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Low inflation, low unemployment, high growth — this is the Philippines

Last week, the Philippine Statistics Authority (PSA) released two important monthly reports, on the country’s unemployment rate for December 2023, and the inflation rate for January 2024. They show really good results — unemployment is at a 19-year low, inflation at a three-year low. See these stories in BusinessWorld: “Inflation sharply drops to 3-year low” (Feb. 7), “Jobless rate hits record low in 2023” (Feb. 8).

I am updating this column’s monthly monitoring of global and regional inflation and unemployment data. I have put together in Group A the G7 industrial countries, in Group B are the big South Asian nations, and in Group C are the big East Asian countries (see the table).

Budget Secretary Amenah F. Pangandaman has asserted again the optimistic trajectory of the Philippine economy, saying that “We are now in a low inflation, low unemployment, high growth path, the best situation that any economy can hope for. Our budget priorities will remain on improving both the hard and soft infrastructure for our people that will further raise their productivity, income and social well-being, their overall quality of life in the long term.”

Well said, Madam Secretary. In fact many G7 countries now have higher inflation than the Philippines — the UK, the US, Canada, France, and Germany. And the G7 unemployment rates are all higher than the Philippines’ except for Japan. High inflation, high unemployment, and low growth (even contraction in Germany) is the worst combination that any economy would wish to have.

One disturbing trend globally is that food inflation is higher than overall inflation. For instance, in January 2024, food inflation and overall inflation rates were, respectively: Germany, 4.2% and 2.9%; France, 5.7% and 3.1%; Italy, 5.9% and 0.8%; South Korea, 5.9% and 2.8%; Taiwan, 4.1% and 1.8%; Indonesia, 5.8% and 2.6%; and the Philippines, 3.5% and 2.8%.

These countries’ agriculture, climate, and energy policies have made big contributions to this ugly trend. Imposing high taxes on diesel (used by tractors, harvesters, trucks, irrigation pumps, fishing boats, etc.), for example, raises the cost of farming and transportation of produce. The Philippines’ diesel tax until 2017 was zero, then it became P6/liter after the TRAIN law of 2018 (RA 10963) was passed. And then there is land conversion from agriculture to solar farms.

Also last week, on Feb. 5, the Development Budget Coordination Committee (DBCC) held its first meeting this year, with new members Finance Secretary Ralph Recto and Special Assistant to the President for Investment and Economic Affairs Frederick Go, joining the old members, Economics Secretary Arsenio Balisacan, Budget Secretary Amenah Pangandaman, and the Bangko Sentral representative.

Secretary Recto postulated that economic targets should be revised towards more realistic levels and rates. See another story in BusinessWorld: “Growth, fiscal goals need to be ‘more realistic,’ says DoF chief” (Feb. 12).

Given the declining trend in growth globally, a mild reduction in the Philippines’ growth target, from 6.5%-7.5% to 6%-7%, is not a bad idea, to avoid future disappointment if targets are high and not attained a few months later.

There are three important policy measures that I think must be held and sustained.

One, control spending and limit public borrowings, from P2.2 trillion/year average in 2020-2023 to below P1.8 trillion/year in 2024-2028. This way, the target of reducing the Debt/GDP ratio, from 60% in 2023 to possibly 40% to 45% by 2028, has a higher chance of being attained.

Two, distortionary policies in agriculture and energy must be revisited if not reversed. This is to help reduce food inflation and, hence, overall inflation rates.

And three, avoid any new tax hikes in 2024 and possibly beyond. The Philippines’ current situation of high growth (3rd highest GDP growth in 2023 among the top 40 largest economies in the world), low inflation, and low unemployment (as discussed above) happened without any tax hikes.

On controlling spending, I want to mention that we should not entertain the lobby of the country’s defense establishment and their allies in media, academe, and think tanks, to purchase $36 billion (P2.016 trillion at P56/$) worth of military hardware (submarines, new battleships, missiles, and jetfighters). Excluded in their P2-trillion costly and impractical budget are spending for ammo, spare parts, and training. The Philippines should focus on diplomacy and negotiations, not war mongering.

And not only the military establishment but also the police, coast guard, and other agencies will be lobbying for their own trillions of pesos for additional acquisitions and manpower expansion. The Philippines may not prosper anymore as the agencies will just invent new spending, new borrowings, and new taxes.

If the military and various agencies push hard for their trillions of extra spending, one possible option is the massive, large-scale privatization of the land and assets of the Armed Forces of the Philippines, the Philippine National Police, and the Philippine Coast Guard. Use the proceeds of this privatization for their costly modernization, don’t pick the money from the taxpayers’ pockets.

