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Necessary cuts in the 2025 budget; Argentina’s fiscal reforms

The big public backlash against the proposed budget for 2025 was triggered by the big reductions made this month by the Bicameral Conference Committee from the proposed budget submitted last August: that of the Department of Social Welfare and Development (DSWD) was reduced by nearly P100 billion (its Ayuda sa Kapos Ang Kita Program or AKAP was cut by P12.8 billion, 4Ps by P50 billion, others by P33 billion), the Philippine Health Insurance Corp. or PhilHealth’s budget was cut by P74.4 billion, the Pension and gratuity fund by P36 billion, the Commission on Higher Education’s (CHED) was cut by P26.9 billion, the Department of Health (DoH) by P25.8 billion, the Department of Agriculture (DA) by P20 billion, and the Department of Labor and Employment (DoLE) by P18 billion, among others.

Then the Bicameral Committee significantly increased the budgets for the following: unprogrammed appropriations were increased by P373 billion, the Department of Public Works and Highways (DPWH) by P288.7 billion, Congress’ own budget was increased by P18.8 billion, and the allocation to local government units (ALGUs) went up by P10.6 billion, among others.

My quick reaction to the cuts in the budgets of the social agencies (DSWD, the Department of Education or DepEd, DoH, State Universities and Colleges, among others) is that this should have been done in 2022 or 2023, not 2025. There were big increases in their budgets in 2020 to 2021 because of lockdown, the virus crisis leading to an economic crisis, so the big increases were understandable.

But there was no more virus crisis and economic crisis in 2022 and beyond, but heavy welfare spending funded by heavy borrowing continued which should not have been done.

The DoH experienced a big jump in its budget, from P98 billion in 2019 to P177 billion in 2020, and P236 billion in 2021. The DSWD also experienced a big jump, from P139 billion in 2019 to P347 billion in 2020, and P230 billion in 2022. DepEd has had consistent increases in its budget. PhilHealth’s went up from P68 billion in 2019 to P80 billion in 2022 and P100 billion in 2023 (see Table 1).

Meanwhile, government revenues suffered heavy declines in 2020 due to the lockdown and the mandatory shutdown of taxpaying businesses and people. Revenues fell from P3.13 trillion in 2019 to only P2.86 trillion in 2020 and P3 trillion in 2021.

The budget deficit increased, from P660 billion in 2019 to P1.37 trillion in 2020, P1.67 trillion in 2021, and P1.61 trillion in 2022. Financing or borrowings increased from P876 billion to an average of P2.2 trillion yearly from 2020 to 2023. Interest payments from higher public borrowings jumped from P360 billion in 2019 to P503 billion in 2022 and are projected to reach P767 billion in 2024 (see Table 2).

I support the reduction in the budgets of many social agencies, but I do not support the increase in those of other sectors, particularly the DPWH and the unprogrammed appropriations.

There should be forced savings via the consistent reduction in the budget of many welfare agencies because high public debt, high interest rates, and high interest payments have big “diswelfare” effects on the poor themselves.

Last week I went to Buenos Aires, Argentina, to attend the Tholos Forum 2024. I was with fellow leaders of free market think tanks, institutes and taxpayers’ associations from many countries in South America, North America, and Europe. I was the only participant from Asia. The local sponsor of the Tholos Foundation was the Argentina Taxpayers Association.

Many of the speakers were high officials and legislators from La Libertad Avanza, the political party of Argentina’s new president, Javier Milei. Argentinians suffered from horrible high inflation for decades under previous administrations. There were huge, wasteful, and corrupt bureaucracies, the irresponsible printing of money, and a great deal of cronyism in business.

Milei cut the number of Ministries or Departments in government from 19 to nine. He abolished 10 Ministries, not just reduced the budgets of these agencies. He attained a fiscal surplus for Argentina within two months of his administration. This year is the first time in 123 years that Argentina will experience a budget surplus and economic recovery has been visible: inflation has been declining, there has been GDP growth and an escape from recession, business confidence is improving. He is now on another path to reduce the number of taxes and reduce tax rates.

