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Beyoncé Cowboy Carter album takes ‘deeper dive’ into country music history

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US MUSIC superstar Beyoncé on Friday released her highly anticipated country album, Cowboy Carter, which she says was born out of an experience years ago where she “did not feel welcomed.”

Country music legends Linda Martell and Willie Nelson are featured on the album released on Friday, which also had duets with Miley Cyrus, Post Malone and a cover of Dolly Parton’s famed “Jolene.”

Many critics offered praise for the album with Page Six’s Nicholas Hautman calling it “the revival that country music so desperately needed.”

Experts and fans view Beyoncé’s foray into country music as a reclamation and homage to the legacy of Black Americans within country music and culture — a history that has largely gone unrecognized in some mainstream music circles.

They say Beyoncé, who was born and raised in Houston, Texas, is now walking in the footsteps of many acclaimed Black country music legends who came before her.

“The criticisms I faced when I first entered this genre forced me to propel past the limitations that were put on me,” the singer wrote on Instagram ahead of the album’s release.

She had first teased the album when she released two new songs after making a surprise appearance in a Super Bowl commercial recently. The album serves as the second in a three-album project that kicked off with her 2022 critically acclaimed Renaissance.

Beyoncé has been vocal throughout her career about her ties to country music and southern culture, dropping hints throughout her career of the impact both have had.

In a post, she described how a negative experience with the country music crowd led her to do “a deeper dive into the history of Country music.”

The album has a theme of uncovering Black identity in country spaces. One of the album’s 27 titles is called “The Linda Martell Show,” after the first Black woman to perform at the Grand Ole Opry in 1969.

The album also features a cover of The Beatles’ classic track “Blackbird,” retitled “Blackbiird,” which Paul McCartney originally penned as an ode to the nation’s civil rights movement, racial tensions, and the struggles Black women in particular endured to achieve equity.

Beyoncé’s version features Black country artist Tanner Adell and credits other Black artists, including Brittney Spencer, Tiera Kennedy, and Reyna Roberts.

“The instantly timeless 27-track project is a soulful celebration of Southern values and the genre’s African American roots,” Mr. Hautman wrote in Page Six. — Reuters

Ayala Land to hold virtual Annual Stockholders’ Meeting on April 25 at 9:00 a.m.

 

 

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Ayala’s Makati Development forms JV with Japan’s Takenaka

AYALA-LED Makati Development Corp. (MDC) has formed a joint venture (JV) with Japanese general contractor Takenaka Corp. for new projects.

MDTK Corp. was launched on March 21, listed property developer Ayala Land, Inc. (ALI) said in a statement on Monday.

A wholly owned subsidiary of ALI, MDC is engaged in engineering, procurement, construction, and construction management.

The JV, which brings over 400 years of architecture, engineering, and construction experience, will open opportunities for MDC and Takenaka Corp. to take on complex design and construction projects and introduce new technologies and methodologies, ALI said.

“The MDC-Takenaka partnership will become an avenue to advance more innovative and sustainable solutions that will benefit the communities that we serve, especially at this time when the Philippines is primed for exponential economic growth,” ALI and Ayala Corp. Chairman Jaime Augusto Zobel de Ayala said.

Based in Osaka, Takenaka Corp. provides architectural, engineering, and construction services. The company took part in the construction of Ninoy Aquino International Airport Terminal 3 and Bacolod-Silay Airport.

Through its group company Takenaka Civil Engineering & Construction, the Japanese contractor is engaged in constructing the Metro Manila Subway and the Davao City Bypass projects.

On Monday, ALI shares rose by 3.10% or P1 to P33.25 apiece. — Revin Mikhael D. Ochave

Universal Music, Spotify expand ties to boost fan engagement

THE UNIVERSAL Music Group, the world’s biggest record label, expanded its relationship with Spotify Technology to boost fan engagement and music discovery.

Universal, the company behind Taylor Swift and Drake, said its artists will soon be able to share teasers of upcoming music on Spotify, according to a statement released last Thursday.

The new contours of the partnership come amid Universal’s ongoing dispute with TikTok, the short-form video service. The disagreement kicked off in January when Universal’s contract with TikTok lapsed and the two companies failed to find common ground on an extension. Songs from Universal’s catalog have disappeared from the platform. Unlike Spotify, TikTok doesn’t allow listeners to play entire songs.

