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Lawmakers urge Biden to call out more Chinese biotech firms

STOCK PHOTO | Image by Satheesh Sankaran from Pixabay

A Republican and a Democratic member of Congress are calling on the Biden administration to add seven Chinese biotech firms to a list created by the Defense Department to highlight firms it says are allegedly working with Beijing’s military.

In a letter dated March 29 seen by Reuters, Republican Michael Gallagher and Democrat Raja Krishnamoorthi asked Defense Secretary Lloyd Austin to take the action since Beijing could harness the power of biotechnology to strengthen its military.

“Urgent action is needed,” said the lawmakers, who serve as the chairman and ranking member of the Select Committee on the Chinese Communist Party, citing risks that China could “create synthetic pathogens” to gain military advantage.

“The Department of Defense provides responses directly to members of Congress in matters of this kind,” a department spokesman said in a statement. “We have no additional information or further details to release at this time.”

A spokesperson for the Chinese Embassy in Washington said “some people” in the United States should stop suppressing Chinese companies under false pretexts.

“When it comes to ‘using biotech to strengthen its military,’ the US side should reflect on itself, rather than groundlessly attacking and smearing China,” the spokesperson, Liu Pengyu, said in a statement.

The letter is the latest sign of growing concern in Washington about China’s biotech sector.

The US Congress is considering legislation to bar federal agencies from contracting with China’s BGI and WuXi AppTec, among others, as part of an effort to keep China from accessing American genetic data and personal health information.

US intelligence officials in late February told senators working on the bill that Chinese pharmaceutical firm WuXi AppTec had transferred US intellectual property to Beijing without consent, Reuters reported.

Being placed on the Pentagon’s Chinese military-backed companies list doesn’t involve immediate bans. However, it can be a blow to companies’ reputations and represents a warning to US firms considering doing business with them. It could also put pressure on the Treasury Department to sanction them.

In their letter, Gallagher and Krishnamoorthi call for the addition of Innomics and STOmics, which they allege are subsidiaries of BGI. BGI Genomics Co., a publicly listed subsidiary of BGI Group, was added to the list in 2022.

Reuters reported in 2021 that BGI has made sales worldwide of prenatal tests developed in collaboration with China’s military and has used them to collect genetic data from millions of women for sweeping research on traits of populations.

BGI has said it is not controlled by the Chinese government or military and that it respects human rights.

The letter also names Origincell, for allegedly operating a bio-storage cell tank and having ties to the Chinese military and Vazyme Biotech, which allegedly makes bioactive compounds and has investors with ties to the military.

“STOmics Americas is a U.S.-based company that has no operations in China nor any connections whatsoever with the Chinese military,” the BGI Group said in a statement.

The other companies did not immediately respond to requests for comment.

Lawmakers in February asked that WuXi AppTec be considered for the list. The company has said it poses no national security risk to any country. It also has said it is not aware of any unauthorized transfers of any US client’s IP to China. – Reuters

US, Britain announce partnership on AI safety, testing

FREEPIK

WASHINGTON – The United States and Britain on Monday announced a new partnership on the science of artificial intelligence safety, amid growing concerns about upcoming next-generation versions.

Commerce Secretary Gina Raimondo and British Technology Secretary Michelle Donelan signed a memorandum of understanding in Washington to jointly develop advanced AI model testing, following commitments announced at an AI Safety Summit in Bletchley Park in November.

“We all know AI is the defining technology of our generation,” Ms. Raimondo said. “This partnership will accelerate both of our institutes work across the full spectrum to address the risks of our national security concerns and the concerns of our broader society.”

Britain and the United States are among countries establishing government-led AI safety institutes.

Britain said in October its institute would examine and test new types of AI, while the United States said in November it was launching its own safety institute to evaluate risks from so-called frontier AI models and is now working with 200 companies and entites.

Under the formal partnership, Britain and the United States plan to perform at least one joint testing exercise on a publicly accessible model and are considering exploring personnel exchanges between the institutes. Both are working to develop similar partnerships with other countries to promote AI safety.

“This is the first agreement of its kind anywhere in the world,” Ms. Donelan said. “AI is already an extraordinary force for good in our society, and has vast potential to tackle some of the world’s biggest challenges, but only if we are able to grip those risks.”

Generative AI – which can create text, photos and videos in response to open-ended prompts – has spurred excitement as well as fears it could make some jobs obsolete, upend elections and potentially overpower humans and catastrophic effects.

In a joint interview with Reuters Monday, Ms. Raimondo and Ms. Donelan urgent joint action was needed to address AI risks.

“Time is of the essence because the next set of models are about to be released, which will be much, much more capable,” Ms. Donelan said. “We have a focus one the areas that we are dividing and conquering and really specializing.”

Ms. Raimondo said she would raise AI issues at a meeting of the US-EU Trade and Technology Council in Belgium Thursday.

The Biden administration plans to soon announce additions to its AI team, Raimondo said. “We are pulling in the full resources of the US government.”

Both countries plan to share key information on capabilities and risks associated with AI models and systems and technical research on AI safety and security.

