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Shari’ah-compliant securities reduced to 53 — PSE

THE Philippine Stock Exchange (PSE) announced on Monday that 53 companies are Shari’ah-compliant, down from 55 previously.

Three securities were removed from the list, while one was added, the PSE said, citing its quarterly screening for the period ending March 25.

The new list does not include Greenergy Holdings, Inc., PTFC Redevelopment Corp., and Marcventures Holdings, Inc. The PSE added Victorias Milling Company, Inc.

The PSE releases the updated list of Shari’ah-compliant securities every quarter. The market operator issued the previous list on Jan. 8, covering the period ending Dec. 25, 2023.

Shari’ah refers to the moral and religious code of Islam that covers rules, regulations, teachings, and values governing the lives of Muslims.

“Shari’ah-compliant investment instruments create a mechanism for listed companies to gain access to potential funding from Islamic investors including those in countries in the Middle East and other countries with high Islam population such as Malaysia and Indonesia,” the PSE said.

 The adoption of Shari’ah in the Philippine capital market allows local Islamic investors to comfortably participate in the Philippine business community as well as to create an ethical investment climate, it also said.

 The PSE tapped the services of IdealRatings, Inc. to assess listed companies in accordance with Shari’ah standards under the Accounting and Auditing Organization for Islamic Financial Institutions.

 IdealRatings looks at companies’ adherence to Shari’ah standards in terms of their business activities and financial ratios.

 Under the business screening, the income of companies derived from activities such as adult entertainment, alcohol, cinema, defense & weapons, financial services, gambling, gold and silver hedging, interest-bearing investments, music, pork, and tobacco must be less than 5%.

 In terms of financial ratio screening, a company’s cash or interest-bearing deposits or investments should not exceed 30% of its market capitalization, while its interest-bearing debt should not go beyond 30% of its market capitalization.

 “Through the screening process, securities that are engaged in activities involved in Haraam (impermissible or unlawful) will be taken out from the list of Shari’ah compliant stocks,” the PSE said. — Revin Mikhael D. Ochave

Bjorn Ulvaeus says ABBA success humbling as he marks two milestones

BJORN ULVAEUS (C) with cast members of Mamma Mia! on stage at The Novello theater in London. — REUTERS

LONDON — ABBA’s Bjorn Ulvaeus reflected on the Swedish pop group’s reach and longevity as he joined Mamma Mia! cast and creators for the musical’s 25th anniversary celebrations in London on Saturday.

Saturday also marked 50 years since ABBA won the Eurovision Song Contest final in Brighton, United Kingdom, in 1974 with the song “Waterloo,” bringing them to global attention.

“About this time in the evening, exactly 50 years ago, I was standing on another stage in another city here in the UK,” Mr. Ulvaeus said.

“It’s strange to think that if we hadn’t won … I most probably wouldn’t be standing here today. And this wonderful adventure which we call Mamma Mia! Wouldn’t have happened,” he said, speaking to the audience on the London stage.

ABBA was formed by Ulvaeus, Benny Andersson, Agnetha Faltskog, and Anni-Frid Lyngstad in Stockholm in 1972.

Mamma Mia!, composed by Mr. Ulvaeus and Mr. Andersson and based on their songs, originally opened in London’s West End on April 6, 1999. Written by Catherine Johnson and directed by Phyllida Lloyd, it centers around a mother and daughter with three possible fathers. 

According to its creators, over 70 million people have seen productions of the show in more than 450 cities around the world, staged in 16 different languages. It has also led to two blockbuster movies.

“The fact that somehow ABBA has managed to touch so many millions of lives around the world, generation after generation and people ask me ‘how does it feel for you to know that?,’ and that’s a very good question and very hard to answer,” Mr. Ulvaeus, 78, said.

“It’s a very elusive feeling. It’s more to do with gratitude and with humility than pride, because it humbles you to know that so many people have listened to something you’ve created and that they’ve been made happy by it or sad, and that it has meant so much for them in their lives.”

“It’s very difficult to fully emotionally grasp that, at least for me,” said Mr. Ulvaeus, who was joined on stage by producer Judy Craymer, who first met him and Mr. Andersson in the 1980s and convinced them that a musical could be made from their songs.

With its 25-year run, Mamma Mia! becomes the 3rd longest running musical in West End history, after Les Miserables, which made its debut in 1985 and The Phantom of The Opera, launched a year later, in 1986. — Reuters

Repower Energy signs deal with NIA for mini hydropower projects

RENEWABLE ENERGY developer Repower Energy Development Corp. (REDC) announced on Monday an agreement with the National Irrigation Administration (NIA) for the development of mini hydropower plants.

The company and NIA have signed a memorandum of understanding seeking to develop mini hydropower plants in three areas where the agency has existing infrastructure, the company said in a statement.

REDC had requested NIA’s permission to conduct comprehensive studies on the economic, financial, and technical viability of the projects.