The Philippines need not follow Argentina’s hard U-turn in public spending, but big reforms in social spending are possible because we are not in any crisis, viral or economic. We should do this before a real fiscal crisis occurs if the consistent increase in our public debt stock is not controlled.

 

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

DoE sees about 300 participants in Renewable Energy Market

FREEPIK

ALMOST 300 entities are expected to participate in the Philippines’ Renewable Energy Market (REM), which is expected to become fully operational on Dec. 26, the Department of Energy (DoE) said on Monday.

“The full commercial operation of the REM is pivotal in advancing the country’s clean energy transition,” Energy Secretary Raphael P.M. Lotilla said in a statement. “It supports compliance with the RPS (renewable portfolio standards), fosters investment in renewable energy and ensures a robust framework for sustainable energy trading.”

Under Republic Act No. 9513 or the Renewable Energy Act of 2008, the DoE must establish REM for the trading of RE certificates, equivalent to one-megawatt-hour of RE generation.

The REM provides a platform for trading these certificates, allowing participants to meet their obligations under renewable portfolio standards.

The standards require distribution utilities, electric cooperatives and retail electricity suppliers to get a portion of their energy supply from eligible RE resources, contributing to the growth of the RE industry in the country.

In 2023, on-grid power suppliers were ordered to expand the share of RE in their output to 2.52% from 1%.

The REM launched its interim commercial operations in 2022.

Mr. Lotilla said the Energy Regulatory Commission, Independent Electricity Market Operator of the Philippines, Philippine Electricity Market Corp. and private stakeholders have worked with the DoE in ensuring the readiness and operationalization of the REM.

The Energy chief said the trading and usage of RE certificates are expected to become more frequent as renewable energy demand continues to grow.

“With the REM now fully operational, the country is poised to harness the power of renewable energy for a cleaner and greener future,” the DoE said.

The Philippine government seeks to increase the share of renewable energy in the country’s power generation mix to at least 35% by 2030 and 50% by 2040. — Sheldeen Joy Talavera

PHL digital fraud rates higher than global levels

TOWFIQU BARBHUIYA-UNSPLASH

DIGITAL FRAUD RATES in the Philippines during the Black Friday shopping weekend this year were higher than the global average, according to an analysis by TransUnion.

“For all attempted e-commerce transactions where the consumer was in the Philippines, 13.6% were suspected of digital fraud during the 2024 holiday shopping weekend — down from 14.3% in the same period from the Thursday before Black Friday to Cyber Monday 2023,” TransUnion Philippines said in a statement. “However, despite decreasing numbers within the country, the suspected retail digital fraud rate during the holiday shopping weekend in the Philippines is alarmingly 196% higher than the global rate of 4.6% — which dropped from 6.0 last year.”

“We are encouraged to see a gradual decline in digital fraud rates within the Philippines market. However, these rates still significantly exceed the global rate, which underscores the need for continued efforts from both public and private sectors to further address the prevalence of digital fraud in the country. With the increase in suspected fraudulent activities observed during the holiday shopping weekend, it is imperative for both businesses and consumers alike to remain vigilant as we navigate this busy festive season,” Yogesh Daware, chief commercial officer of TransUnion Philippines, said.

TransUnion said there was a higher suspected digital fraud rate during this year’s five-day Black Friday holiday shopping weekend (Nov. 28-Dec.2) versus the global level for attempted e-commerce transactions where the consumer was in the Philippines.

It found that 15% of all attempted e-commerce transactions on Black Friday, Nov. 29, where the consumer was in the Philippines during the time of transaction, were suspected to be digital fraud, higher than 4.5% globally.

“It was the highest suspected retail digital fraud rate in the Philippines out of all the days in the 2024 holiday shopping weekend,” it said.

“As most private sector employees in the Philippines are salaried under a bi-monthly pay cycle, many Filipino consumers received their salaries within the 2024 holiday shopping weekend on Nov. 29,” TransUnion said. “It is also possible for most consumers to have received their 13th month pay and any other Christmas bonuses they may be eligible for around this time of the year as well.”