Additionally, a new agreement with Universal Music Publishing Group will enable Spotify to distribute music videos in the US, the company said in the statement.

In 2017, Spotify struck a long-term licensing deal to keep offering songs from Universal. The deal also allowed Universal to get data from Spotify on the listening patterns of its users, helping the label improve its marketing to fans. — Bloomberg

Godzilla and Kong team up for their latest outing of destruction

IMDB

LOS ANGELES — Giant monsters Kong and Godzilla are back after 2021’s Godzilla vs. Kong but this time, instead of causing devastating destruction by fighting each other, they are teaming up — and causing devastating destruction together.

Godzilla x Kong: The New Empire sees not only the return of the two titans but also actors Rebecca Hall’s scientist Ilene Andrews and Brian Tyree Henry’s conspiracy theorist Bernie. It introduces Downton Abbey and Beauty and the Beast actor Dan Stevens as eccentric veterinarian Trapper.

In the sequel, Kong and Godzilla both sense a threat coming from Hollow Earth, where both originate from, and they can only win by teaming up together. They are aided on their mission by Andrews’ adopted daughter Jia, played by Kaylee Hottle, who can also sense the hidden enemy.

“The technology’s there, the confidence is there, it’s time to be able for the first time ever to do a movie that lets the (monsters) tell their own story from their own (point of view),” director Adam Wingard told Reuters.

“I was just very excited to be able to do all these sequences where they’re visually driven and we go sometimes eight minutes without a line of dialogue and you’re just there with the monsters.”

“That’s the dream movie I’d always wanted to see as a kid and that’s what this is all about, fulfilling that lifelong sort of goal,” added Mr. Wingard, who also directed Godzilla vs. Kong.

The cast had to give highly energetic performances to keep up with the lead monsters and were often helped by LED screens showing what they were reacting to. Tyree Henry’s Bernie is the most freaked out.

“Count how many times I say ‘oh my god,’ like how many times it’s screamed, how many times it’s whispered because that is literally the state of panic I found my character in for most of this movie,” the actor said.

Godzilla x Kong: The New Empire is currently in theaters. Its MTRCB rating is PG. — Reuters

Gov’t upsizes T-bill award as rates of all tenors drop

BW FILE PHOTO

THE GOVERNMENT upsized the volume of Treasury bills (T-bills) it awarded on Monday as rates dropped across all tenors amid strong demand and expectations of a US Federal Reserve cut in June.

The Bureau of the Treasury (BTr) raised P17 billion from the T-bills it offered on Monday, above the P15-billion plan, as total bids reached P47.75 billion or more than thrice 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 P12.928 billion. The three-month paper was quoted at an average rate of 5.704%, 0.6 basis point (bp) lower than the 5.71% seen last week. Accepted rates ranged from 5.655% to 5.75%.

The government likewise made a full P5-billion award of the 182-day securities, with bids reaching P16.26 billion. The average rate for the six-month T-bill stood at 5.865%, down by 1.5 bps from the 5.88% fetched last week, with accepted rates at 5.845 to 5.885%.

Meanwhile, the Treasury raised P7 billion via the 364-day debt papers, more than the P5-billion plan, as tenders for the tenor totaled P18.562 billion. The average rate of the one-year T-bill went down by 1.7 bps to 5.965% from the 5.982% quoted for a P5-billion award last week. Accepted yields were from 5.945% to 5.985%.

Strong demand for the one-year T-bill prompted the BTr to double the accepted volume of non-competitive bids for the tenor, it said in a statement on Monday.

At the secondary market on Monday before the auction, the 91-, 182-, and 364-day T-bills were quoted at 5.7254%, 5.9181%, and 6.074%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data provided by the BTr.

“The lower awarded rates reflected bolstered views of a June US policy rate cut following the softer-than-expected US personal consumption expenditures (PCE) inflation report for February,” a trader said in an e-mail.

US prices moderated in February, with the cost of services outside housing and energy slowing significantly, keeping a June interest rate cut from the Federal Reserve on the table, Reuters reported.

The PCE price index rose 0.3% last month, the Commerce department’s Bureau of Economic Analysis said. Data for January was revised higher to show the PCE price index climbing 0.4% instead of 0.3% as previously reported. Economists polled by Reuters had forecast the PCE price index gaining 0.4% on the month.

In the 12 months through February, PCE inflation advanced 2.5% after increasing 2.4% in January.

