be known for his gory “massacre” films, which tackled crimes that terrified a nation. He marked 1993 with The Vizconde Massacre: God Help Us! (based on the 1991 murders of the middle-class Vizconde family), The Myrna Diones Story: Lord Have Mercy! (based on the 1992 massacre of a Cordillera family), and Humanda Ka Mayor! Bahala na ang Diyos (loosely based on the 1993 Eileen Sarmenta rape-slay case). All of these films had gore, melodramatic music, rather questionable decisions of taste (the Vizconde movie was shot in the same house where the murders took place), and the screams of Kris Aquino (the presidential daughter and then-budding actress, yet to hit her stride as a well-loved television host, who gained the description “Massacre Queen” for starring in these films). Still, the formula worked: Mr. Caparas saw out the 1990s and the early 2000s with sensationalized depictions of brutal and topical crimes.

His other film credits include movies about rape victims and actresses Maggie dela Riva and Annabelle Huggins, murder victim Delia Maga (a film  by Joel Lamangan about her alleged murderer, convict Flor Contemplacion, the execution of whom caused diplomatic unrest between Singapore and the Philippines, was released the same year with Nora Aunor in the title role; a more decidedly villainous Elizabeth Oropesa plays her in Mr. Caparas’ version of events), and murder victim actress Lilian Velez (played by Sharon Cuneta; Mr. Caparas was a whiz at setting up star-studded casts).

In 2009, Mr. Caparas was involved in a controversy when he and six others were proclaimed as National Artists of the Philippines. The honor was disputed by the National Commission for Culture and the Arts (NCCA) and the Cultural Center of the Philippines (CCP), among other artistic bodies and individual artists. The complaints were raised due to the nature of Mr. Caparas’ work, as well as the presidential prerogative exercised by then-president and now Representative Gloria Macapagal-Arroyo. In 2013, the Supreme Court declared the National Artist proclamations of Mr. Caparas, Philippine Educational Theater Association founder Cecile Guidote-Alvarez, fashion designer Pitoy Moreno, and architect Francisco Mañosa, null.

While the franchises spawned by his comic series live on, his last actual film credit was for 2017’s Kamandag ng Droga. A street in Pasig is named after him, and Mrs. Macapagal-Arroyo awarded him with a Presidential Medal of Merit in 2007.

His wife, Donna Villa, died in 2017; and they are survived by children CJ and Peach.

“Dad, you will forever be loved, cherished, and honored… by all of us. Love, The children of a King,” said Ms. Caparas in her Facebook post.

The wake, as announced by Ms. Caparas, will start on May 27, from noon to midnight at the Golden Haven Memorial Chapels and Crematorium, Villar Sipag, C5 Extension Road, Brgy. Manuyo Dos, Las Pinas. — Joseph L. Garcia

PNB plans return to offshore debt market

WIKIMEDIA.ORG

PHILIPPINE National Bank (PNB) is looking to raise at least $300 million from an issuance of offshore bonds, it said on Monday.

The offer, which has an option to upsize, was approved by the bank’s board of directors on May 24, the lender said in a disclosure to the local bourse.

Alongside the offer, PNB’s board also approved the doubling of its euro medium-term note program to $2 billion from $1 billion previously.

The approved offer will be issued out of this updated program, the bank said.

In 2019, PNB raised a record $750 million from the offshore debt market through fixed-rate senior notes, more than double its $300-million target, as the order book reached $3.25 billion.

These bonds were priced at 99.473% for a yield of 3.391% and a coupon rate of 3.28%.

Proceeds from the bonds were used to support PNB’s loan expansion.

PNB’s net income rose by 10.39% year on year to P5.31 billion in the first quarter amid higher interest earnings and decreased provisions and expenses.

As of end-2023, PNB was the seventh-largest bank in the country in terms of assets with P1.21 trillion, latest central bank data showed.

