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Yields on term deposits drop before Fed decision

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TERM DEPOSIT yields fell on Wednesday ahead of the US Federal Reserve’s policy decision this week and following the release of latest Philippine inflation data.

The Bangko Sentral ng Pilipinas’ (BSP) term deposit facility (TDF) attracted bids worth P291.099 billion on Wednesday, above the P230 billion on the auction block and the P250.427 billion in bids a week ago for a P210-billion offer.

Tenders for the seven-day papers reached P155.328 billion, higher than the P130 billion auctioned off by the central bank. It was also above the P133.311 billion in bids for the P120-billion worth of deposits offered last week.

Banks asked for yields ranging from 5.955% to 6.1%, narrower than the 5.95% to 6.13% margin a week earlier. This caused the average rate of the one-week deposits to slip by 0.68 basis point (bp) to 6.0824% from 6.0892%.

Meanwhile, bids for the 14-day term deposits stood at P135.771 billion, above the P100-billion offer as well as the P117.116 billion in tenders for the P90 billion auctioned off a week ago.

Accepted rates were from 6% to 6.13%, also narrower than the 6% to 6.1685% range a week ago. As a result, the average rate for the two-week deposits fell by 1.14 bp to 6.1167% from 6.1281% last week.

The BSP has not auctioned off 28-day term deposits for more than four years to give way to its weekly offerings of securities with the same tenor.

The central bank uses the term deposits and BSP bills to help mop up excess liquidity in the financial system and to better guide market rates.

“The TDF average auction yields were again slightly lower for the seventh straight week, ahead of the widely expected Fed rate cut on the next Fed rate-setting meeting on Nov. 7,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

The Federal Reserve on Thursday is expected to cut interest rates again, this time by a quarter of a percentage point to the 4.50%-4.75% range, Reuters reported.

The US central bank launched its policy easing cycle with an unusually large half-percentage-point rate cut in September, the first reduction in borrowing costs since 2020. The Fed hiked rates by 525 bps in 2022 and 2023.

Traders on Tuesday trimmed bets on Fed interest rate cuts next year as early tallies for the US presidential election rolled in through the evening.

Traders of futures contracts tied to the Fed’s policy rate now see the Fed likely stopping its rate cuts after just two more such cuts in the first half of 2025, bringing the rate to the 3.75%-4% range.

Mr. Ricafort added that TDF yields went down as Philippine inflation remained within the central bank’s target in October despite picking up from the month prior.

Headline inflation picked up to 2.3% in October from 1.9% in September, the Philippine Statistics Authority reported on Tuesday.

Still, this was slower than the 4.9% print in the same month last year. This was also within the BSP’s 2%-2.8% forecast for the month and a tad below the 2.4% median estimate in a BusinessWorld poll of 11 analysts.

For the first 10 months, the consumer price index averaged 3.3%, well within the BSP’s 2-4% target for the year but above its 3.1% baseline forecast. — L.M.J.C. Jocson with Reuters

Alternergy lends P4.45 billion to wind subsidiary

UNSPLASH

ALTERNERGY Holdings Corp. has lent up to P4.45 billion to its wholly owned subsidiary, which may be converted into an additional 5,000 subscription shares at P889,000 apiece.

In a regulatory filing on Wednesday, Alternergy said its board approved entering into a convertible subordinated interest-bearing loan agreement with Alternergy Wind Holdings Corp.

The board also approved setting up a wholly owned subsidiary that will serve as the shared services center of the corporation and its subsidiaries.

“The wholly owned subsidiary shall be incorporated with an authorized capital stock and paid-in capital of up to P5 million,” the company said.

The company is targeting to develop up to 500 megawatts of additional wind, solar, and run-of-river hydro projects.

Shares in the company on Wednesday fell by 2.13% to close at P0.92 apiece. — Sheldeen Joy Talavera

St. Luke’s Medical Center digitizes patient records with Sunrise EHR platform

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ST. LUKE’S Medical Center has partnered with Altera Digital Health to digitize its medical records, it said on Tuesday.

The healthcare institution will use Altera Digital Health’s Sunrise electronic health record (EHR) platform at its Quezon City and Bonifacio Global City facilities to transition to digital from paper records, it said in a statement.

“At St. Luke’s Medical Center, we are enhancing patient care through the adoption of Altera’s Sunrise EHR platform. This advanced technology enables our clinicians to collaborate more efficiently, streamline processes, and maintain a strong focus on patient-centered care, all while securely managing health records,” St. Luke’s Medical Center President and Chief Executive Officer Dennis P. Serrano said.