These projects cover the river irrigation systems in Brgy. Dapdap in Tayabas, Quezon; Brgy. Sta. Justina in Iriga City, Camarines Sur; and Brgy. Poblacion in Pilar, Bohol.

“We would like to thank NIA Administrator Eddie Guillen and the entire organization for their trust and confidence in REDC by allowing us to develop and integrate mini hydropower plants into their existing infrastructure,” REDC President Eric Peter Y. Roxas was quoted as saying.

“These will benefit the Filipino people through renewable energy that will be delivered to their households. At the same time, these projects are designed to uphold the property rights of Filipino farmers so that they can continue with their livelihood,” he added.

REDC is a run-of-river hydropower developer, a subsidiary of Pure Energy Holdings, which has 124 megawatts (MW) of mini-hydropower projects clustered in Laguna, Quezon, Camarines Sur, Bukidnon, and other provinces under development.

The company is currently constructing a 4.5-MW hydropower plant in Quezon and a 20-MW plant in Bukidnon. Both plants are targeted to start operations by the fourth quarter of 2025.

For the third quarter, the company reported an attributable net income of P36.51 million, up 19.3%. Gross revenues went down by 11.9% to P103.26 million.

At the local bourse on Monday, shares of the company went down by P0.20 or 3.33% to close at P5.80 each. — Sheldeen Joy Talavera

The irony that was the April 9 holiday

PRISONERS OF WAR on the Bataan Death March. — US AIR FORCE

“Good evening, everyone everywhere. This is the Voice of Freedom broadcasting to you from somewhere in the Philippines.

“Bataan has fallen. The Philippine-American troops on this war-ravaged and blood-stained peninsula have laid down their arms. With heads bloody but unbowed, they have yielded to the superior force and numbers of the enemy. The world will long remember the epic struggle that the Filipino and American soldiers put up in the jungle fastnesses and along the rugged coasts of Bataan. They have stood up uncomplaining under the constant and grueling fire of the enemy for more than three months. Besieged on land, and blockaded by sea, cut off from all sources of help in the Philippines and America, these intrepid fighters have done all that human endurance should bear. For what sustained them through these months of incessant battle was a force more than physical. It was the force of an unconquerable faith — something in the heart and soul that physical adversity and hardship could not destroy. It was the thought of native land and all that it holds most dear, the thought of freedom and dignity and pride in those most priceless of all our human prerogatives.

“Our men fought a brave and bitterly contested struggle. All the world will testify to the almost superhuman endurance with which they stood up until the last, in the face of overwhelming odds.

“The decision had to come. Men fighting under the banner of an unshakable faith are made of something more than flesh, but they are not impervious to steel. The flesh must yield at last, endurance melts away, and the end of the battle must come. Bataan has fallen! But the spirit that made it stand — a beacon to all the liberty-loving people of the world — cannot fall!”

The above was the message broadcast from the secret radio station Voice of Freedom in Malinta Tunnel in Corregidor on April 9, 1942 that informed the Filipino people and the world that “Bataan has fallen.” It was written by Captain Salvador P. Lopez, who was at the time assigned to the headquarters of General Douglas MacArthur, commander of the United States Army Forces in the Far East (USAFFE). The broadcast was delivered by 3rd Lieutenant Normando “Norman” Reyes.

Mr. Lopez, who had earned a Bachelor of Arts degree in English in 1931 and a Master of Arts degree in Philosophy in 1933 from the University of the Philippines, was teaching literature and journalism at the University of Manila before the war. He was also a daily columnist and magazine editor of the Philippines Herald. When war broke out, Lopez was drafted into the Philippine Army as captain and assigned to Gen. MacArthur’s headquarters on Corregidor. He was captured by the Japanese when the island fortress fell on May 6, 1942.

After the war, he served as adviser on Political Affairs, Philippine Mission to the United Nations, becoming Charge d’affaires, and subsequently Acting Permanent Representative. He was also assigned to diplomatic posts in a number of European countries. President Diosdado Macapagal appointed him Secretary of Foreign Affairs. President Ferdinand Marcos named him ambassador to the United States in 1968 but he appointed him president of the University of the Philippines the following year. It was during his presidency that UP students became political activists, staging mass protest marches and rallies against the Marcos regime right from the First Quarter Storm in 1970.

Mr. Reyes, born to a Filipino father and an American woman, was studying in the American school H. A. Bordner when war broke out. When schools closed, Reyes worked full time in Station KZRH in Manila until the end of December 1941 when the Japanese closed in on Manila. He was drafted into the Philippine Army as a 3rd lieutenant and sent to Corregidor as a broadcaster.