 

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

minimalgovernment@gmail.com

Dune: Part Two director decided to tell sequel story his own way

JOSH BROLIN (R) and Timothée Chalamet in a scene from Dune: Part Two. — IMDB.COM

LOS ANGELES — Canadian director Denis Villeneuve is inviting audiences back to the desert planet Arrakis for Dune: Part Two, the second installment of the sci-fi epic starring Timothée Chalamet and Zendaya.

The Dune franchise is based on author Frank Herbert’s highly acclaimed 1965 novel of the same name.

Dune: Part Two, distributed by Warner Bros WBD.O, arrives in US theaters on March 1. It opens in Philippine cinemas on Feb. 28.

The first Dune film, which was also directed by Mr. Villeneuve came out in 2021, followed the character Paul as he went from being the noble heir to House Atreides to being stranded with his mother, Jessica, on the planet Arrakis.

Eventually, Paul is revered as the messiah of the Arrakis locals, called the Fremen.

For the second film, Mr. Villeneuve decided to go with a different timeline than Herbert originally did, making Dune: Part Two pick up right after the first film ends, rather than replicating the two-year time jump from the novels.

His cinematic sequence of events lends his version of the story a unique look that is new to both book fans and movie audiences.

However, Mr. Villeneuve feels his take is closer to Herbert’s lore.

“When Frank Herbert wrote the book and when the book was out, he was disappointed how people perceived Paul’s character. He felt that people thought that Paul was a hero and for him, Paul was an anti-hero, he was a dark figure, he was a danger,” he said.

Mr. Villeneuve said that Mr. Herbert intended Dune to be a cautionary tale about charismatic figures, eventually writing Dune Messiah to be an epilogue that corrects the misconceptions of Paul in his first books.

“So when I wrote the adaptation, I made sure to try to make sure that I was closer to Frank Herbert’s initial intentions,” the 56-year-old filmmaker added.

While he continues to adapt Mr. Herbert’s books, Mr. Villeneuve makes his own strategic decisions for the films.

The first two films are an adaptation of just one book from Mr. Herbert, and Mr. Villeneuve is eager to keep the Dune franchise going.

“My goal in the beginning was to adapt Dune, the first book. I finished it. It would make sense to me to finish Paul Atreides’ arc with Dune Messiah, the second book, and make a trilogy,” Mr. Villeneuve said.

“So, that’s in the work right now, and when I have a solid screenplay, there’s a strong chance that I go back to Arakkis,” he added. — Reuters

AI boom reawakens Silicon Valley’s housing market

WIKIMEDIA

RICHES from the artificial intelligence (AI) boom are reigniting the housing market in California’s Silicon Valley.

Open houses in the San Jose area are packed, million-dollar-plus starter homes often sell for hundreds of thousands over asking, and listings are flying off the market at the fastest rate in the US.

Buyers are rushing to take advantage of a recent dip in mortgage rates, and they’re flush from a yearlong rally in Big Tech stocks fueled by AI exuberance. Many people taking the plunge now have never purchased a house before.

“We have so many first-time buyers,” said Julie Wyss, a Los Gatos-based agent with Keller Williams. “They’re feeling very wealthy.”

Competition for homes is intensifying as the pandemic exodus from Northern California to cheaper locations around the country winds down. Return-to-office mandates are pressuring workers to find places close to the many headquarters that dot the suburban landscape, from Apple, Inc. and Alphabet, Inc. to AI chipmaker Nvidia Corp., with a share price that’s tripled in the past year.

That’s helped offset the effect of thousands of layoffs roiling the tech industry. In an area known for scarce supply, even a small bump in demand can set off bidding wars.

No US housing market is as tied to the tech industry’s fortunes as Silicon Valley and the broader San Francisco Bay Area. But agents in other hubs, from Boston and Seattle to Denver, may also see a bounce in demand during the key spring selling season, traditionally kicking off right after the Super Bowl this weekend.

Among the 50 biggest US metro areas, San Jose is in the lead with the fastest home-sales pace. There, 61% of new listings went under contract in less than 14 days, according to Redfin Corp. data measuring the four weeks through Feb. 4. In second place was the Seattle market — home to Amazon.com, Inc. and Microsoft Corp. — where 59% of listings disappeared that quickly.

Properties in the San Jose area sold at an average of 2% over the list price, Redfin said. That could translate to a significant premium in a place where sellers asked a median of $1.3 million.

Company stocks often make up a big chunk of compensation for software engineers and other tech employees, which explains how they can afford such pricey houses.

“You don’t buy a $3-million home in Los Altos on a $200,000 salary,” said Michael Simonsen, founder of San Francisco-based housing data firm Altos Research. “But you can buy it with your stock wealth.”