“Our Sunrise EHR platform is designed with flexibility in mind, and we believe it will equip St. Luke’s Medical Center with the tools to optimize their digital processes to support their patient and clinician needs, paving the way for stronger and better care delivery, while better supporting healthcare practitioners’ workloads,” Altera Digital Health Executive Vice-President for Asia-Pacific Todd Haebich said.

Sunrise is a comprehensive, configurable, and scalable platform that St. Luke’s said can help their hospitals deliver more responsive healthcare services.

“EHRs have increasingly been recognized for improving patient care and enhancing efficiencies in healthcare processes. The Sunrise platform’s support will enable St. Luke’s team to digitize data, streamline existing processes, and achieve further scalability while providing secure facilitation and management of patient records, supporting clinicians in delivering the best care possible to patients,” it said.

The technology is expected to help St. Luke’s evaluate the outcomes of its interventions and treatments for its patients and allow doctors and clinicians to collaborate and manage patients’ health records more effectively, it added.

“Using the Sunrise EHR platform, clinicians can get a unified view of their patient’s health records and better organize their care history while their patients are with St. Luke’s Medical Center. The platform can act as an information hub across the healthcare system, making it possible for clinicians to holistically review patients’ past notes and care plans, helping solve the problem of fragmented records that many patients with multiple care providers have,” St. Luke’s said.

The platform also provides clinical decision support functions that provides clinicians with information to assist them in determining the medication needed by patients, it said.

“Through its sophisticated connected medication management feature, doctors can leverage the platform promptly to check on their prescription’s proper dosing and any drug-to-drug interactions with their patients.” — BMDC

BSP issues new guidelines on banks’ operational resilience

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THE BANGKO SENTRAL ng Pilipinas (BSP) has issued operational resilience guidelines for its supervised financial institutions (BSFIs) to strengthen their ability to manage and mitigate the impact of potential disruptions to ensure the continuous delivery of services.

BSP Circular No. 1204 Series of 2024 dated Oct. 28 will amend sections of the Manuals of Regulations for Banks and Non-Bank Financial Institutions to include the new rules alongside existing guidelines on operational risk management.

“This aims to strengthen BSFIs’ ability to manage and mitigate the impact of disruptions on their critical operations, given frequent natural disasters and fast-paced advancements in technology,” the central bank said in a statement on Wednesday.

“The new guidelines are crucial given the increasing threats to business operations. They complement our previous efforts to strengthen the financial resilience of supervised institutions,” BSP Governor Eli M. Remolona, Jr. said. “Operational resilience ensures the overall safety and soundness of both individual institutions and the entire financial system.”

The guidelines will help ensure that financial services will remain accessible “despite prolonged business interruptions, such as those experienced during the COVID-19 pandemic,” the BSP said.

This will support the smooth functioning of the real economy, the BSP said in the circular.

The BSP said operational disruptions include man-made causes like cyberattacks or fraud, as well as natural causes like weather disturbances.

Under the guidelines, BSFIs are required to integrate operational resilience in their governance structures and risk management processes.

“In establishing an operational resilience framework, BSFIs must identify critical operations, which, if disrupted, would cause material harm to their customers, their business, and/or the financial system,” the BSP said.

“They must also set tolerance levels for disruption or how much disruption they can handle while still delivering critical operations. BSFIs must ensure that they remain within their established limits.”

The BSP said BSFIs must determine the range of severe but plausible scenarios of varying nature, seriousness, and duration relevant to their business and risk profile.

“These are essential in prioritizing critical operations and determining capabilities to withstand and absorb disruption within the tolerance level acceptable to the BSFI, considering the range of adverse scenarios identified,” it said.

Financial institutions should also map out interconnections and interdependencies within their operations to identify and resolve potential vulnerabilities in the delivery of services, especially those involving service providers.

“This will enable the BSFIs to holistically assess the sources of vulnerabilities and invest in appropriate resilience measures before disruption occurs so that BSFIs can remain within their tolerance for disruption,” the central bank said.

BSFIs should also plan and manage risks to critical operations and test their ability to deliver these services and to respond and recover from disruption, it added.

“This should include, among others, clear delineation of the roles and responsibilities and succession of authority in the event of disruption; and an incident response plan that contains key steps to handle the disruption and assess how it will affect the BSFI’s risk appetite and tolerance for disruption,” it said.