Its shares down by 15 centavos or 0.65% to end at P23 apiece on Monday. — AMCS

Colliers: Office market sustained momentum amid challenges

ADOLFO FELIX-UNSPLASH

DURING the first quarter (Q1), total office transactions in Metro Manila reached 240,100 square meters (sq.m.), 88% higher versus the same period in 2023. Traditional firms cornered 44% of total office space deals recorded in Metro Manila, followed by business process outsourcing firms (BPOs) at 33% and Philippine Offshore Gaming Operators (POGOs) at 23%.

While transactions volume has increased year on year (YoY), we noted that area size requirements of some tenant classes have decreased. For instance, the average deal size of traditional firms decreased from 800 sq.m. to 600 sq.m.

Despite sustained demand, net take-up remains muted (75,000 sq.m. in Q1 2024) in Metro Manila due to continued space surrenders due to nonrenewal and rightsizing of occupiers. In Q1 2024, we recorded 161,000 sq.m. of new surrenders, slightly higher than the average quarterly vacated space of 145,000 sq.m. in 2023. We expect this trend to persist until early 2025 as the remaining pre-pandemic leases are yet to expire.

2024 US ELECTIONS SEEN TO PAUSE NET DEMAND
The 2024 US Elections is expected to affect net take-up as the largest office space occupiers are outsourcing companies which get as much as 60% of their businesses in America. Colliers’ historical office market data has shown that over the past three pre-pandemic US Elections, office net demand peaks the quarter before the end of the elections as occupiers are signing up deals before the election has decided.

On average, net demand decreased by 30% quarter on quarter (QoQ), yet eventually recovers by 40% QoQ in the succeeding quarter of the election period.

PERSISTING HIGH VACANCY MARKET
While overall Metro Manila office vacancy marginally improved to 19% in Q1 2024, we expect this to increase to 19.6% by end-2024 given new supply completions and space surrenders. The volume of vacated spaces is expected to follow the trend of office transactions as the market is still contending with expiring pre-pandemic leases.

FLATTISH RENTAL GROWTH
Growth of headline rates in Metro Manila remains flat as we recorded an increase of only 0.6% YoY. Rental spreads (i.e the difference from headline to transacted rates) range between from 5% to as high as 30%, especially in high vacancy markets such as Bay Area.

BRIGHT SPOT IN THE COUNTRYSIDE
The countryside saw better performance during the first three months of the year. A total of 52,000 sq.m. of office deals were recorded in provincial areas, with Metro Cebu (35%) leading in terms of activity followed by Pampanga (17%) and Davao (15%).

While there is an increase in demand for office space in provincial areas, Colliers has noted that some markets have limited availability of options for outsourcing locators with typical area size requirements of 2,500 sq.m. Using our Q1 2024 data, Colliers has identified regions with high, middle, and low availability of options for a typical BPO requirement of 2,500 sq.m. Some areas identified with moderate to low supply are Bacolod, Iloilo, Cavite, Davao, Cagayan de Oro, and Dumaguete.

MAXIMIZE EXISTING MARKET CONDITIONS
The current market condition presents opportunities that both tenants and landlords can take advantage of. We encourage tenants to review their real estate as early as 18 months before lease expiry date to have a better position for a good renewal or relocation.

The leasing process has now lengthened as current hybrid policy and employee demographics have become key considerations in real estate planning. We advise that the first six months be dedicated to workplace strategy, i.e, studying utilization metrics and employee locations then the next 12 months be spent for proper site selection, landlord discussions and fit-out construction or renovation.

While landlords taper down Metro Manila supply in the next four years, refurbishment of aging properties in their current portfolio is encouraged to support market-competitive rental rates. Developers are also encouraged to assess their provincial office pipeline and ramp up the construction of ongoing projects in identified key locations with low availability of options.

 

Kath Taburada is a senior market analyst, while Kevin Jara is the director, both at Colliers Philippines.