Tech workers Karan Syal and his wife had been looking for months, eager to find something before prices moved even higher. But time after time, they were discouraged by 100 people touring an open house, or a barrage of offers that would have forced them to bid more than what they were willing to pay.

So they changed their strategy, making offers immediately after agents tease that a property will be “coming soon” to the market.

In December, they set sights on a 2,000-square-foot (186-square-meter) house in San Jose’s sought-after Cambrian school district, only to find themselves competing with another early-bird buyer. Their agent, Rabeet Noor of Intero Real Estate, sent in his final counteroffer, amping up the urgency by setting it to expire in less than one hour. The seller accepted the $1.725-million bid — $100,000 over asking — and the couple closed last month.

“We still got into a slight bidding war,” Mr. Syal said. “That’s way easier than fighting 10 wolves at the same time.”

It helped that the chipmaker where his wife works has seen its stock soar. That provided reassurance to their mortgage lender and enabled the couple to sell some shares to make the 20% down payment, he said.

The monthly mortgage bill of $8,500 is a bit of a stretch, but Mr. Syal said it’s a calculated risk. If borrowing costs fall, they’ll simply refinance out of their current 6.375% rate.

Mortgage rates that surged over the past couple years have kept inventory in the area — and across the US — tight because few homeowners are willing to sell if it means giving up their cheap loans. Move-up buyers like Mr. Syal aren’t selling at all. He said he plans to fill his previous house with a tenant instead, while hanging onto the 2.25% mortgage.

The San Jose housing market — one of the most expensive in the world — has been on a roller coaster in recent years. Prices peaked in 2022 after Covid sent buyers racing to the suburbs, but then the market cooled with the surge in rates last year. The drop in borrowing costs from October’s peak helped set off the latest buying frenzy.

The pandemic migration to less-expensive places such as Nashville and Austin has slowed, and far fewer homeowners are leaving the Bay Area now. Net outflow fell to 26,000 in the fourth quarter, down 13% from a year earlier and just half of the level of the peak in September 2021, Redfin data show.

While high costs are still driving some people away, Silicon Valley keeps minting millionaires who see value in living close to their jobs. Buyer desperation is creeping back, especially in prized locations like Cupertino or Los Gatos, where few homes are available to buy, said Ms. Wyss, the Keller Williams agent.

She’s been trying to persuade a husband and wife, both earning big tech salaries, to bid a little higher. After a year of looking, they decided to go hard on a house in San Carlos that they really wanted. The asking price for the 1,600-square-foot property with canyon views was $2.35 million. They came in at $2.6 million and Ms. Wyss was told by the seller’s agent to not even bother trying $2.7 million. It sold to somebody else.

“We’ve been writing offers, left and right,” Ms. Wyss said. “We’re always like $50,000 behind.”

The city of San Francisco has been slower to recover than Silicon Valley, in part because it was hit so hard by the pandemic, with demand especially sluggish for expensive downtown condos. Well-located houses, on the other hand, are drawing a lot of attention, even before they officially reach the market.

Alexander Lurie, an agent with Compass in San Francisco, hosted an informal open house for a $3.5 million, three-bedroom property in the Marina District, on the same weekend the San Francisco 49ers were in the NFL Conference Championships.

Fifty-five parties came to tour the property — newly refurbished with an open floor plan and expansive backyard. After seeing all that interest, the seller bumped up the price to $4.5 million.

“We saw people come out when our hometown team is vying for the Super Bowl,” Mr. Lurie said. “If that isn’t a good sign, I don’t know what is.” — Bloomberg

ACEN gets backing from Australian Embassy for expansion plans

THE Australian Embassy in the Philippines has pledged support for energy company ACEN Corp. in exploring additional opportunities in Australia following the company’s deal with the First Nations Yindjibarndi people.

“What ACEN and the Yindjibarndi group are doing is fully aligned with the strategic partnership between Australia and the Philippines,” said Australian Ambassador to the Philippines Hae Kyong Yu in a statement.

“We are happy to collaborate and work together to ensure that the partnership is mutually beneficial and sustainable,” she added.

Last year, ACEN partnered with the aboriginal group through Yindjibarndi Aboriginal Corp. to develop and operate large-scale renewable energy projects in Western Australia.

“The partnership is one of the largest indigenous-led renewable energy initiatives in Australia, with a focus on sustainable development and economic opportunities,” the embassy said.

Under the partnership, ACEN and the Yindjibarndi group will be creating Yindjibarndi Energy Corp. to develop wind, solar, and renewable energy projects on Yindjibarndi Ngurra, a 13,000-square kilometer area within the group’s exclusive native title land.

“ACEN has established a solid footprint in Australia’s renewable energy sector, contributing significantly to the country’s clean energy transition and sustainability goals,” the embassy said.

