Home Blog Page 1806

El Salvador mined nearly 474 bitcoins, adding to state crypto holding, in last three years

ANDRÉ FRANÇOIS MCKENZIE-UNSPLASH

 – El Salvador has mined nearly 474 bitcoins since 2021 thanks to a volcano-fueled geothermal power plant, official data showed on Tuesday, bringing the government’s total bitcoin portfolio to nearly $354 million at current prices.

The country’s “Bitcoin Office,” an official government entity, reports that government coffers now hold 5,750 bitcoins.

The new additions, 473.5 bitcoins worth some $29 million since September of 2021, were powered by a small amount of geothermal energy generated by the country’s imposing Tecapa volcano, touted as a green way to accumulate the well-known cryptocurrency, which is not regulated by any central bank.

The administration of Bitcoin enthusiast President Nayib Bukele, who earlier this year was reelected to a second term, has installed 300 processors to “mine” bitcoins from the volcano.

Of the 102 megawatts (MW) produced by the state-owned power plant, 1.5 MW are devoted to cryptocurrency mining. The so-called crypto mining process requires large amounts of energy for computing and cooling data processing centers, which perform complex math equations in order to secure cryptocurrencies like bitcoin.

Elsewhere in the world, cryptocurrency miners have recently come under increased scrutiny for their electricity-sapping operations, and for the impact their activity has on power grids and carbon emissions.

In 2021, El Salvador became the first country to adopt bitcoin as legal tender, alongside the U.S. dollar which it adopted two decades earlier. The bitcoin move earned Nayib’s government harsh criticism for its embrace of the volatile cryptocurrency, including from the International Monetary Fund (IMF).

Cryptocurrency miners Foundry USA, Ant pool, ViaBTC, F2Pool and Binance Pool pooled their resources to win a reward for opening a blockchain that can verify the last three years of bitcoin transactions originating from the power plant, according to the government Bitcoin Office. – Reuters

TikTok creators file suit to block US divestment or ban law

 – A group of TikTok creators said Tuesday they filed suit in US federal court seeking to block a law signed by President Joe Biden that would force the divestiture of the short video app used by 170 million Americans or ban it, saying it has had “a profound effect on American life.”

The TikTok users suing include a Texas Marine Corps veteran who sells his ranch products, a Tennessee woman selling cookies and discussing parenting, a North Dakota college coach who makes sports commentary videos, a Mississippi hip hop artist who shares Biblical quizzes and a recent college graduate in North Carolina who advocates for the rights of sexual-assault survivors.

“Although they come from different places, professions, walks of life, and political persuasions, they are united in their view that TikTok provides them a unique and irreplaceable means to express themselves and form community,” said the lawsuit.

Davis Wright Tremaine LLP, a law firm representing the creators, provided a copy of the lawsuit to Reuters it said had been filed in the US Court of Appeals for the District of Columbia Circuit.

The White House declined comment. A Justice Department spokesperson said the TikTok law “addresses critical national security concerns in a manner that is consistent with the First Amendment and other constitutional limitations. We look forward to defending the legislation in court.”

The suit, which seeks injunctive relief, says the law threatens free speech and “promises to shutter a discrete medium of communication that has become part of American life.”

Last week, TikTok and its Chinese parent company ByteDance filed a similar lawsuit, arguing that the law violates the US Constitution on a number of grounds including running afoul of First Amendment free speech protections.

TikTok creators filed a similar suit in 2020 to block a prior attempt to block the app under then President Donald Trump, and also sued last year in Montana asking a court to block a state ban. In both instances, courts blocked the bans.

Trump has since reversed course and criticized efforts to ban TikTok but has not joined the app.

The law, signed by Mr. Biden on April 24, gives ByteDance until Jan. 19 to sell TikTok or face a ban. The White House has said it wants to see Chinese-based ownership ended on national security grounds but not a ban on TikTok.

The law prohibits app stores like Apple, and Alphabet’s Google, from offering TikTok and bars internet hosting services from supporting TikTok unless ByteDance divests TikTok.

The creators’ suit said “because TikTok currently has approximately 170 million users in the United States, the fine for continuing to enable access to TikTok would be roughly $850 billion.”

The suit says to the extent the government may claim the law is needed to protect Americans’ data, “it has tried that strategy before and lost.” The suit says “the concerns are speculative, and even if they were not, they could be addressed with legislation much more narrowly tailored to any purported concern.”

The TikTok lawsuit said last week the divestiture “is simply not possible: not commercially, not technologically, not legally … There is no question: the Act (law) will force a shutdown of TikTok by January 19, 2025.”

Driven by worries among US lawmakers that China could access data on Americans or spy on them with the app, the measure was passed overwhelmingly in Congress just weeks after being introduced.