In October, Mr. Biden signed an executive order that aims to reduce the risks of AI. In January, the Commerce Department said it was proposing to require US cloud companies to determine whether foreign entities are accessing U.S. data centers to train AI models.

Britain said in February it would spend more than 100 million pounds ($125.5 million) to launch nine new research hubs and AI train regulators about the technology.

Ms. Raimondo said she was especially concerned about the threat of AI applied to bioterrorism or a nuclear war simulation.

“Those are the things where the consequences could be catastrophic and so we really have to have zero tolerance for some of these models being used for that capability,” she said. – Reuters

Max’s Group to convene on May 9 for its annual meeting of stockholders

 

 

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BSP sees 3.4-4.2% inflation for March

DIFFERENT VARIETIES of rice are sold at Paco Market, March 13, 2024. — PHILIPPINE STAR/RYAN BALDEMOR

By Luisa Maria Jacinta C. Jocson, Reporter

HEADLINE INFLATION likely further accelerated in March and might have even breached the target for the first time in three months, the Bangko Sentral ng Pilipinas (BSP) said.

Inflation likely settled within 3.4% to 4.2%, the central bank said in a statement on Monday.

The upper end of the BSP’s forecast could have exceeded the 2-4% target for the first time in three months.

The lower end of the forecast would be unchanged from 3.4% in February.

Year on year, inflation would be slower than 7.6% a year earlier.

A BusinessWorld poll of 17 analysts yielded a median estimate of 3.8% for March inflation, within the BSP’s forecast.

“Continued price increases of rice and meat along with higher domestic oil prices and electricity rates are the primary sources of upward price pressures for the month,” the BSP said.

Latest data from the Agriculture department showed that the average retail price of a kilo of local well-milled rice ranged from P49 to P55 as of March 27, higher than P39 to P46 average a year ago. A kilo of regular milled rice costs P50, higher than the P34 to P40 a year ago.

Manila Electric Co. (Meralco) raised the rate for a typical household by P0.0229 to P11.9397 per kilowatt-hour (kWh) in March due to the higher transmission charge.

Fuel prices continued to rise in March. Pump price adjustments stood at a net increase of P2.30 a liter for gasoline and P0.65 a liter each for diesel and kerosene.

“Meanwhile, lower prices of fruits, vegetables and fish along with the peso appreciation could contribute to downward price pressures,” the BSP said.

The local statistics authority is set to release March inflation data on April 5.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc. said inflation might continue to breach the target in the coming months.

“We anticipate headline inflation to surge past 4% year on year starting in March with a hefty contribution from the rice consumer price index (CPI) and latent drought effects on the prices of the other crops, with the worst-case scenario of nearly 5%,” he said in an e-mail.

In February, rice inflation surged to 23.7%, the fastest since 24.6% in February 2009.

Mr. Asuncion said his estimates show that inflation could peak at 5% in May.

Colegio de San Juan de Letran Graduate School Associate Professor Emmanuel J. Lopez in an e-mail said inflation could accelerate in March amid elevated petroleum prices and effects from the El Niño dry spell.

An uptick in inflation could prompt the central bank to keep rates higher for longer.

“As mentioned by the BSP, Finance Secretary Ralph G. Recto, and even the President himself, the central bank will likely take its time before loosening the monetary reins,” Aris D. Dacanay, HSBC economist for ASEAN (Association of Southeast Asian Nations), said in an e-mail.

“Inflation risks are still too tilted to the upside while strong growth grants the central bank the luxury to keep its policy rate high for longer,” he added.

President Ferdinand R. Marcos, Jr. earlier this month said inflation is still the country’s biggest problem and that it might be too soon to cut rates.

To tame inflation, the BSP kept its benchmark rate steady at a near 17-year high of 6.5% for a third-straight meeting in February. It raised borrowing costs by 450 basis points (bps) from May 2022 to October 2023.

The Monetary Board will hold its next policy review on April 8.

Manufacturing activity further slows in March

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) stood at 50.9 in March, a “modest improvement” from the 51 reading in February. — PHILIPPINE STAR/KJ ROSALES

PHILIPPINE factory activity expanded at a slower pace in March, as production contracted for the first time since July 2022, a survey by S&P Global showed.

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) stood at 50.9 in March, a “modest improvement” from 51 in February.

This matched the PMI in January and was the weakest reading since 50.6 in September last year.

Manufacturing Purchasing Managers’ Index (PMI) of select ASEAN economies, March 2024A PMI reading above 50 denotes better operating conditions than in the preceding month, while a reading below 50 shows the opposite.

The Philippines’ latest PMI reading marked the seventh straight month of improving operating conditions.

“The health of the Filipino manufacturing sector revealed some underlying concerns as the first quarter came to a close,” Maryam Baluch, economist at S&P Global Market Intelligence, said in the report. “Contributing to the somewhat mixed picture was a fresh fall in production levels, with companies attributing this to material shortages.” 

In March, the Philippines’ PMI reading was the second-fastest among six Association of Southeast Asian Nations (ASEAN) member-countries, behind only Indonesia (54.2).

Vietnam (49.9), Thailand (49.1), Malaysia (48.4) and Myanmar (48.3) posted contractions in March.