Prior to its partnership with the Yindjibarndi, ACEN had also partnered with another First Nations group — the Anaiwan people — in New South Wales after launching its New England solar project in March 2023. — Justine Irish D. Tabile

Net Foreign Direct Investments (November 2023)

NET INFLOWS of foreign direct investments (FDIs) into the Philippines in November surged to its highest level in almost two years amid an improving economic outlook. Read the full story.

 

NeNet Foreign Direct Investment (November 2023)

Value of PhilPaSS Plus transactions lower last year

THE VALUE of transactions made through the Philippine Payment and Settlement System (PhilPaSS) Plus fell by 2.3% last year amid lower transactions with Bangko Sentral ng Pilipinas (BSP) units.

Transactions hit P500.41 trillion from P512.06 trillion in 2022, according to data posted on the central bank website. The volume of PhilPaSS Plus transactions rose by 5.1% to 1.448 million from a year earlier.

PhilPaSS Plus is the lone peso real-time gross settlement (RTGS) system in the Philippines that is owned and operated by BSP.

It allows efficient and low-risk settlement of large-value fund transfers between financial institutions and facilitates the settlement of fixed-income security trades and other financial market transactions.

By settling retail payment clearing results, the PhilPaSS Plus ensures that people, businesses and the government can send and receive money through several channels such as checks, automated teller machines, InstaPay and PESONet.

Based on BSP data, transactions settled with BSP units fell by 9.3% to P372.926 trillion last year. Payments from customers, corporations and the government went up by 13.7% to P31.83 trillion from 2022.

The value of transfers between financial institutions rose by 43.2% to P20.12 trillion, while intra-account transfers increased by 12.7% to P7.45 trillion. Government collections and payments rose by 1.1% to P10.12 trillion.

Transactions made through the financial market infrastructure and clearing switch operators grew by 15.1% to P92.63 trillion. The central bank had 5,987 average daily transactions worth P2.06 trillion.

The BSP through its Payments and Settlements Department serves as the payment system operator responsible for the operation and maintenance of PhilPaSS and its critical components.

It ensures that PhilPaSS operates continuously, safely and efficiently so that time-critical payments are completed to facilitate and enhance economic processes. Smooth operations also allow it to manage risks and absorb shocks to promote financial stability, according to BSP. — Keisha B. Ta-asan

Why PHL’s strategic partnership with Japan is crucial for its emerging middle power role in the region

PHILIPPINE STAR/EDD GUMBAN

Under the direction of President Ferdinand “Bongbong” Marcos, Jr., the Philippines navigates a complex strategic environment by implementing a comprehensive vision through the National Security Policy (2023–2028), which outlines the strategies for the Philippines to achieve an “aspiring middle power” role in the region.

Emmers and Teo (2018) discuss how a middle-power approach to security involves self-identification and external states shaping that identity. This suggests that a state can exercise agency even with limited resources and influence for the Philippines.

Two concerns are addressed in this essay: How may the Philippines seek to fulfill its ambition to become a middle power in the Indo-Pacific region? Second, how can such an approach achieve self-reliance and regional stability simultaneously?

BALANCED FOREIGN POLICY
Through its security policy, the Philippines participates in US-led identity-based strategizing, recognizing that ASEAN centrality extends to the larger Indo-Pacific region.

Intended to protect sea lanes of communication, the Indo-Pacific framework highlights the formation of new geopolitical coalitions around the QUAD (made up of Australia, Japan, India, and the US) and AUKUS (Australia, the US, and the UK). Its main objective is to counter China’s revisionism, while China aims to advance an alternative normative order. This development raises concerns among many, particularly in light of China’s rejection of the Indo-Pacific framework.

Against this background, the Philippine security policy also asserts that ASEAN centrality remains a “regional norm” in the Asia-Pacific region, crucial for economic integration and managing regional stability.

This purposeful positioning of ASEAN centrality on two distinct frameworks demonstrates the Philippines’ attempt at a balanced foreign and security policy stance.

MIDDLE POWER ALIGNMENT: ‘COUNTRY OF CHOICE’
The Philippines’ approach of “integrating with allies,’” as stipulated in the security policy, creates an opportunity for the country to achieve some autonomy from the risks associated with the US alliance. This is exemplified by the evolution of the strategic cooperation between the Philippines and Japan. The reflexivity of bilateral relations is evident in its history, especially in how both sides opted to define and react to China’s rise. Because it had development assistance components, partnering with Japan also contributed to lessening the Philippines’ economic dependency on China.

Stephen Nagy (2022) argues that the process of forging partnerships with like-minded states, such as Japan (and Australia), helps strengthen the Philippines’ “ability to cooperate,” which is essential for achieving “middle power alignment” or the diplomatic outreach that middle powers undertake to respond to fast-shifting regional dynamics. Taking a non-military approach to ensure regional stability has been a distinct part of Philippine-Japan relations since the 20th century.