For Nov. 28, the Philippines’ digital fraud rate was at 13.7% (versus 5.3% globally). This went down to 12.1% on Nov. 30 (4.2%), then up to 12.2% on Dec. 1 (4.6%) and to 14% on Dec. 2 or Cyber Monday (4.5%).

Fraudsters normally strike over the holidays as consumers ramp up spending, TransUnion added.

“In addition to the Philippines seeing a higher suspected retail digital fraud rate compared to the global rate during the holiday shopping weekend, its speed of decline also lagged behind,” it said.

“TransUnion observed a 5% decrease in the rate of suspected retail digital fraud during the holiday shopping weekend in the Philippines between 2023 and 2024. This is notably lower than the global decline rate of 23% during the same period,” it said.

The Philippines’ suspected e-commerce fraud rates have been consistently higher than the global average this year, TransUnion said.

“Beyond this year’s holiday shopping weekend, for the days in 2024 up to that period (Jan. 1 to Nov. 27, 2024), the Philippines continued to show higher suspected retail digital fraud rates than globally,” it added.

The percentage of suspected e-commerce fraud in the Philippines stood at 12.3% for the days leading up to this year’s Black Friday shopping weekend versus the 7.5% global average, TransUnion data showed.

This was slightly up from the 12.2% seen last year. Meanwhile, the global average for the same period dropped from 12.5% in 2023. — L.M.J.C. Jocson

Hollywood embraces God and the ‘cowboy curious’ to broaden audience

LOS ANGELES — The script for the biblical epic Mary, which tells the story of the Nativity from the perspective of Mary of Nazareth, languished in Hollywood for some 15 years before entering production.

As the independent film approached completion this September, it attracted interest from three major Hollywood studios and streaming giant Netflix, which emerged as the global distributor and released the movie this month.

Mary has ranked among Netflix’s top 10 English-language movies, attracting 24.6 million views.

“The marketplace has changed dramatically over the course of the past five years,” said director D.J. Caruso. “Particularly in the epic or the high-quality, faith-based genre. There’s a real desire or hunger out there now.”

Hollywood is turning to God, the American West and outdoor enthusiasts to capture a wider audience. Major film studios, wealthy investors, and streaming services are pouring money into faith-based movies, rodeos, and outdoor lifestyle programming as an alternative to superhero sagas or dramas heavy with sex and violence.

Studio executives, talent agents, and television showrunners told Reuters the industry has recognized it is missing broad swaths of the United States. Donald J. Trump’s election as president in November, buoyed by working-class voters, underscored the importance of programming to the whole country, not just cities on the coasts.

Hollywood has periodically mined the Bible for box office gold with films such as The Ten Commandments and Noah. The success of Angel Studios’ Sound of Freedom, a 2023 thriller loosely based on the story of a Homeland Security agent who rescues children from sex trafficking, won over religious and conservative audiences and sparked new interest in the genre.

FROM HORROR TO FAITH
Hollywood’s master of modern horror, Paranormal Activity filmmaker Jason Blum, joined Lionsgate and other investors in backing The Wonder Project, an independent studio that raised more than $75 million to produce faith-based films and series for Amazon Prime Video. Its series about a biblical king, House of David, will be released in February.

“There are an awful lot of people throughout the country that think this is exactly the type of programming they’d like to watch — particularly with their families,” said Lionsgate Vice-Chairman Michael Burns.

Lionsgate this year renewed its partnership with Kingdom Story Company, the production company behind Jesus Revolution.

Netflix, meanwhile, struck a multiyear deal with acclaimed filmmaker and actor Tyler Perry to produce faith-based films for the streaming service.

Some executives told Reuters the industry has recognized it is missing broad regions of the US with films and TV shows that garner critical acclaim but draw a narrow audience.

The disparity is exemplified by the commercial success of Paramount Network’s Yellowstone, the Western family melodrama that swept America’s heartland. Yellowstone attracted more than 11.4 million viewers in its fifth-season finale — nearly four times as many as the 2023 finale of the Emmy-winning HBO series Succession.