The four-year battle over TikTok is a significant front in the ongoing conflict over the internet and technology between the United States and China. In April, Apple said China had ordered it to remove Meta Platform’s WhatsApp and Threads from its App Store in China over Chinese national security concerns.

Biden could extend the Jan. 19 deadline by three months if he determines ByteDance is making progress. The creators’ suit notes Biden’s campaign uses TikTok, quoting his campaign’s deputy manager as saying it “would be silly to write off any place where people are getting information about the president.” – Reuters

Elon Musk ordered to testify again in US SEC probe of Twitter takeover

FILE PHOTO: Elon Musk, CEO of SpaceX and Tesla and owner of X, formerly known as Twitter, attends the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition centre in Paris, France, June 16, 2023. REUTERS/Gonzalo Fuentes/File Photo

 – federal court ordered on Tuesday that Elon Musk must testify again in the US Securities and Exchange Commission’s investigation into his $44 billion takeover of Twitter.

The SEC sued Mr. Musk in October to compel the CEO of electric carmaker Tesla and rocket company SpaceX to testify after he refused to attend a September interview for the investigation. The billionaire said the SEC was trying to “harass” him with a number of subpoenas.

The investigation concerns whether Mr. Musk broke federal securities laws in 2022 when he bought stock in Twitter, which he later renamed X. It is also reviewing statements and SEC filings he made in relation to the deal, the agency has previously said.

US Magistrate Judge Laurel Beeler in February ruled in favor of the agency to compel the deposition and Musk requested a review of the decision.

“As Judge Beeler explained, the investigations Musk contends constitute harassment are ‘legitimate government investigations’,” US District Judge Jacqueline Scott Corley said on Tuesday.

“Musk has not met his burden of demonstrating the subpoena is unreasonable.”

This marks the latest dispute in a years-long feud between Mr. Musk and the top US markets regulator, dating back to 2018 when he tweeted that he had “funding secured” to take Tesla private.

In 2022, Mr. Musk supplied the SEC with documents for its probe and also testified via videoconference for two half-day sessions in July of that year, the SEC has said in court documents. Agency lawyers have said they have more questions for Mr. Musk after receiving new documents, and had sought additional testimony.

Mr. Musk was not immediately available for comment. – Reuters

House OK’s rice tariffication law amendments on 2nd reading

The House of Representatives on Tuesday approved on second reading a bill amending the Rice Tariffication Law, in an effort to address spiraling prices of rice. — PHILIPPINE STAR/RYAN BALDEMOR

By Kenneth Christiane L. Basilio

THE HOUSE of Representatives on Tuesday approved on second reading a bill that seeks to allow the National Food Authority (NFA) to sell rice at subsidized prices during emergencies including shortages.

Philippine congressmen through a voice vote agreed to expand the agency’s regulatory functions over the rice industry through House Bill No. 10381 amid spiraling prices of the staple.

The bill seeks to amend the Rice Tariffication Law (RTL), which gave private traders full control over rice imports in 2019.

The measure also extends the validity period for the Rice Competitiveness Enhancement Fund (RCEF) for six more years and increases its budget to P15 billion from P10 billion, congressmen said during plenary debates.

“The House’s expeditious action on the Rice Tariffication Law amendments comes from… the current rice price crisis,” Albay Rep. Jose Maria Clemente S. Salceda told BusinessWorld in a Viber message. “It has exposed the shortcomings of the global rice trade and why domestic support remains crucial.”

The House of Representatives is expediting its deliberations on the rice law to address the expensive costs of rice in markets by allowing the NFA to restore its price stabilization and supply regulation functions. 

Retail prices of staple grain range between P50 and P65 per kilo, according to latest Philippine Statistics Authority data.

House Speaker Ferdinand Martin G. Romualdez said amending the Rice Tariffication Law would reduce rice prices to less than P30 a kilo.

“By amending the RTL, we aim to bring about tangible reductions in rice prices,” Mr. Romualdez said in a statement. “Lowering rice prices to less than P30 is a crucial step towards ensuring food security and economic stability.”

Under the bill, the NFA would be allowed to intervene in the market under the direction of the National Price Coordinating Council — comprised of state economic managers — during food security emergencies caused by rice shortages and sustained increases in the price of the staple grain.

“An empowered NFA really would have a role to play in ensuring food and especially rice security,” IBON Foundation Executive Director Jose Enrique A. Africa told BusinessWorld in a Viber message before the bill’s approval.

He said addressing rice inflation requires the government to look beyond reinstating NFA’s regulatory functions.

In April, rice inflation surged by 23.9%, but easing from the 24.4% a month prior as world rice prices declined.

Mr. Africa said the Philippines should reduce its dependence on imported rice given the peso’s weakness.

“The import content of palay is over 30%, and a large part of rice inflation is through this channel,” Mr. Africa said. “Reducing the import content of food and the vulnerability of food prices to foreign exchange movements goes far beyond the NFA.”