They have been marked by a practical and cooperative approach to enhancing maritime security and addressing the threat of China and other threats to peace in the southeast-northeast Asian region.

During the early 2000s, Japan and the Philippines pursued confidence-building initiatives centered around counterterrorism and non-nuclear proliferation. As their threat perceptions converged, Japan shifted towards a more focused approach to maritime security, including capacity building of the Philippine Coast Guard, training in counterterrorism, and search and rescue operations. With the sealing of relations towards strategic partnership in 2012, their joint efforts concentrated on law enforcement training in territorial waters, bolstering maritime domain awareness, sharing information, combating piracy, ensuring environmental protection, and addressing Humanitarian Assistance and Disaster Relief (HADR). On the side of the Philippines, this entailed decisions to socialize the defense and military establishments outside the US sphere and towards Japan’s high-level defense exchanges.

By the 21st century, practical cooperation has deepened through port visits, naval exercises, and equipment transfer to build the Philippines’ surveillance, monitoring, and interoperability capabilities, eventually creating a community of practice in maritime security. These actions sowed the groundwork for a Status of Forces Agreement (SOFA) between the Philippines and Japan or Japanese access to Philippine bases.

PHILIPPINES DEFENSE NETWORKS
Given the context of the US rivalry with China, the Philippines’ geopolitical significance has made it an attractive partner for major and middle powers. As a player for regional stability, the Philippines’ location in the South China Sea, along with the East China Sea, forms a “single littoral” on which northeast Asia’s peace is contingent.

Thus, the Philippines aims to maximize its defense networks and views the revitalized Philippines-US alliance as its most vital asset to do so (The Lowy Institute, 2023). With an elevated partnership with Japan, the Philippines can realign with other states, such as the planned US-Japan-Philippines trilateral cooperation. Combined with the modernization of the Philippine Armed Forces, these efforts contribute to building minimum credible deterrence.

CONCLUSION
As the Philippines navigates the complexities of the Indo-Pacific geopolitical landscape, its collaboration with Japan becomes pivotal in advancing its aspirations for regional significance.

By leveraging the strengths of this strategic partnership, the Philippines is well-positioned to play a more substantial role as an emerging middle power.

 

Alma Maria O. Salvador, PhD is an associate professor of political science at Ateneo de Manila University.

US office buildings remain half empty 4 years after pandemic

JASON DENT-UNSPLASH

FOUR YEARS after coronavirus disease 2019 (Covid-19) filled hospital emergency rooms, closed schools and emptied out cities, US offices remain about half vacant.

Office occupancy in 10 of the largest US metropolitan areas rose to a new high of 53% for the week ended Jan. 31, according to Kastle Systems, a firm that provides security to buildings. The firm’s barometer on how corporate return-to-office policies is going has been hovering around that level for 13 months. Yet, cities are shrugging off empty offices and its implications for the commercial real estate market because they can, for now.

“Commercial real estate is not a key driver of general fund revenues for the majority of local governments,” said Michael Rinaldi, head of US local governments at Fitch Ratings, in an e-mail. “Declines can be managed through careful expenditure management and/or stability in other revenue sources, including residential property taxes, sales tax, utility taxes, etc.”

The reluctance or in some cases refusal of workers to return to offices has shaken the real estate market, with New York Community Bancorp being cut to junk this week by Moody’s Investors Service after it said was slashing payouts and stockpiling reserves to cover troubled loans tied to commercial real estate.

To be sure, the bedrock of most municipal finance is the property tax. And any decline in a property’s assessed valuation, which are affected by vacancy rates, will translate to a decrease in taxes collected. How deep those declines are can vary and will determine the impact on each city.

The Kastle Back to Work Barometer, which measures employees swiping into offices that the firm provides services to, hit a low of 14.6% in April 2020 and first reached 50% in January of 2023. Despite companies requiring employees to return to offices, some threatening dismissal if they don’t comply, the measure has remained around that level, with dips during summer holidays and the week between Christmas and New Year’s.

For those cities with large central business districts, Mr. Rinaldi said any pressure would be “more meaningful but not insurmountable.”

“The full impact of commercial real estate valuation declines on tax revenues will likely be phased in over several years allowing time for contingency plans to take hold,” he said.

Scott Nees, director and lead analyst at S&P Global Ratings, agreed in an e-mail that any decline in the commercial real estate market would be felt only gradually, and that most cities would see “some level of ‘tax-shifting,’ where residential and other commercial properties end up shouldering a larger share of the tax burden, given that the office share of assessed value has declined relative to other properties.”