PHL told to subsidize power, explore oil reserves in South China Sea

PHILSTAR FILE PHOTO

By Ashley Erika O. Jose, Reporter

THE PHILIPPINES should start subsidizing power costs and explore oil reserves in the South China Sea to lower electricity rates, according to business tycoon Ramon S. Ang.

“There is a big natural gas field in the West Philippine Sea [and] we should concentrate on developing that in the future,” the San Miguel Corp. president and chief executive officer told reporters on the sidelines of an economic forum on Monday, referring to areas of the sea within the Philippines’ exclusive economic zone. “The area is disputed but we should explore that in the future.”

Mr. Ang said the country has high electricity costs in the absence of state subsidies aside from taxes on power and oil products.

The Electric Power Industry Reform Act of 2001 deregulated the Philippine power industry and privatized state-owned power generation and transmission assets.

The measure was enacted supposedly because government control of the industry inhibited private sector expansion.

But the Department of Energy sees no need to subsidize power costs.

“What is the need for it if we trust private sector investors to come in and invest in the Philippine energy sector?,” Energy Assistant Secretary Mario C. Marasigan told BusinessWorld in an interview. “What’s the need for a subsidy?”

The Center for Energy, Ecology and Development in a 2020 report said the Philippines has the second-highest electricity prices in Asia at P8.96 per kilowatt-hour on the average.

Meralco has said the rate for a typical household would rise to P11.41 per kilowatt-hour this month.

National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan said the Philippines is leaning toward not subsidizing the oil and power sector.

“We should avoid subsidizing power, electricity and fuels generally because the biggest consumers of fuels are the rich,” he said on the sidelines of the forum.

Growth momentum key to Philippines’ upper middle-income goal

ALEXES GERARD-UNSPLASH

At the BusinessWorld Economic Forum (BWEF) 2024, which was held on May 22 at the Grand Hyatt Hotel, National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan reiterated the economic team’s target of having the Philippines become an upper middle-income country (UMIC) by 2025. See this story in BusinessWorld, “PHL on track to reach upper middle-income status, says NEDA chief” (May 24).

A UMIC is a country that has a gross national income (GNI) of between $4,466 to $13,845 per person per year. GNI is computed by taking gross domestic product (GDP) minus net primary income from abroad (NPIA), mainly but not entirely overseas Filipino worker (OFW) remittances. In 2023, the GNI of the Philippines at current or nominal prices was P26.99 trillion while GDP was P24.32 trillion, so the NPIA was P2.67 trillion.

In per capita values in 2023, GNI was P241,165 or $4,335 at an average exchange rate of P55.63/US$ last year, and GDP per capita was P217,300 or $3,906. This means that we only need to increase our GNI per capita by $131 or P7,362 at P56.20/US$ to be a UMIC this year.

We need this kind of increase in per capita income to further attract investments, domestic and foreign. Investors should know that not only is our total population or consumer base rising, but so is the spending capacity per person. So, they will put their money and investments here, or expand existing ones, which will create more jobs and further raise our per capita income.

The average share to total GDP from 2019 to 2023 were: household consumption (C) 73%, capital formation or investment (public plus private) 23%, and government consumption 14%. So, it is C that really drives — pulls up or down — overall GDP and GNI, and we are curious to see what would further raise C. After all, someone’s spending is someone’s production, or a family’s demand is another family’s supply.

I checked the growth rate of GDP and C and compared it with the overall inflation of the Philippines. There is indeed an inverse relationship between the inflation rate and C: When inflation is low, say below 4%, C is high, between 5.5% to 6.2%, and consequently, GDP is high, 6.2% to 6.6%, as it was from 2010 to 2019. When inflation is high, above 4%, C is low — C was only 4% from 2005 to 2009, and 2.5% from 2020-2023. Investment also follows the same trend as C (see the table).