Developing the industrial capability of the agriculture sector is needed to strengthen the domestic production of rice, he added.

Amendments to the Rice Tariffication Law would also modify how RCEF is allocated. Around 53.5% of the fund would go to farm mechanization projects, up from the current 50%. This increase would help in modernizing the country’s rice sector, according to proponents of the measure.

The allocation for the propagation and distribution of rice seeds under the bill was reduced to 29.7% from the current 30%, while rice seed allocation was trimmed to 29.7% from 30% currently.

Farm credit assistance for farmers has been cut to 6% from 10% while extension services for agricultural training was reduced to  3.3% from 10% of the rice fund.

During the bill’s period of amendments, Albay Rep. Edcel C. Lagman, Sr. moved for the deletion of a provision allowing the NFA to regulate foreign investment in the rice and corn industry, which the House adopted.

“This deletion will also send the message that as much as practicable, the rice and corn industry must remain with Filipino farmers and entrepreneurs to protect the production and sale of the Philippines’ staple grain and cereal from foreign influence,” Mr. Lagman said.

Action for Economic Reforms Coordinator Filomeno S. Sta Ana, III. agreed with Mr. Lagman’s amendment to the bill, saying that is not part of the NFA’s role.

Peso’s prolonged weakness could stoke inflation — analysts

PHILIPPINE STAR/WALTER BOLLOZOS

By Luisa Maria Jacinta C. Jocson, Reporter

THE PROLONGED weakness of the Philippine peso could potentially fan inflation, but the central bank does not need to intervene unless the currency significantly drops, analysts said.

“Peso weakness becomes worrisome if, for instance, over a period of one year, the peso depreciates by P5, or to P63,” GlobalSource Partners country analyst Diwa C. Guinigundo said in a Viber message. 

“This could potentially give rise to an additional 0.4 ppt (percentage point) or if the risk-adjusted inflation forecast of the peso is now at 4%, we might be looking at 4.4%.”

The peso closed at P57.84 against the dollar on Tuesday, strengthening by two centavos from its P57.86 finish on Monday. Its finish on Monday was its lowest in 18 months or since the P58.19-per-dollar close on Nov. 10, 2022.

The Bangko Sentral ng Pilipinas (BSP) does not need to intervene immediately unless the local currency drops sharply, Mr. Guinigundo said.

“Unless the peso shows sharp, disorderly fluctuations or some speculation persists, I don’t think the BSP will immediately go into active play in the foreign exchange market. Not worth losing its ammunition,” he said.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc. said that the BSP may need to act if the peso further depreciates.

“I think that the BSP has established that their line-in-the-sand is the P58 level. I think they will intervene further with the US dollar-peso rate further weakening,” he said in a Viber message.

“However, I think that the market is being cautious but positioning with the release of US inflation data this week that may give further clues on how the Fed will proceed with its rate cuts,” he added.

BSP Governor Eli M. Remolona, Jr. earlier said that the central bank has only intervened in the foreign exchange market in “small amounts” to “maintain orderly markets.”

The BSP previously intervened in the foreign exchange market when the peso reached a record low of P59 against the dollar in October 2022.

Meanwhile, Mr. Guinigundo noted that the recent depreciation so far “may not necessarily translate into higher inflation” for the rest of the year.

“Short-term exchange rate pass-through for every P1 depreciation now stands at .08 percentage point additional inflation,” he added.

Inflation accelerated for a third straight month to 3.8% in April but marked the fifth straight month that inflation fell within the 2-4% target range.

However, Mr. Guinigundo said the peso would only sink drastically amid conditions such as a “significant reduction in economic growth, sharp increase in fiscal deficit and public debt, and huge increase in the balance of payments deficit.”

The Philippines’ gross domestic product (GDP) grew by a weaker-than-expected 5.7% in the first quarter, faster than 5.5% in the previous quarter but slower than 6.4% a year ago.

The National Government’s (NG) debt as a share of GDP stood at 60.2% as of the first quarter, below the 61.1% a year earlier and the 60.3% target set this year.

Meanwhile, the deficit-to-GDP ratio stood at 4.46% at end-March, easing from 4.82% a year ago and below the 5.6% deficit ceiling this year.

“If the market perceives the government not to be doing anything to address the huge imports of rice and other commodities, or stop smuggling and corruption, or improve governance in general, then that could cumulatively trigger a substantial weakening of the peso,” Mr. Guinigundo said.

Mr. Guinigundo said that a global economic slowdown and a spike in oil prices “could also contribute to upside risks for the peso to lose ground against the US dollar.”

Latest Development Budget Coordination Committee assumptions show that the peso may range from P55 to P57 for 2024.

Meanwhile, Fitch Ratings in a report said that investment-grade sovereigns in the Asia and the Pacific (APAC) face “limited risks” from exchange rate pressures.