The average ASEAN headline PMI improved to 51.5 in March from 50.4 in February, which S&P Global said signaled a “solid improvement in operating conditions.”

In the Philippines, S&P Global noted that production in March contracted for the first time since July 2022 due to shortages in raw materials.

“The downturn came despite firms in general recording sustained demand for goods. However, if firms are able to successfully secure materials and build their stocks, the downturn in output could be fleeting,” Ms. Baluch said.

Philippine manufacturers reported growth in new orders in March but these were “historically subdued.”

“The rate of growth moderated on the month and was the second weakest in the current seven-month sequence of expansion,” S&P Global said.

Meanwhile, companies started to hire more workers in March, with job growth the strongest in a year and a half.

Ms. Baluch noted manufacturing companies had also ramped up buying activity in March, marking the fourth consecutive monthly rise.

While costs of raw materials increased due to El Niño and shortages, S&P Global said some suppliers tempered price hikes to boost sales.

“As a result, cost burdens rose at the weakest pace since October 2020. Furthermore, Filipino goods producers reduced their selling prices for the first time in nearly four years, albeit only fractionally,” it said.

Manufacturers in the Philippines kept an optimistic outlook on output, although confidence declined for a third straight month.

“Sentiment among manufacturers weakened and was the least optimistic in nearly four years. Firms were concerned that increased market competition would limit growth prospects. However, hopes of demand conditions domestically and globally strengthening continued to buoy confidence levels,” Ms. Baluch said.

The headline PMI measures manufacturing conditions through the weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%).

Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the shortage in raw materials experienced by manufacturers might have been due to the Red Sea shipping crisis.

In a Viber message, he said the shortage is only temporary, but manufacturers might have to adjust operations.

“Overall, manufacturers may have to deal with margin compression but may also be wary of potential market loss if they increase their prices,” Mr. Asuncion said. “With El Niño weakening… manufacturing may soon pick up once more as we move into the second half of 2024 when interest rate cuts are largely expected by the market.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the slight easing in manufacturing activity might have been due to the Holy Week break.

“The local manufacturing gauge is still in expansion mode for nearly all months since September 2021 (except for the contraction mode in August 2023 at 49.7), therefore still one of the bright spots for the Philippine economy,” he said in an e-mail.

FACTORY ACTIVITY IN ASIA
Meanwhile, factory activity in many Asian economies weakened in March despite a rebound in China as lackluster domestic demand dragged growth, surveys showed on Monday, clouding the outlook for a once fast-expanding and key driver of the global economy.

Export powerhouses Japan and South Korea saw manufacturing activities shrink, as well as Taiwan, Malaysia and Vietnam in a sign of the fragile state of the region’s economies.

China’s Caixin/S&P Global Manufacturing Purchasing Managers’ Index (PMI) rose to 51.1 in March from 50.9 the previous month, a private survey showed, expanding at the fastest pace in 13 months with business confidence hitting an 11-month high.

The findings join an official PMI survey released on Sunday that showed China’s factory activity expanded for the first time in six months.

The rebound in China, which is struggling to mount a strong economic revival partly due to a protracted property crisis, provides some welcome relief to Beijing and investors globally.

Yet, the weakness in other parts of Asia highlights the challenge the region’s policy makers face as they wrestle with patchy signs of recovery in global demand and uncertainty on when the US Federal Reserve would start to cut interest rates.

“China’s exports are picking up a bit but that’s because their goods are cheap. That means other Asian countries must compete with China for demand that’s not growing,” said Toru Nishihama, chief emerging market economist at Dai-ichi Life Research Institute.

“With no clear driver of global growth, it’s hard to paint a rosy outlook for Asia,” he added.

Japan’s final au Jibun Bank PMI stood at 48.2 in March, the highest since November and recovering from February’s 47.2 which marked the fastest contraction in over three-and-a-half years.

But activity contracted for a 10th straight month as new export orders slumped, reflecting souring sentiment in key markets like China and North America, the survey showed.

South Korea’s manufacturing activity also weakened in March as slowing domestic demand offset robust overseas sales, with the PMI falling to 49.8 in March from 50.7 in February. — Beatriz Marie D. Cruz with Reuters

February budget gap widens

BW FILE PHOTO

THE NATIONAL GOVERNMENT’S (NG) budget deficit ballooned in February amid double-digit growth in state spending, the Bureau of the Treasury (BTr) reported on Monday.

Data from the BTr showed that the fiscal gap widened by 54.81% to P164.7 billion from P106.4 billion a year earlier.

Month on month, the budget balance swung back to a deficit from the P88-billion surplus in January.

National Government Fiscal Performance“The wider budget gap stemmed from the 22.14% year-over-year increase in expenditures, matched with moderate revenue growth of 5.73%,” the BTr said in a press release.

In February, government expenditures surged by 22.14% to P388.7 billion from P318.2 billion a year ago.

The BTr said expenditure growth was driven by “higher releases to local government units, as well as larger disbursements recorded in the Department of Health and Department of Social Welfare and Development for their banner health and social protection programs, respectively.”