Thomas Tull, founder of superhero movie producer Legendary Entertainment, recognized the opportunity before many others. Together with TWG Global and Guggenheim Partners Chief Executive Officer (CEO) Mark Walter, he launched Teton Ridge in 2019, a Western sports, entertainment and lifestyle brand built around rodeos. The company, which is owned by TWG Global, attracted additional investment from venture capitalist Jim Breyer and the Lee Bass family office.

The live competitions — which include bull riding, steer wrestling and barrel racing — attract a global audience of 80 million people a year.

COWBOY HEROES
Teton Ridge saddled up, last month acquiring The Cowboy Channel and Cowgirl Channel, a deal that secured exclusive media rights to more than 600 Professional Rodeo Cowboys Association rodeos. That augments its collection of Western sports properties, which include the American Rodeo Contender Series, whose championship weekend is carried live on Fox Sports, and the Let’s Freakin’ Rodeo podcast, hosted by top-ranked tie-down roper Ty Harris and his cousin, filmmaker Cole Harris.

Meanwhile, Teton Ridge Entertainment is exploring Western stories in films, series, and documentaries, including adapting the late bestselling author Louis L’Amour’s novel Fallon, which is set in the Old West, appealing to an audience CEO Deirdre Lester describes as the “cowboy curious.”

“Our mission is to be making content for an underserved audience,” said Jillian Share, president of Teton Ridge Entertainment. “Making stuff where it appeals to a much larger part of our country than a lot of the stuff that we — myself included — have been focused on for the last 20 years of my career.”

She called the cowboy “the first true, great American hero.”

“You look at superheroes and you look at Marvel and DC, and you’re like, what’s more iconic than the cowboy?” Ms. Share said.

Veteran entertainment executive Peter Chernin’s investment fund The Chernin Group became the principal investor in MeatEater in 2018, a blossoming media brand built around outdoorsman Steven Rinella, a best-selling author, podcaster and host of a forthcoming History Channel series, Hunting History.

Some, however, feel sidelined by Hollywood’s pursuit of the American heartland. They worry that executives have become fearful of being branded “woke,” a label hurled at Walt Disney by Florida Governor and former Republican presidential candidate Ron DeSantis.

One television showrunner, who was in the final phase of negotiations for a streaming series featuring a diverse cast, learned a day after Mr. Trump’s election that the project would not go forward. The showrunner, who requested anonymity for fear of retaliation, saw a correlation between the programming decision and Mr. Trump’s victory.

Another development executive shared an e-mail from one network executive, who rejected a project as too “political.”

Earlier this year, the makers of The Apprentice, a biopic about Mr. Trump, struggled to find a distributor even after an enthusiastic reception at the Cannes Film Festival in May.

An attorney for Mr. Trump sent a cease-and-desist letter to the filmmakers. Briarcliff Entertainment released the movie in October, and stars Sebastian Stan and Jeremy Strong were nominated for Golden Globe awards.

This week, Disney said it had removed a transgender storyline from upcoming Pixar animation series Win or Lose. The character will remain in the show, but the few lines of dialogue that reference the character’s gender identity have been removed.

“When it comes to animated content for a younger audience, we recognize that many parents would prefer to discuss certain subjects with their children on their own terms and timeline,” a Disney spokesperson said. — Reuters

Rate cuts may spur demand for property loans

JCOMP-FREEPIK

By Beatriz Marie D. Cruz, Reporter

THE Monetary Board’s continued easing cycle would probably increase demand for real estate loans, according to construction and property developer JCV & Associates (JCVA).

“If there’s going to be another rate cut… that will spur more loans,” JCVA President and Chief Executive Officer Jason C. Valderrama told BusinessWorld on Thursday. “The demand for loans will be higher.”

Banks and trust entities’ exposure to the property sector eased to 20.17% at the end of December 2023 from 20.55% three months earlier, according to central bank data.

Investments and loans extended by Philippine banks to the property sector rose 4.3% to P3.15 trillion at end-2023.

“Definitely, there will be more developments,” Mr. Valderrama said.

Last week, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said the Monetary Board would continue to cut interest rates in 25-basis-point (bp) increments, though it might keep rates steady at its December meeting.