“Fitch Ratings believes that policies designed to support exchange rates are unlikely to pose significant near-term risks to the credit profiles of APAC investment-grade sovereigns, but any deterioration of official reserve buffers could pose greater risks to vulnerable ‘frontier markets’ in the region,” it said.

The credit rater said that using reserves to mitigate foreign exchange volatilities has not had a “significant impact” on APAC credit profiles.

It also said that even though US interest rates remain higher-for-longer, APAC sovereigns would be able to “generally allow their exchange rates to depreciate gradually against the dollar rather than deploying reserves aggressively to resist depreciation.”

Meralco rates up in May

PHILIPPINE STAR/RYAN BALDEMOR

By Sheldeen Joy Talavera, Reporter

RESIDENTIAL CUSTOMERS in areas served by Manila Electric Co. (Meralco) will see higher electricity bills this month due to the increase in generation charge.

In a statement on Tuesday, Meralco said that the overall rate will climb by P0.4621 per kilowatt-hour (kWh) to P11.4139 per kWh in May from P10.9518 per kWh in April.

Households consuming 200 kWh will see their monthly bills increase by around P92.

Meanwhile, those consuming 300 kWh, 400 kWh, and 500 kWh will see their monthly electricity bills go up by P139, P185, and P231, respectively.

“Driving this month’s overall rate increase was the generation charge which went up by P0.4455 per kWh primarily due to higher costs from the Wholesale Electricity Spot Market (WESM) and power supply agreements (PSAs),” the power distributor said.

Charges from the WESM rose by P1.7913 per kWh due to the “tight supply condition in the Luzon grid during the April supply month as demand went up by 2,401 MW (megawatts).”

“There were three days with yellow alert and five days with yellow/red alerts from normal conditions the previous supply month. In addition, the secondary price cap was triggered 19% of the time in April versus only 7% the previous month,” the company said.

Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said at a briefing that the company had to resort to the spot market as the supply situation last month was “challenged.”

“As you know, the supply situation in April was challenged, not only on our side but the entire grid. So, if we did not resort to the spot market, we would have had a shortage in our energy supply,” he said in mixed English and Filipino.

According to the National Grid Corp. of the Philippines, the Luzon grid was placed under red alert for five days and yellow alert for 11 days in April.

The Visayas grid was on red alert for five days, and on yellow alert for 10 days. On the other hand, the Mindanao grid was on yellow alert for two days.

Charges from PSAs went up by P0.2871 per kWh “due to lower excess energy deliveries of some PSAs, which were priced at discount.”

The increase was also attributed to the charges from an emergency PSA that covered Meralco’s supply requirements while awaiting regulatory approval of PSAs that underwent competitive selection processes.

Peso depreciation, which affected 14% of PSA costs that were dollar-denominated, also contributed to the increase, the company said.

On the other hand, charges from independent power producers (IPPs) fell by P0.6942 per kWh due to higher average IPP dispatch and lower fuel prices.

Meralco said that the IPP rate reflected the withholding of charges from First Gas in accordance with the Energy Regulatory Commission order.

WESM, PSAs, and IPPs accounted for 30%, 36%, and 34% respectively of Meralco’s total energy requirement for May.

The transmission charge, taxes, and other charges increased by P0.0166 per kWh in May.

“Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges, and the Feed-in Tariff Allowance (FIT-All) are all remitted to the government,” the company said.

Distribution charge has been unchanged at P0.0360 per kWh since August 2022.

Meanwhile, Meralco said that incidents of power interruptions due to kite-flying increased to 40 between January and March compared with last year’s 26.

“We are appealing to our customers to refrain from flying kites and picking fruits near power lines since these can cause power interruptions and accidents,” Mr. Zaldarriaga said.

Meralco’s controlling stakeholder, 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.

PHL banks’ exposure to the real estate sector eases to 20%

Philippine banks’ exposure to the real estate sector declined to 20.17% as of end-December 2023. — PHILIPPINE STAR/MICHAEL VARCAS

THE EXPOSURE of Philippine banks and trust entities to the property sector eased to 20.17% as of end-December last year, from 20.55% at end-September 2023, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Preliminary BSP data also showed this was lower than the 20.98% ratio at the end of December 2022.

Investments and loans extended by Philippine banks to the real estate sector increased by 4.3% to P3.15 trillion as of end-December from P3.02 trillion as of end-December 2022.

“This may have to do with the expanding base of total loans that mathematically led to a smaller share of real estate loans to total loans,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The ratio also eased amid the need for banks to comply with limits on real estate loans, investments, and other related exposures, as a matter of prudence to address concentration risks on the industry,” he added.

Central bank data showed that real estate loans rose by an annual 5.8% to P2.74 trillion as of end-December from P2.59 trillion as of December 2022.