“Similarly, higher capital expenditures posted by the Department of Public Works and Highways contributed to the growth of February 2024 disbursements,” it added.

Interest payments jumped by 40.22% to P47.8 billion in February from P34.1 billion a year ago.

Primary spending, which refers to total expenditures minus interest payments, climbed by 19.97% to P340.9 billion from P284.1 billion a year ago.

Meanwhile, revenues rose by 5.73% to P224 billion from P211.9 billion a year earlier.

Tax revenues went up by 8.56% year on year to P211.3 billion, as Bureau of Internal Revenue (BIR) collections increased by 6.65% to P138 billion and Bureau of Customs (BoC) revenues climbed by 12.19% to P70.6 billion.

On the other hand, nontax revenues declined by 26.21% to P12.7 billion in February. Revenues from other offices plunged by 42.62% to P6.2 billion due to “lower Malampaya proceeds.”

During the month, BTr income inched up by 1.56% to P6.5 billion due to higher dividend remittances and the NG’s share from Philippine Amusement and Gaming Corp. income.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said the jump in state spending in February was expected.

“It’s the start of the year and understandably the NG would like to get spending going via local government units, health and social services and the flagship infrastructure development,” he said in a Viber message.

“Note that interest payments also were up 40% year on year, and this is also within our expectation of NG’s push for fiscal consolidation and debt payments,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort noted that high inflation and elevated interest rates had driven up expenditures.

Inflation accelerated for the first time in five months to 3.4% in February.

The Bangko Sentral ng Pilipinas (BSP) kept its benchmark rate steady for a third straight meeting at a near 17-year high of 6.5% in February.

TWO-MONTH DEFICIT
In the first two months of 2024, the budget deficit swelled by 26.56% to P76.7 billion from P60.6 billion in the year-ago period as revenue collection and expenditures grew by double digits.

Government revenues jumped by 15.32% to P645.8 billion from P560 billion a year earlier.

Tax revenues jumped by 18.66% to P596.5 billion as BIR and Customs collections increased by 22.58% to P446.4 billion and 7.84% to P144 billion, respectively.

Nontax revenues, on the other hand, dropped by 13.95% to P49.4 billion. This as BTr income slid by 3.8% to P23.2 billion, while revenues from other offices fell by 21.33% to P26.1 billion.

The BTr said the income drop was “mainly on account of lower interest income on NG deposits and BTr investments.”

Meanwhile, expenditures rose by 16.42% to P722.5 billion in January-February from P620.7 billion a year ago.

Interest payments surged by 50.53% to P122 billion, while primary expenditures went up by 11.29% to P600.5 billion.

“For the coming months, a further pickup in business and other economic activities would still lead to higher government tax revenue collections amid intensified tax collection efforts, as well as other priority tax reform measures,” Mr. Ricafort said.

This year, the NG’s deficit ceiling is capped at P1.39 trillion or 5.1% of gross domestic product (GDP).

As of end-2023, the deficit as a share of GDP stood at 6.2%. The government is targeting to bring this further down to 3% by 2028. — Luisa Maria Jacinta C. Jocson

World Bank raises Philippine GDP growth projection for 2025

Motorists are stuck in traffic during morning rush along the southbound lane of EDSA in Cubao, Quezon City, April 1, 2024. — PHILIPPINE STAR/MIGUEL DE GUZMAN

THE WORLD BANK (WB) maintained its economic growth forecast for the Philippines this year but raised its 2025 growth projection, amid expectations of higher consumer spending and foreign investments.

In its latest East Asia and Pacific (EAP) Economic Update, the World Bank said it expects Philippine gross domestic product (GDP) to grow by 5.8% this year, the fastest in Southeast Asia along with Cambodia.

The Philippines and Cambodia are seen to expand faster than Vietnam (5.5%), Indonesia (4.9%), Malaysia (4.3%), Lao People’s Democratic Republic (4.0%), Timor-Leste (3.6%), Thailand (2.8%) and Myanmar (1.3%).

For 2025, the World Bank raised its GDP forecast for the Philippines to 5.9% from 5.8%.

However, the World Bank’s growth forecasts for the Philippines are lower than the government’s target of 6.5-7.5% for 2024 and 6.5-8% for 2025 to 2028.

“What has sustained growth in the Philippines, like much of the region, has been consumption and the recovery in services,” WB East Asia and Pacific Chief Economist Aaditya Mattoo said at a virtual briefing on Monday.

He noted foreign investment flows into the Philippines might increase after the government implemented significant reforms such as Republic Act No. 11659 or the Public Service Act, which allows full foreign ownership in key sectors such as telecommunications and airlines.

“(The reforms) should begin to pay off in terms of greater foreign investment, which though in the short run… the flows have been less strong than we would have expected,” Mr. Mattoo said.

Climate and geopolitical shocks, as well as elevated inflation and high interest rates are risks to the growth outlook.

“If there is a resurgence in inflation, for example in the United States, which might well see interest rates even higher for longer, that would certainly affect growth throughout the region as we have estimated,” he said.