Lt. Reyes was the voice on radio that told of the story of Capt. Jesus Villamor shooting down two Japanese planes from his Boeing fighter plane, and of a “mile-long convoy” of US ships with troops, arms, ammunition, and food on its way to Manila. That was the convoy that kept the spirit of the beleaguered, shell-shocked, wounded, starving, and tropical disease-ravaged troops in Bataan afloat and kept them fighting. Unknown to the gallant soldiers in Bataan, the convoy had been ordered to divert to Brisbane, Australia as the port of Manila and the US Naval bases in Sangley Point and Subic, where the troops and cargo were to be disembarked, had all been destroyed by Japanese bombers.

Lt. Reyes was captured along with the 11,500 men and women of the USAFFE on Corregidor. After several months in prison, he was shipped to Japan.

The Voice of Freedom was a makeshift radio station in Malinta Tunnel in Corregidor. It was set up by former Radio KZRH technicians Wallace “Ted” Ince and Simeon Cheng out of components of their station, which was shut down along with all Manila stations on orders of Gen. MacArthur. The objective of the Voice of Freedom was to broadcast favorable news for the Allies. It first went on the air on Jan. 2, 1942 and fell silent permanently with the Fall of Corregidor.

KZRH was put up by Samuel Gaches, the owner of H. E. Heacock Co., a department store in Escolta, Manila. It was the fourth commercial radio station in the Philippines. It went on air on July 15, 1939. On Dec. 8,1941, KZRH was the first station to announce the Japanese attack on Pearl Harbor.

After World War II, the Elizalde brothers — Federico, Joaquin, and Manuel — bought KZRH. They transferred its operations to the Insular Life Building in Plaza Cervantes. On June 12, 1946, the Elizaldes established the Manila Broadcasting Co., the country’s first radio network, with KZRH as its flagship station. The station returned to the airwaves on July 1, 1946. When the Philippines separated from the American broadcasting milieu in 1948, KZRH changed its callsign to DZRH.

That Voice of Freedom broadcast on April 9, 1942 was the cause of the irony that the April 9 holiday was. The broadcast extolled the valor of the “Battling Bastards of Bataan.” We are supposed to remember on April 9 of every year “the epic struggle that the Filipino and American soldiers put up in the jungle fastnesses and along the rugged coasts of Bataan.” But for many years we remembered instead the Fall of Bataan — the mass surrender of Filipino and American soldiers to the Japanese Imperial Army. That was because the broadcast opened and closed with the statement “Bataan has fallen.”

In April 1961, President Carlos P. Garcia signed Republic Act No. 3022 into law, declaring April 9 of every year as “Bataan Day.” Only in June 1987, did President Corazon C. Aquino put it right when she issued Executive Order No. 203 referring to the April 9 holiday as “Araw ng Kagitingan.”

 

Oscar P. Lagman, Jr. is an avid reader of Philippine history.

Century Pacific Food income jumps 12% to P5.6B

PO-LED Century Pacific Food, Inc. (CNPF) recorded a 12% increase in its 2023 net income to P5.6 billion, driven by higher sales.

The listed food and beverage manufacturer saw an 8% growth in revenues to P67.1 billion despite the softening of its original equipment manufacturer (OEM) exports segment, CNPF said in a regulatory filing on Monday.

 CNPF said its branded segment, which accounted for majority of sales, recorded an 11% sales growth, led by the milk, marine, and meat segments.

 The branded segment also includes products such as pet food, coconut, refrigerated food, and plant-based alternatives.

 The company saw a 4% decline in its OEM tuna and coconut exports segment due to the supply chain challenges and elevated commodity costs that led to softer markets.

 “The branded business continued to exhibit resilience amidst a volatile macroeconomic environment. Our primary focus is on delivering affordable nutrition through our vast assortment of brands and products spanning multiple price tiers — our way of providing value to our consumers in both good and challenging times,” CNPF Chief Financial Officer Richard Kristoffer S. Manapat said.

 CNPF recorded a 15% increase in earnings before interest, taxes, depreciation, and amortization to P8.7 billion as a result of gross margin expansion and “efficient” operating expenses management.

 “On the whole, we are pleased to deliver consistent and profitable growth despite operating in a volatile environment in 2023. We attribute this to the all-weather nature of our business model, diversified portfolio, and prudent usage of our resources,” Mr. Manapat said.

 “We ended the year on solid footing, putting us in a good position to reinvest in growth and sustainability as well as to provide our shareholders with a healthy return on their investment,” he added.

 CNPF generated P8.4 billion in operating cash flows last year, of which P1.4 billion was released as dividends, while P1.5 billion was reinvested in capital expenditures for capacity expansion and for renewable energy initiatives.

 The company expanded its solar capacity to 8.8 megawatts and commissioned a new biomass boiler that can be fueled by coconut shells.

Meanwhile, Mr. Manapat said that CNPF aims to grow its top line and bottom line in the low double-digit territory this year.

 “We are only in the early days of 2024… We plan to reinvest gains from improving commodities into growth and expansion, as we continue to focus on affordability and providing better, healthier food options to Filipino consumers,” he said.