The BSP has lowered interest rates by 50 bps since it began its easing cycle in August, bringing the policy rate to 6%.

For 2025, JCVA expects growth in revenues and headcount, with over 60% of its projects coming from old clients.

“We’re projecting to grow 50-60% next year, we’re very bullish and optimistic,” Mr. Valderrama separately told a news briefing.

“We have a very robust pipeline of projects. I think we’ve secured half of our revenue target already for next year and that’s because 67% of our [projects] are from our repeat clients,” he added.

For next year, key growth drivers include logistics, healthcare and tourism, Mr. Valderrama said.

The firm has partnered with a major e-commerce player to build an 11-hectare sorting center in Cavite, he added. The sorting center, which will break ground next year, has a construction timeline of two to three years.

Mr. Valderrama also cited the robust growth potential in data centers, noting that JCVA is working on an eight-megawatt (MW) hyperscale data center in Quezon City.

“In terms of capacity, we’re at 500 MW and that’s going to be around 950 MW by 2028,” he said.

JCVA also has expansion projects with major hospitals and banks, Mr. Valderrama added.

It has also been integrating digital solutions to fast-track its construction process. The firm uses Building Information Modeling to create digital project models, which help teams identify potential issues before starting construction.

It also uses an artificial intelligence-powered platform that provides a 360-degree, real-time documentation of construction sites. The firm also uses drones to monitor larger projects.

Clients can monitor project progress without visiting the site through JCVA’s cloud-based platform Agile + Vault, which provides real-time updates on schedules, budgets and construction progress, as well as daily site photos and walkthrough videos.

More construction developers are also expected to be more compliant with “green” certifications, Mr. Valderrama said, particularly the WELL Building Standard, EDGE (Excellence in Design for Greater Efficiencies), LEED (Leadership in Energy and Environmental Design) and BERDE (Building for Ecologically Responsive Design Excellence).

“We’ve started progressively pursuing these certifications after the pandemic. It’s become more of a requirement for clients now,” he added.

Peso strengthens to over one-week high on BSP, Fed rate cut hopes

BW FILE PHOTO

THE PESO strengthened to an over one-week high against the dollar on Monday amid signals of further rate cuts from the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve.

The local unit closed at P58.45 per dollar on Monday, appreciating by 36 centavos from its P58.81 finish on Friday, Bankers Association of the Philippines data showed.

This was the peso’s best finish in over a week or since it closed at P58.24 against the greenback on Dec. 12.

The peso opened Monday’s session stronger at P58.70 against the dollar, which was already its worst showing for the day. Its intraday best was its closing level of P58.45.

Dollars exchanged went down to $1.18 billion on Monday from $1.33 billion on Friday.

The local currency was supported by the seasonal surge in overseas Filipino worker remittances ahead of the Christmas holiday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The peso continued to strengthen following rate cut signals from BSP Governor Eli M. Remolona, Jr., Mr. Ricafort added.

On Friday, Mr. Remolona told Bloomberg that the Monetary Board could deliver another rate cut at their first policy meeting next year, noting that they are “neither more dovish nor less dovish.”

The Monetary Board on Thursday cut benchmark interest rates by 25 basis points (bps) for a third straight meeting to bring the policy rate to 5.75% from 6%. The BSP has reduced borrowing costs by 75 bps since the start of its easing cycle in August.

“The peso gained after Fed official Goolsbee commented that US policy rates would be reduced by a ‘fair amount’ next year, easing initial market concerns of a less aggressive cutting pace by the US central bank which prevailed after the latest Fed policy meeting last Thursday,” a trader said in a Viber message.

Chicago Federal Reserve President Austan Goolsbee said on Friday he now projects a shallower rate-cutting path in 2025 than he had previously, but added he still believes the US central bank’s policy rate will fall a “judicious amount” next year, Reuters reported.

“The uncertainty about policy makes it particularly hard to make estimates of what the neutral rate is and what the inflation rate is in particular,” Mr. Goolsbee told CNBC.

With the policy rate well above its eventual stopping point of around 3%, Mr. Goolsbee said, dropping inflation means the Fed will need to bring it down “a fair bit” over the next 12 to 18 months.