The World Bank projects GDP growth for East Asia and the Pacific at 4.5% this year and 4.3% for 2025. This is slower than the region’s projected 5.1% expansion in 2023.

“Most economies in developing East Asia and Pacific, other than several Pacific island countries, are growing faster than the rest of the world, but slower than before the pandemic,” the World Bank said.

The region’s slower growth is partially due to China, whose economy is expected to slow to 4.5% this year and 4.3% next year.

“China is aiming to transition to a more balanced growth path but the quest to ignite alternative demand drivers is proving difficult,” the World Bank said.

Excluding China, the region’s GDP is projected to expand by 4.6% this year and 4.8% in 2025.

“The likely rebound in global goods trade and the gradual easing of global financial conditions are expected to offset the impact of China slowing down,” it said.

POVERTY TO DECLINE
Meanwhile, the World Bank expects Philippine GDP growth to average at 5.9% from 2024 to 2026, driven by strong domestic demand.

“The medium-term outlook will be driven by robust private consumption activity, supported by declining inflation, a healthy labor market and steady remittance inflows,” it said in its Macro Poverty Outlook for the Philippines.

It expects poverty in the Philippines to decline despite risks from extreme climate events.

“Poverty incidence using the World Bank’s poverty line for lower middle-income countries of $3.65/day, PPP (purchasing power parity) is projected to decrease from 17.8% in 2021 to 12.2% in 2024 and further decrease to 9.3% in 2026,” it said.

The World Bank said risks to this outlook include high inflation that would “dampen economic activity by keeping the policy rate higher for longer, erode purchasing power and threaten to deepen poverty and worsen economic vulnerability.”

“The possibility of higher-than-expected global inflation, still tight global financing conditions, a further slowdown in the growth of China and escalating geopolitical tensions could cause a sharper-than-expected growth slowdown which would further dampen external demand,” it added. — B.M.D.Cruz

PAL earnings more than double on higher travel demand

REUTERS

By Ashley Erika O. Jose, Reporter

PAL Holdings, Inc., the listed operator of flag carrier Philippine Airlines (PAL), saw its attributable net income more than double to P16.81 billion last year, driven by heightened passenger volume and route expansions.

The company’s net income for 2023 rose to P16.81 billion from P8.16 billion a year ago, it said in a regulatory filing on Monday.

PAL’s passenger revenue increased by 37% to P160 billion in 2023 from P114 billion in 2022, boosting the company’s overall revenues.

The company said that higher revenues offset the increase in gross expenses as its top line climbed to P179.12 billion, marking a 28.6% increase, citing a “significant” rise in passenger volume compared to its previous combined revenues of P139.24 billion.

The company flew a total of 14.7 million passengers in 2023, a 58% jump from last year’s 9.3 million passenger count.

Data provided by the Civil Aeronautics Board (CAB) showed that PAL’s subsidiary PAL Express’ passenger volume rose to 7.77 million from 3.84 million in 2022.

The flag carrier also managed to operate about 105,294 flights in 2023, a 36% climb from 77,533 flights in 2022.

The company said its combined expenses went up by 23.9% to P151.04 billion from P121.93 billion in 2022 after operating more flights for the period.

PAL operated two new routes such as the Manila-Perth and Cebu-Laoag flights and it also relaunched 13 flights last year.

In 2023, PAL’s jet fuel consumption went up by 8% due to the increase in flight activity, the company said, adding that fuel costs accounted for the 45.3% share of its overall revenues.

The construction of two new Mabuhay lounges in Manila and Cebu, along with the refurbishments of all its other lounges in the Philippines, were also factored into the company’s higher expenses for the period.

Its maintenance expenses went up by 39.1% to P22.14 billion from P15.91 billion in 2022 due to higher aircraft utilization.

For 2024, PAL targets to capitalize on the increased resources to further strengthen its global and local network, while also upgrading its aircraft fleet and adding new aircraft in the next few years.

“To preserve the gains we have achieved, we must not rest on our laurels. PAL’s corporate transformation continues — we are taking in new aircraft, retrofitting cabins of current aircraft, upgrading airport lounges, and introducing more product innovations to address our strategic, financial, and operational needs across all areas of our operations,” Stanley K. Ng, president and chief operating officer of PAL, said in a separate media release.

The substantial increase in income of listed airline companies demonstrate improved operational efficiency and cost management, Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said.

“Despite a considerable rise in total operating expenses, primarily driven by higher fuel costs and fleet-related expenses,” Mr. Arce said in a Viber message.

“PAL’s growth prospects appear promising, supported by its strengthened financial position, improved operational efficiency, and the anticipated rebound in travel demand post-pandemic.”

To recall, CAB recorded a total of 50.18 million passenger volume for 2023 covering both domestic and international flights.

The Tourism department reported 5.45 million international visitors in 2023, surpassing the year’s target of 4.8 million.

For 2024, the department aims to attract 7.7 million international visitors.

PAL must take advantage of its route expansions and strategic customer offerings to sustain the company’s growth, Mr. Arce noted.

Strategic alliances, route expansions, and enhanced customer offerings could further drive PAL’s growth in the coming years.