CNPF’s brands include Century Tuna, Argentina, 555, Ligo, and Birch Tree. The company is also one of the leading providers of private label tuna and coconut products for export.

 CNPF shares fell by 0.82% or 30 centavos to P36.50 apiece on Monday. — Revin Mikhael D. Ochave

Social innovation in Sablayan

FACEBOOK.COM/PUPSABLAYANBRANCH

When I learned that Sablayan, Mindoro Occidental was the site of the Sablayan Prisons and Penal Farm (SPPF), the Philippines’ largest penal colony with a sprawling 16,190 square meters, I promised myself that I would help, even in some small way, some of the 1,800+ Persons of Deprived Liberty (PDLs) there.

Sablayan is a 1st class municipality in the province of Occidental Mindoro. According to the 2020 census, it has a population of 92,500+ people. It has a total land area of almost 2,200 square kilometers, making it the largest municipality in the nation.

PUP AND SABLAYAN AND STANFORD
It is providential that the Polytechnic University of the Philippines (PUP) established its 21st campus in Sablayan in 2010. It offers bachelor’s programs in Secondary Education, Cooperatives, and Entrepreneurship.

In the course of my Stanford fellowship with the Distinguished Careers Institute, I had the privilege of being part of a course in the Design School (D.School) entitled “Design to Equip Learners in Under Resourced Communities.” With Stanford D.School professors Paul Kim, Laura McBain, and Isabelle Hau, and working with PhD student Alessandra Napoli and Computer Science senior Carina Wing Fung, we posed the typical design HMW (How Might We) question: How Might We enhance the teaching capability of PUP to support the SPPF PDLs?

Two progressive PUP leaders, Vice-President of Campuses Pascualito B. Gatan and Dean of Business and key contact Cindy F. Soliman — agreed to be co-designers to this project.

STEPS IN THE DESIGN PROCESS
Empathy interviews are Step 1 of the Stanford Design Process and involve conversations with stakeholders in which the interviewers place themselves “in the shoes of the interviewees.” The design team interviewed Leine S. Alcaraz, the head of PUP-Sablayan; Dr. Arnulfo A. Jacinto, the PUP-Sablayan faculty representative; Felipe S. Balilo, the PUP-Sablayan student representative; Chief Superintendent Robert A. Veneracion, the head of SPPF; and two PDLs.

Next is the “Defining” Step. Teaching activities at PUP-Sablayan for students are managed out of PUP in Sta. Mesa, Manila, while limited teaching activities at SPPF for PDLs are supervised by the Department of Education. Therefore, the design challenge has been defined as: “How do you start to equip the SPPF PDLs with training and education that could lead them to acquire degrees while inside SPPF, and/or life skills prior to their exit from SPPF?”

Then comes the “Ideating” Step. Addressing the design challenge involves answering the HMW question. It was clear from the onset that a sustainable PUP-SPPF partnership would have to be a long-term one. While we have to think big in terms of the opportunities that this collaboration will provide the overall Sablayan community, most especially the students and the PDLs, we do have to start small with immediately doable projects on a pilot basis. This would inform PUP and SPPF of adjustments in the projects, work arrangements, and relationships necessary to ensure robust and sustainable solutions that work.

Based on the premise above, the Design Team brainstormed on ideas and arrived at two initial projects that could be launched within the next six months:

1. Building teaching bandwidth by tapping senior PUP Sablayan students to become teaching assistants in SPPF; and,

2. Designing and conducting Life Skills workshops for PDLs who are about to leave SPPF.

Once these projects are launched, PUP and SPPF could jointly assess the projects on a regular basis.

PROTOTYPING AND TESTING
In the design process, prototypes are models of products or services, made in accordance with customer requirements, to be tested and improved over time.

To build teaching bandwidth in an under-resourced ecosystem, a proposed system map was developed by the design team that involved linking highly qualified and capable senior PUP Sablayan students (aspiring for secondary education degrees) to assist SPPL teachers. It is envisioned that these seniors will eventually teach the courses once they graduate.

As PDLs need to become productive members of society upon their reentry and avoid being recidivists, intervention in the form of a Life Skills Workshop will be conducted within three months of PDL’s scheduled departure from the facility. Key topics — such as managing money, managing oneself, and managing family and community — will be taught, and individualized coaching and counselling sessions will be scheduled.

THE PROTOTYPING STEP WILL BE FOLLOWED BY A TESTING STEP.
The above prototypes will be evaluated in a forthcoming visit to Sablayan. During this visit, a PUP-SPPL team will be organized to oversee the pilot implementation of an initial batch of student teaching assistants for an initial six-month period. Lessons will then be gathered, and the solution finalized in accordance with the design process steps. A maiden run of the Life Skills workshop is also planned, and an evaluation of the workshop will be conducted to finalize the design of the workshop’s future runs.