Still, he said S&P sees “a stable credit picture for most major cities, but one that is evolving and where risks are likely to continue amplifying through at least the next few years.” — Bloomberg

Figaro Coffee Group net income up 7%

LISTED food and beverage company Figaro Coffee Group, Inc. (FCG) recorded a 7% increase in its attributable net income to P194.75 million in the second quarter of its fiscal year ending June led by higher revenues.

FCG said in a regulatory filing on Monday that its revenues during the October to December period rose 42% to P1.45 billion from P1.02 billion a year ago.

In the first six months, FCG recorded a 7% increase in its attributable net income to P282.94 million from P265.11 million a year ago.

The company’s system-wide sales rose by 36% to P2.79 billion from P2.05 billion last year, while revenues increased by 36% to P2.77 billion compared to P2.04 billion a year ago.

“This was brought about by the opening of 38 stores from July 1, 2023 which brought the total number of stores to 203 by end of December 2023,” FCG said.

FCG said its gross profit also improved by 31% to P1.29 billion.

“Gross profit increased by 31% primarily due to the increase in volume from store expansion and opening, though the gross profit margin slightly reduce from 48.4% to 46.8% due to inflation for major raw materials during the start of 2023,” the company said.

Meanwhile, FCG’s operating expenses increased by 44% to P917.5 million from P635 million last year.

“Operating costs also increased by 44% as a result of the massive store opening activities during the year which resulted to increasing overhead costs,” the company said.

Figaro Coffee has one subsidiary, Figaro Coffee Systems, Inc., through which it operates various brands such as Figaro Coffee, Angel’s Pizza, Tien Ma’s, and Café Portofino.

On Monday, FCG shares dropped by one centavo or 1.41% to 70 centavos apiece. — Revin Mikhael D. Ochave

‘30 Lives’: MCAD focuses on games and videos that speak to gaming

PEOPLE VIEWING Harun Farocki’s four-part video series Parallel — BRONTË H. LACSAMANA

VIDEO games, board games, and video works engaging with the rules of games take the spotlight in “30 Lives,” a showcase of the gaming world at the Museum of Contemporary Art and Design (MCAD) Manila.

The exhibit, running until March 31, features works by Harun Farocki, Lu Yang, Heecheon Kim, Ikoy Ricio, and Miguel Inumerable, and games developed by students of the Interactive Entertainment and Multimedia Computing program of the De La Salle-College of Saint Benilde (DLS-CSB).

While it invites visitors to enjoy the games and videos on display, MCAD aims to “weave across temporalities, from card games to artists’ deployment of video games into their work, and engage in activities long derided for their apparent triviality.” Harun Farocki’s four-part video series Parallel, for example, follows and discusses the construction, visual landscape, and inherent rules of computer-animated game worlds.

“When you play a game, it’s a moment of separation from reality, allowing you to create a totally different world. There’s a capacity for critique. They’re seen as trivial but are actually a very powerful, huge part of contemporary life now,” said Maria Joselina Cruz, MCAD Director and Curator, in an interview with BusinessWorld at the exhibit’s opening reception on Feb. 2.

“Every piece challenges how we think about gaming, life, fiction, reality, and how they all skew into each other,” she said.

One fascinating representation of this is Lu Yang’s video work Wrathful King Kong Core, which centers on a fearsome Tibetan Buddhist deity.

For Ms. Cruz, this work was essential to include as it is an intersectional work — a “film that feels like a video game quantifying the different aspects of wrathful gods and breaking down the mythology using game-ified language.”

Heechon Kim’s Cutter III is also a stand-out, an installation that is neither completely game nor video. While it is viewed like a film, each playback is not guaranteed to be the same, randomized by the Unity game engine that it runs on so that scenes are arranged differently in each viewing.

“It uses the medium of gaming to tell a story. The narrative follows a character who plays a game and finds that reality and fiction start to blur,” said Ian Carlo Jaucian, MCAD’s exhibitions consultant and co-curator for “30 Lives.”

He told BusinessWorld that a major part of the work is Benilde students making their own mystery-adventure spin-off game from it, also showcased in the exhibit.

“All the assets from Cutter III were shared by Mr. Kim with the students of Benilde, and they were given the freedom to do whatever they wanted,” said Mr. Jaucian.

THE KONAMI CODE
In 2023, the global gaming market was valued at $281.77 billion and is expected to grow to $665.77 billion by 2030, according to Fortune Business Insights.

The ubiquity of this form of entertainment in people’s lives motivated MCAD to pursue putting up an exhibit dedicated to it, Ms. Cruz explained.

“It engages the human mind with algorithms and strategies,” she said. “Another impetus is the fact that there’s a gaming design course in Benilde, the first gaming design course in the Philippines, which started 15 years ago.”

