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Debt service bill hits P1.6T in 2023

US one-hundred-dollar notes are seen in this picture illustration taken in Seoul Feb. 7, 2011. — REUTERS

THE NATIONAL Government’s (NG) debt service bill jumped to P1.604 trillion in 2023, exceeding its program for the year by 3%, the Bureau of the Treasury (BTr) reported.

Data from the BTr showed that the NG’s debt repayments rose by 24% from the P1.293 trillion recorded in 2022.

It also exceeded the P1.552-trillion program for debt payments last year by 3%.

Interest payments increased by 25% year on year to P628.33 billion from P502.86 billion in 2022. Treasury data showed interest payments exceeded the P610.665-billion program for the full year by 2.9%.

Interest paid on domestic debt rose by 13.64% to P435.75 billion last year. This included P263.177 billion in interest payments for fixed-rate Treasury bonds, P149.738 billion for retail Treasury bonds and P17.166 billion for Treasury bills.

Meanwhile, principal payments went up by 23.40% to P975.278 billion in 2023 from P790.323 billion a year earlier. Amortization payments exceeded the P941.353-billion program for 2023 by 3.66%.

Principal payments on foreign debt in 2023 declined by 7.19% year on year to P121.113 billion, while amortization on domestic debt rose by 29.45% to P854.165 billion.

In December alone, the government’s debt repayments rose by 21.51% to P68.866 billion from P56.674 billion in November.

Month on month, interest payments also rose by 24.99% to P60.678 billion from P48.548 billion in November.

Interest paid on domestic debt jumped to P43.552 billion, 23.53% higher than P35.257 billion from the previous month.

Broken down, interest payments on fixed-rate Treasury bonds stood at P14.487 billion, retail Treasury bonds at P25.62 billion, and Treasury bills at P1.891 billion.

For the month of December, amortization payments inched up by 0.76% to P8.188 billion from P8.126 billion in November.

Principal payments on foreign debt in December were flat at P8.062 billion, or 0.4% higher than the previous month’s P8.03 billion. Amortization on domestic debt increased by 31.25% to P126 million compared with P96 million in November.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said higher interest rates globally resulted in an increase in interest expenses and debt service costs.

“Weaker peso exchange rate vs. the US (United States) dollar since 2023 increased the peso equivalent of foreign/external debt, on top of the sharp increase in global and local interest rates since then,” he said in a Facebook Messenger chat.

John Paolo R. Rivera, president and chief economist at Oikonomia Advisory & Research, Inc., said the higher debt payments were driven by exchange rate risk.

“The (peso) settled at a depreciated value and is not appreciating significantly to reduce the value of debt. This is a challenge for fiscal consolidation as we are paying more than what we should be,” Mr. Rivera said in a Viber message.

Mr. Ricafort said easing inflation towards the central bank’s target would push the US Federal Reserve to cut rates later this year.

“That could be matched locally and help ease debt servicing costs of the National Government amid relatively stable peso exchange rate,” he added.

The Fed raised its policy rate by 525 bps to 5.25-5.5% from March 2022 to July 2023. The US central bank said they want convincing evidence that inflation would sustain its decline before they consider rate cuts.

Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. last week said it’s too early to declare victory over inflation, which he said is threatened by rice prices and higher-than-expected minimum wages.

Philippine inflation quickened to 3.4% in February, mainly due to rising food prices including rice. — Beatriz Marie D. Cruz

Lessen import dependence, unnecessary spending to curb inflation — analysts

Inflation accelerated to 3.4% in February due to rising food, oil and transport prices. — PHILIPPINE STAR/EDD GUMBAN

By Beatriz Marie D. Cruz, Reporter

THE GOVERNMENT of President Ferdinand R. Marcos, Jr. should cut unnecessary spending and boost law enforcement against anomalous activities in the agriculture sector to cool inflation, analysts said at the weekend.

“The uptrend in inflation indicates that the problem originates domestically,” Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said in a Facebook Messenger chat. “Poor agricultural production especially because of El Niño is expected to further elevate overall prices.”

“The only thing the government can do now is to put its house in order by reducing unnecessary expenditures and formulate a strong industrial policy that can induce a structural transformation and raise productivity,” he added.

Inflation accelerated to 3.4% in February from 2.8% in January due to rising food, oil and transport prices. However, it is cooler than the 8.6% print a year ago.