SOCIAL INNOVATION
This partnership between PUP-Sablayan and SPPF promises to create a social impact, defined as significant and/or positive changes that solve or at least address social challenges, in the Sablayan community and may well serve as a template for other municipalities and cities in the Philippines.

I am very hopeful that in the Philippines, social innovation — new social practices that aim to meet social needs in a better way jointly curated by private, public and civil society sectors — will thrive and flourish.

 

Dr. Ramon “Mon” B. Segismundo is a member of the Management Association of the Philippines’ Shared Prosperity Committee. He is a 2023-2024 fellow of the Stanford University Distinguished Careers Institute. He holds a Doctorate in Business Administration from the Singapore Management University. He is the CEO of Singapore-based OneHRX.

map@map.org.ph

rbsegismundo@onehrx.com

Colliers: Developers ramping up residential projects in Cebu City

PHILIPPINE STAR/MIGUEL DE GUZMAN

(Second of two parts)

THIS is the conclusion of my piece on Cebu’s exciting residential landscape. What stands out is that more projects are due to be turned over in Cebu over the next few years. This should give Cebu investors and end-users more options. 

CEBU CONDOMINIUM SUPPLY TO GROW BY A FIFTH IN 2026
Colliers recorded the completion of 10,500 new condominium units in Cebu in 2023. Among the notable completions during the year include Avida Land’s Avida Towers Riala, as well as Cebu Landmaster’s Mivela Garden Residences, Casa Mira Towers Guadalupe, and Casa Mira Towers Mandaue. Meanwhile, we also recorded the completion of Thyme Residences, the first condominium project in Minglanilla.

We see  substantial completion across Metro Cebu from 2024 to 2025. By 2026, Colliers expects Cebu’s condominium stock to reach 93,100 units with the average annual completion of 5,000 new units from 2024 to 2026. Projects from national developers in the pipeline include Rockwell Land’s The Villas at Aruga, Megaworld’s Pearl Global Residences, 8990’s Urban Deca Homes Banilad (2 towers), and Arthaland’s Lucima. These projects, classified as affordable to luxury in terms of total contract price (TCP) per unit, are dispersed across Cebu Business Park, Mactan Newtown, Lapu-Lapu City and Mandaue City.

AFFORDABLE TO LOWER MID-INCOME PROJECTS DOMINATE
In 2023, Colliers recorded the take-up of 5,620 condominium units in Cebu, down 33% year on year. The affordable to lower mid-income projects (P2.5 million to P7 million), accounted for about 62% of total condominium units sold in the pre-selling market during the year.

In our view, the demand for these segments is partly sustained by investors who plan to rent out their units to outsourcing employees. These segments should also receive sustained demand from local investors as well as Filipinos working abroad looking for viable investment options.

The affordable to lower mid-income segments also dominated the take-up for house-and-lot (H&L) projects in Cebu, accounting for 55% of horizontal units sold in 2023. In our opinion, take-up for these units is also supported by remittance-receiving households, especially as Cebu is part of Central Visayas region, one of the top sources of deployed overseas Filipino workers (OFWs) in 2022.

MORE PRONOUNCED PRODUCT DIFFERENTIATION AS DEMAND RECOVERS
Colliers encourages developers to assess the viability of launching more master-planned communities to take advantage of the government’s infrastructure projects.

Overall, we see Cebu reaping the benefits of a recovering property market. With the largest condominium stock outside of Metro Manila, Colliers believes that Cebu is well-prepared to capture demand post-Covid. Metro Cebu has options that cater to the demands of end-users and investors. The region also has diversified projects that serve the residential needs of young employees to the more discerning and astute investors. Colliers projects a recovery in residential demand beyond 2024. This should be supported by sustained regional economic growth, stable inflow of remittances from Filipinos working abroad, and sustained BPO investment, with Cebu cornering more than half of office space deals closed outside of Metro Manila in 2023. Developers should further explore opportunities in the market but these strategies should revolve around the continued offering of attractive promos and flexible payment schemes as well as exploration of alternative locations for residential development, covering condominium, house and lot, and lot only developments.

With more projects in the pipeline covering vertical and horizontal developments, Colliers believes that it is essential for Cebu developers to further differentiate to stand out in a fiercely competitive market and satisfy the demands of discerning and astute investors. Homegrown developers with sizable parcels of developable land should explore the viability of forming joint ventures with national and even foreign developers. We expect more projects that will incorporate green and sustainable features, more open spaces as well as upscale amenities. Developers should also test the upscale to luxury markets especially now that investors and end-users start to gravitate toward more expensive projects especially given Cebu market’s constantly rising affluence. Colliers data show that it’s not just the condominium  projects that have constantly posted price increases; prices of House and Lot and Lot Only units have also increased across Cebu.