Though price pressures are subsiding, the pace has slowed from the first half of last year, and inflation remains above the US central bank’s 2% target.

Fed Chair Jerome H. Powell said on Friday February’s inflation data was “more along the lines of what we want to see.”

Fed officials last month left the central bank’s policy rate unchanged in the current 5.25%-5.5% range, having raised it by 525 bps since March 2022.

Policy makers anticipate three rate cuts this year. Financial markets expect the first rate reduction in June.

T-bill rates declined ahead of the release of Philippine inflation data for March this week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

A BusinessWorld poll of 17 analysts conducted last week yielded a median estimate of 3.8% for March headline inflation.

If realized, this would be faster than the 3.4% print in February, but slower than the 7.6% rate recorded in the same month a year ago. This would also be within the Bangko Sentral ng Pilipinas’ (BSP) 3.4%-4.3% estimate for the month.

This would mark the second straight month that inflation picked up on a monthly basis and the fourth straight month that the consumer price index (CPI) was within the BSP’s 2-4% annual target.

The Philippine Statistics Authority will release March CPI data on April 5, Friday.

On Tuesday, the BTr will offer P30 billion in reissued seven-year Treasury bonds (T-bonds) with a remaining life of six years and nine months.

The Treasury is looking to raise P195 billion from the domestic market this month, or P75 billion through 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 5.1% of gross domestic product this year. — A.M.C. Sy with Reuters

Filinvest Land leases Buendia building to DTI

GOTIANUN-LED Filinvest Land, Inc. (FLI) has leased its entire Filinvest Building in Buendia, Makati City, to the Department of Trade and Industry (DTI).

FLI, through its office business unit Filinvest Cyberparks, Inc., is leasing the 14-storey Filinvest Building in Gil Puyat Avenue to DTI as part of the government agency’s plan to consolidate its various operating units, the listed property developer said in a statement on Monday. 

The property developer did not provide further details on the lease agreement such as its value and duration.

The lease encompasses 10,668.40 square meters and was finalized after FLI and DTI signed a lease agreement.

DTI’s operating units that will transfer to the Filinvest Building include the Office of the Secretary, Competitiveness and Innovation Group, Consumer Protection Group, and Communications Office.

“Filinvest Buendia provides an optimal environment for our operations, enabling us to enhance our services and better serve the Filipino people,” Trade Assistant Secretary Agaton Teodoro O. Uvero said.

In 2023, FLI saw a 30% jump in its attributable net income to P3.77 billion. The company’s consolidated revenue and other income rose by 13% to P22.55 billion in 2023 from P19.94 billion in 2022 led by higher contributions from its residential and leasing segments.

FLI shares were unchanged at 68 centavos per share on Monday. — Revin Mikhael D. Ochave

Creating more investments for the Philippines

FREEPIK

In recent years, the Philippines has been undergoing an extensive overhaul of its tax system. One such law is the CREATE Act, which was passed in 2021. Under CREATE (the Corporate Recovery and Tax Incentives for Enterprises Act), the corporate income tax was lowered, and the existing incentives regime was rationalized. Since the law was passed, the Philippines has approved P1.1 trillion worth of investment capital.

However, one of the bills currently pending before Congress seeks to amend CREATE to further improve its provisions. Dubbed CREATE MORE, the proposed bill seeks to, among others, restore the authority of administering incentives to the Investment Promotion Agencies (IPAs), instead of the Fiscal Incentives Review Board (FIRB).

The main reason for reverting the authority to grant incentives to IPAs is the removal of an additional bureaucratic layer in the granting or denial of incentives. How the system works at present is that business enterprises must seek the approval of either the IPA or the FIRB, depending on the amount of investment capital. Pursuant to an FIRB advisory released Feb. 19, the threshold for the FIRB’s jurisdiction starts at P15 billion. Incentives application for businesses with an investment capital of less than P15 billion is subject to the approval of the relevant IPA.

The problem with this current system is that it delays the start of commercial operations of business enterprises covered by that threshold. They have to go either to the IPA or the FIRB first when they could just go straight to the IPA instead. This step does not add any additional value to the investment approval process since the FIRB will just approve what was recommended by the IPAs.

Another feature proposed by the CREATE MORE bill is creating a clear distinction in the jurisdiction of each relevant government agency. Ideally, those within ecozones are governed by the Philippine Economic Zone Authority (PEZA) while those outside ecozones are governed by the Board of Investments (BoI). However, this is not strictly implemented. For example, the BoI has the authority to register projects even if those projects are located in a PEZA-registered building. A proposal by PEZA is to delineate the actual limits of each, such that there would be no confusion as to the authority of the BoI and PEZA.