“As part of its incident response plan and to strengthen its response capabilities, the BSFI should maintain a catalogue that includes an inventory of incident response and  recovery actions, roles and responsibilities of key officers/personnel as well as internal and external resources,” it added.

The new guidelines will be implemented in phases, the BSP said, to “ensure smooth transition and implementation.”

BSFIs must submit an accomplished self-assessment questionnaire within one year from the circular’s effectivity to help them identify areas for improvement and prepare action plans for their operational resilience frameworks, it added.

“Operational resilience is an end state or outcome wherein the BSFI demonstrates that it can continue to render its critical operations through significant disruption. reducing the impact on its customers and the financial system. This contributes to reinforcing the BSFI’s viability amidst significant disruptions. promoting the financial system’s resilience and stability and servicing the real economy,” the BSP said.

“Critical to achieving this is the recognition that disruptions will occur, necessitating forward looking assessments, including emerging risks, as well as careful planning and preparation to respond accordingly, as part of the BSFI’s overall risk management.” — L.M.J.C. Jocson

Oldest restaurant in the world? We tried it out

INTERIOR of St. Peter’s Stiftskeller — STPETER.AT

By Joseph L. Garcia, Senior Reporter

WHILE Sobrino de Botin (founded 1725) might hold the distinction of being the Oldest Restaurant in the World in the Guinness World Records, medieval scholar Alcuin would like a word.

Alcuin, who served in Charlemagne’s court, mentioned St. Peter’s Stiftskeller (“stiftskeller” was a word for a monastery’s wine cellar, which it had been originally) in writing back in 803 — no typos, just a three-numeral year. During our visit to St. Peter’s in Salzburg’s St. Peter’s Abbey on Oct. 13, our server knowingly smiled when we tried to argue about Sobrino de Botin’s age, and simply handed us a flyer detailing the restaurant’s history. It does mention that they’ve been around for 1,200 years: “Our restaurant is therefore considered the oldest inn in Europe,” it says quite authoritatively. The monastery that contains it was founded in 696.

Perhaps the confusion lies in the fact that monasteries then did not charge for food, and accepted and served visitors for free out of Christian charity and piety. The restaurant’s list of visitors is legendary (if it is true). “Faust knows it to be a place of quality,” the restaurant’s flyer says loftily — Faust as in the legendary German figure who gave his name to the word “Faustian” after the myth that he had sold his soul to the devil. The restaurant places his visit in 1510. Christopher Columbus and Wolfgang Amadeus Mozart are said to have been guests as well, while Michael Haydn, composer Joseph Haydn’s younger, less famous brother, lived at the inn in 1763.

Another source of confusion for the restaurant’s true age is the pauses in its operation, along with its changes of ownership and function according to regime changes, and the natural flow of business (Sobrino de Botin, on the other hand, has been in continuous operation since it opened and supposedly, the flame in its oven has never been put out). For example, French troops occupied the building in 1809 during the Napoleonic wars (possibly pausing operations). In 1992, businessman Claus Haslauer and his wife Veronika took over the lease of St. Peter’s Stiftskeller and renamed it St. Peter’s Stiftskulinarium in 2017.

It’s quite hard to find: our driver from a previous The Sound of Music tour (which was filmed in Salzburg; which we will not discuss, because we led the singing during the tour) dropped us off by an entrance and told us to go through two arches and turn right. We found it through a gaggle of tourists taking pictures of the sign, with two crossing keys, boasting of the restaurant’s 803 founding. Stone and rock surround the restaurant, emphasizing its medieval origins, but contemporary art dots the place, making one aware of the present year.

The restaurant seats more than 600, in a series of various rooms (it has a Baroque Hall, built in 1903, where Mozart concerts are performed at dinner). Despite coming an hour early for our 2 p.m. reservation, we were seated quite promptly in a room with terracotta floors, ancient wooden beams and panels (which were now transformed into booths), and hunting trophies like deer skulls. The place was crowded on our Sunday visit, with well-dressed Salzburg seniors (possibly after mass; the city is still quite Catholic) sharing space with tourists in various dress (a familiar scene throughout Austria). The restaurant is divided into two concepts — Achthundert Drei (that’s 803 in English) which serves “international fine-dining cuisine”; and Peter, which serves Austrian and Mediterranean specialties.

