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Airline pilots, crews voice concerns about Middle East routes

YOUSEF ALFUHIGI-UNSPLASH

 – In late September, an experienced pilot at low-cost European airline Wizz Air felt anxious after learning his plane would fly over Iraq at night amid mounting tensions between nearby Iran and Israel.

He decided to query the decision since just a week earlier the airline had deemed the route unsafe. In response, Wizz Air’s flight operations team told him the airway was now considered secure and he had to fly it, without giving further explanation, the pilot said.

“I wasn’t really happy with it,” the pilot, who requested anonymity from fear he could lose his job, told Reuters. Days later, Iraq closed its airspace when Iran fired missiles on Oct. 1 at Israel. “It confirmed my suspicion that it wasn’t safe.”

In response to Reuters’ queries, Wizz Air said safety of crew and passengers was its utmost priority and would not be compromised “in any circumstances”, adding its decisions on where to fly are based on stringent risk assessments in collaboration with third party intelligence specialists.

“Our aircraft and crews will only fly in airspace that has been deemed safe and we would never take any risks in this respect,” Wizz Air also said in a statement.

The airline said it had conducted a thorough risk assessment before deciding to fly over Iraqi airspace in November and followed guidance from the European Commission and the European Union Aviation Safety Agency (EASA), which had deemed it safe on July 31.

It also said it was rerouting some flights following EASA recommendations and its own risk assessment review. It did not give further details on which routes and flights were affected.

The airline has suspended flights to and from Tel Aviv until Jan. 14.

Reuters spoke to four pilots, three cabin crew members, three flight security experts and two airline executives about growing safety concerns in the European air industry due to escalating tensions in the Middle East following Hamas’ attack on Israel in October 2023, that prompted the war in Gaza.

The Middle East is a key air corridor for planes heading to India, South-East Asia and Australia and last year was crisscrossed daily by 1,400 flights to and from Europe, Eurocontrol data show.

The safety debate about flying over the region is playing out in Europe largely because pilots there are protected by unions, unlike other parts of the world.

Reuters reviewed nine unpublished letters from four European unions representing pilots and crews that expressed worries about air safety over Middle Eastern countries. The letters were sent to Wizz Air, Ryanair, airBaltic, the European Commission and EASA between June and August.

“No one should be forced to work in such a hazardous environment and no commercial interests should outweigh the safety and well-being of those on board,” read a letter, addressed to EASA and the European Commission from Romanian flight crew union FPU Romania, dated Aug. 26.

In other letters, staff called on airlines to be more transparent about their decisions on routes and demanded the right to refuse to fly a dangerous route.

There have been no fatalities or accidents impacting commercial aviation tied to the escalation of tensions in the Middle East since the war in Gaza erupted last year.

Air France opened an internal investigation after one of its commercial planes flew over Iraq on Oct. 1 during Tehran’s missile attack on Israel. On that occasion, airlines scrambled to divert dozens of planes heading towards the affected areas in the Middle East.

The ongoing tensions between Israel and Iran and the abrupt ousting of President Bashar al-Assad by Syrian rebels at the weekend have raised concerns of further insecurity in the region.

The use of missiles in the region has revived memories of the downing of Malaysian Airlines Flight MH17 over eastern Ukraine in 2014 and of Ukraine International Airlines flight PS752 enroute from Tehran in 2020.

Being accidentally shot-down in the chaos of war is the top worry, three pilots and two aviation safety experts told Reuters, along with the risk of an emergency landing.

While airlines including Lufthansa and KLM no longer fly over Iran, carriers including Etihad, flydubai, Aeroflot and Wizz Air were still crossing the country’s airspace as recently as Dec. 2, data from tracking service FlightRadar24 show.

Some European airlines including Lufthansa and KLM allow crew to opt-out of routes they don’t feel are safe, but others such as Wizz Air, Ryanair and airBaltic don’t.

AirBaltic CEO Martin Gauss said his airline meets an international safety standard that doesn’t need to be adjusted.

“If we start a right of refusal, then where do we stop? [When] the next person feels unhappy overflying Iraqi airspace because there’s tension there?” he told Reuters on Dec. 2 in response to queries about airBaltic flight safety talks with unions.

Ryanair, which intermittently flew to Jordan and Israel until September, said it makes security decisions based on EASA guidance.

“If EASA says it’s safe, then, frankly, thank you, we’re not interested in what the unions or some pilot think,” Ryanair CEO Michael O’Leary told Reuters in October, when asked about staff security concerns.

EASA said it has been involved in a number of exchanges with pilots and airlines on route safety in recent months concerning the Middle East, adding that disciplining staff for raising safety concerns would run counter to a “just culture” where employees can voice worries.

 

INSUFFICIENT REASSURANCES

One Abu Dhabi-based Wizz Air pilot told Reuters he was comfortable flying over the conflict-torn region as he believes the industry has a very high safety standard.

Wizz Air said it has a safety, security and operational compliance committee which assists the board by overseeing policies and their implementation.

“We always strive to be transparent and to keep our crew well informed,” it said, referring to internal safety reporting system and regular updates to staff.

For some pilots and crew members working at budget airlines, the reassurances of the companies are insufficient.

They told Reuters pilots should have more choice in refusing flights over potentially dangerous airspace and requested more information about airline security assessments.

“The fact that Wizz Air sends emails asserting that it’s safe is irrelevant to commercial employees,” read a letter from FPU Romania to Chief Operating Officer Diarmuid O’Conghaile, dated Aug. 12. “Flights into these conflict areas, even if they are rescue missions, should be carried out by military personnel and aircraft, not by commercial crews.”