Broken down, commercial real estate loans went up by an annual 5.5% to P1.73 trillion, while residential real estate loans increased by 6.7% to P1 trillion.

Meanwhile, past due real estate loans jumped by 2.4% to P135.261 billion.

This as past due commercial real estate loans rose by 4.4% to P39.987 billion, while past due residential real estate loans edged higher by 1.5% to P95.274 billion.

Gross nonperforming real estate loans inched up by 0.5% year on year to P108.389 billion.

This brought the gross nonperforming real estate loan ratio to 3.96% as of end-December from 4.17% as of end-2022.

Meanwhile, real estate investments in debt and equity securities declined by 5.9% to P410.653 billion in the period ending December 2023.

Mr. Ricafort also noted that higher borrowing costs may have reduced the demand for new real estate loans.

“Since real estate development and purchases by buyers require relatively larger amount of capital and financing, (it’s more) sensitive to higher interest rates.”

From May 2022 to October 2023, the central bank raised rates by a cumulative 450 basis points (bps) to bring the benchmark rate to a 17-year high of 6.5%.

The BSP monitors lenders’ exposure to the real estate industry as part of its mandate to guide financial stability.

In 2020, the central bank raised the real estate loan limit of banks to 25% of their total loan portfolio from 20% previously to free up additional liquidity as part of its relief measure during the pandemic.

Separate BSP data showed that housing prices rose at a slower pace in the fourth quarter of 2023. The Residential Real Estate Price Index rose by 6.5% in the fourth quarter, much slower than the 12.9% expansion in the third quarter and the 7.7% growth in the same period a year ago. — Luisa Maria Jacinta C. Jocson

Ayala Corp. Q1 income hits P13B, driven by banking, property gains

AYALA Corp. (AC) on Tuesday reported a 28% increase in its first-quarter (Q1) attributable net income to P13.07 billion, driven by strong performances in its banking and property segments.

First-quarter core net income, which excludes one-off items, improved by 26% to P11.8 billion, AC said in a statement to the stock exchange on Tuesday.

The conglomerate saw a 10.5% jump in its first-quarter consolidated revenue to P87.27 billion from P78.97 billion in 2023.

Total costs and expenses climbed by 15% to P67.66 billion during the period compared with P59 billion last year.

AC attributed its first-quarter performance to the growth of core businesses such as the Bank of the Philippines Islands (BPI), Ayala Land, Inc. (ALI), and ACEN Corp.

“We are seeing growth momentum across most of our businesses. This speaks to the resilience of the economy and our ability to provide products and services that are valued by customers,” Ayala President and Chief Executive Officer Cezar P. Consing said.

For the banking segment, BPI posted a record-high quarter net income of P15.3 billion for the first three months, up by 26% from last year, as total revenue increased by 25% to P39.5 billion.

Loans grew by 18.7% to P2 trillion, while total deposits increased by 13% to P2.4 trillion. Fee income grew by 27% to P8 billion on the growth of businesses such as cards, wealth management, and Insurance.

Operating expenses rose by 20% to P18 billion due to higher spend on manpower, technology, and marketing.

On the property business, ALI recorded a 39% increase in its first-quarter net income to P6.3 billion as property development revenues went up by 47% to P25 billion on higher bookings across all residential segments as well as commercial and industrial lot sales.

ALI’s reservation sales climbed by 20% to P33.3 billion carried by sales from AyalaLand Premier’s Park Villas in Makati, The Courtyards Phase 3 in Vermosa, and Alveo’s Park East Place in Bonifacio Global City.

Leasing and hospitality revenues surged by 8% to P10.9 billion led by improved mall occupancy and increased mall, office, and hotel rental rates.

For the energy business, ACEN posted a 34% jump in its first- quarter consolidated net income to P2.7 billion mainly from the ramp up of new operating capacity as well as the P389 million in cash value realization earnings proceeds from the partial sale to Acciona Energia of ACEN’s loan to The Blue Circle’s Mui Ne Wind project in Vietnam.

 Total renewable attributable output was up by 49% to 1,580 gigawatt-hours while statutory revenues, increased 8% to P9.9 billion.

On the telecommunications business, Globe Telecom, Inc. saw its attributable net income fall by 6.07% to P6.81 billion despite posting higher revenues for the period. 

“This was mainly attributed to higher depreciation expenses and non-operating charges, as opposed to non-operating income in the same period last year,” Globe said in a regulatory filing.

Globe’s gross revenue for the period increased slightly to P45.31 billion, 0.6% higher than the P45.03 billion reported in the January to March period last year.

Excluding one-time gains from the company’s tower sale, normalized net income reached P5.8 billion, 13% higher year on year, Globe said without disclosing a comparative figure. 

Meanwhile, the conglomerate’s healthcare unit, Ayala Healthcare Holdings, Inc. (AC Health), logged a 14% increase in revenue to P2.2 billion during the period.