The Colliers Philippines team is looking forward to lining up more briefings in Cebu. It’s interesting to see what the future holds and the vast opportunities that national and homegrown players are planning to tap in Cebu in the years to come. I, myself, am excited for our next Cebu rendezvous!

 

Joey Roi Bondoc is the research director for Colliers Philippines.

Colin Farrell embodies film noir detective in Sugar

IMDB
IMDB

LOS ANGELES — Film noir is back, with a lot of color, starring Colin Farrell in Sugar, a new Apple+ series set in contemporary Los Angeles.

The role of a private detective battling inner demons as he tracks down a Hollywood producer’s missing granddaughter is a dream come true for the Golden Globe Award winner for best actor in The Banshees of Inisherin.

“I do love film noir, and I have had a love for it that pre-dates this show, so there were certain tropes that I was well aware of,” Mr. Farrell said in an interview.

The noir genre began with crime films in the 1940s and 1950s, featuring sharp shadows, pessimistic characters, smoke and rainy streets in black and white.

“I was well aware of the archetypical trope aspect to those things,” said Mr. Farrell, whose character John Sugar works on a case that turns his whole world upside down.

The series, which premieres on Friday, juxtaposes the colorful landscapes of Los Angeles with scenes that look like vintage Hollywood noir. Scenes between characters are edited in ways that surprised the actors.

“I knew I was filming a noir but then once I’m done with my process, there’s a completely separate creative process that happens after,” said British actor Kirby Howell-Baptiste, who plays Sugar’s manager Ruby in a contemporary twist.

“So when I watched it, the voiceover was a mystery to me, all of that footage that’s cut into it, the way it is cut, all of that was such a mystery.”

Mr. Farrell fondly recalled some nights when they were shooting car footage: Cinematographer Cesar Charlone would get in the passenger seat and Mr. Farrell would drive them to downtown Los Angeles for 40 minutes.

“There were moments where I was kind of honest-to-God pinching myself, going, ‘this is just unbelievable’ and ‘aren’t we so lucky?’,” Mr. Farrell said. — Reuters

ASEAN+3: Selected Demographic Indicators, 2021

THE PHILIPPINE population is expected to be among the youngest in the region, with the country still in the early stage of its demographic transition as fertility rates remain high and the number of working-age individuals seen to peak by 2051 — the latest among Southeast Asian economies, a think tank said. Read the full story.

ASEAN+3: Selected Demographic Indicators, 2021

Treasury bills, bonds fetch higher rates

BW FILE PHOTO

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday but partially awarded the Treasury bonds (T-bonds) it auctioned off as rates rose across all tenors amid hawkish bets on the Bangko Sentral ng Pilipinas’ (BSP) policy statement later in the day.

The Bureau of the Treasury (BTr) raised P15 billion as planned from the T-bills it offered on Monday as total bids reached P39.939 billion, or more than twice the amount on the auction block.

Broken down, the BTr borrowed P5 billion as programmed from the 91-day T-bills as tenders for the tenor reached P10.333 billion. The three-month paper was quoted at an average rate of 5.772%, 6.8 basis points (bps) higher than the 5.704% seen last week. Accepted rates ranged from 5.698% to 5.8%.

The government likewise made a full P5-billion award of the 182-day securities, with bids reaching P15.036 billion. The average rate for the six-month T-bill stood at 5.885%, up by 2 bps from the 5.865% fetched last week, with accepted rates at 5.823 to 5.919%.

Lastly, the Treasury also raised P5 billion as planned via the 364-day debt papers as demand for the tenor totaled P14.57 billion. The average rate of the one-year T-bill went up by 1.8 bps to 5.983% from the 5.965% quoted for a P7-billion award last week. Accepted yields were from 5.95% to 6.025%.

The Treasury on Monday allowed tax-exempt government-owned and -controlled corporations to purchase one-year T-bills over the counter at government financial institutions at the same average rate.

At the secondary market before the auction, the 91-, 182-, and 364-day T-bills were quoted at 5.7527%, 5.8942%, and 6.0057%, respectively, based on PHP Bloomberg Valuation (BVAL) Service Reference Rates data provided by the BTr.

Meanwhile, the BTr raised just P20.625 billion for the reissued 10-year bonds it offered on Monday, below the P30-billion program, despite total bids reaching P37.36 billion or more than the auction volume.

This brought the total outstanding volume for the series to P85.6 billion, the BTr said in a statement after the auction.

The bonds, which have a remaining life of nine years and nine months, were awarded at an average rate of 6.439%, with accepted yields ranging from 6.365% to 6.48%.

The average rate of the reissued bonds was 21.2 bps higher than the 6.227% quoted for the papers when they were last offered on March 12 and 18.9 bps above the 6.25% coupon for the issue.

This was also 6.5 bps higher than the 6.374% seen for the same bond series and 10.8 bps above the 6.331% quoted for the 10-year tenor at the secondary market on Monday before the auction, based on PHP BVAL Service Reference Rates data provided by the Treasury.