“Maintaining cost-effective operations, optimizing fleet utilization, and enhancing service quality will be essential for profitability and competitiveness,” he said.

Additional fleet investments, route expansions could also unlock new growth opportunities for the company, Mr. Arce said, adding that monitoring fuel prices, currency fluctuations, and regulatory changes will be important to mitigate risks and capitalize on favorable market conditions.

“While challenges persist, [airline companies] have demonstrated resilience and potential for growth. By focusing on operational excellence, strategic initiatives, and market responsiveness, airlines can sustain their growth momentum in the dynamic aviation industry,” Mr. Arce said.

What you need to know about buying K-pop stocks

HYBECORP.COM

SOUTH Korea’s K-pop industry is booming, but investors in its stocks can easily get burned.

Thanks to now world-famous acts like BTS and Blackpink, the industry is worth about $5 billion, according to analysts, and is continuing to grow as more people around the world tune in. That’s pushed up the stocks of K-pop stars’ agencies and transformed moguls like Hybe Co.’s Bang Si-Hyuk into billionaires.

Still, the industry is highly dependent on the actions of a few key players, and negative news about its stars can wipe out millions in market value.

Consider what happened a few weeks ago: Reports emerged that one of the biggest Korean pop stars had a boyfriend, and the stock price of her agency plunged.

The news about singer Karina from the group Aespa ignited outrage among her fans, some of whom even sent a truck with an electronic billboard that said “Do you not get enough love from your fans?” to her agency SM Entertainment Co. Its shares fell 11% in South Korea, and Karina, who’s real name is Yu Ji-min, issued an apology.

Although the stock has since recovered, the episode illustrates the perils of the industry, both for its stars and for investors.

So, should you turn your love of K-pop into an investment? Here’s what you need to know:

WHAT’S THE CASE FOR INVESTING IN K-POP?
It has a huge global fan base, which Bokyung Suh, senior analyst at Sanford C. Bernstein, estimates at about 500 million people. That’s continuing to grow as more music lovers discover the genre. He estimates the industry will have a 12% compound annual growth rate until 2030.

Surging demand for concerts alongside rising ticket prices should boost profits for the companies behind K-pop acts, said Lars Ognarsson, head of research at Jakota Index Portfolios. He’s also optimistic because of increased album sales as well as the continued overseas expansion.

“Digital streaming for K-pop is soaring, including a significant increase in the number of streams within English-speaking markets,” he said.

Plus, Hybe is expanding its presence in the global music scene through mergers and acquisitions, he noted. In November, the company acquired its first Latin music company, following its purchase of US-based QC Media Holdings.

WHAT ARE MY OPTIONS?
First, the key players: there are four big companies behind most of K-pop’s stars — Hybe, SM Entertainment, JYP Entertainment Corp., and YG Entertainment Inc.

Hybe is known for the boy band BTS, also called the Bangtan Boys, which arguably turned the K-pop industry as a whole into a global phenomenon. SM is behind Karina’s Aespa along with Super Junior and Girls’ Generation, among others. Artists under JYP include Stray Kids, Boy Story, and 2PM, while YG is known for Blackpink and BigBang.

They’re all listed on the Korea Exchange, which can be difficult for foreign investors to access, although the country’s regulators are working to make it easier.

For US investors, there’s the Jakota K-Pop and Korean Entertainment ETF (KPOP), which invests in companies that will benefit from the industry’s growth. Its largest holdings are internet services firms Kakao Corp. and Naver Corp. along with SM and Hybe. The fund’s price has fallen almost 15% so far this year.

In Hong Kong, an option is the newly launched Global X K-Pop and Culture ETF (3158 HK), which counts Hybe and media production company CJ ENM Co. as its biggest positions.

WHAT ARE THE RISKS?
One of the biggest headwinds for the industry in recent years was news that BTS would take a pause to focus on individual projects, which sent Hybe plunging 28% and wiped out as much as $1.7 billion in market value. Under South Korea law, able-bodied men are required to complete 18 to 21 months of military service, and two of the BTS members began their duties in December.

Although the stock has since recovered, the episode was indicative of BTS’s influence on the K-pop world.

In general, the shares are notoriously volatile, which is especially dangerous for those who aren’t investing for the long term. Consider Hybe’s share price: In 2023 alone, it rose 77% in the first six months of the year, then fell 38% through mid-November, before rallying another 23% to close the year.

Much of the volatility comes from how fervently K-pop fans and the country’s retail investors follow the industry. That means news events can easily trigger big prices moves, Mr. Suh said.

For example, anything from a single group’s contract renewal to rumors of drug use to a star debuting a new relationship can result in gains or losses for the entire sector. K-pop artists are intensely scrutinized by both fans and their management companies. Some reports allege that many singers have a “no dating” clause in their contracts to make them more appealing to fans, and stars such as members of the group Great Guys have spoken out about restrictive diets and forced gym routines. — Bloomberg

Entertainment News (04/02/24)

CCP’s Cine Icons honors Eddie Romero with Aguila

THE CLASSIC Filipino film Aguila, written and directed by National Artist Eddie Romero and starring National Artist Fernando Poe, Jr. (FPJ), will have a special screening this April. In celebration of the 100th birth anniversary of Mr. Romero, it will be shown for free and open to the public as part of the Cultural Center of the Philippines’ (CCP) Cine Icons program, which brings back works by National Artists for today’s audiences. It will be screened on April 3, 1 p.m., at the GSIS Theater in Pasay City. A talkback will follow afterwards. Aguila is a 1980 period drama film that delves into the history of the Philippines while telling the life story of the elderly character played by FPJ, Daniel Aguila. It had six wins at the 1981 FAMAS Awards and nine nominations at the 1981 Gawad Urian Awards.