So, if we want to expand C, investment, overall GDP, and, by extension, per capita income, we should pursue policy measures that are investment-friendly, productivity- and supply- enhancing, and waste-reducing. These in turn will reduce inflation, especially food inflation.

Mr. Balisacan said in his speech at the economic forum that “If growth this year is not dampened, [we] should be on track… The good thing is inflation is manageable now. Even though we expected worse for the April [print], it turned out better than expected. So, we hope that will continue.”

Finance Secretary Ralph G. Recto correctly observed that “The Philippines’ rise to upper middle-income status is anchored on sustaining our growth momentum. The trajectory, the policies, and the momentum are in place. To achieve that, we are focused on keeping the economy growing at an elevated pace by maintaining price stability, achieving or even surpassing our revenue targets, and investing in productivity-enhancing sectors.”

Budget Secretary Amenah F. Pangandaman has appropriately pointed out that “our public spending priorities remain focused on improving our human and physical infrastructure, productivity-raising education, transportation (air-land-sea) and communication-enhancing infrastructures that will further increase our overall economic productivity and efficiency.”

I support the economic optimism of the economic team. In particular, I support Mr. Recto’s policy of no-new-taxes, improving revenue collection like controlling smuggling and illicit trade, and improving non-tax revenues. I also support Ms. Pangandaman’s National Government Rightsizing Program (NGRP): control the expansion of the bureaucracy while improving the efficiency of those offices that are retained.

Pursuing high and sustained growth is non-negotiable because it refers to uplifting more Filipinos from poverty and uplifting the middle class to become wealthy households. The pursuit of economic prosperity and material wealth will lead to more environmental sustainability and a more peaceful future.

Yesterday afternoon, May 27, the economic and infrastructure teams held a Philippine Economic Briefing at the Philippine International Convention Center. I will discuss the major points they took up in this column on Thursday.

 

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

minimalgovernment@gmail.com

Lamudi sees heightened developer confidence with rise in ad spending

ONLINE property marketplace Lamudi Philippines said developers are increasing their spending on online advertising as they continue to launch new projects this year.

“The outlook is bright. We are seeing more confidence from developers as they continue to launch new projects and increase their advertising spending online,” Lamudi Philippines Associate Director for Corporate Accounts Mark Bailey told BusinessWorld on May 5.

Mr. Bailey added that one of the key opportunities this year for developers is international marketing to overseas Filipino workers, following a record year of remittances.

Data from the Bangko Sentral ng Pilipinas showed that cash remittances rose 2.5% to $2.74 billion in March from $2.67 billion in the same month last year.

“While we enable a seamless property search journey online with lamudi.com.ph, there will always be a need for face-to-face interaction when considering an investment,” Mr. Bailey said, referring to the Lamudi Property Fair held from May 3 to 5 at TriNoma Activity Center.

The three-day fair allowed real estate developers to open stalls and offer deals, discounts, and promotions to property seekers.

Mr. Bailey said the fair brought the property-seeking audience closer to its partner developers such as RLC Residences, Ayala Land, Avida, Amaia, Aboitiz Land, PH1 World Developers, Filinvest Alabang, Vista Land, and BPI Buena Mano.

Taylormade Construction and Realty Corp., Picar Development Corp., Community Creators, Inc., Eton Properties, DMCI Homes, Hausland Development Corp., and Primehomes Real Estate Development, Inc. were also present.

Lamudi Philippines Associate Director for Brand Marketing Carlo Rosales said the company is also set to go to Cebu as part of its plan to cater to an expanded audience in the Visayas-Mindanao region.

The anticipated Cebu leg is set for Aug. 16 to 18 at Robinsons Galleria Cebu, marking a comeback from the two-day expo in 2019.