“The awarded rates at today’s auction reflected hawkish expectations ahead of the BSP meeting today,” a trader said in an e-mail on Monday.

The BSP on Monday kept its policy rate unchanged at a near 17-year high of 6.5% for a fourth straight meeting, as expected by 16 analysts in a BusinessWorld poll last week.

Rates on the central bank’s overnight deposit and lending facilities were likewise kept at 6% and 7%, respectively.

BSP Governor Eli M. Remolona, Jr. said at a briefing after the meeting that the Monetary Board deemed it necessary to maintain its tight policy settings amid persistent upside risks to inflation stemming from higher food and transport costs, adding they stand ready to adjust rates as needed to ensure price stability.

The BSP hiked borrowing costs by 450 bps from May 2022 to October 2023 to tame inflation.

Headline inflation quickened for a second straight month in March as prices of rice continued to surge, the Philippine Statistics Authority (PSA) reported last week.

The consumer price index (CPI) accelerated to 3.7% year on year in March from 3.4% in February, preliminary data from the PSA showed. This was slower than the 7.6% clip in the same month last year.

The March CPI was within the BSP’s 3.4-4.2% forecast for the month and was slightly below the 3.8% median estimate in a BusinessWorld poll of 17 analysts. March also marked the fourth straight month that inflation was within the central bank’s 2-4% target range.

Rice inflation climbed to 24.4% in March from 23.7% in February. This was also its fastest print since the 24.6% in February 2009.

It contributed 1.8 ppt to headline inflation or around 48% of the total.

For the first quarter, headline inflation averaged 3.3%.

Cautious signals from US Federal Reserve officials last week also pushed up T-bill and T-bond yields on Monday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Federal Reserve officials including US central bank chief Jerome H. Powell on Wednesday continued focusing on the need for more debate and data before interest rates are cut, a move financial markets expect to occur in June, Reuters reported.

“Recent readings on both job gains and inflation have come in higher than expected,” Mr. Powell said in a speech to the Stanford Graduate School of Business. While policy makers generally agree that rates can fall later this year, he said this will happen only when they “have greater confidence that inflation is moving sustainably down” to the Fed’s 2% target.

His remarks repeated language the Fed has adopted as it tries to balance the risks of cutting interest rates before inflation is truly controlled with the risks of suppressing economic activity more than is needed.

The Fed last month held its benchmark overnight interest rate steady in the 5.25%-5.5% range, where it has been since July.

The BTr is looking to raise P195 billion from the domestic market this month or P75 billion from T-bills and P120 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 5.6% of gross domestic product this year. — A.M.C. Sy with Reuters

Security Bank, Mitsubishi Motors set to form JV

SECURITY Bank Corp. (Security Bank) announced on Monday a partnership with Mitsubishi Motors Corp. (Mitsubishi Motors) to offer financing services to the latter’s customers in the Philippines.

The two companies will form a joint venture (JV), which is expected to start operations next year, with Mitsubishi Motors holding 51% ownership stake and Security Bank holding 49%, Security Bank said in a disclosure to the local bourse.

The entity will offer sales financing instruments and services to Mitsubishi Motors’ customers and dealers in the Philippines through Security Bank.

“This joint venture is in line with Security Bank’s commitment to provide superior customer experiences through our BetterBanking brand promise,” Security Bank President and Chief Executive Officer Sanjiv Vohra said.

“By combining the strengths of both Mitsubishi Motors and Security Bank through this new company, we are in the best position to offer enhanced auto financing services to match our customers’ needs. This means more attractive promos, competitive financing packages, and fast decisioning. Thus, we deliver better value to customers,” he added.

Filipinos typically rely on financing when buying cars, Security Bank noted.

“This is our 61st year in business in the Philippines, where we now have a strong presence and a large market share,” Mitsubishi Motors Executive Vice-President Tatsuo Nakamura said.

“Through this joint venture, we hope we can provide Mitsubishi Motors vehicles to more customers in this ever-expanding market,” he added. — Aaron Michael C. Sy

Higher deficit ceilings point to dangerous trend

Last week there were several important developments in the macroeconomic and fiscal situation of the Philippines. See these reports in BusinessWorld: “NG debt hits record P15.18 trillion” (April 4), “Philippines lowers growth target for 2024, raises deficit ceilings” (April 4), “PSA lowers economy’s growth to 5.5% in 2023” (April 5), “Inflation accelerates for a second month in a row in March” (April 5).

Public debt keeps rising, not falling. The GDP growth targets made by the Development Budget Coordination Committee (DBCC) were adjusted downwards. And the inflation rate rose to 3.7% in March — although this is just half of the 7.6% inflation in March 2023, the steady decline from October 2023 to January 2024 has halted.