Prequel The First Omen comes to Philippine cinemas

EVIL incarnate returns in a different form in The First Omen, a prequel to The Omen franchise. The film stars Nell Tiger Free, Tawfeek Barhom, Sonia Braga, and Ralph Ineson, with Charles Dance and Bill Nighy, and is directed by Arkasha Stevenson. Set in 1971, the story follows Margaret, a young American woman who is sent to Rome to begin a life of service to the church, where she encounters a darkness that causes her to question her own faith. It puts a spotlight on the mother of the film series’ Antichrist Damien. The First Omen opens in theaters nationwide on April 5.

Mission Impossible: Dead Reckoning on HBO GO

THE SEVENTH part of the Mission: Impossible film series will be joining the HBO platform this month. The film follows Ethan Hunt (played by Tom Cruise) and his team in facing off against a rogue artificial intelligence known as “the Entity.” Their mission is to track down a dangerous weapon before it falls into the wrong hands. The film’s cast includes Simon Pegg, Rebecca Ferguson, Ving Rhames, Hayley Atwell, Vanessa Kirby, and Pom Klementieff. The complete Mission: Impossible collection is available on the platform. Mission Impossible: Dead Reckoning premieres on HBO and HBO GO on April 6.

Tothapi joins Sony Music, releases new single

BICOL-based band Tothapi is the newest addition to the Sony Music Entertainment family. The rising jazz-influenced pop group recently went viral with their song “Celeste,” receiving praise from veteran superstars like Regine Velasquez. Following their addition to Sony, they released their first official single, “Kutsinta,” a mellow tune about the beauty of a healthy, committed relationship. “Our band wanted to produce a pop-style genre that emits good-vibe energy and is love-driven,” they said in a statement. Tothapi’s “Kutsinta” is out now on all digital music platforms worldwide.

Chinese hit YOLO to screen in Philippine cinemas

THE Chinese comedy drama YOLO, currently the box office champion in China for 2024, will open in Philippine theaters this month. The film follows Le Ying (played by Jia Ling, who also wrote and directed the film), an unemployed woman in her 30s who is still living with her parents. The story kicks off when she meets a boxing coach (played by Lei Jiayin) who changes her life. YOLO hits Philippine cinemas on April 17.

Porter Robinson releases new single

GRAMMY-nominated artist Porter Robinson has returned with a new single “Cheerleader,” along with a music video directed by Hugh Mulhern with the creative direction of Mom+Pop. “What would be something that people could love with zero context — just instantaneous, universal, explosive connection? ‘Cheerleader’ is my take on bottling that feeling,” Mr. Robinson said in a statement. The pop track is out now on all streaming platforms.

Randy Santiago set to perform at PICC

KNOWN as Mr. Private Eyes, musician Randy Santiago will be holding a one-night concert party at the PICC Plenary Hall in Pasay City on April 12. Entitled EYECON The Club Experience, the concert aims to bring the club scene to the venue. Mr. Santiago’s many guests for the concert will be led by Pops Fernandez, and include Juan Miguel Salvador, Gino Padilla, Nina, and Rachel Alejandro. New talents will also join in: JM Yosures, Khimo, Lyka Estrella, JM dela Cerna, Marielle Montellano, Jezza Quiogue, LA Santos, Calista, and Six-Part Invention. The concert will encourage audiences to sing and dance to the groove of the 1980s and ’90s. It takes place on April 12, 8 p.m., at the PICC Plenary Hall. Tickets are available via TicketWorld.

Timmy Albert joins Converse All Stars on song

SINGER-songwriter Timmy Albert has joined forces with Converse All Stars to release his latest single, “GET UP!” The track is the latest offering from All Star Projects, an initiative that provides emerging creatives with funding and mentorship to help accelerate their careers. “Being in the music industry is a free fall. Growing up, you often feel like you’re enjoying the flight, but then gravity hits you hard with reality — having to land, stay grounded again, and force yourself to get up,” Mr. Albert said in a statement about what the song conveys. His brothers RJ and Ryan Pineda also collaborated on the music production. “GET UP!” is out now on all streaming platforms.

Vampire thriller Abigail in PHL cinemas this month

THE FILM Abigail will be bringing the titular ballerina vampire to Philippine screens this month. It centers on a group of would-be criminals who kidnap the 12-year-old ballerina daughter of a powerful underworld figure for ransom. Little do the captors know that, locked in an isolated mansion, she is no normal little girl. The film stars Kathryn Newton, Melissa Barrera, Dan Stevens, Giancarlo Esposito, and Alisha Weir as Abigail. The film arrives in cinemas on April 17.