Mircea Constantin, a former cabin crew member who represents FPU Romania, said Wizz Air never gave a formal response to this letter and similar ones sent earlier this year, but did send security guidance and updates to staff.

A pilot and a cabin crew member, who declined to be named for fear of retaliatory action, said they got warnings from their employers for refusing to fly on Middle Eastern routes or calling in sick.

 

 

CONGESTED SKIES

Last month, 165 missiles were launched in Middle Eastern conflict zones versus just 33 in November 2023, according to the latest available data from Osprey Flight Solutions.

But airspace can only be enforceably restricted if a country chooses to shut it down, as in the case of Ukraine after Russia’s full-scale invasion in 2022.

Several airlines have opted to briefly suspend flights to places like Israel when tension rises. Lufthansa and British Airways did so after Iran bombarded Israel on April 13.

But this limits the airspace in use in the already congested Middle Eastern skies.

Choosing to fly over Central Asia or Egypt and Saudi Arabia to avoid Middle Eastern hot spots is also more costly as planes burn more fuel and some countries charge higher overflight fees.

Flying a commercial plane from Singapore to London-Heathrow through Afghanistan and Central Asia, for instance, cost an airline $4,760 in overflight fees, about 50% more than a route through the Middle East, according to two Aug. 31 flight plans reviewed by Reuters.

Reuters could not name the airline as the flight plans are not public.

Some private jets are avoiding the most critical areas.

“At the moment, my no-go areas would be the hotspot points: Libya, Israel, Iran, simply because they’re sort of caught up in it all,” said Andy Spencer, a Singapore-based pilot who flies private jets and who previously worked as an airline pilot.

Spencer, who has two decades of experience and flies through the Middle East regularly, said that on a recent flight from Manila to Cuba, he flew from Dubai over Egypt and north through Malta before refueling in Morocco to circumvent Libyan and Israeli airspace.

EASA, regarded by industry experts as the strictest regional safety regulator, issues public bulletins on how to fly safely over conflict zones.

But these aren’t mandatory and every airline decides where to travel based on a patchwork of government notices, third-party security advisors, in-house security teams and information sharing between carriers, leading to divergent policies.

Such intelligence is not usually shared with staff.

The opacity has sown fear and mistrust among pilots, cabin crew and passengers as they question whether their airline has missed something carriers in other countries are aware of, said Otjan de Bruijn, a former head of European pilots union the European Cockpit Association and a pilot for KLM.

“The more information you make available to pilots, the more informed a decision they can make,” said Spencer, who is also an operations specialist at flight advisory body OPSGROUP, which offers independent operational advice to the aviation industry.

When Gulf players like Etihad, Emirates or flydubai suddenly stop flying over Iran or Iraq, the industry sees it as a reliable indicator of risk, pilots and security sources said, as these airlines can have access to detailed intelligence from their governments.

Flydubai told Reuters it operates within airspace and airways in the region that are approved by Dubai’s General Civil Aviation Authority. Emirates said it continuously monitors all routings, adjusting as required and would never operate a flight unless it was safe to do so. Etihad said it only operates through approved airspace.

Passenger rights groups are also asking for travelers to receive more information.

“If passengers decline to take flights over conflict zones, airlines would be disinclined to continue such flights,” said Paul Hudson, the head of U.S.-based passenger group Flyers Rights. “And passengers who take such flights would do so informed of the risks.” – Reuters

Biden commutes sentences of 37 of 40 inmates on federal death row

GAGE SKIDMORE-COMMONS.WIKIMEDIA.ORG

 – U.S. President Joe Biden on Monday commuted the sentences for 37 out of 40 federal inmates on death row, converting them to life in prison without parole, before he hands power to President-elect Donald Trump on Jan. 20.

Mr. Biden’s move will frustrate Mr. Trump’s plan to expand executions. Unlike executive orders, clemency decisions cannot be reversed by a president’s successor, although the death penalty can be sought more aggressively in future cases.

Mr. Trump restarted federal executions during his first term in office from 2017 to 2021 after a nearly 20-year pause.

Mr. Biden, who ran for president opposing the death penalty, put federal executions on hold when he took office in January 2021.

In recent weeks, he has faced pressure from congressional Democrats, opponents of capital punishment and religious leaders such as Pope Francis to commute federal death sentences before he leaves.

“Make no mistake: I condemn these murderers, grieve for the victims of their despicable acts, and ache for all the families who have suffered unimaginable and irreparable loss,” Mr. Biden said in a statement.

“But guided by my conscience and my experience … I am more convinced than ever that we must stop the use of the death penalty at the federal level,” he said. “In good conscience, I cannot stand back and let a new administration resume executions that I halted.”

spokesperson for Mr. Trump criticized the commutations. “These are among the worst killers in the world and this abhorrent decision by Joe Biden is a slap in the face to the victims, their families, and their loved ones,” spokesperson Steven Cheung said in a statement.

Earlier this month, Mr. Biden commuted the sentences of nearly 1,500 people and pardoned 39 more convicted of nonviolent crimes.

He also issued a full and unconditional pardon of his son Hunter, after repeatedly insisting he would not do so. Hunter Biden had pleaded guilty to tax violations and was convicted on firearms-related charges.