As regards the incentives themselves, there are also other provisions that warrant looking into.

Presently, after the Income Tax Holiday period, a registered business enterprise (RBE) can avail themselves of the Enhanced Deductions incentive, but it will be subject to the regular 25% corporate income tax. CREATE MORE seeks to improve this incentive by offering RBEs a 20% corporate income tax rate to those granted an Enhanced Deductions incentive. This additional benefit will undoubtedly make tax rates more competitive with the global market, as a step toward the OECD-proposed minimum global tax rate of 15%.

There is also a need to further authorize IPAs, specifically PEZA, with the authority to downgrade incentives. Prior to CREATE, PEZA allowed the downgrading of incentives (e.g., from an Income Tax Holiday or ITH incentive to a Special Corporate Income Tax or SCIT incentive) in cases where they did not meet certain conditions. However, there is no similar provision for this under the CREATE Act. This means that failing to meet a few conditions already warrants the cancellation of incentives of that RBE.

Adding a provision that allows the PEZA some flexibility in the granting of incentives would make the Philippines more competitive. The cancellation of incentives for failure to meet a few conditions is a harsh punishment that can affect the economic performance of RBEs. It may be better to rely on the expertise and specialized knowledge of the PEZA on the appropriate act for such matters. This expertise and specialized knowledge is reflected in its contributions to foreign direct investments in the country. For 2023 alone, PEZA was lauded for drawing in P175.7 billion in approved investments, which increased by 25% compared to P140.7 billion in 2022.

Recently, the Asian Consulting Group (ACG) entered into a Memorandum of Understanding with PEZA to reflect their joint vision of encouraging inflow investments and reinvestments into the Philippines. Through its International Tax and Investment Roadshow, ACG will be promoting the Philippines as an investment destination and guiding potential investors on the ins-and-outs of doing business in the Philippines. It started in Singapore, Malaysia, and Japan early this month and will continue in South Korea, then in the United States in April 2024, followed by Europe in May 2024, and Australia and Canada in June 2024. (For more information, visit www.acg.ph.)

Another proposal under the CREATE MORE bill exempting RBEs from the need to obtain business permits from LGUs. To recall, the purpose of the establishment of ecozones is to minimize government intervention in the operation of businesses located therein. However, at present, RBEs are still required to obtain local government permits, such as mayor’s permits or business permits. RBEs should be exempt from these requirements and, in lieu thereof, be liable to pay a 2% local tax to be collected by the relevant IPAs and remitted to the LGU concerned.

Finally, CREATE MORE provides a clarification on the grant of non-income tax incentives (i.e., duty exemptions, VAT exemptions on importation, and VAT zero-rating on local purchases). These non-income tax incentives should continue to be granted notwithstanding the lapse of the income tax incentives (i.e., ITH or SCIT). The rationale for the grant of these non-income tax incentives stems from the nature of an ecozone as a “separate customs territory.”

Overall, these changes seek to further enhance the administration of tax incentives in the Philippines. Unnecessary bureaucratic layers and procedures will only drive away potential investors and will make the Philippines a less competitive investment destination on the global scale. At the moment, the most pressing issue for foreign investors and locators is the processing and approval of the VAT refund. While the TRAIN Law (the Tax Reform for Acceleration and Inclusion Law) mandates an enhanced VAT refund system, it is still quite a challenge given the possible liability and risk on the part of Bureau of Internal Revenue and the pending implementation of electronic invoicing to automate the processing of the refund.

ACG stands as a testament to the country’s unwavering commitment to foster a conducive environment for investment and economic development. ACG will continue to collaborate with the policymakers and the business community, particularly foreign chambers, to make sure we further improve the ease of doing business in the country.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.

 

Raymond “Mon” A. Abrea is an MPA/mason fellow at Harvard Kennedy School. He is a member of the MAP Tax Committee and the MAP Ease of Doing Business Committee, co-chair of the Paying Taxes on Ease of Doing Business Task Force, and is the chief tax advisor of ACG.

map@map.org.ph

mon@acg.ph

Spice Girl Mel B shares more in expanded memoir, aims to help abuse survivors

WATERSTONES.COM
WATERSTONES.COM

NEW YORK — Spice Girl Mel B is releasing an expanded version of her 2018 memoir, sharing more details about her personal life which she hopes will help survivors of domestic abuse.