Mr. Goolsbee had previously indicated he felt rates would need to fall by 100 basis points next year, in line with the previous view of his fellow policy makers. Projections released last week after the Fed cut its policy rate by a quarter of a percentage point to the 4.25%-4.5% range show most US central bankers see just 50 bps of cuts next year.

For Thursday, the trader said the peso could appreciate amid continued inflows amid the holidays. The trader sees the peso moving between P58.30 and P58.55 per dollar, while Mr. Ricafort sees it trading from P58.25 to P58.65. — Luisa Maria Jacinta C. Jocson with Reuters

SN Aboitiz taps GEDI to build battery storage expansion in Isabela

ABOITIZPOWER.COM

SN ABOITIZ POWER Group has tapped a Chinese firm to build the second phase of its Magat Battery Energy Storage System in Ramon, Isabela with a capacity of 16 megawatts.

The company awarded the engineering, procurement and construction agreements to international engineering company GEDI China Energy, a unit of state-owned China Energy Engineering Corp., it said in a statement on Monday.

The expansion builds on the first phase of its 24-MW Magat battery storage system, which started commercial operations in January.

The company is targeting to start the construction of the second phase in the first half of 2025, with commercial operations slated by the first half of 2026.

Chuangang Guo, deputy general manager at GEDI international branch, vowed to deliver the project “with high-quality performance.”

SN Aboitiz Group President and Chief Executive Officer Joseph S. Yu said the Magat battery storage expansion underscores the company’s “mission to lead in the renewable energy space and accelerate the country’s transition to a more sustainable energy future.”

SN Aboitiz is a joint venture of Aboitiz Power Corp. and Norwegian company Scatec ASA.

It owns and operates the 112.5-MW Ambuklao and 140-MW Binga hydroelectric power plants in Benguet and Magat hydroelectric power plant with a capacity of up to 388 MW on the border of Isabela and Ifugao.

It also owns and operates the 8.5-MW Maris hydro and 24-MW Magat BESS in Isabela. — Sheldeen Joy Talavera

The year’s worst climate news you haven’t heard about

FREEPIK

THERE’S BEEN no shortage of grim climate news to hit the headlines over the past year. In March, the United Nations’ weather agency declared 2023 was the hottest year on record; in November, it said the current 12 months will be even more scorching. In the US, Donald Trump was re-elected, promising more petroleum production and a shredding of support for clean energy. Hype around energy-hungry AI is prompting utilities to slow down on plans to close fossil-fuel generators, in expectations of soaring demand from data centers.

As if that wasn’t bad enough, some of the most troubling trends out there have flown mostly under the radar. Here are three additional things which mostly haven’t hit the headlines in 2024, to keep you up at night.

A DRY PATCH FOR HYDRO
We hear plenty about the travails of nuclear power and the growth of wind or solar, but far too often, the biggest source of clean power, hydroelectricity, is an afterthought. That’s an unfortunate oversight, because it’s going through a worryingly bad patch. Hydro generation hasn’t increased in five years, and in many of the places where we most needed it the failures are even more pronounced.

Electricity production from dams is down in the US by about a fifth since it peaked in 2017. In China, the failure of late-summer rainfall in the Yangtze basin caused output to plummet to drought-like levels, forcing coal generators to ramp higher in September to make up the shortfall. Brazil has been importing record amounts of coal to offset weak production from the dams that dominate its grid.

Hydro is a fundamentally seasonal industry and it’s always possible that a few years of healthier rains will allow it to recover. But the persistent underperformance of late might indicate something worse: The very climate change that renewable power aims to avert is drying up the regular pulse of floodwater hydro requires to play its part in the energy transition.

FOREST FUELS
If you’re concerned about palm oil, it’s probably mostly as an Orangutan-threatening additive in cosmetics and chocolates. News that the world’s fourth-most populous country is planning to switch half its diesel to biofuels, however, sounds… good, right?