Kelley Henry, a federal defender who represents Rejon Taylor and Ricky Allen Fackrell, two of the men whose sentences were commuted, said Biden has shown “extraordinary courage” with the decision. “At bottom, it is an act of grace and mercy,” she said.

She will not be able to speak to Mr. Taylor and Mr. Fackrell until Friday, but said she knows from preparing their clemency petitions that they will be grateful for the news.

Fackrell was convicted of murdering a fellow inmate at a federal prison in 2014. Mr. Taylor was convicted of carjacking and kidnapping resulting in death for killing a man in Georgia in 2003.

Ms. Henry expects that all 37 men will be moved from death row in Terre Haute, Indiana to other Bureau of Prisons facilities in the coming months.

 

EXCEPTIONS

The decision on Monday does not apply to cases of terrorism or hate-motivated mass murder.

It leaves out three of the most well-known men on federal death row: Dzhokhar Tsarnaev, convicted for his involvement in the bombing at the Boston Marathon finish line in 2013; Dylann Roof, convicted for the shooting spree at the Emanuel African Methodist Episcopal Church in Charleston, South Carolina in 2015; and, Robert Bowers, who was convicted for the mass shooting at the Tree of Life synagogue in Pittsburgh in 2018.

All three men have filed appeals and legal challenges to their sentences which must be resolved before execution dates can be set, a process that can take years.

Human-rights groups praised Biden’s decision. Amnesty International USA called it a big moment for human rights.

“The President’s decision is a significant step towards his 2020 promise to end the death penalty at the federal level and incentivize states to follow suit,” Paul O’Brien, executive director of Amnesty International USA said in a statement.

Biden’s decision does not affect the nearly 2,200 death-row prisoners convicted in state courts, as he holds no authority over such executions.

Republican lawmakers criticized Biden for the move. Republican Representative Chip Roy called it “unconscionable” on social media platform X. “The Presidents pardon power is being abused by @JoeBiden to carry out a miscarriage of justice,” he said.

Senator Tom Cotton said “when given the choice between law-abiding Americans or criminals, Joe Biden and the Democrats choose criminals every time.”

Presidents typically order a round of pardons toward the end of their time in office.

The Office of the Pardon Attorney, part of the Justice Department, has received nearly 12,000 requests for clemency during Biden’s term, according to a tally kept by the pardon attorney. As of Dec. 9, the president had issued 161 clemency grants — 26 pardons and 135 commutations. – Reuters

PCC greenlights $3.3-B LNG deal

By Sheldeen Joy Talavera, Reporter

THE PHILIPPINE Competition Commission (PCC) on Monday said it has approved the $3.3-billion landmark deal among three energy giants, allowing them to proceed with their joint acquisition of power facilities and a liquefied natural gas (LNG) facility in Batangas, but subject to certain conditions.

In a statement on Monday, the PCC said it has greenlit the joint acquisition of two gas-fired power plants and an LNG terminal by Meralco PowerGen Corp. (MGen), Therma Natgas Power, Inc. (Therma), and San Miguel Global Power Holdings Corp. (SMGP).

“The deal, which is considered critical for strengthening the country’s energy supply, is subject to conditions aimed at ensuring fair competition and promoting transparency,” the competition watchdog said.

MGen is the power generation arm of Manila Electric Co. (Meralco) while Therma is a wholly owned subsidiary of Aboitiz Power Corp. (AboitizPower), through Therma Power, Inc. (TPI). SMGP is the power arm of conglomerate San Miguel Corp.

Under the $3.3-billion deal, MGen and AboitizPower will jointly invest in two of SMGP’s gas-fired power plants: the 1,278-megawatt (MW) Ilijan power plant and the new 1,320-MW combined cycle power facility.

The three companies will also invest in the LNG import and re-gasification terminal, owned by Linseed Field Corp., in Batangas.

In a joint statement, MGen, AboitizPower, and SMGP welcomed PCC’s approval, saying that the transaction is expected to “boost the country’s energy security and infrastructure.”

“The companies expressed their appreciation for the PCC’s thorough review process and affirmed their shared commitment to advancing a competitive energy market that delivers real benefits to Filipino consumers,” the energy giants said.

With the approval, the companies said they are committed to complying with all regulatory requirements and pledged to “collaborate closely with stakeholders to align their efforts with the government’s energy goals.”

“This partnership highlights the shared vision of MGen, AboitizPower, and SMGP to address the growing energy needs of the Philippines while promoting transparency, fairness, and long-term sustainability in the energy sector,” the companies said.

However, the PCC said it has identified “potential competition concerns” during its review of the mega-deal, “including risks of coordination in the national power generation market and foreclosure in power supply deals with distribution utility companies.”

The PCC said the “ultimate” parent companies — Pilipinas Enterprise Management Holdings, Inc.; Aboitiz & Company, Inc.; and Top Frontier Investment Holdings, Inc. — had submitted “voluntary commitments” on Oct. 18 to address these competition concerns.

The commitments were reviewed by the PCC, taking into account comments from stakeholders, industry players, Department of Energy (DoE), and the Energy Regulatory Commission (ERC).

The PCC said it approved the companies’ resulting voluntary commitments on Dec. 20, noting that these conditions are “vital to maintaining a competitive market.”

“Key safeguards include PCC oversight of the Competitive Selection Process (CSP) to ensure power supply agreements are awarded through a transparent and competitive bidding process. This oversight aims to prevent collusion or unfair practices,” it said.

“The acquired companies must also operate independently of their parent companies, with strict measures to separate IT systems, offices, and management to prevent coordination or undue influence.”