The British singer and television personality, born Melanie Brown, has added three new chapters to Brutally Honest, which looked back on her childhood, meteoric rise to fame, and marriage to her ex Stephen Belafonte, who she said had been abusive towards her. He denied the claims.

“It’s now 2024 and a lot has happened since (the book’s release) … I got my MBE for campaigning and spreading awareness about domestic abuse. I am engaged. I bought my first house and I’ve done a lot of healing with my relationships,” Ms. Brown told Reuters.

“I wanted to give survivors that hope and that honesty that ‘you know what, I’m going through it too still, just like you are. So don’t give up’.”

Ms. Brown, a patron of the charity Women’s Aid, became a Member of the Order of the British Empire (MBE) in 2022 for services to charitable causes and vulnerable women.

“It’s given me more of a purpose. It’s like an extension of girl power because I’ve been screaming girl power since I was 19, and then for 10 years I was very girl powerless and now I’m speaking my truth,” she said of her campaigning against domestic abuse.

“I’ve got … survivors behind me cheering me on, saying ‘yes be our voice’ because my story is their story.”

Ms. Brown, 48, said she originally released her memoir after encouragement from both her daughter and her friend, Louise Gannon, who wrote the book with her.

“I have the platform … I’m reaching out to people that don’t have a voice, that don’t have a safe place where they can get help or talk about it,” Ms. Brown said.

Earlier this month, the Spice Girls — consisting of Ms. Brown (Scary Spice), Victoria Beckham (Posh Spice), Melanie Chisholm (Sporty Spice), Emma Bunton (Baby Spice), and Geri Horner, formerly Geri Halliwell (Ginger Spice) — shared a video marking 30 years since their first auditions.

The group, which formed in 1994, stormed charts around the world with hits including “Wannabe” and “Say You’ll Be There” before going their separate ways. Four of them reunited for a 2019 tour.

Asked about previously hinting at something new involving all five Spice Girls, Brown said: “I can’t say exactly …, but us five have been talking … for a long, long time now, many, many months.

“So, we’re going to announce something soon … and I know the fans are not going to be disappointed. It’s going to be very exciting.” — Reuters

PHL banks fail to meet end-December mandated MSME lending quotas

BW FILE PHOTO

PHILIPPINE BANKS failed to meet the mandated loan quotas for micro, small, and medium enterprises (MSMEs) in 2023, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

At end-December 2023, credit extended by the banking industry to MSMEs amounted to P502.209 billion, accounting for only 4.83% of their total loan portfolio of P10.38 trillion.

In 2022, banks extended P493.503 billion in loans or 5.24% of their entire loan book.

Under Republic Act No. 6977 or the Magna Carta for MSMEs, banks are required to allocate 10% of their total loan portfolio for small businesses to support the sector. Broken down, 8% of loans must go to micro and small enterprises and 2% to medium-sized enterprises.

However, banks have long opted to incur penalties for noncompliance instead of taking on the risks associated with lending to small businesses.

BSP data showed that banks’ loans to micro and small enterprises amounted to P200.787 billion last year. This comprised just 1.93% of their loan book and was well below the 8% minimum quota.

Meanwhile, lending to medium-sized enterprises stood at P301.422 billion, equivalent to 2.9% of banks’ loan portfolio and above the 2% quota for the sector.

By type of bank, universal and commercial banks disbursed P131.926 billion to micro and small enterprises as of end-December, equivalent to only 1.47% of their P9.56-trillion loan portfolio and below the minimum ratio. 

Big banks’ loans to medium-sized enterprises stood at P248.165 billion or 2.59% of their loan book.

On the other hand, thrift banks’ loans to micro and small enterprises reached P30.38 billion or 3.74% of their P610.092-billion loan portfolio. Loans to medium enterprises hit P34.275 billion or 5.68% of their loan book.

Meanwhile, rural and cooperative banks extended loans worth P38.313 billion to micro and small enterprises, equivalent to 19.23% of their P192.783-billion credit portfolio and well above the minimum amount required by law.

Their loans to medium enterprises amounted to P18.977 billion or 9.84% of their portfolio, also above the credit quota.

Lastly, digital banks disbursed P170 million in credit to micro and small enterprises in 2023, representing 0.89% of their P19-billion loan portfolio.