Not so fast. The biggest contributor to demand over the past decade, by far, has been Indonesia’s mandates requiring ever-higher shares of biodiesel in road vehicles. The current 35% blend will be raised to 50% by 2028, one of the key policy promises of new President Prabowo Subianto after his election in February. Even palm oil producers don’t think the increased demand, to 18 million metric tons from 11 million tons currently, can be met from existing ageing plantations.

A study in August estimated that such a plan would require an additional 5.3 million hectares of forest to be cut down by 2042, an area about 25% larger than Denmark. Over-dependence on biofuel blending also translates into lackluster government support for electrified and public transport.

COAL IS BACK IN INDIA
For many years, the future of coal in India’s grid was looking bleak. Too many power plants were built in the early 2010s, leaving the country with a stock of underutilized, loss-making thermal generators. Cheaper solar and wind and lackluster economic growth meant fossil fuels seemed on the verge of being squeezed out.

That looks less the case right now. With Chinese demand barely growing and declines in the US and Europe, India is the only place in the world that’s seen a substantial increase in coal consumption this year. Utilization of plants has now been running at healthy levels for the best part of two years, restoring profitability. Solid fuel generation capacity declined in recent years, but it’s now creeping back, with state-owned Coal India Ltd. planning to invest $8 billion in new plants and the government promising to make the fleet a third larger by 2032.

If the ongoing renewables boom (see below) doesn’t avert those plans, coal’s role in India’s grid looks to be getting back on track.

For the sake of accountability, how did what I predicted about 2023’s worst overlooked climate news pan out? You can read the original article to make up your own mind, but here’s my assessment.

Carbon offsetting is just getting started: Trading emissions for promised reductions in deforestation suffered a huge reputational blow in 2023 after claims of questionable methodology and greenwashing. As we suspected, it’s looking in much better health now. The UN climate conference in November finally agreed a system for international trade. Critics fear that might undermine the integrity of more robust carbon credits by giving polluters access to a cheap pool of low-quality offsets. Europe’s carbon permits have fallen about 7.2% since.

India’s renewables buildout is failing: We are only one year of data into this, but it looks (hearteningly) that our dismay last year was misplaced. At the end of November, 24.5 gigawatts (GW) of modern renewables had been connected, close to double 2023’s full-year figure. It’s still well below the 40 GW to 50 GW that’s going to be needed each year to hit ambitious targets for 2030, but for the moment the market is accelerating — though not fast enough to prevent the aforementioned return to coal.

The ocean is sucking up less carbon: Science moves more slowly than news headlines, so it will be a while before we have enough evidence to confirm that the seas are reaching a saturation point in their ability to absorb CO2 from the atmosphere. Still, there’s been plenty of similar evidence over the past year that the land is also drawing down less carbon, and even belching more methane to heat the planet. Nature has helped slow global warming in recent decades, but its ability appears to be flagging.

If that all feels far too gloomy, we’ll have a look at some neglected good news tomorrow.

BLOOMBERG OPINION

Madonna fans end class action in Washington over late concerts

MADONNA.COM

Three Madonna fans have dropped a lawsuit that accused the pop superstar and the owner of Washington, DC’s Capital One Arena of misleading concertgoers by starting a pair of her shows two hours late.

The fans on Thursday voluntarily dismissed the proposed class action in federal court in Washington without giving a reason.

Lawyers for both sides did not immediately respond to requests for comment and more information, including whether a settlement was reached.

The case was among several others in New York and Florida alleging Madonna violated laws against unfair and deceptive trade practices by beginning shows after their advertised start times. Madonna and her concert venues denied deceiving fans.

The plaintiffs who sued over the Washington concerts said they had to leave the shows early in December 2023 because of the delays. The lawsuit accused Madonna of showing “total disrespect for her fans.”

The lawyer who filed the case, Marcus Corwin, withdrew a similar lawsuit in federal court in Brooklyn in June. Madonna’s lawyers had accused Mr. Corwin of falsely telling a judge that there had been a settlement.

Judges in a pair of similar lawsuits in Florida recently ruled for Madonna in stopping the cases from moving forward for now. — Reuters

High-rise condominiums to address PHL housing crisis, urban planners say

A VIEW of buildings in Makati City. — PHILIPPINE STAR/MICHAEL VARCAS

By Beatriz Marie D. Cruz, Reporter

VERTICAL HOUSING helps ensure more affordable housing options for the urban poor, while offsetting high land costs, according to urban planners.