These companies’ board of directors should include independent members, while internal trading units should operate independently of affiliates, the PCC said.

The PCC also directed power plants to submit reports on unplanned outages within seven days of reporting to the DoE to promote transparency. The competitive retail electricity market reports should also be “shared” with the PCC.

Parent companies are also required to appoint a competition compliance officer to monitor the fulfillment of these commitments, the watchdog said.

“The PCC will communicate to DoE and ERC the conditions imposed, as well as coordinate on the alignment of existing guidelines and policies with competition law and policy to curb competition concerns that may arise from similar transactions,” it said.

The PCC said the conditions will remain in effect for five years, with the possibility of an extension depending on market conditions. Violations could result in daily fines of up to P2 million per infraction, among others.

Asked for comment, ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said the commission has yet to receive the copy of the approval of the transaction.

“It is important for us to review the conditions of such approval so we can also verify and validate continuing compliance by the parties with relevant provisions of the EPIRA (Electric Power Industry Reform Act),” she said in a Viber message.

“We trust that the PCC’s approval signals a way forward that addresses these concerns,” she added.

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said that the launch of the LNG facility should ensure stable and affordable power supply amid growing demand in the country.

“It should, however, be just one among the many sources of power for our needs, as LNG remains subject to global price fluctuations, and it would be best that the country boasts of an energy mix from multiple sources, with a clear preference for renewables,” he said in a Viber message.

Juan Paolo E. Colet, managing director at China Bank Capital Corp., said that PCC’s approval “paves the way for a massive investment in our country’s energy infrastructure that hopefully translates to lower energy prices.”

“The government clearly recognizes the importance of LNG in diversifying the country’s power supply and ensuring energy security,” he said via Viber.

Mr. Colet said that SMGP stands to benefit through an improved balance sheet and the availability of resources for its other investments.

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

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

NG to borrow P629B locally in first quarter

BW FILE PHOTO

THE National Government (NG) is planning to borrow P629 billion from the domestic market in the first quarter of 2025, as it seeks to frontload borrowings ahead of the May elections, the Bureau of the Treasury (BTr) said on Monday.

In a notice on its website, the BTr said it seeks to raise P264 billion from the issuance of Treasury bills (T-bills) and P365 billion via Treasury bonds (T-bonds) in the January-to-March period.

“Higher offering amounts per auction of Treasury bills and Treasury bonds could also frontload/hedge some NG borrowings before the May 2025 midterm elections,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort told BusinessWorld.

In January, the government plans to borrow P213 billion domestically, consisting of P88 billion in T-bills and P125 billion in T-bonds.

The government will hold four auctions for T-bills in January and will try to raise P7 billion via the 91- and 182-day tenors at each auction. It will also offer P8 billion in 364-day T-bills weekly.

Next month’s T-bill auctions will be held on Jan. 6, 13, 20, and 27.

The Treasury will offer P30 billion in five-year T-bonds on Jan. 7, P30 billion in seven-year T-bonds on Jan. 14, and P30 billion in 10-year T-bonds on Jan. 21.

It also seeks to generate P35 billion from the auction of three-year and 25-year bonds on Jan. 28.

In February, the BTr will try to raise P203 billion — P88 billion via T-bills and P115 billion via T-bonds. It will borrow P7 billion via the 91- and 182-day tenors at each auction, as well as P8 billion via the 364-day T-bills.

T-bill auctions are scheduled on Feb. 3, 10, 17, and 24.

For the long-term debt, the government will offer P30 billion each in five-year T-bonds on Feb. 4, seven-year debt paper on Feb. 11, and 10-year T-bonds on Feb. 18. It seeks to raise P25 billion from 20-year T-bonds on Feb. 25.

For March, the Treasury seeks to borrow P213 billion from the domestic market, comprised of P88 billion from T-bills and P125 billion from T-bonds.

It scheduled four T-bill auctions in March. It will sell P7 billion each in 91-day and 182-day T-bills, and P8 billion in 364-day T-bills at the auctions on March 3, 10, 17 and 24.

The BTr has four T-bond auctions scheduled for March. It will sell P30 billion in five-year debt paper on March 4, P30 billion in seven-year T-bonds on March 11, and P30 billion in 10-year bonds on March 18.

The Treasury seeks to borrow a combined P35 billion via three-year and 25-year bonds on March 25.

“We’re only able to see an expected increase in volume [in the borrowing plan] because there was a reduction in the fourth quarter,” a trader told BusinessWorld in a phone interview, adding the BTr will frontload its requirements this year.

In the fourth quarter of 2024, the government planned to borrow P310 billion from the domestic market, but actually raised P312.6 billion.

The trader also said that offering two T-bond tenors in the same auction is not an “extraordinary” event, noting it was done a few years ago.

For 2025, the NG plans to borrow P2.55 trillion, 0.97% lower than P2.57 trillion this year. Of this, domestic borrowings are set at P2.04 trillion, while external borrowings are pegged at P507.41 billion.

For 2025 to 2027, the NG plans to source at least 80% of its borrowing program from domestic sources, and 20% from foreign lenders.

The NG’s outstanding debt inched up to a fresh high of P16.02 trillion as of end-October amid the peso’s depreciation against the US dollar. Of the total debt stock, 67.98% came from domestic sources. — A.R.A.Inosante

IMF: Monetary policy must be calibrated to account for severe shocks

ATTENDANTS refuel vehicles at a gas station along East Avenue, Quezon City, Dec. 9, 2024. — PHILIPPINE STAR/MIGUEL DE GUZMAN

THE PHILIPPINES’ monetary policy may need to be calibrated to integrate increasingly drastic supply shocks, the International Monetary Fund (IMF) said.