Lamudi said this was brought about by the key insights from its 2023 Real Estate Hotspots Unwrapped, which showed a rising interest among condo buyers in Cebu, coupled with the city’s improving infrastructure. Aubrey Rose A. Inosante

BoJ to proceed cautiously with inflation-targeting frameworks, governor says

FLICKR.COM

TOKYO — The Bank of Japan (BoJ) will proceed cautiously with inflation-targeting frameworks, Governor Kazuo Ueda said on Monday, noting that some challenges are “uniquely difficult” for Japan after years of ultra-easy monetary policy.

In an opening speech to a BoJ-hosted conference in Tokyo on central banking, Mr. Ueda said Japan has “made progress in moving away from zero and lifting inflation expectations.”

To achieve 2% inflation in a sustainable and stable manner, the BoJ “will proceed cautiously, as do other central banks with inflation-targeting frameworks,” he said.

“While many of the challenges we face are similar to those encountered by our counterparts, some are uniquely difficult for us,” the BoJ chief added.

Mr. Ueda noted that estimating the neutral interest rate accurately is particularly challenging in Japan, given the prolonged period of near-zero short-term interest rates over the past three decades.

“The absence of significant interest rate movements poses a considerable obstacle in assessing the economy’s response to changes in interest rates,” he said.

At the same conference, BoJ Deputy Governor Shinichi Uchida said the end of Japan’s battle against persistent deflation is in sight, but acknowledged that anchoring inflation expectations to the 2% target is “a big challenge.”

Labor market conditions have changed structurally and irreversibly, helping resolve the original causes of deflation such as excess labor supply, Mr. Uchida said.

“We returned to a conventional monetary policy framework, aiming at a 2% price stability target through adjustments of the short-term policy rate, which means we have overcome the zero lower bound,” he said.

In a landmark move in March, the BoJ ended eight years of negative interest rates and other remnants of its radical stimulus as it judged that sustained achievement of its 2% inflation target was in sight.

Mr. Ueda has said the central bank intends to hike rates to levels considered neutral for the economy, as long as growth and inflation move in line with its projections.

Markets are expecting the BoJ to soon embark on a full-fledged tapering of bond purchases, sending the 10-year Japanese government bond yield to a 12-year high last week. They are also pricing in an interest rate hike to at least 0.20% by the end of the year. — Reuters

Taiwan’s increasingly political Drag Race queen wows fans on home stage

Nymphia Wind in RuPaul’s Drag Race. — IMDB

TAIPEI — Taiwan’s Nymphia Wind, the first East Asian to take the crown in RuPaul’s Drag Race and an increasingly political figure, wowed hundreds of fans at a big homecoming performance in Taipei.

Wearing her signature yellow outfit, Nymphia took to the stage to wild applause on Saturday night with 50 other drag queens, including fellow RuPaul’s contestants Mirage and Plane Jane.

Her win last month has electrified Taiwan, giving a boost to the proudly democratic island, which China claims as its territory, and which has limited international recognition a boost to its already firmly established liberal credentials.

Nymphia has become an unabashed unofficial ambassador for Taiwan on the world stage and champion of its democratic, freewheeling way of life. Taiwan legalized same-sex marriage in 2019, a first for Asia.

This month Nymphia put on a riotous, emotional performance for outgoing President Tsai Ing-wen at the presidential office, and last week she took part in massed protests against contentious parliament reforms.

“My stance is the same: that we need to safeguard the democracy that we have fought so hard to gain,” she told reporters before headlining the International Drag Festival in Taipei. “I think we should stand up to defend what we care about.”

She added: “I’m still adjusting to everything I’ve experienced. It happened so fast. I’m proud to take on the responsibility of queen.”

Nymphia was already a well-established artist on Taiwan’s thriving drag scene, often wearing over-the-top outfits inspired by bananas, and has done shows at Taiwanese temples and photo shoots at wet markets dressed as a banana. 

Her win has inspired others, including her best friend.

“What we need to do is be ourselves, let everyone knows that everything we are doing is for art,” said Chiang Wei, 26.

While Taipei hosts East Asia’s largest Pride march every October, the community has occasionally faced hostility from conservative groups.