Earnings before interest, taxes, depreciation, and amortization, excluding ramp-up costs for its new cancer hospital in Taguig and Konsulta MD healthcare app, rose by 36% to P127 million.

AC Industrials trimmed its net loss to P931 million in the first quarter from P980 million last year.

“Of the total losses, P670 million came from an impairment provision for Via optronics. Excluding provisions, normalized losses were at P243 million from P270 million due to the absence of MTC-Con’s P154 million loss in the same period of last year and lower losses from Merlin Solar,” the conglomerate said.

Integrated Micro-Electronics, Inc. saw a wider net loss to $3.7 million as its industrial customers continued to see softness in their end-consumer markets.

On Tuesday, AC shares rose by 1.80% or P10.50 to P593.50 per share. — Revin Mikhael D. Ochave and Ashley Erika O. Jose

Banking, tobacco units lift LT Group’s profit to P6.42 billion in first quarter

LUCIO C. Tan’s LT Group, Inc. reported a 1% increase in its first-quarter attributable net income to P6.42 billion, driven by its banking and tobacco units.

Philippine National Bank (PNB) took up 46% or P2.97 billion of the total first-quarter income, while the tobacco business shared 41% or P2.65 billion, LT Group said in a statement to the stock exchange on May 13.

Tanduay Distillers, Inc. (TDI) contributed 4% or P254 million, while Asia Brewery, Inc. (ABI), Eton Properties Philippines, Inc., and Victorias Milling Co., Inc. accounted for 2% each, at P155 million, P116 million and P100 million, respectively. Other income contributed 3% or P168 million.

For the first quarter, PNB’s net profit under the pooling method grew by 10% to P5.31 billion from P4.83 billion in 2023.

Loans and receivables increased by 4% to P610 billion while net interest income surged by 12% to P11.69 billion. Net service fees and commission income dropped by 24% to P1.18 billion.

LT Group said its tobacco business, led by PMFTC, Inc., saw a 13% decline in first quarter net profit to P2.66 billion. Most of the income was from equity in net earnings from the group’s 49.6% stake in PMFTC.

First-quarter industry volume excluding illicit trade fell 11% to 10.2 billion sticks due to affordability challenges of consumers, increasing illicit incidence, and the proliferation of vaping products.

For the group’s liquor business, TDI recorded a 1.2% drop in net income to P255 million during the period as liquor volume fell 13%. Bioethanol volume increased by 1%.

Revenue declined by 5% to P5.9 billion due to lower liquor volume that was partially offset by a price increase in early 2023.

As of end-March, TDI’s nationwide market share rose to 31.6% from 29.1% last year.

The conglomerate’s beverage business, led by ABI, saw a 107% jump in first-quarter net profit to P155 million as revenues increased by 15% to P4.39 billion on higher volumes across product lines.

During the period, the Cobra energy drink brand maintained its leadership with a 57% market share while bottled water brands Absolute and Summit had the third largest share at 19%.

Meanwhile, Eton Properties recorded a 5% drop in its first quarter net income to P116 million. Leasing revenues surged by 12% on higher occupancy and lease rates.

The property developer was able to book P50 million in residential sales as it resumed the selling of remaining inventory from previously launched projects such as 68 Roces in Quezon City and in Eton City, Laguna.

Eton currently has a leasing portfolio of around 289,000 square meters, of which close to 192,000 square meters is for office space.

On Tuesday, LT Group shares were unchanged at P10.02 per share. — Revin Mikhael D. Ochave

Graffiti in the white cube: Banksy’s works in BGC

A SCREEN PRINT and a reproduction of Banksy’s 2008 post-Hurricane Katrina mural Nola in New Orleans.

THE CHALLENGING relationship between Banksy and museums has persisted over decades — echoing that of graffiti artists and elite art institutions in general — most recently finding its way to the Philippines.

On May 14, the Metropolitan Museum of Manila (The M) in Bonifacio Global City (BGC) opened an exhibit titled “Banksy Universe.”

Following online backlash from Filipinos who quickly pointed out that the show is unauthorized, The M released a statement that, like many such exhibitions in museums around the world, “Banksy Universe” is not authorized or endorsed by Banksy.

However, it features “a significant number of works that trace the trajectory of Banksy’s career, affording a closer look into the themes that preoccupy him, as well as the transformative power of art,” the museum said.

Now open to the public, the exhibit at The M joins the list of possibly hundreds of other exhibits held in the graffiti writer’s name over the years that Pest Control, the organization that handles Banksy’s affairs, has declared unauthorized.

Galleries and museums are “trophy cabinets of a few millionaires,” the elusive artist once said. But because Banksy remains anonymous, the ongoing struggle to enforce copyright and trademark laws over his art continues.