“Looking ahead, monetary policy may need to adjust to more frequent and severe supply-side shocks,” the IMF said in its latest Staff Report for the 2024 Article IV Consultation.

“Inflation dynamics in the Philippines have been characterized by a stronger influence of supply factors over demand factors in recent years, in part reflecting the Philippines’ high reliance on imports of fuel and food, limited use of price controls, and exposure to adverse climate events.”

The IMF said the “frequency, severity, and persistence” of severe supply shocks may rise in the future due to climate change and rising geoeconomic fragmentation.

The Philippines has been the most at-risk country globally for 16 straight years, according to the latest edition of the World Risk Index.

The country is typically hit by several storms and other extreme weather events throughout the year, which causes billions of pesos worth of agricultural and infrastructure damage.

“The BSP (Bangko Sentral ng Pilipinas) will need to be careful in ‘looking through’ them to ensure second-round effects do not lead to a de-anchoring of inflation expectation,” the IMF said.

Inflation has soared since 2022 due to a spike in global commodity prices and supply-chain disruptions. Philippine annual inflation averaged 5.8% in 2022 and 6% in 2023.

FOREX INTERVENTION?
The IMF said that the foreign exchange rate could act as a “shock absorber,” while foreign exchange intervention (FXI) could be appropriate under certain circumstances.

“Shifting expectations regarding future policy rates in the US have raised peso volatility. The BSP has been appropriately focusing on domestic price stability, allowing the exchange rate to play its role as a shock absorber, and should continue to do so,” it added.

So far this year, the peso has sunk to the P59-per-dollar level thrice. The BSP has said it is watching the peso closely and has been a bit more active than usual in the markets.

“Given the Philippines’ shallow FX markets — the most relevant IPF (Integrated Policy Framework) friction — and the nonlinear impact of exchange rate fluctuations on inflation expectations, FXI can play a role in mitigating risks associated with abrupt exchange rate movements.”

“Nevertheless, deployment of FXI should only be temporary and not a substitute for warranted macroeconomic policy adjustments.”

The BSP has said it only intervenes to curb speculation and keep markets orderly.

“Going forward, in considering the optimal response to periods of stress and elevated uncovered interest rate parity premia, the BSP should remain cognizant of tradeoffs between using FXI and domestic foreign exchange market deepening.”

Meanwhile, the IMF also said it will be crucial to “ensure coordination across different parts of the BSP’s toolkit.”

“While total holdings have declined, the BSP retains a substantial portfolio of government securities acquired as part of the COVID-19 response. It has allowed the BSP to move to a variable-rate/variable-amount reverse repurchase (RRP) framework, where the target RRP rate is the policy rate.”

“Going forward, the BSP could usefully communicate a strategy for the size of its balance sheet in normal times… to provide more certainty to market participants.”

It cited the central bank’s recent move to lower the reserve requirements, saying it will lead to a welcome decline in financial intermediation costs and better align reserve requirements with regional peers.

“Changes in the reserve requirement ratio (RRR) need to be factored into the overall monetary policy stance and coordinated with any changes in the size of the BSP balance sheet,” the IMF said.

Starting October this year, the BSP reduced the RRR for universal and commercial banks and nonbank financial institutions with quasi-banking functions by 250 basis points to 7% from 9.5%.

The IMF also noted the move to reactivate the interest rate swap (IRS) market and establishing a benchmark yield curve to “further develop the Philippines’ fixed income and money markets and improve monetary policy transmission.”

“The authorities’ recent initiative to create an enhanced peso IRS market based on the RRP will help businesses and banks hedge local interest rate risk.”

Last month, the central bank launched the peso IRS market, following the release of the updated International Swaps and Derivatives Association. This is part of its efforts to deepen the capital markets.

“The fragmentation of the yield curve at the short end with yields on government securities well below those on BSP bills remains an obstacle for accurate valuation of working capital that also hampers the development of the IRS and derivatives markets,” the IMF said.

“Coordinated efforts by both the Bureau of the Treasury (e.g., by increasing issuance at maturities below 365 days) and the BSP (e.g., by further expanding access to nonbanks and ensuring that BSP bills can be used as collateral) are essential to address yield curve fragmentation and improve monetary policy transmission.” — Luisa Maria Jacinta C. Jocson

External debt service up by 17% at end-Sept.

REUTERS/DADO RUVIC/ILLUSTRATION

THE PHILIPPINES’ external debt service burden increased by an annual 17% as of end-September due to a rise in both interest and principal payments, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Debt servicing on external borrowings climbed by 16.8% to $12.85 billion in the first nine months from $11 billion in the same period a year ago.

BSP data showed principal payments went up by 16.8% to $6.925 billion as of end-September from $5.928 billion in the previous year.

Interest payments likewise increased by 16.8% year on year to $5.925 billion from $5.072 billion.

At end-September, the external debt service burden as a share of gross domestic product (GDP) rose to 3.9% from 3.5% a year prior.

Separate data from the BSP showed the Philippines’ outstanding external debt hit a record $139.64 billion as of end-September, higher by 17.5% year on year.

This brought the external debt-to-GDP ratio to 30.6%, up from 28.9% in the previous quarter.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the rise in external debt payments was due to an increase in matured foreign debt in the previous months, which led to higher servicing.