Kim Won-shik drops new song for K-drama

KOREAN star Kim Won-shik has unveiled his latest single, “To Be With You,” as part of the soundtrack for the Philippine adaptation of the popular K-drama What’s Wrong with Secretary Kim. The ballad aims to enrich the emotional tapestry of the show, produced under Universal Records Philippines. Won-shik performed it live earlier this month, and an official music video will be released soon. “To Be With You” is now available on all major streaming platforms. What’s Wrong With Secretary Kim, starring Kim Chiu and Paulo Avelino, is available for viewing exclusively on VIU.

DHL Express eyes further expansion of operations in PHL

INTERNATIONAL logistics and shipping firm DHL Express is planning to further expand its operations in the Philippines, its top official said.

“We’re the market leader in the Philippines now. We’ve expanded our gateway and service centers in the Philippines, and we’ll continue to do so,” DHL Express Chief Executive Officer John Pearson said in an interview with Businessworld.

Last year, DHL Express opened a 4,768-square-meter service center in Pasig City amid increasing demand for deliveries. The facility includes three warehouses, a customer retail outlet, and material handling equipment.

The company’s aircraft are operational through the Manila gateway and Cebu, which commenced operations in 2019.

DHL Express also upgraded its dedicated aircraft in the Philippines, increasing its capacity to 55 tons.

With 12 weekly flights, it serves the Hong Kong-Manila-Cebu-Manila-Hong Kong route.

“Between those two things and making sure we’ve got the right aviation network into and out of the Philippines, (this) gives best possible quality and efficiency for our customers,” Mr. Pearson said.

“As we grow, we need to continue to invest in facilities, and Philippines is no exception to that,” he said.

He also said that the continued growth in parcel volume would drive increased investments in the Philippines.

“Because without growth in volumes, we don’t need new facilities. We can’t spruce up our existing conveyor, material handling equipment, and our facility to cater to a country that’s not growing very easily.”

The company allocates up to €1.5 billion annually to the expansion of its global aviation hubs, gateways, or service centers.

“(We use) €1-1.5 billion, depending on the year. Some of that is directed towards Asia, and within Asia, some of it is directed towards the Philippines,” he added. — A.H. Halili

US firm eyes rolling out metering solution in PHL

UNITED STATES-BASED grid management services provider SparkMeter is seeking to distribute its metering systems in the Philippines after obtaining a compliance certificate from the Energy Regulatory Commission (ERC).

“(The certificate) allows us to proceed with commercial sales and operations and provide our solution commercially to all of the utilities in the Philippines,” SparkMeter Chief Executive Officer Dan Schnitzer said in an interview with BusinessWorld.

“The ERC certificate is a big step for SparkMeter because we can now actually sell the solution in the Philippines to the utilities,” he added.

The company received a compliance certificate from the ERC last month, which it said “fosters collaboration with electricity cooperatives and investor-owned utilities.”

“This accreditation not only enables SparkMeter to market and distribute its products across the Philippines but also aligns with the nation’s ambitious energy goals to reduce the dependency on traditional energy sources and transition to renewable alternatives,” the company said.

Mr. Schnitzer said the company may provide “the whole solution as a single company” to power distributors.

“That ends up being very expensive to the utility to have to integrate all of these different systems and that’s what makes SparkMeter different and what makes us more cost-effective is we provide the solution as a single company,” Mr. Schnitzer said.

Founded in 2013, SparkMeter is currently operating in over 25 countries and enabling utilities operating in remote areas through its technology to access features such as flexible billing, customer communications, and remote monitoring and control.

Utilities can obtain smart grid analytics through SparkMeter’s GridScan software catering for various utility needs including transformer loading analysis, customer outage detection and analysis, and revenue loss analysis.

SparkMeter had pilot installations with rural electric cooperatives in Zamboanga and Pampanga last year, and it is now eyeing to work with more electric cooperatives and distribution utilities in the country.

“I think, by the end of the year, we’d love to be working with another five or six,” Mr. Schnitzer said.

SparkMeter is coordinating with the National Electrification Administration and the Philippine Rural Electric Cooperatives Association, Inc. to work with more power distributors.

Mr. Schnitzer said that using their metering system with its software would allow electric cooperatives and distribution utilities to reduce power costs.

“Once they’ve adopted it, they’ll then hopefully see some of these cost impacts, which will allow them to stabilize rates or even reduce rates,” he said. 

SparkMeter decided to roll out its technology in the Philippines for having “a large number of cooperatives” and “very ambitious renewable energy targets.”

“We wanted to work in the Philippines because we saw the potential of our technology to help meet the national policy goals around reducing costs and increasing renewable energy,” Mr. Schnitzer said.

“And there are really few smart meters that have been installed so far, so it’s a very big market for a US company like ours, it’s very attractive… it’s a country that’s looking to do the types of things that we hope our technology can help achieve,” he added.

The Philippine government is targeting to increase the share of renewable energy to the country’s power mix to 35% by 2030 and 50% by 2040. — Sheldeen Joy Talavera

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