“The irony of Banksy’s work being gathered and shown in a museum is not completely lost on us. We do understand that, as an institution, we also represent the ‘beholden-ness’ to the status quo that Banksy rails against in his art,” said Bambina Olivares, The M’s head of special projects, at a May 10 preview for the media.

“We also have to deal with the practicalities of where else we can show something like this,” she added. The screen prints and graffiti reproductions are arranged in a way that educates the unaware about Banksy’s career.

In an interview with BusinessWorld, Ms. Olivares explained that the intention is to be respectful of Banksy’s legacy and to start conversations about how graffiti and vandalism can be seen as legitimate art forms.

“Not everyone has the chance to travel to see the original works, so this allows people to discover it right here,” she said.

THE EXHIBIT
The M is a sleek, swanky art museum a few steps away from Bonifacio High Street, attracting an affluent crowd of curious passersby and art patrons alike.

Within its white walls, on the building’s second level, “Banksy Universe” is a strange, other world. Displayed are recreations and prints of Banksy’s signature stencil murals, some cheeky and some more serious, from various times and places — London, Los Angeles, New York City, Palestine, and even Ukraine, from the early 2000s up to the 2020s.

The exhibit can be credited for covering as much ground as possible, from the reproduced mural of a London cop urinating on a wall, to a print of a protester throwing a bouquet of flowers, each piece contextualized by short descriptions. There is the table of the Central Park street vendor that Banksy once supplied with his original stencils to sell to unknowing passersby.

There is a corner dedicated to posters about “Dismaland,” a subversion of the Disney theme park that Banksy put up in Somerset, UK, with a projection of a looped video showing the original place. There is the merchandise from the grimy luxury of “Walled-Off Hotel,” a play on the high-end Waldorf Hotel, that was installed amid the wartime rubble in Bethlehem in 2017.

Of course, there’s the recreation of Love is in the Bin, a print which was auctioned for over £1 million at Sotheby’s in London and shredded on the spot.

WHAT IS GAINED, WHAT IS LOST
While “Banksy Universe” is educational for those who don’t know much about, or don’t “get,” Banksy at all, the place clearly lacks the grit that characterizes the seedy urban environment where the works emerged.

The M instead replicates it with orange traffic cones lined up here and there on the floor, and the sounds of the shaking and hissing of a paint spray can being played as you wander through the space.

Adrienne Cacatian, a sociology instructor from the University of the Philippines Diliman, told BusinessWorld in an interview that Banksy’s works, once regarded as vandalism, now have a different value after being coopted into the mainstream art circuit.

“The whole thing with vandals’ subculture is that their works’ value is hinged on how organic the duration and life is. The longer it’s up without getting buffed, the more highly regarded it is,” she said via private message, based on personal observations while studying the culture of graffiti.

“Why would you take a work that is so clearly meant to be on a wall outside in a particular context and put it inside the sterile, white cube?” she added.

Banksy Universe, the collective of art enthusiasts that donated over 100 of these items and prints to the exhibit, has been operating for over 20 years — even before Banksy was discovered by museums and galleries. Their spokesperson is Chris Johnson, the only collector and member of the group who isn’t anonymous like their idol.

“In the early 2000s in Paris, we used to put up plexiglass or other protective coverings onto the Banksy works to stop building owners or local police from removing them,” he said in an interview with BusinessWorld.

He explained that, while the pieces in the “Banksy Universe” exhibit in Manila are from personal collections of authenticated prints, the goal is to share as much about the graffiti writer’s work with the world as possible.

VANDALISM IN THE PHILIPPINES
One of Ms. Cacatian’s personal projects is @mgasulatsadingding, an Instagram account that documents graffiti, so that works of vandalism can be recorded before being erased forever by authorities.

In her encounters and conversations with vandals, she found that graffiti is often seen as closer to crime than art, she told BusinessWorld, precisely because its existence will always be contentious and debated.

That “Banksy Universe” in particular is being shown at The M, located in BGC which is known for its strict restrictions on vandals, demonstrates “the gentrification of vandalism when so many others get jailed or fined for it.”

Meanwhile, The M and the Banksy Universe collective have chosen the non-government organization Childhope Philippines as their charity partner for the six month-long exhibit. Early in May, they held a spray paint session that aimed to encourage street children to express themselves through art. “We would never do this project without having Childhope as our charity partner. All proceeds from the “Banksy Universe” gift shop go to those street children,” Mr. Johnson said.

While it remains to be seen if these children will grow up to have their works celebrated or vilified in the very city Banksy’s works are now being shown, everyone else can come see what all the fuss is about at The M, located on Mariano K. Tan Center, 30th St., BGC, Taguig City. The entrance fee is P550. — Brontë H. Lacsamana

CREC moves IPO to June

SAAVEDRA-LED Citicore Renewable Energy Corp. (CREC) has moved its planned P7.9-billion initial public offering (IPO) to June.