Peter’s menu is surprisingly contemporary, with dishes like ceviche and exotic ingredients like Kaffir lime leaf (we’re sure those weren’t around when the monks were in charge). We have those at home, so we opted for the Austrian specialties. Mamma ordered the Pete’s Roast Beef with Onions (€37.90) with bacon beans and mashed potatoes. We got the Tafelspitz (€31.90), a traditional Austrian dish of boiled organic Salzburg beef, with creamed spinach, apple horseradish, and chive sauce on the side. We also got the Homemade Boiled Beef Soup (€10.90), with porcini mushroom dumplings, root vegetables, beech mushrooms, and chives.

Our server offered us bread, at €6, but we’d gladly pay for it over and over again. The bread — brown, chewy, dense, and spongy — tasted like it came out of a fairy tale. The butter, however, whipped and with a flavor of toffee (it was a salted caramel butter), firmly placed it in our time.

Mamma gave me a taste of her roast beef: it was in chunky red wine sauce and topped with crispy fried onions. The meat was a bit tough, but its flavor is yet to be matched. The Boiled Beef Soup, as a traditional Austrian dish, can be found in most homes and restaurants (we had had it twice before, at the museum restaurants at the Kunsthistorisches and the Schönbrunn Palace — frankly, its a less tasty nilaga, which means we’ve had it several times at home). St. Peter’s version was slightly sweeter than the previous versions we tasted, from the generous use of onions and herbs. The root vegetables (carrots and radish are our guesses) were finely cut into strips as a touch of finesse.

Now the Tafeslpitz — that was something. We saw three other tables (with the well-dressed seniors) order it as well, and we watched the show with which it was presented. When it was our turn, it came in a copper pan, and with the various sauces and accoutrements, it was a visual spectacle of abundance. The server also makes it a show, smearing the plate with the spinach on one side, and horseradish on the other. It came with a broth that was basically the soup from earlier, but the boiled beef, tender and yielding, must have come from a prized cow because of its supreme flavor. It’s excellent for cold days (and there are many in Austria). We could feel the workhorse quality of the dish, meant to fortify the insides for work and cold; the pleasure is a bonus. While the server took away the leftover broth from the other tables, we asked for her to leave ours, because what can we say? We like soup.

If you’re used to more exciting flavors, the food may not stand out too much — but who says we came here for the food? The sums aren’t too princely, and there are few places in the world where you can eat in a place older than the concept of nationhood itself. Empires have fallen and risen; St. Peter’s still stands.

No time to rest

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(First of two parts)

“Oh great…” I recall thinking to myself as I watched a foreign news clip of Vietnamese troops pulling out of Cambodia atop armored personnel carriers in 1989.

As I leafed through report after report on my desk in an agency that was monitoring the withdrawal, I realized that the Vietnamese — who had defeated the United States and France previously and left China bloodied at their border — had by then waged nearly half a century of continuous warfare that steeled them into a hardy, disciplined, and intensely patriotic people (Southeast Asia’s Germans, as we called them at that time).

It will just be a matter of time before they overtake us economically now that they finally have peace, I thought back then as I watched the last Vietnamese columns cross over from Cambodia.

That’s history now, of course, with Vietnam outdoing us on many counts: save for a few years, it has been sustaining one of the fastest economic growth rates in the region and in the world, with relatively slow inflation and, since 2020, bigger per capita income than ours, while its bourse overtook ours between 2011 and 2015 in terms of number of listed firms — and all that while keeping a lid on income inequality. Not bad for an economy run by communists, I thought.

Fast forward to last year, when I chanced upon an NHK feature that ended with a scene along a Phnom Penh alley showing makeshift structures on the side that were teaming to the brim with students in uniform. Asked by the reporter what they were doing there late in the afternoon instead of heading for home, two of the kids replied that they were taking extra English and mathematics lessons after the day’s regular classes. I was immediately struck by a bout of deja vu, coming as this scene did in the wake of reports of just how poorly our students have fared in international ratings on reading comprehension, as well as math and science proficiency (not to mention many new university grads’ inability to grasp subject-verb agreement and their incomplete sentences which I have seen in application forms and tests). Of course, quality of government is another matter altogether.

TAKING STOCK
So as competition intensifies all around us, e.g., as Western investors seek to diversify from China in search of new locations nearby, it behooves us to keep track of where we have a fighting chance of outdoing our neighbors.

Cursory observations:

• We have the second fastest economic growth next to Vietnam, even as such expansion is concentrated in and driven by select sectors, and income inequality remains among Asia’s widest.

• Vietnam, Laos and Myanmar have contiguous land borders with China — whose growth has been slowing, but which remains the world’s second-biggest economy nonetheless — so they have a compelling inherent edge over us in terms of logistics for those still targeting China (coz, objectively, can anyone truly decouple from that economy?), since we have to rely on costly maritime transport (Philippine freight rates are among the highest in Southeast Asia).