Vera Yang, 27, who watched Nymphia and the other drag queens at the show on Saturday, said she had become more courageous to express herself after watching her journey on the show.

“I feel like I see myself in there. I am not a person who is good at expressing myself due to the environment I’m in, but after seeing what she’s done, I feel that I can give it a try regardless of whether it will succeed,” she said. — Reuters

AboitizPower taps Thai firm for smart power plants

BANGKOK — Aboitiz Power Corp. (AboitizPower) has partnered with Thailand-based REPCO NEX Industrial Solutions to turn its conventional coal power plants in the Philippines into smart facilities.

“This partnership between AboitizPower and REPCO NEX will establish the Philippines’ first smart power plant,” Ronaldo S. Ramos, chief operating officer at unit AboitizPower Thermal Business Group, said at the signing ceremony here on Monday.

He said the company would “harness the power of data science and AI (artificial intelligence) to create a digital twin technology.”

Its “Project Arkanghel” will develop digital twins for the 300-megawatt (MW) Therma South, Inc. in Davao City and the 340-MW Therma Visayas, Inc. in Toledo City, Cebu.

Both assets will serve as pioneer models for future installations at other thermal sites, AboitizPower said in a separate statement.

It added that digital twins are a virtual replica of a power plant that mimics its operational processes and systems, allowing operators to simulate or stress-test scenarios.

The technology will also let them detect faults and glitches earlier and in real time, all within a virtual environment.

A digital power plant will streamline data collection and review for the benefit of asset health monitoring, life cycle management and predictive maintenance, the company said.

“The energy landscape in the Philippines is constantly evolving on the path towards transition,” AboitizPower Chief Finance Officer Juan Alejandro “Sandro” A. Aboitiz said at the ceremony.

“Our economy continues to grow at a rapid pace, requiring new sources of dependable and reliable power supply to support that economic growth,” he added.

In 2022, the Aboitiz group launched its Great Transformation campaign to become the Philippines’ first “techglomerate” by using resources and cross-company synergies to deliver more value. — Sheldeen Joy Talavera

Furiosa, Garfield top disappointing Memorial Day weekend

Anya Taylor-Joy in a scene from Furiosa: A Mad Max Saga. — IMDB

Furiosa: A Mad Max Saga, the latest installment of the dystopian action films, took in $25.6 million in the United States in the first three days of the Memorial Day weekend.

The Warner Bros. Discovery, Inc. picture had been projected to generate between $30 million and $40 million, according to estimates from the research site Boxoffice Pro.

Meanwhile, The Garfield Movie, about the comic strip cat, came in second at $24.8 million, according to data from Comscore, Inc. Its distributor, Sony Group Corp. projected that Garfield would lead the weekend over four days through the Monday holiday.

Either way, the results could be the worst performance for a No. 1 film released on Memorial Day weekend in decades. The industry has been struggling to bounce back from the twin strikes by writers and actors last year and a consumer shift to watching films at home.

The opening of Furiosa was accompanied by a good deal of publicity, including a Cannes Film Festival premiere and much media attention to returning director George Miller and new star Anya Taylor-Joy. — Bloomberg

Fake scientific studies are a problem that’s getting harder to solve

BRANDI REDD-UNSPLASH

FAKING it until you make it may be a common practice in some careers. But it’s clearly unethical for scientists and medical researchers. All the same thousands of fake papers are churned out by so-called paper mills and published every year, many of them in peer-reviewed journals. The issue made headlines recently when Wiley, a respected publishing house, announced it would be dropping 19 of its journals associated with a publisher they had acquired, called Hindawi, in part because they were infested with fake papers. But the problem was known before: The fraud sleuthing blog For Better Science called attention to the “fraud-positive” attitude at Wiley back in 2022. (And I covered the problem of fake research on my Follow the Science podcast back in 2021.)