Rice inflation quickened to 23.7% in February from 22.6% in January and 2.2% year on year. It also marked the fastest print for rice inflation since the 24.6% recorded in February 2009.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said law enforcement agencies must bolster its regulatory powers to manage prices.

“Effective monitoring and enforcement on price management/regulatory mandat… would be their major contribution that inflation is duly managed, especially in the enforcement of laws and regulations on prices to prevent undue overpricing/profiteering,” he said in a separate Messenger chat.

Last month, the Department of Agriculture began its investigation on claims that officials from the National Food Authority sold thousands of tons of rice to certain traders at low costs.

Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said he now expects headline inflation to average 4.2% this year, before easing to 3.8% in 2025.

“We now expect headline inflation to surge past 4% year on year starting in March with hefty contribution from rice consumer price index and latent drought effects on the prices of the other crops. We penciled in a high of 5% year on year for inflation in May (2024) before the deceleration begins in June,” he said in a Viber message.

Mr. Asuncion said core inflation would remain at the upper half of the BSP’s 2-4% inflation target and would be less vulnerable to food price shocks.

Core inflation, which excludes volatile prices of food and fuel, quickened by 3.6% in February year on year. The print was slower than 3.8% in the previous month and 7.8% a year ago.

PAUSE TO CONTINUE
Meanwhile, analysts predict that the Monetary Board will keep key interest rates unchanged in the coming months.

“Since the government has strongly insisted that its decision on the matter will be data-driven, it is obvious that the latest inflation data won’t sway monetary policy makers to veer away from the current path of elevated interest rates,” University of Asia and the Pacific Senior Economist Cid L. Terosa said in an e-mail.

Last week, Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. said the central bank has yet to determine the timing of rate cuts as it is still “too soon to declare victory” over inflation.

At its February meeting, the central bank kept its target reverse repurchase rate steady at a near 17-year high of 6.5% for a third straight meeting. The BSP has raised borrowing costs by 450 basis points from May 2022 to October 2023 to tame inflation.

Security Bank Corp. Chief Economist Robert Dan J. Roces said the BSP will likely keep a “cautious monetary policy stance” despite the uptick in inflation.

“The BSP remains unlikely to resort to significant policy adjustments unless upside risks, particularly persistent food price increases, materialize and threaten the inflation target,” Mr. Roces said via Viber.

Philippines’ big banks saw slower asset growth in fourth quarter

Peoples walk past automated teller machines in Makati City, June 23, 2016. — REUTERS

THE PHILIPPINES’ big banks saw slower growth in total assets in the fourth quarter of 2023, while loans grew the fastest in three quarters despite high interest rates.

The latest edition of BusinessWorld’s quarterly banking report showed the combined assets of 43 universal and commercial banks rose by 7.6% year on year to P24.21 trillion in the October-to-December period from P22.51 trillion a year earlier.

Asset growth eased from the 8.78% seen in the third quarter of 2023, and the slowest in seven quarters or since 7.37% in the first quarter of 2022.

Big banks’ asset growth eases, loan growth rises in Q4

Meanwhile, total loans jumped by 10.22% to P12.28 trillion in the fourth quarter from P11.14 trillion in the same quarter in 2022. It was also faster than the 7.01% growth in the third quarter.

The loan growth during the fourth quarter was the fastest in three quarters or since 10.84% increase in the first quarter of 2023.

Banks saw an increase in loans despite the high interest rate environment.

The Bangko Sentral ng Pilipinas (BSP) raised benchmark interest rates by a cumulative 450 basis points between May 2022 and October 2023 to tame soaring inflation. The central bank has kept the key rate at a near 17-year high of 6.5% since then.

On an annual basis, the banks’ median return on equity (RoE) jumped to 9.29% from 6.36% in the same period a year ago. It was slightly higher than the 9.28% in the third quarter.

RoE, an index of profitability, is the ratio of net profit to average capital and it measures the amount shareholders earn from their investments in a company.

Meanwhile, the share of bad loans to the total loan portfolio, also known as the nonperforming loan  ratio, inched up to 3.39% from 3.28% a quarter ago. This was also higher than 3.17% in 2022.

Loans are classified as nonperforming if there is principal or interest left unpaid for more than 90 days beyond the due date.