This is why games made by Benilde students are displayed in the museum, providing an opportunity for more people to stop by and try them out outside of the usual final project showcase.

Mr. Jaucian added that the show’s title, “30 Lives,” harkens back to the Nintendo days in the 1980s. “It’s arguably the most famous cheat code (up, up, down, down, left, right, left, right, B, A, Start) that you enter in a console’s controller to get 30 lives. We chose that as the entry point because it speaks to a lot of the topics that we want to talk about.”

“You want to cheat in the game because you want to beat it, but is it really a cheat if it was built by the developers who made that game?” he said.

The variety of works in the exhibit explores this in different ways, from Miguel Inumerable’s code-based video games to Ikoy Ricio’s ironic board games and card games.

For Mr. Inumerable, the algorithmic rules he programs into his work employ randomness with no goal, while Mr. Ricio plays with the irony of luck in collecting trump cards of nasty car wrecks or diseases on a board to effectively win by dying.

“They’re all interconnected. Video games involve rules within a certain world that you adjudicate to a computer, whereas with board games you are the judge and player at the same time,” Mr. Jaucian explained. 

He added that while it’s good to see current trends and practices within the gaming industry and community, it is MCAD’s hope that more people — beyond those with relations to games — will also find the showcase interesting.

The Gamers Union for Innovation and Leadership Development (GUILD) is even hosting a Virtual Reality (VR) games day at MCAD on Feb. 13, adding more original works by Interactive Entertainment and Multimedia Computing students of Benilde. These involve head gear which simulate three-dimensional reality through stereoscopic displays.

The game day on Feb. 13 is free and open to the public, with slots for 10 a.m., 11:30 a.m., 1 p.m., 2:30 p.m., and 4 p.m. The “30 Lives” exhibit runs until March 31 at MCAD, located in the Benilde Design + Arts Campus along Dominga St. in Malate, Manila. — Brontë H. Lacsamana

How PSEi member stocks performed — February 12, 2024

Here’s a quick glance at how PSEi stocks fared on Monday, February 12, 2024.

Experts, officials clash over economic ‘Cha-cha’

PCOO

By John Victor D. Ordoñez, Reporter

WHILE legal and business experts told the Senate on Monday that the government must first fulfill its poverty reduction goals and streamline bureaucratic bottlenecks that deter the entry of foreign investors, the finance department maintained its openness to easing economic restrictions in the 1987 Constitution.

“The question right now is timing and removing all those restrictions, today is not the right time to amend, 21% of Filipinos are still living in poverty,” Bernardo M. Villegas, economist and one of the framers of the 1987 Constitution, told the Senate hearing on Resolution of Both Houses (RBH) No. 6, which seeks to ease Charter-based restrictions on foreign investments.

Earlier, President Ferdinand R. Marcos, Jr. asked the Senate to review economic provisions of the Constitution amid calls for a people’s initiative to push for Charter change (Cha-cha). His administration is aiming to reduce poverty incidence to 9.0% by 2028.

“Right now, we should have a single-minded focus on the scandal that 21 percent of our population is living in demonizing poverty,” Mr. Villegas told the Senate.

Based on the latest Philippine Statistics Authority (PSA) report, the poverty rate for the first half of 2023 decreased to 22.4% from 23.7% in the same period in 2021, bringing the estimated number of Filipinos whose income was not enough to buy basic food needs to 9.795 million. In 2021, the figure was 10.945 million and 9.031 million in 2019.

BDO Capital and Investment Corp. President Eduardo V. Francisco told the same hearing that foreign investors have mainly been complaining about the slow bureaucracy and red tape when approving foreign-funded projects.

Citing his experience with foreign investors, Mr. Francisco said it takes about 167 signatures to approve a foreign investment renewable energy project, adding that it used to take 250 signatures to get projects up and running.

Former chief justice Hilario G. Davide, Jr. earlier told senators that Congress should focus on cutting red tape and corruption instead of easing foreign restrictions under the 1987 Constitution.

For its part, the Department of Finance (DoF) reiterated that it is open to easing economic restrictions in the 1987 Constitution same as the President’s stance.

“Allow me to make it clear. This administration’s position in introducing reforms to the Constitution extends to economic matters alone, for those strategically aimed at boosting our economy. Nothing more,” Mr. Marcos said last week.

“We are echoing the position of the President to consider the economic provisions of the Constitution so that certain sectors of the economy are opened up,” Finance Undersecretary Bayani H. Agabin told the senators on Monday.

The Joint Foreign Chambers of Commerce in the Philippines (JFC) also reiterated its stance of supporting easing foreign economic provisions in the current Charter at the same hearing.