These aren’t just papers with fudged data — in many cases, all the data and the text have been invented from whole cloth, generated with artificial intelligence, or plagiarized. They’re fake all the way through. The creators of these fake papers have been dubbed paper mills, and they operate by reaching out to scientists and offering to write papers with the scientists’ names at the top — for a price.

Paper mills have proliferated because of a pathology that’s afflicted many areas of science. Scientists are rewarded for the quantity of their research more than its quality. And peer review is non-functional in many journals.

In that disturbed ecosystem, parasitic companies flourish by helping scientists cheat to bolster their resumes, snag competitive academic jobs, and impress funding agencies. Ultimately that causes some precious resources to get routed to cheaters and away from more worthy scientists.

Worse still, some of the fake results can seep into other articles, contaminating the state of medical knowledge, said David Sanders, a biologist at Purdue University who has been tracking scientific misconduct and the paper mill problem. For enough money, the paper mills can make a fake paper look more influential by creating other fake papers that cite it, he said. The paper mill studies can even get cited in seemingly legitimate review papers if the review authors — who are also trying for volume — don’t pay sufficient attention to what they’re reviewing.

Some paper mill papers show obvious flaws, including patently plagiarized graphs, images, and text. Some are translated from English to another language and back — and that can lead to bizarre wordings, such as “lactose intolerance” becoming “lactose bigotry,” said Sanders. Still others show absurdities like an experiment in which half a sample of ovarian cancer patients was male.

Now with the help of ChatGPT, paper mills can create much more coherent, plausible papers cheaply and effortlessly. Scientific fields beset by fake papers might do better to address the roots of the problem rather than trying to chase them down. Ivan Oransky, co-founder of the blog Retraction Watch, has been tracking problematic research for years. He said that paper mill output has been estimated to make up about 2% of papers. That may not sound big, but somewhere between 2 million and 6 million scientific papers are published every year, so 2% adds up to a lot.

Some journals are more than 50%-generated by paper mills, said Sanders. The way he described it, the paper mills find a susceptible journal and then “they completely parasitize it.”

He said he blames not just shoddy peer reviews, but a perverse system of evaluating scientific merit. “Hiring committees or grant committees don’t have the wherewithal to make an actual evaluation,” Sanders said. So, scientists get rewarded based on the number of publications they author and the number of other publications that cite these.

Even many legitimate journal articles don’t advance the state of knowledge, he said, at least in the biomedical arena. Researchers might have gathered a bit of additional data for an ongoing project, which should be deposited into a data bank rather than turned into an unnecessary paper. “I would say the majority of articles that are published now make no contribution beyond the data they present,” he said. “They are not worth reading.”

The whole incentive system is warped, he said, and people are so dependent on grants for their survival that they’ll “do whatever is necessary.”

The fake papers often use a pre-existing template, he said, filling in words and data like a game of Mad Libs. Paper mill creations are more pervasive in fields where papers tend to be formulaic, like nanotechnology, computer science, and an area of cancer research called microRNAs.

But some fault also lies with other scientists who cite these fake papers in review articles — which are proliferating at a rate far beyond what’s beneficial to science or society. Even when initial papers get retracted, their impact re-mains in the form of citations and mentions in review papers.

Eventually, the bad papers can contaminate standards of medical care, said Sanders. Some people are developing cancer diagnostics based on fake papers. He’s seen a paper mill product referenced in a thesis defense. He’s even heard from cancer patients citing a fake paper to inquire about alternative therapies.

Funding agents could help by refusing to fund work that goes into badly reviewed journals laden with fake findings. They could keep a list of approved journals that do rigorous peer review and only fund work aimed at get-ting published in those. Sanders said more funding should also go into fraud detection in science.

People don’t need millions of scientific papers, most of them doing little to advance our knowledge. We need more scientists to put their energy into quality control or slow, careful research. Science is a competitive field and those who make it shouldn’t be fakers.

BLOOMBERG OPINION