• Ensuring that we have adequate infrastructure to support the growth of businesses — and to spread these structures and digital facilities beyond our few main economic hubs — remains a nagging key challenge in comparison to our peers.

• We have among the highest value added and corporate income tax rates in Southeast Asia.

• We also have some of the costliest electricity in this region — while much of this situation is due to our neighbors’ energy subsidies, our own energy sector reforms started nearly a quarter of a century ago in 2001 have not resulted in the desired adequate supply and proper pricing.

• While we have been catching up with the rest of the region in terms of infrastructure budget in relation to gross domestic product (GDP), the same cannot be said of education (an investment more vital for our future), for which we allocated an equivalent of about just 3.8% of GDP for this year (even as it has been the biggest allocation in annual government budgets) against a 4% regional average (according to a paper of the Philippine Institute of Development Studies) and about 6.6% in India.

• A young, easily trainable work force has long been a key come-on for us, but that is also increasingly true of many of our neighbors.

English proficiency has also been a unique edge which we have held for decades, but our neighbors’ push to hone their students’ facility with this language compares with a perceptible decline in such mastery among ours (still more proficient than their Southeast Asian peers, but, hey, watch out).

• And it does not help that we are perceived to be among the Southeast Asian economies most tied down by red tape and corruption. To be sure, casual conversations with Filipinos who have done business in investor darling Vietnam, for instance, bared their own brushes with crooked officials and cumbersome rules there. Asked what sets Philippine corruption apart from that of its peers, businessmen’s anecdotes revolve around the “sheer amount involved,” perhaps due in part to the “multi layers” of bribery involving various regulatory offices at the national level as well as local governments.

Still, moves we have been making could already be taking incremental effect.

Net foreign direct investments (FDIs) — actual inflows minus outflows — recorded by the central bank have so far shown a 7.5% year-on-year growth to $5.256 billion in the seven months to July, apparently on track to reversing consecutive annual declines of 3.96% to $9.116 billion in 2023 and 20.8% to $9.492 billion in 2022. Last year showed the Philippines recording the smallest decline in net FDIs against drops of 43.8% to $8.3 billion for Malaysia, 73.6% to $3 billion for Thailand (so we beat those two countries in terms of net FDI levels as well in 2023) and 12.2% to $21.7 billion for Indonesia. Only net inflows to Singapore and Vietnam grew — by 17.7% to $175.2 billion and 3.3% to $18.5 billion, respectively — in 2023.

So, where do we go from here?

(To be continued on Nov. 21.)

 

Wilfredo G. Reyes was editor-in-chief of BusinessWorld from 2020 through 2023.

Branded segment boosts Century Pacific earnings

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CENTURY Pacific Food, Inc. saw its third-quarter attributable net income surge by 14.7% to P1.64 billion, fueled by growth in its branded segment.

In a regulatory filing on Wednesday, Century Pacific Food logged a gross revenue of P19.03 billion, up by 11% from P17.14 billion for the August-to-September period, its financial statement showed.

The company attributed its revenue growth to its branded businesses such as its marine, meat, and milk, and other emerging segments, Century Pacific Food said.

“Amid a soft consumer environment, the segment continued to post sustained growth, supported by a diverse portfolio of brands spanning progressive price tiers,” the company said.

For the nine-month period, Century Pacific Food logged an attributable net income of P5.28 billion, marking a 14% increase from P4.63 billion in the same period last year.

The company’s gross revenue ballooned to P56.88 billion for the January-to-September period, jumping by 12.4% from P50.59 billion in the same period last year.

The company also incurred higher expenses for the nine months to September, rising to P50.41 billion from last year’s P44.79 billion, according to its financial statement.

Further, the company said its OEM (Original Equipment Manufacturer) Exports business, which covers its tuna and coconut exports, recorded an improvement in 2024 as commodity prices and foreign exchange were favorable compared to last year.

Century Pacific Food said its operating cash flow for the nine months amounted to P4.9 billion, which allowed the company to fund its acquisition of Coco Harvest, Inc. and increase its coconut processing capacity.

Coco Harvest, which is a fully integrated coconut facility in Misamis Occidental, is expected to help support the company’s OEM coconut export business.

“Furthermore, it will help stimulate the local economy by increasing the demand for plant auxiliary services and providing market access to coconut farmers in the region,” it said.