They extended P10 million worth of loans to medium enterprises or 0.03% of their total loan book.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said banks missed the MSME lending quotas after the BSP ended a regulatory relief measure implemented during the coronavirus pandemic, which allowed them to use their loans to the small firms as alternative compliance with reserve requirements.

“There is still a lot of potential to further grow MSME loans, such as the availability of more credit information on MSMEs to be shared among banks through centralized credit bureaus to reduce asymmetric or limited credit information for MSMEs and encourage and increase confidence of banks in lending to MSMEs,” he said in a Viber message.

“More credit guarantees for MSMEs would also help encourage more bank lending for MSMEs. These would also reduce the credit risks for MSME loans,” Mr. Ricafort added. — Luisa Maria Jacinta C. Jocson

Sunlight Air starts flights from Clark airport following hub relocation

YASSINE KHALFALLI-UNSPLASH

BOUTIQUE airline Sunlight Air has started offering flights from Clark International Airport after relocating its hub there.

“In line with our commitment to delivering exceptional customer service and top-tier flights to underserved local destinations, we are happy to have launched our first flight from Clark,” Ryna C. Brito-Garcia, Sunlight Air chief executive officer, said in a press briefing at Clark International Airport on Monday. 

Sunlight Air, operated by Sunlight Express Airways, launched its Clark-to-Busuanga flight on Monday.

The airline targets to capture the growing demand for travel, the company said in a statement.

Currently, the company flies to Siargao, San Vicente, and Coron in Palawan; and Caticlan in Aklan. 

“We do (have Manila operations), we have Manila-Cebu,” Ms. Brito-Garcia told reporters. 

The decision to move its hub from Ninoy Aquino International Airport to Clark primarily stems from the availability of space and the advanced technologies offered by the airport, making it more convenient for passengers, she added.

“It’s a lot more spacious. They have innovative approaches to doing things also. They have a self-check-in kiosk. They have the baggage drop,” Ms. Brito-Garcia said. 

The company is also optimistic because the Clark airport serves as an alternative gateway to the Philippines’ capital, she noted.

“A lot of people would be surprised, of course Central Luzon’s population is big. Our biggest population in Metro Manila is Quezon City, it is very congested. For now, a lot of people do not know about Clark yet but I think in time, we will get there,” she added.

Sunlight Air plans to launch new domestic flights from Mactan-Cebu International Airport on April 3, with more routes to follow.

Noel F. Manankil, president and chief executive officer of Luzon International Premiere Airport Development (LIPAD) Corp., said the company is expecting more than two million passengers for 2024.

“We are confident that Clark has its own catchment population. Central and Northern Manila, of course and I think we’ve proven that. So long as the flights are available, then passengers will come,” Mr. Manankil told reporters. 

In an earlier interview with BusinessWorld, Mr. Manankil said LIPAD, the company that manages and operates the Clark International Airport, is anticipating a 42.9% increase in domestic passengers this year to 915,168 from 640,381 in 2023.

International passengers will rise by 14% to 1.55 million from 1.36 million in 2023. 

The expected passenger volume for the year was actually lower than its previous forecast, he said.

“The original forecast was a bit higher than 2.4 (million), but because of engine issues,” Mr. Manankil said, adding that the earlier projection was about four million passengers. 

To recall, American aerospace manufacturer Pratt & Whitney inspected A320/321 NEO aircraft engines worldwide following suspected issues resulting in grounding of several aircraft.

For Sunlight Air, Ms. Brito-Garcia said the boutique airline will add more fleet in the next two to three years.

“It could be purchased, it could be through lease. [About] two to three planes in the next years,” she said. — Ashley Erika O. Jose

Shein and Temu are driving oil, not GM and Toyota

REUTERS

TO HEAR overseas oil executives talk, you would think that Chinese drivers and air passengers were coming to the rescue of an oil market looking for direction.

Reports from staff on the ground in China suggest that “demand is looking very good,” Trafigura Group Chief Executive Officer Jeremy Weir told Bloomberg Television earlier last month on the sidelines of the CERAWeek industry conference in Houston. “Shops are full, restaurants are full, and I think we’re going to see international travel increase a lot.” Downgrades to the outlook for electric vehicles have been serious enough that oil consumption won’t peak until the 2030s, Vitol SA CEO Russell Hardy said at the same event.