The median capital adequacy ratio — the ability to absorb losses from risk-weighted assets — rose to 20.17% from 17.97% a year ago. This was lower than the 21.54% in the previous quarter.

The ratio remained above the 10% regulatory minimum set by the BSP as well as the international minimum standard of 8% set under the Basel III framework.

The leverage ratio, which gauges the institution’s ability to absorb shocks by measuring the bank’s capital relative to total exposure, reached a median of 10.91% in the fourth quarter, higher than 10.86% in the third quarter. This exceeded the central bank’s 5% guideline as well as the international standard of 3%.

The net interest margin (NIM) of banks also inched up to 3.86% in the fourth quarter from 3.71% in the previous quarter. NIM is an indicator of banks’ investing efficiency by dividing annualized net interest income by average earning assets.

Meanwhile, return of assets (RoA), which measures the profit generated per peso of an asset, slipped to 1.46% from 1.51% in the third quarter.

The leverage ratio, NIM, and RoA were new inclusions in the banks’ fourth-quarter financial reports following BSP’s amended guidelines on publishing balance sheets for lenders.

Sy-led BDO Unibank, Inc. (BDO) remained the biggest bank based on total assets with P4.4 trillion, followed by Metropolitan Bank & Trust Co. (Metrobank) with P3.38 trillion and Land Bank of The Philippines (LANDBANK) with P3.29 trillion.

By loans issued, the top three were BDO with P2.85 trillion, followed by Bank of the Philippine Islands with P1.93 trillion and Metrobank with P1.55 trillion.

BDO also had the highest total deposits with P3.56 trillion. Trailing behind were LANDBANK and Metrobank with P2.9 trillion and P2.38 trillion, respectively.

Among banks with at least P100 billion in assets, Maybank Philippines, Inc. (Maybank) had the fastest year-on-year increase of 26.69%. Closely trailing were MUFG Bank, Ltd. with 23.99% growth and China Banking Corp. with 18.24%.

Philippine Trust Co. recorded the fastest annual loan growth at 36.78% in the last quarter of 2023, followed by Maybank with 26.24% and the Philippine Bank of Communications with 23.06%.

BusinessWorld Research has been tracking the financial performance of the country’s biggest banks every quarter since the late 1980s using the bank’s published statement of conditions. — Andrea C. Abestano

Red Sea crisis could fan Asia’s inflation anew, delay rate cuts

A cargo ship is seen off the coast of Djibouti. — LUKE DRAY/GETTY IMAGES VIA BLOOMBERG

ASIA could see slower economic growth and a resurgence of inflation as escalating violence in the Red Sea snarls shipping between the region and their trade partners in the US and Europe, according to the Economist Intelligence Unit (EIU).

The supply chain disruptions could cut as much as 0.5 percentage point (ppt) off Asia’s economic growth this year and add up to 0.4 ppt to the inflation rate, the EIU said in a report.

“Given that Asian exports were already hit last year by weak Western demand, the recent attacks will weigh further on various export-dependent economies, particularly in Southeast Asia, where container trade has nearly collapsed,” the report read, citing Indonesia, Thailand and Malaysia as among those most vulnerable.

Most of the region will likewise be hit indirectly through the spike in shipping costs, especially those that rely on food imports such as the Pacific Island countries, New Zealand, India and Pakistan.

“Higher inflation could leave central banks in countries such as the Philippines, Australia and India in a more difficult situation in terms of finding an opportunity to begin monetary easing,” the EIU said.

Protracted shipping disruptions could also push manufacturers to seek options closer to their end-user markets, rather than tapping the “stretched” supply chains in Asia, it said.

Based on EIU estimates, shipments from northwest Europe now take 56 days to reach Malaysia and Singapore from 32 days before the Houthi attacks began in November. For China, Hong Kong and Taiwan, it lengthened to 55 days from 42 days. — Bloomberg

ProCredit secures US$4.1 million in pre-seed funding to propel tech-enabled SME lending

ProCredit Team (from left to right): Ged Cotoco, Ana Dipasupil, Adnan Agha, Dwaipayan Mitra, and Kim Ordas

ProCredit, a Philippines-based small and medium enterprise (SME) lender, closed a US$4.1-million pre-seed round, led by Integra Partners, with participation from the Menardo Jimenez Family Office, M Venture Partners (MVP), Cento Ventures, Gobi Partners (Gobi-Core Philippine Fund), and several local angel investors.