At the local bourse, shares in the company closed 80 centavos, or 1.94% higher, to end at P42 apiece. — Ashley Erika O. Jose

Performance of Philippine Agriculture

THE PHILIPPINES’ agricultural production plunged by 3.7% in the third quarter, the steepest decline in nearly four years, the statistics authority said on Wednesday. Read the full story.

Performance of Philippine Agriculture

South Korea fines Meta about $15 million over collection of user data

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SEOUL — South Korea has ordered Facebook owner Meta Platforms to pay 21.62 billion won ($15.67 million) in fines after finding it had collected sensitive user data and given it to advertisers without a legal basis, Seoul’s data protection agency said.

The US tech giant obtained information from about 980,000 South Korean Facebook users on issues such as their religion, political views, and sexuality while failing to seek agreement from users, the Personal Information Protection Commission said in a statement on Tuesday.

The information was then used by some 4,000 advertisers, the agency said.

A Meta Korea official declined to comment.

“Specifically, it has been found that (Meta) analyzed user behavior data such as pages they liked and advertisements they clicked on Facebook and created and managed advertising themes related to sensitive information,” the commission said.

This included users being categorized for example as being North Korean defectors, following a certain religion, or identifying as a transgender or gay person, the agency said.

Meta had also unfairly declined a request by users to access personal information and failed to prevent data on about 10 South Koreans from being leaked by hackers, the agency said. Reuters

DBP net income drops to P4.68B as of September

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DEVELOPMENT Bank of the Philippines (DBP) saw its net income decline by 8.95% year on year in the first nine months amid lower foreign exchange gains.

The state-run lender’s net income stood at P4.68 billion at end-September, down from P5.14 billion in the same period last year, DBP’s financial statement posted on its website showed.

This came as its non-interest income dropped by 56.69% year on year to P2.85 billion from P6.58 billion, mainly driven by a 83.51% decline in foreign exchange gains to P637.578 million.

Meanwhile, DBP’s net interest income before provisions for impairment increased by 9.98% to P19.07 billion at end-September from P17.34 billion a year prior.

Broken down, its interest earnings rose by 3.93% to P36.1 billion driven by higher income from loans and receivables, while its interest expenses decreased by 2.11% to P17.02 billion.

On the other hand, the bank’s expenses went down by 10.17% to P11.04 billion from P12.29 billion amid lower spending on compensation and taxes, as well as a decline in occupancy costs.

DBP’s net loans and receivables inched up by 1.31% to P481.26 billion at end-September from P475.03 billion a year prior.

On the funding side, deposits with the bank went down by 4.95% to P733.62 billion from P771.86 billion.

DBP’s total assets stood at P967.85 billion as of September, down by 1.43% from P981.89 billion a year ago.

Its capital funds totaled P91.28 billion, up by 8.22% year on year. — AMCS

Eating across a (former) empire

DEMEL SACHERTORTE — DEMEL.COM

By Joseph L. Garcia, Senior Reporter

THE Austro-Hungarian Empire has been gone for more than 100 years, but some vestiges of its greatness still lie in its restaurants. Austria’s contributions to cuisine are hard to ignore: a lot of famous French pastries, collectively called Viennoserie, take the category’s name from Austria’s capital; not to mention popularizing coffee culture in Europe. As for Hungary, it added much-needed spice to the culinary map, thanks to its widespread use of paprika.

THE OLDEST COFFEE HOUSE IN VIENNA
Café Frauenhuber is supposed to be Vienna’s oldest coffee house, standing since 1824. The building is much older, though: a plaque outside states that in 1788, Franz Jahn, personal chef of the Empress Maria Theresa, had founded a restaurant there. Mozart and Beethoven both performed there, in 1788 and 1797, respectively. And before that, it was a bathhouse (according to a perfumer we met there for coffee).

As we sat among the velvet damask seats, parquet floors, and crystal chandeliers, a white tablecloth was whipped out and folded for us by the server. Among the guests were several tired-looking people in black tie (we guessed that they were performers in the various classical concerts all across the city), sharing space with curious tourists in jeans.

On our first visit, we had their Viennese Chocolate, with rum and whipped cream, and it left us almost half-asleep. A second visit bade us to order their goulash, with beef and potatoes, with a Kaisersimmel roll. Filling and intriguingly spicy, the meal and the accompanying aura of history cost €9.10.

We also had Vienna’s most famous dish, the Wiener Schnitzel: veal pounded and fried in batter until it turns crispy. We learned that day that we liked pork better than veal, and we paid €28.90 to find out.