The offer period is scheduled from May 27 to May 31, with the tentative listing and start of trading on the Philippine Stock Exchange, Inc. on June 7, according to the company’s preliminary prospectus.

CREC initially scheduled its IPO listing for May 31, with an offer period from May 20 to May 24.

It is set to offer up to 1.79 billion common shares at a maximum price of P3.99 apiece, including an additional 267.86 million shares for overallotment.

The company trimmed its planned IPO size to P7.9 billion from P12.9 billion. The move came after SM Investments Corp. invested P5 billion in its subsidiary Citicore Energy REIT Corp. (CREIT).

CREIT is the Philippines’ first REIT listing with a focus on renewable energy. It specializes in owning sustainable infrastructure projects, including income-generating renewable energy properties across the Philippines.

CREIT saw its attributable net income for the first quarter increase by 18% to P359.28 million from P304.96 million a year ago.

“The increase is mainly related to full take up of lease revenues of the company’s lease contracts on its newly acquired properties in Lumbangan and Luntal, Batangas and Arayat, Pampanga and Pangasinan…,” the company said in its quarterly report released on Tuesday.

The company added that this was “offset by the accrual and recognition of the interest expense for the period for the first and second coupon payments of the P4.5 billion green bond issuance.”

CREIT’s gross revenues rose by 26% to P472.84 million driven by its newly acquired parcels of land under CREIT’s green asset portfolio.

It said that this has translated to 24% growth in earnings before interest, taxes, depreciation and amortization.

“This solidifies CREIT’s position as the largest REIT (real estate investment trust) landlord for renewable energy developers and operators,” the company.

For the January-to-March period, the company’s gross profit increased by 27% to P446.78 million due to the “expansion of leasing activities arising from various acquisitions of freehold assets out of the green bond’s proceeds.”

Gross expenses rose by 7.86% to P26.07 million from P24.17 million previously.

CREIT said it has declared dividends amounting to P0.049 per share, up 4% a year ago. This will be payable on July 9 to shareholders on record as of June 13, it said.

The P0.049 per share dividend equates to an annualized yield of 7%, based on May 10 closing price of P2.82, the company said.

“We have remained consistent in providing investors a sustainable and attractive dividend paying REIT instrument from recurring but growing lease revenues, with asset acquisition in support of Citicore Renewables’ project pipeline,” CREIT President and Chief Executive Officer Oliver Y. Tan said.

“This also demonstrates the resiliency of our REIT investment strategy to keep on adding value-accretive assets, effectively CREIT mirroring the growth roadmap of its sponsor CREC,” he added.

CREIT is the Philippines’ first REIT listing with a focus on renewable energy. It specializes in owning sustainable infrastructure projects, including income-generating renewable energy properties across the Philippines.

Its parent company and sponsor, Citicore Renewable Energy Corp. (CREC) is set to list its shares on the Philippine Stock Exchange on May 31, aiming to raise as much as P7.9 billion.

CREC has over 5 gigawatts (GW) of projects in its pipeline which are in varying stages of development with its first GW well underway. — Sheldeen Joy Talavera

Director Mohammad Rasoulof flees Iran ahead of Cannes premiere

A SCENE from director Mohammad Rasoulof’s film The Seed of The Sacred Fig.

CANNES — Mohammad Rasoulof, a celebrated Iranian director whose latest film is competing in the Cannes Film Festival, has fled Iran after being sentenced to eight years in prison and flogging.

In a statement dated Sunday, Mr. Rasoulof said he was in an unspecified location in Europe. “I had to choose between prison and leaving Iran. With a heavy heart, I chose exile,” it said.

Mr. Rasoulof said he made the decision after he learned about a month ago that his sentence had been confirmed.

“Knowing that the news of my new film would be revealed very soon, I knew that without a doubt, a new sentence would be added to these eight years,” he said, according to the statement.

Mr. Rasoulof, whose passport was confiscated in September 2017, also criticized the scope and intensity of repression by Iranian authorities and called for the world cinema community to stand by filmmakers facing censorship and defend freedom of speech.

The announcement spurred speculation that Mr. Rasoulof may attend the premiere next Friday of The Seed of The Sacred Fig.

Iranian authorities had pressured the Iranian director, who won the Berlin Film Festival’s top award with his 2020 drama There Is No Evil, to withdraw his film from Cannes, he said.

In a caption accompanying a short video of a mountain path on his Instagram, Mr. Rasoulof said he needed to work on the final technical stages of post-production of his film entry.

“I am thankful and indebted to friends, relatives, and individuals who, with kindness, selflessness, and at times risking themselves, aided me in crossing the border and reaching a safe haven in this arduous and lengthy journey,” he wrote.

“I am alive to narrate it.” — Reuters