ProCredit is a tech-enabled SME lender started by a founding team with over 50 years of combined emerging markets and SME-lending experience, having held senior lending roles at Citigroup, Standard Chartered, ANZ, and the Asian Development Bank. Leveraging this deep domain expertise, ProCredit aims to become one of the largest SME lenders in the Philippines, employing credit-first client engagements, a rules-based underwriting and portfolio management architecture, and flexible product offerings incorporating risk-based pricing, all powered by a proprietary technology back-end to significantly reduce operating costs and expenses, while drastically improving customer experience.

ProCredit will expand its loan book through organic and inorganic growth, and raise additional capital. The fintech startup is also considering expansion into the banking sector, given the founders’ extensive experience managing lending operations in regulated banks across Asia, Africa, and the United States. This would allow ProCredit to offer a fuller suite of lending solutions to its mid-market SME customers.

“We are thrilled to add ProCredit to our portfolio. We rarely see such an experienced and thoughtful founding team positioned against such a large, underserved market opportunity. ProCredit will play a significant role in providing improved access to credit to the economy’s most important sector,” said Chris Kaptein, managing partner at Integra Partners.

“We are confident that our investment in ProCredit will further Integra’s mission of investing where profits and purpose converge for a win-win for all parties,” Mr. Kaptein added.

The Menardo Jimenez Family office also participated in the round. The family office invests across different sectors of the Philippines’ economy, focusing on real estate, financial services, and agriculture.

“We are very familiar with the lending gap in the SME segment. While others are focused on consumer lending and deposit acquisition, we think ProCredit is well placed to become the financial services partner of choice to the SME segment,” Joel Jimenez of the Menardo Jimenez Family Office added.

Mayank Parekh, founding partner at M Venture Partners (MVP) shared: “Eight in 10 formal loans are channeled to large corporations in the Philippines, leaving 15 million SMEs and workers with little access to traditional finance. MVP is proud to support Adnan and the ProCredit Team in their mission to unlock financing for underserved SMEs. We were impressed with the quality of the team, focused business model, and proprietary underwriting technology to drive financial inclusion.”

The company is keen to speak to debt and equity investors, Philippine market participants, borrowers, and potential partners. ProCredit’s solutions for SMEs can be further explored by visiting http://procredit.ph.

FEU project drives economic empowerment for Batangas women

FEU Head Chemist Jim Cruz teaching women of Quilitisan how to make Amparo soap.

Far Eastern University (FEU) is an active partner of the women of Brgy. Quilitisan, Calatagan, Batangas in the production of Amparo, a handmade soap showcasing beneficial cleansing action and local tropical scents.

Amparo is part of Project Calatagan, a capacity-building program implemented by the FEU Community Extension Services (CES) to drive economic and agricultural sustainability, natural resources management, eco-tourism, and various health-related, socio-political, and psycho-educational development programs.

The university’s CES endorses four variants of Amparo, namely Local Fusion, Earthy Floral, Summer Fresh, and Morning Fresh.

“The women of the community will be provided with a wage rate for every piece of Amparo soap produced,” said CES Director Dr. Luzelle Anne Ormita. “Since most of these partners are homemakers, this is an opportunity for them to have an alternative source of income without having to leave their homes. We hope that this will be a step for them toward economic empowerment.”

Taking a research-based approach is a key component to FEU’s community extension projects. Rather than one-shot volunteer activities, the university focuses on creating long-term, sustainable impact that is anchored on the United Nations Sustainable Development Goals (SDGs).

With Amparo, FEU aims to provide decent work and economic growth to the Brgy. Quilitisan community in adherence to the United Nations SDG 8. Other projects for the community are the organization of the Quilitisan Cooperative and the mushroom cultivation in the area (SDG 2 and 15), all of which pave the path toward building sustainable cities and communities (SDG 11).

Spearheaded by Jacqueline Marjorie Pereda, CES leader of Project Calatagan, the production of Amparo involved a holistic approach that included various training sessions, ongoing quality control measures, and a commitment to continuous process improvement.

The product name Amparo was given by Graciel Lintag of the Academic Affairs Office with respect to the first name of the spouse of FEU founder Nicanor Reyes, Sr.