MCDONALD’S — A MODERN EMPIRE
Ha! Bet you weren’t expecting that. The world’s largest fast-food chain, spreading across 100 countries, has unique items across its markets. The McDonald’s in Vienna has the Steakhouse Classic and the Bacon Hamburger Royal with Cheese. Well, it’s hard to distinguish one from the other, but this is what we can say: The beef patties are large, just a few inches away from becoming the size of my own face, and are of an excellent quality. At fast-food prices (neither cost more than €6), they can stand toe-to-toe with any “gourmet” burger here at home (which might sell for twice the price).

The buns are of such excellent texture you’d think they wore makeup, not to mention the wide variety of sauces for dipping fries (we counted curry, Hot Devil spicy sauce, and real Honey Mustard; among others). Suddenly, ketchup in sachets just won’t do anymore.

A TALE OF TWO SACHERTORTES
One of Vienna’s most famous cakes, it was invented by Franz Sacher in 1832, supposedly for politician Prince Metternich. Today, it’s a chocolate cake with apricot jam between its layers, covered in dark chocolate icing, and served with whipped cream.

You’re probably waiting for us to say that we tried it in Hotel Sacher, the luxury hotel founded by Franz Sacher’s son. Nope: the long lines and the expensive reservation fees put us off. Instead, we tried it at Kurkonditorei Oberlaa, a popular chain in Austria (one of its flagship locations happened to be across the street from our hotel) and at Demel, a pastry shop founded in 1786 and supplier to the Viennese Imperial court. Demel also faced a legal battle with the aforementioned Hotel Sacher due to its own claims as the origin of the Sachertorte (it was settled out of court).

The Sachertorte at Oberlaa had a sugary chocolate shell and was light and refined. Demel also had long lines, thanks to its reputation and its fame with the Instagram crowd. They had a special window for coffee orders and Kaiserschmarrn, a sweetened pancake supposedly a favorite of Emperor Franz Joseph I; customers took pictures as soon as the paper cone containing them popped out of the window.

Compared to the cake at Oberlaa, Demel’s version had a milder and more well-rounded chocolate flavor and was more moist and dense. Oberlaa’s was drier, but had a more intense flavor. We ordered Franziskaner coffees at both restaurants (a sister of the Cappucino, which also takes its name from monks’ habits, of a different order): espresso and milk, topped off with generous amounts of whipped cream. Hats off to Demel, their coffee was richer and creamier.

THE MOST BEAUTIFUL CAFé IN THE WORLD
We had a late lunch in what is supposedly the “most beautiful café in the world,” Budapest’s New York Café.

Once populated by the most eminent Hungarian writers of its day, it opened in 1894. World War II halted its operations, and with its 1954 reopening lacked its previous luster. It was restored in 2006 to its former glory, and in 2011, it was bestowed its Most Beautiful award by U City Guide, then again in 2012. Instagram helped retain its reputation through the decades.

Built in an eclectic Italian Renaissance-style, it also had elements of Baroque and Belle Epoque as well. Gilding, marble, bronze, and crystal made their way with the place, and we might also add that almost all the servers had a movie-star beauty to them, emphasized by their formal uniforms.

A string quartet played as we sipped Hungarian goulash (more complex than its Austrian counterpart), which had a fresher, more herbaceous flavor than the goulash from the humbler restaurant we visited earlier in the day. We were only at the smaller restaurant because it was in a mansion sequestered by the previous communist regime from our aristocratic tour guide’s family.

We followed that with Chicken Paprikash, a Hungarian stew (the main stars are in the name). Spicy, perfectly tender; the accompanying spaetzle was perfectly moist and soft and was delightful tossed in the paprika sauce.

There were long lines here as well (eight groups were ahead of us when we arrived after the lunch rush, but we were luckily rushed ahead to the first two slots; the line kept growing as the afternoon wore on), and the food was expensive. Still, it’s not easy to put a price on the glimmer in one’s eye when you’re transported to another, more beautiful world. 

Fixing education

PHILIPPINE STAR/JOHN RYAN BALDEMOR

The Philippine government is preparing to borrow $150 million (roughly P8.5 billion) from the World Bank (WB) to finance a series of projects aimed at improving public education. According to reports, these initiatives will run from 2025 to 2030, potentially benefiting over 21 million students from kindergarten to Grade 10. While any investment in education is welcome, a critical look at the numbers raises questions about the adequacy of this funding.