“More foreign borrowings especially since the COVID (coronavirus disease 2019) pandemic led to some increase in external debt maturities in recent months as being felt recently,” he added.

Mr. Ricafort also noted relatively higher interest payments amid still-elevated interest rates as the US Federal Reserve only began its easing cycle in late September.

The US central bank kicked off its rate-cutting cycle in September with a larger-than-expected half-percentage-point reduction. The Fed aggressively hiked rates from 2022 to 2023 to tame soaring inflation.

The BSP’s external debt data cover borrowings of Philippine residents from nonresident creditors, regardless of sector, maturity, creditor type, debt instruments or currency denomination. — Luisa Maria Jacinta C. Jocson

Powering the holidays

From left: Living up to the Christmas spirit of giving, Kevin Roi Canubas, Grid Manager at the Cayanga-Bugallon solar plant, is driven in work by his desire to make a meaningful impact to the environment and to her daughter’s future. Cheryl Leine G. Asuero, Systems Operation Engineer for distribution utility Davao Light, recognizes the importance of her role in helping ensure continuous electricity and sustaining the holiday spirit, most especially for her daughter at home. Vincent Alden Cruz, Plant Operator for GNPower Mariveles Energy Center, works for the welfare of his family, even if that means having to delay their Christmas celebration.

AboitizPower’s unsung heroes who are on duty this Christmas season to help keep the lights on

Kevin Roi Canubas, 29 and a first-time dad, will miss his daughter’s first Christmas so the festive lights in homes can continue to shine.

Kevin’s Noche Buena this year would be in the Cayanga-Bugallon solar plant in Pangasinan, where he works as a Grid Manager for Hedcor, AboitizPower’s renewable energy asset manager, together with his team and away from his family.

“As a first-time dad, I sometimes find myself missing key moments with my daughter, especially as she celebrates her first Christmas. It’s never easy, but it’s all part of the responsibility I’ve embraced in this industry,” Kevin said.

“We approach every day — whether it’s a holiday or not — as just another Monday because, in the power industry, energy is always in demand, no matter the season. This holiday season is no exception,” he explained.

AboitizPower’s 94-megawatt peak solar facility in Cayanga, Bugallon, Pangasinan

As a Grid Manager, Kevin oversees the operation and maintenance of the 94-megawatt peak solar plant, ensuring it continues to deliver clean and efficient power to the grid.

“I pursued a Bachelor of Science in Electrical Engineering because of my deep interest in innovation and technology. My passion for renewable energy stems from a desire to make a meaningful impact on the environment,” Kevin recounted. “Being able to fulfill that passion as a Grid Manager is a tremendous source of fulfillment for me.”

“We recognize the importance of ensuring the seamless operation of our assets, even during the holidays. Should any disruptions arise, our team remains on standby, ready to respond and resolve them promptly,” he said.

Despite already being with AboitizPower for five years, Kevin still finds new meaning in his work, which gained a new lens thanks to the arrival of his firstborn.

“It brings me immense joy to know that I’m contributing to a cleaner, more sustainable future — not just for my daughter, but for generations to come,” he added.

“Christmas is one of the brightest celebrations — both literally and figuratively — and we at AboitizPower want to ensure that brightness shines on by delivering clean, reliable, and sustainable energy to power the joy and memories of this season.”

Duty calls

Cheryl Leine G. Asuero, 43, is an electrical engineer working at distribution utility Davao Light, separated by a three-hour drive from her family in General Santos City.

Digital substations like Davao Light’s Binugao substation enhance power distribution networks, serving as vital facilities that transform high-voltage electricity into a distribution level stable and ready for residential, commercial, or industrial use.

She gets to spend precious time with her daughter every two weeks when one visits the other or vice versa. Most days, they can only interact through video calls as Cheryl fulfills an on-call job as a Senior Systems Operation Engineer.

“As a Systems Operation Engineer, we monitor and control the whole system under the franchise of Davao Light and ensure that we deliver continuous power,” she explained. “We operate and monitor all our 138-kV lines, 69-kV lines, substations and feeder lines 24/7, regardless of occasions, events, and holidays. All Systems Operation Engineers are on-call, responding should there be a major outage.”

“If that happens, we manage the system and restore power in the shortest possible time,” she added. “We also conduct load transfers and manage line reconfigurations when needed.”

Despite being away from her family and the uncertainties in her schedule this season, the holiday spirit of joy and celebration is not lost to Cheryl.

“Our role is very important especially during the holidays. We make sure that the entire franchise area will be lit and customers will fully enjoy the spirit of Christmas, making the most of their time with their loved ones,” she said.

“My family is my contentment and my safe place. My work gives me that sense of fulfillment that pushes me to be more engaged and do all that I can in my field of work.”

Holiday wishes

Vincent Alden Cruz, 37, always has his wife and two children in mind, especially whenever he can’t count down the clock with them to Christmas or to a New Year.

The GNPower Mariveles Energy Center is a 632-MW coal-fired capacity located in Mariveles, Bataan.

For 12 years, Vincent has been a Plant Operator at GNPower Mariveles Energy Center, an AboitizPower subsidiary. He is responsible for the crucial task of ensuring a steady supply of fuel by overseeing its unloading and delivery from the receiving port to the main power plant.

“There’s just a part of you that makes you think about your family. You wish to be together to welcome Christmas and the New Year, enjoying the Noche Buena and wishing each other happiness,” Vincent said. “Whenever I’m on duty during the Christmas or New Year Eves, I take a moment to greet and talk to them through the phone.”