NEW MACROECONOMIC AND FISCAL TARGETS
In Table 1 are the new targets set by the DBCC last week, I arranged them into three sets of parameters: A for macroeconomic assumptions, B for fiscal outlook, and C for GDP growth targets. Then I compared the old targets made in April 2023 with the new ones.

For 2023, the actual growth of 5.5% was lower than the targeted 6-7% but the deficit target was generally achieved.

For 2024, the new deficit target is much higher — P1.48 trillion (5.6% of GDP) vs the P1.36 trillion of the old target. It is the same for 2025, with the new deficit target set much higher at P1.49 trillion compared with the P1.20 trillion in old target (see Table 1).

It is the same trend for 2026 to 2028, the deficit’s new targets are set much higher than the old targets. And this points to a dangerous trend — disbursements and public spending have become more uncontrollable while projected revenues cannot keep up.

Two important medium- to long-term policies should be set.

First, the planned privatization of some government assets — like property of the Ninoy Aquino International Airport or NAIA, the New Bilibid Prison property, the Armed Forces of the Philippines’ golf course, Philippine Amusement and Gaming Corp. (better known as PAGCOR), etc. — should be started earlier.

Second, the planned huge procurement (P2 trillion) of materiel for the Armed Forces of the Philippines (AFP) (submarines, battleships, jetfighters, missiles, ammo) and several hundred billion pesos worth of materiel for the Philippine Coast Guard (PCG) should be junked. Instead, we should focus on high-profile diplomatic negotiations as the cheaper alternative to have a peaceful resolution of the territory disputes in the West Philippine Sea.

If these two measures are not considered, if government will only rely on more taxation while public spending keeps rising fast, the public debt stock will keep rising and interest payments alone would approach P1 trillion/year — it was already P670 billion in 2023.

ELECTRICITY SUPPLY TO SUSTAIN HIGH GROWTH
Last Friday, April 5, I attended the Philippines Electric Power Industry Forum (PEPIF) 2024, which had the theme, “Powering a Sustainable and Secure Energy Future for the Country,” held at the Iloilo Convention Center in Iloilo City. I will write more about it in the next column, but for now I will make my own projection on the amount of electricity in terawatt-hours (TWh) we will need in the medium-term to avoid blackouts because the projected power demand will be high due to high GDP growth targets as discussed above.

First, I computed the average growth in power generation from 2017 to 2022 (it’s 5.1%) to approximate generation in 2023 as data is not yet available from the Department of Energy. Second, I introduced and computed two concepts: 1.) the electricity multiplier in percent expansion (= % growth GDP / % growth power generation), and, 2.) the electricity multiplier in monetary values (= GDP P billion increase / generation TWh increase). All this is done with the assumption of ceteris paribus or all other things/factors being equal or constant.

For the first concept (the electricity multiplier in percent expansion), it shows that a 1% expansion in power generation contributes to a 1.3% expansion in GDP. For the second concept (the electricity multiplier in monetary values), a one TWh increase in power generation contributes to a P236 billion expansion in real GDP size.

But since the country’s per capita kilowatt-hour (kWh) generation remains low and “yellow-red alerts” were still being declared even through 2023, I adjusted the electricity multiplier from 1.3% to 1.2% to help ensure more electricity stability and security in the medium-term.

My results show that the Philippines’ power generation must expand from 5 TWh/year in 2017-2022 (excluding the horrible lockdown year of 2020) to 6.4 TWh/year in 2023-2025, and 8 TWh/year in 2026-2028 (see Table 2).

The electricity multiplier in monetary values from 2023-2028 is at a more realistic level: for every 1 TWh increase in power generation, real GDP size increases by P222 billion.

Since the theme of PEPIF 2024 was focused on renewable energy (RE), lots of the discussions were focused on megawatt (MW) installed capacity expansion by RE, not megawatt-hours (MWh) actual generation expansion. The former can be a deceptive metric because not all MW are the same. A 100-MW solar plant can deliver only about 18 MW of electricity in a day while a 100-MW coal plant and 100-MW gas plant can deliver about 65 MW and 60 MW of electricity in a day, respectively.

For our economic security, we should have energy security, and such can only come from reliable sources like thermal plants (coal, gas, oil peaking plants) and nuclear power. I liked the assessment and speech by Jimmy Villaroman, President of Aboitiz Renewables, Inc. (ARI). He said at the forum:

“We advocate a balanced approach, growing renewable energy and investing in traditional sources… our transition in the Philippines, as in the rest of Asia and the Pacific, must be gradual and intelligent. It has to be well-planned; uniquely suited to each country… We believe LNG is a great complement to RE due to the latter’s inherent intermittency…. We’re also studying the feasibility of small modular reactors… as other long-term solutions.”

Yes, we cannot and should not abandon conventional sources. Sustained high economic growth, more job creation, are goals that are more noble and more practical than high RE share to total energy mix.

 

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

minimalgovernment@gmail.com

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