“From a larger urban perspective, vertical housing makes the provision of urban services more cost-effective,” Joel L. Luna, principal at Joel Luna Planning and Design, said in an e-mail.

“Bringing more people together in a compact land area reduces the per capita cost of providing utilities, infrastructure, roads and other services compared with a sprawling development,” he added.

At a recent Senate hearing, Senator Cynthia A. Villar questioned the Department of Human Settlements and Urban Development’s plan to set up more medium-rise condominiums, saying these are only for the middle class.

“Why are you prioritizing the 3.2 million housing [units] for the middle class when your mandate is to help the poor and the homeless?” she told the Nov. 12 hearing, citing the need for more affordable housing options for the poor.

The Pambansang Pabahay Para sa Pilipino Housing Program, a flagship project of the Marcos administration, seeks to build 3.2 million housing units by 2028.

The program will focus on building in-city, high-density/vertical housing units using idle state lands and backed by government financial institutions.

Felino A. Palafox, Jr., president of Palafox Architecture Group, Inc., said vertical housing in urban areas would give the poor access to basic needs such as work and transportation.

“The urban poor should live close to their places of work, the schooling of their children, and public transit,” he said via telephone.

He added that vertical housing is more environment-friendly than horizontal housing units.

“When you have a large single-family home in the middle of the city, you’ll have a higher carbon footprint because you’re arrogating to yourself prime urban land resources,” he said.

Compared with traditional housing models, medium- and high-rise buildings also help maximize land space and reduce piping costs, according to urban planner and landscape architect Paulo G. Alcazaren.

“The key is the cost of land. If the land is expensive, then building up is the only way to recover the cost,” he said in an e-mail.

Vertical housing is also seen as the more practical choice in urban areas, where limited space and high demand drive up land prices and construction costs, according to Mr. Luna.

“In urban centers where high demand and scarcity of space drives unit land prices to levels that far exceed the unit cost of construction, building vertically would be the practical way to create new supply of space,” he said.

“At the fringes of urban centers (peri-urban, suburban or rural areas) where land is more abundant and where land values remain lower than the cost of building vertically, horizontal development is more economically practical,” he added.

However, Mr. Luna cited the need for a “multi-dimensional” approach to solving the country’s housing problem, noting that it is an issue of poverty.

“Why are they (urban poor) migrating to cities? Where did they come from and what circumstances made them leave their place of origin?” he asked.

Addressing issues on livelihood and employment, rural poverty and land ownership, among others, are as equally important as the housing crisis.

“The type of building is just one facet of a very complex issue,” Mr. Luna said.

To ensure affordable vertical housing options, the government should allocate more state land in urban areas to public housing, and push for subsidies or tax incentives, Mr. Luna said.

Building more vertical housing units would also help lower costs, Mr. Alcazaren said. “It’s economies of scale. If we need to build six million units, then the projection for costs goes down.”

Self-help housing, which allows beneficiaries to participate in construction, provides skill training and employment opportunities, Mr. Luna said. Housing developers should also allow livelihood opportunities in the area such as small businesses, childcare services and community farming.

Developers can use more locally available materials, build more energy- and water-efficient buildings through renewable sources of power and rainwater harvesting, Mr. Luna said.

How PSEi member stocks performed — December 23, 2024

Here’s a quick glance at how PSEi stocks fared on Monday, December 23, 2024.

Philippines improves in Global Sustainability Ranking

The Philippines ranked 67th out of 191 countries in the 2024 Global Sustainable Competitiveness Index (GSCI) by sustainable intelligence Swiss-Korean think tank and management consultancy SolAbility. The index evaluates countries’ competitiveness and sustainability performance using 216 quantitative indicators grouped into six pillars of national development. With a score of 44.6 (the highest being 100), the Philippines is above the global average sustainable competitiveness score of 43.4.

Philippines improves in Global Sustainability Ranking

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