GMEC operates the 632-megawatt coal-fired facility in Mariveles, Bataan. Vincent recognizes the importance of each and every team member in running important baseload facilities like GMEC, which helps power the needs of businesses and communities across Luzon and the entire country.

“Our role is important because at AboitizPower, each team member is an important contributor to the company. Whether it’s a holiday or a normal day, every day we go to work is important,” Vincent said.

This holiday season, Kevin, Cheryl, Vincent, and thousands more of their colleagues continue to work behind the scenes to operate and maintain the power plants and distribution facilities that help keep the lights on across the country. Their service and sense of responsibility is among the most generous Christmas presents we can ever receive.

 


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Santa Claus was inspired by a real figure who fought against miscarriages of justice

FREEPIK

SANTA CLAUS is based on the real historical figure of St. Nicholas, a Byzantine bishop born in present-day Turkey. Because of the extraordinary legends and miracles attributed to him he became one of the most popular saints in Europe.

Dutch migrants probably spread his fame to the US and there the patron saint of children was transformed through books, magazines and films into the familiar Santa Claus, or Father Christmas, figure we know today.

There is the story about St. Nicholas that everyone knows — the one about him giving gifts to the poor in the dead of night — the Santa Claus origin story. But there’s another story that is probably less familiar to most of us.

It’s a story about how Nicholas fought against a miscarriage of justice. The story begins when a local businessman goes to see the provincial governor. For reasons that are lost to history, he wants three innocent men, Nepotian, Ursyna, and Apollyn, killed. The governor, a notoriously dishonest man called Eustathios, is only too happy to help.

The earliest writing on the life of Nicholas is to be found in the Bibliotheca Hagiographica Graeca, and believed to be written in the first half of the 9th century by Michael the Archimandrite. It suggests that once the bribe had been paid, the men were condemned to death.

Word of what was happening reached Nicholas and he raced to the square. Just as the executioner raised his sword to dispatch the first prisoner, Nicholas threw himself between the executioner and the condemned man. Grabbing the executioner’s arm, he ripped the sword away, untied the innocent men and set them free.

He then admonished the governor. When faced with the righteous fury of Nicholas, Eustathios fell to his knees and repented, promising to change his ways, sources suggest.

This is a very different image of St. Nicholas than most people are used to in the 21st century. This is not the kind and humble 4th-century bishop, the proto-Santa Claus. Instead, this is the action hero, the St. Nicholas who is not afraid to face down an executioner’s sword.

As bishop of Myra — a coastal town in what is now Turkey — St. Nicholas was a leading Christian figure in an empire that was growing more and more concerned about the increasing power of Christianity.

The Roman emperor Diocletian decided it was time to send out a message. He ordered the torture of any Christian who refused to worship the Roman gods. It unleashed a reign of terror. Nicholas was one of those imprisoned and tortured. The persecution by Diocletian lasted between eight and 10 years.

When Bishop Nicholas was finally freed, he was a changed man. Putting his life on the line for people he had never met could have been simply because he knew what it felt like to be innocent and have your freedom taken away.

And so, while the story of St Nicholas secretly handing out bags of gold to a poor family should be remembered and eventually become the inspiration for the jolly, rosy-cheeked figure of Santa Claus, there are other aspects to this character.

Nicholas was a wealthy man and so when he gave away his gold it was an act of kindness but nothing that he could not afford. That he chose to do so anonymously showed his humility. These were the acts of a compassionate bishop, of a man who would soon become celebrated, then famous, and eventually a saint.

And as the centuries passed, the legend of St. Nicholas would grow and grow — as would the powers attributed to him. From controlling the weather to appearing to Roman emperors in dreams, there seemed to be little that St. Nicholas could not do.

He became the patron saint of children, pawnbrokers, unmarried women, sailors, repentant criminals, students, business people and countless European cities. And of course, eventually he would become reimagined as Santa Claus.

But there is something about the story of the rescue of the three innocent men and Nicholas’ fight for justice that stands out against all the embellishments, the Christmas films and the myths. It’s a tale that shows how and why the legend of Nicholas spread across the world. — The Conversation via Reuters Connect

 

Brian Thornton is a senior lecturer in Journalism at the University of Winchester.

Makers of Taiwan invasion TV series fear backlash from China

STILL from Zero Day trailer

TAIPEI — A Chinese warplane goes missing near Taiwan. China sends swarms of military boats and planes for a blockade as Taiwan goes on a war footing. Panic ensues on the streets of Taipei.

The premise of Zero Day, a new Taiwan TV drama envisioning a Chinese invasion, is a topic that has for years been considered too sensitive for many Taiwan filmmakers and television show creators, who fear losing access to the lucrative Chinese entertainment market.

But as China steps up military threats, including the large massing of naval forces last week and daily military activities close to the island, the upcoming drama confronts the fear by setting the 10-episode series around a Chinese invasion of Taiwan.

“We thought there is freedom in Taiwan but in film and TV production we are restricted by China on many levels,” said Cheng Hsin Mei, the showrunner on Zero Day.

China, which claims Taiwan as its own territory over the objections of the government in Taipei, is a much larger market for film and television. Taiwanese entertainers are popular there partly due to language and cultural similarities.

Ms. Cheng said creators in free and democratic Taiwan, however, are indirectly confined by Beijing’s powerful state censorship.