The group that gives least credence to this bullish talk is a surprising one: oil executives from, er, China.

Electric vehicles will displace more than 20 million metric tons of crude demand this year, equivalent to 10% of the country’s gasoline and diesel consumption, according to Lu Ruquan, president of state-owned China National Petroleum Corp.’s Economics & Technology Research Institute. The same 20-million-ton figure was echoed by Dong Zhao, CEO of the biggest refiner, China Petroleum & Chemical Corp. or Sinopec, who predicts Chinese demand won’t grow beyond 2026.

The best way to understand this apparent contradiction is to remember oil consumption in the world’s biggest emitter these days isn’t so much about GM and Toyota as Shein and Temu — because it’s being driven by chemicals, not vehicles. If Chinese oil consumption is growing, it’s because the country is aggressively moving its petrochemicals sector onshore, displacing demand that was previously served by imports from Japan, South Korea, the Persian Gulf, and Europe.

The climate implications could be significant. Such a move doesn’t necessarily increase consumption, and consequent pollution; it may end up doing no more than move the location of processing facilities.

Furthermore, petroleum fuels must be burned to be used, instantly putting emissions into the atmosphere. Petrochemicals, however, tend to keep their carbon locked up in their molecular structures. Though they’re anything but CO2-free, an oil industry shifting from fuels to chemical feedstocks is likely to see emissions decline even ahead of a peak in liquid fuels usage.

Consider the so-called teapot refineries, a group of privately owned chemical plants in Shandong province that specialize in producing diesel for trucks, trains, and generators. Run rates in recent weeks have been at their slowest pace, outside of pandemic restrictions, since 2016.

That makes no sense in a world where Chinese travel is surging — but it’s entirely consistent with what’s actually been happening in recent years, where a new breed of private refiners such as Rongsheng Petrochemical Co. and Hengli Petrochemical Co. have been spending billions building plants specializing in chemicals rather than gasoline and diesel.

Roughly 90% of China’s increased thirst for oil between 2021 and 2024 is coming from the chemical feedstocks of LPG, ethane, and naphtha, according to the International Energy Agency (IEA). Gasoline and even jet fuel and kerosene are barely increasing.

Additional Chinese production capacity for the key chemical inputs of ethylene and propylene between 2019 and 2024 will exceed what presently exists in Europe, Japan, and South Korea put together, IEA oil market analyst Ciaran Healy noted in a commentary last December. “Global oil demand excluding petrochemical feedstocks remains lower than in 2019 and has grown little since 2017,” he wrote.

Petrochemicals had historically been an exception to Beijing’s general push to be self-sufficient in basic materials, but the new plants being built by Rongsheng, Hengli and even offshore players such as BASF SE are changing that picture. As a result, traditional trade deficits in most downstream oil derivatives are turning into substantial surpluses.

China’s output of synthetic fibers alone rose by 21 million metric tons between 2018 and 2023 — enough to spin more than 100 billion T-shirts a year. If you’re seeking an explanation for the remarkable persistence of “Chinese oil demand,” you’re better off looking at the world’s consumption of plastic products and cheap clothing from the likes of Shein Group Ltd. and PDD Holdings, Inc.-owned Temu, rather than travel behavior.

A crucial question for the direction of the global climate is how the rest of the world now responds. Executives running petrochemical facilities outside China are facing glutted markets erasing their profit margins. The EU in November imposed anti-dumping duties on Chinese products made from PET, the type of plastic derived from polyethylene that’s widely used in bottles.

Indorama Ventures Pcl, the Thai chemicals business that’s the biggest producer of PET worldwide, will spin off two of its most profitable units and restructure its business to navigate “fundamental long-term changes in global chemical markets” amid subdued Chinese demand, the company announced earlier this month.

In Europe, competition from the influx of low-cost Chinese products in recent months has been an issue for chemicals producers on a par with the disappearance of cheap Russian gas as feedstock. “We see imports from China coming in, in an order of magnitude like never before,” BASF Chairman Martin Brudermüller told an investor call last month.

Right now, plants outside China are still holding on and pumping out products at a loss, in the hope that global consumption of plastics will eventually catch up. There’s no guarantee when, or even whether, that happens. Should the global chemicals sector capitulate to the tidal wave of polymers flowing out of China and shut down, 2024’s demand surge might look like oil’s last gasp, before decline and fall set in.

BLOOMBERG OPINION

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