“It (JFC) supports and promotes open international trade, free investment and improved conditions of business that’s what we advocate,” Canadian Chamber of Commerce of the Philippines President Julian H. Payne, speaking for the JFC, said. “The Joint Chambers of Commerce supports the easing of restrictions on foreign direct investment (FDI) wherever this is possible.”

He added that removing these restrictions would boost FDI in sectors where foreigners have limited ownership.

The Senate is in the middle of deliberating on the RBH 6, which is seeking to ease foreign ownership restrictions in education, public utilities and advertising.

DEBATE ON PUBLIC UTILITIES
Mr. Payne said that using legislation or executive action instead of restrictions in the Constitution would allow for more timely adjustments with international business conditions, citing recent amendments to the Public Service Act.

Congress earlier passed changes to the 85-year-old law to allow full foreign ownership in domestic shipping, telecommunications, shipping, railways and subways, airlines, expressways and tollways, and airports.

Senator Mary Grace Poe-Llamanzares, who sponsored the Senate bill amending the Public Service Act, said opening up public utilities to foreign ownership could “open a can of worms” might threaten national interests.

“This is not just a discussion about the entry of foreign capital and businesses,” she said at the hearing in mixed English and Filipino. “Other countries would be able to country our water, electricity, seaports, gasoline and our public utility jeeps. Are we ready for this?”

“The Philippines today has one of the most liberal foreign investment laws in ASEAN (Association of Southeast Asian Nations) as well as in Asia,” former Supreme Court Associate Justice  Antonio T.  Carpio told senators on Monday.

“The Philippines without amending the Constitution has passed several laws to open the economy to 100-percent foreign ownership.”

HOUSE LEVELS WITH PRESIDENT ON ‘CHA-CHA’ FOR INVESTMENTS
Meanwhile, the House of Representatives will follow the President’s push for economic amendments to the 1987 Constitution to allow more foreign investors into the country.

“The House will follow the President,” Albay Rep. Jose Ma. Clemente S. Salceda said in a news briefing.

“Effectively, the instruction of the President is [to] let the Senate do its work on RBH (Resolution of Both Houses) 6,” Mr. Salceda said.

“In effect, I think we’re shelving PI (people’s initiative)…because that is the instruction of the President,” Mr. Salceda said, in hopes to brush off the politicizing of Charter change.

Mr. Salceda said that opening the economy to foreign direct investments would help achieve the Marcos administration’s goal of achieving upper middle-income status by 2025.

He said that upper middle-income status begins at $4,256 gross national income (GNI) per capita. The Philippines’ GNI per capita is around $3,950, Mr. Salceda noted, and is expected to grow at $4,466 by next year.

“So, we need to grow our GNI per capita by a combined 13% between 2024 and 2025 to make it, or around 6% per year in 2023 and 2024,” Mr. Salceda said in a separate statement.

Marikina Rep. Stella Luz A. Quimbo said that amending economic provisions of the Charter must go hand-in-hand with addressing issues in the country’s bureaucracy.

“Charter change (“Cha-cha”) is not a panacea for all our country’s economic ills. There must also be remedy for corruption, red tape, and expensive electricity,” Ms. Quimbo told the briefing in a mix of English and Filipino.

She cited Australian telecommunications company Telstra, which backed up last minute from entering the Philippine market in 2017 due to “so much unpredictability in the regulatory environment.”

Ms. Quimbo said pushing for economic Charter change is the “clearest signal to our foreign investors that… the Philippines is sure with what it wants to do, which is to open up to the economy.”

“Economic Cha-cha, which merely is for the reduction of inflexibilities rather than prescribing its parameters, is not about opening the floodgates to undermine local stakeholders but about laying the groundwork for intelligent and sustainable foreign investment that complements our local industries,” Ms. Quimbo added.

RBH 2 OVER RBH 6
Senators have begun deliberations on RBH 6, which seek to open the Philippines to foreign investments in public utilities, education, and advertising through constitutional change.

However, Mr. Salceda renewed his push for the House’s RBH 2, which extends foreign investments in agriculture, education, land lease and ownership, conveyance, media and advertising via “Cha-cha.”

“The House-proposed RBH 2 touches on a much bigger share of the economy, so naturally, it has a significantly greater growth potential,” he said.

The House’s resolution would unlock 16.53% in economic output, higher than 3.51% gross domestic product (GDP) share in the Senate’s RBH 6.

Congressmen are willing to engage in debates with its counterparts in the Senate regarding constitutional change, they said.

“I wish that the Senate would engage in a healthy debate about the economic provisions,” House Deputy Speaker and Quezon Rep. David C. Suarez told the briefing. — with a report from Beatriz Marie D. Cruz

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