Beijing has regularly called out Taiwanese artists seen as violating China’s political ideology and has threatened to blacklist those unwilling to cooperate.

China pressured a popular Taiwanese rock band to make pro-China comments ahead of Taiwan’s presidential vote early this year, sources told Reuters. Beijing denied pressuring the group Mayday.

China’s Taiwan Affairs Office did not respond to a request for comment.

BUZZ IN TAIWAN
For the Zero Day crew, confronting such a sensitive topic means facing difficulties, from funding and casting to finding places to film.

Ms. Cheng said more than half of the Zero Day crew asked to remain anonymous on the crew list, and some people including a director pulled out of the production at the last minute, due to worries it might jeopardize their future work in China or concerns about the safety of their families working there.

“Our freedom is hard-earned,” Ms. Cheng said, adding people should not give in easily due to fears over China.

“The People’s Liberation Army has launched substantial incursions against us and they are getting closer and closer,” she said. “We should look at this directly rather than pretending that it is not happening.”

The show, which is set to be broadcast online and on yet-to-be-announced television channels next year, is already creating buzz in Taiwan after the extended trailer went online in July.

The drama focuses on several scenarios Taiwan might face in the days leading up to a Chinese attack, including a global financial collapse, the activation of Chinese sleeper agents, and panicked residents trying to flee the island.

“Without freedom, Taiwan is not Taiwan,” the actor who plays a fictional Taiwan president says in a televised speech, urging unity after declaring war on China, in the show’s trailer.

The live broadcast then gets abruptly cut off, replaced by a feed of a Chinese state television anchor calling for the Taiwanese to surrender and to report “hidden pro-independence activists” to Chinese soldiers after their landing in Taiwan.

Milton Lin, a 75-year-old Taipei resident, said he was grateful the TV series was putting a spotlight on the threats by China.

“It helps Taiwanese to understand that we are facing a strong enemy trying to annex us and how we should be on guard with unity to face such an invasion.” — Reuters

PBBM sets farmers free from years of agrarian debt

On Nov. 22, President Ferdinand R. Marcos, Jr. granted Certificates of Condonation with Release of Mortgage (COCROM) and Certificates of Land Ownership Award (CLOA) to Agrarian Reform Beneficiaries (ARBs) in Isabela Province. Granting of COCROMs liberated beneficiaries from over P1 billion in debts comprising amortization, interest, and surcharges.

The President assured farmers of the government’s unwavering support to ensure their welfare. He also vowed the government would continue supporting farmers and fisherfolk until they fully recover from the effects of recent typhoons in the country. He recognized the resilience of Filipinos in Isabela Province who braved and survived the onslaught of six consecutive typhoons.

 


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Rustan’s holds End of Season Sale

RUSTAN’S End of Season Sale returns on Dec. 26. Whether checking off last-minute Christmas gift list items or rewarding themselves after a whirlwind year, this is a chance for customers to indulge in retail therapy, discover luxurious finds, and score discounts of up to 50%. What’s more, FSP members can earn five times the FSP Points for in-store purchases exclusively on Dec. 26. From chic women’s dresses and sharp menswear to beauty must-haves, kids’ essentials, fine jewelry, and home treasures, Rustan’s has something special for everyone. Meanwhile, Beauty Addict members will get an extra +100 Beauty Addict points with any in-store purchase from their favorite beauty brands on Dec. 26. The deals are available in all Rustan’s stores and online at www.rustans.com.

San Jose activates solar plant in Nueva Ecija

PHILSTAR FILE PHOTO

YUCHENGCO-LED San Jose Green Energy Corp. has switched on a 19.6-megawatt-peak (MWp) solar power plant in Nueva Ecija, adding power to the Luzon grid.

The solar facility is expected to generate about 29 gigawatt-hours of electricity per year, the company said in a statement on Monday.

Mobilization of project contractors started in the fourth quarter of 2023 and plant construction was completed in November.

“The San Jose solar plant is the second utility-scale solar plant we put online to the grid this year following the successful export of power last Nov. 12, 2024 from our Dagohoy solar plant in Bohol,” Maria Victoria M. Olivar, PetroGreen Energy Corp. vice-president for commercial operations, said in the statement.

San Jose is one of four renewable energy special purpose vehicles under Rizal Green Energy Corp., a joint venture between Japan’s Taisei Corp. and PetroGreen, the renewable energy (RE) arm of PetroEnergy Resources Corp.

The solar project got its registration for the wholesale electricity spot market from the Independent Electricity Market Operator of the Philippines on Dec. 19 and provisional approval from the National Grid Corp. of the Philippines on Dec. 20, according to Dave P. Gadiano, PetroGreen assistant vice-president for power markets.

“The facility was successfully energized as a load unit last Dec. 11, 2024 which led to the timely completion of the testing of the substation transformer and other electrical components prior to grid export,” he added.

The latest solar facility will be added to Rizal Green’s portfolio, which includes the 27-MWp Dagohoy solar project in Bohol, 25-MWp Bugallon solar project in Pangasinan and 40-MWp Limbauan solar project in Isabela.

The RE plant is also the fourth facility Petro-Green switched on this year after the partial commissioning of the 13.2-MW Nabas-2 wind power project in Aklan and 360-kilowatt-peak rooftop solar facility at Mapua Malayan Colleges of Mindanao in Davao, Ms. Olivar said.

“These new RE facilities not only enlarge and spread PetroGreen’s power operations across the country, but will significantly increase our future revenues,” she added. — Sheldeen Joy Talavera