If we break down the P8.5 billion, this equates to approximately P425 per student over the five-year period. Considering the enormous challenges facing the education sector, this amount appears almost negligible. Yet, as modest as it may be, it is still better than nothing. The question, however, remains: can such a limited budget make a meaningful impact?

The most pressing challenge, as highlighted by the World Bank, is “learning poverty.” An alarming 91% of 10-year-olds in the Philippines cannot read and understand age-appropriate text. The country ranks near the bottom — 77 out of 81 countries — in math, reading, and science. These dire statistics point to a nationwide crisis, with overcrowded classrooms, poor teacher quality, and a lack of essential learning materials identified as primary causes.

It is crucial to acknowledge the systemic issues that have plagued Philippine education for decades. One of the most glaring problems is chronic underfunding. Despite constitutional mandates, public investment in education has been consistently insufficient. In 2019, education spending accounted for just 2.8% of the Gross National Product, far below the recommended 4% benchmark. This chronic underinvestment has created a ripple effect, impacting infrastructure, teacher salaries, and the availability of learning materials.

Many public schools, especially those in rural and remote areas, lack basic facilities like classrooms, libraries, and laboratories. Overcrowded classrooms are the norm, with one teacher often having to manage 40 or more students. This environment is hardly conducive to effective learning, and it is a reality that has persisted for at least half a century.

Another critical factor is the quality of teaching. Teacher education and professional development are areas in desperate need of attention. Higher passing rates in the Licensure Examination for Teachers, coupled with more opportunities for skill enhancement, can help address subpar teaching standards. We also need to ensure that our educators are well-trained, motivated, and equipped to adopt modern teaching methods.

Moreover, the curriculum itself may need a complete overhaul. The current system seems to place emphasis on rote memorization, rather than developing critical thinking, problem-solving, and creativity. This is evident in our students’ poor performance in international assessments in reading, mathematics, and science. Many students know mathematical formulas but struggle to apply them in real-world scenarios or word problems.

Education inequality is another formidable challenge. In a country where poverty is pervasive, children from economically disadvantaged families often find themselves left behind. Geographic isolation further compounds the problem, limiting access to quality education, particularly in rural and conflict-affected areas. The urban poor face similar hurdles, with many parents unable to prioritize education when daily survival is a struggle.

It is easy to prescribe solutions like increasing the national budget for education or reforming the curriculum. However, these are far easier said than done. A large portion of the national budget is already tied up in debt servicing, limiting the government’s ability to allocate more resources to education. Nonetheless, a strategic increase in investment is crucial. Funds must be channeled effectively to improve infrastructure, provide adequate learning materials, and enhance teacher training.

Curriculum reform should be more than just an academic exercise. The new curriculum must prepare students for both local and global demands. As the Philippines is a major exporter of labor, our education system must equip students with skills that are relevant in a rapidly evolving global economy. Critical thinking, creativity, and practical problem-solving must be prioritized to prepare students for the future.

Improving teacher quality is equally important. The Department of Education (DepEd) must collaborate with the private sector to develop comprehensive professional development programs. These should not be one-off workshops but continuous learning initiatives that keep teachers updated on best practices. However, resistance to change is a real challenge. Many educators are reluctant to acknowledge the need for self-improvement, and breaking down this resistance will require concerted effort, possibly through mandatory continuing education.

No education reform will be complete without addressing the socioeconomic barriers that keep children out of school. The government must invest in targeted support for disadvantaged students. This could include scholarships, meal programs, and transportation subsidies. However, financial assistance should not be a blanket approach. It needs to be carefully targeted to maximize impact, ensuring that students with the potential to benefit most are prioritized.

And last but not least, while the government and educators play significant roles, parents are also key players in this equation. A holistic approach to education reform must involve parents as active partners in their children’s learning journey. Parental involvement can make a significant difference, especially in instilling the value of education and encouraging children to stay in school and strive for academic excellence. Simple acts, such as reading with children at home or reinforcing what they learn in school, can have a profound impact.

In countries like Singapore and Japan, the importance of parental involvement is well recognized. These nations have robust education systems, but they also have cultures that place a high value on education and parental engagement. While we cannot replicate their models wholesale, there are valuable lessons to be learned. For instance, promoting a culture that emphasizes education as a pathway to improving one’s quality of life can inspire students to aim higher and do better in school.

Obviously, we need more funding, better infrastructure, and highly skilled teachers. But we also need a curriculum that prepares students for real-world challenges. And perhaps most important, we need parents to step up and be active participants in their children’s education. Education is a shared responsibility, and everyone — government, teachers, parents, and society at large — has a role to play.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com