The actual production began in November 2023. Head chemist Jim Cruz formulated the soap in the FEU laboratory through a series of trials and consecutive consultations with various university departments.

The Spanish word amparo also means “refuge” or “shelter,” which is what the partnership project wishes to offer to the women of Calatagan.

“Our community partners were given hands-on workshops on safety and proper handling of chemicals as part of their training process,” said Ms. Pereda. “Their active participation gained them valuable skills that translate into income-generating opportunities, leaving a spirit of confidence and self-reliance.”

According to Precious Gonzales, one of the soap makers from Barangay Quilitisan, the program has been a great help to them. Aside from the financial gain, she was able to expand her knowledge. Like her, the women became more interested to learn not just about soap making, but also the other livelihood activities that they do together.

Aside from Project Calatagan, FEU also maintains other community extension projects such as Project HOPE (Harnessing Offenders’ Personal Empowerment), which aims for holistic services for women deprived of liberty; Project Mangyan, which aims to improve the living conditions of the indigenous peoples in Occidental Mindoro; and Project SAM, a collaboration with San Agustin Museum to preserve Filipino cultural heritage.

Metro Pacific Tollways finalizing IPO plans 

THE METRO PACIFIC Tollways Corp. (MPTC) said it is currently finalizing its plans for an initial public offering (IPO) as it prepares to bid for a major project in Indonesia.

“It is too early because we are still in the process of valuation between us and San Miguel (San Miguel Corp.) and whether they will accept to include Indonesia, so things will change definitely in the next few months,” Rogelio L. Singson, president and chief executive officer of MPTC, said on the sidelines of a briefing last week.

The company has reaffirmed its target to be listed by 2025 as it is still awaiting certain approvals from its Indonesian operations.

“Our Indonesian [project] is also moving because we just bidded for a huge project there, so things will definitely change and maybe in the next few weeks there will be developments there. If that happens, we will have bigger operations in Indonesia than here in terms of daily traffic,” he said. 

The company bid for a 676-kilometer major concession agreement project in Indonesia, Mr. Singson said.

Last year, MPTC said it needed to raise about $600 million to secure its bid to invest in the Indonesian toll road operator PT Jasa Marga Tbk’s Transjawa Tol.

MPTC has said that the company, along with Singapore’s GIC, is jointly bidding to acquire a portion of the Trans-Java toll road in Indonesia, which operates toll road networks covering a distance of 676 kilometers.

For the year, the company has set a capital expenditure of P28 billion to fund its projects, Mr. Singson said.

Last year, MPTC decided to defer its IPO to 2025, citing the company’s intention to weigh its options in line with a plan to form a joint venture company with San Miguel Corp. (SMC).

“I think so, conservatively because we’re going through evaluation and you can imagine the approval process, “ he said when asked if MPTC’s IPO plans will push through in 2025.

“It is not going to be easy, that is why we are saying the easier thing to do since we are already talking is why don’t we look at specific projects?,” Mr. Singson added. 

The company is in talks with SMC for the possibility of merging some projects as it would be easier and faster to implement, he noted.

MPTC is the tollways unit of MPIC, one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

ACEN, US firm to develop 1 GW of renewables in Philippines

ACEN CORP. and United States-based renewable energy company BrightNight will jointly develop one gigawatt (GW) of renewables in the Philippines worth $1.2 billion over the next five years, the Ayala-led company said on Sunday.

“Our collaboration with BrightNight reflects our shared ambition to develop superior, hybrid renewable energy solutions,” Patrice Clausse, chief investment officer of ACEN, said in a statement.

“The success of our joint projects in India, which are already winning customers and building capacity, serves as a solid foundation for our venture in the Philippines,” he added.

ACEN, through its wholly owned subsidiary Paivatar Energy Corp., has signed a shareholders’ and investment agreement with BrightNight APAC B.V., the company told the local bourse on Friday.

BrightNight APAC is owned by BrightNight LLC, which is structured to offer utility and commercial and industrial customers with “clean, dispatchable renewable power solutions.”

The deal will mark the second GW-scale renewable energy platform partnership between ACEN and BrightNight, following their collaboration on the development of hybrid renewable energy projects in India with a total capacity of over 1.2 GW.

“ACEN’s leadership in the Philippines’ renewables sector is unparalleled, and we are honored they have chosen to form a partnership with us to develop our portfolio of next generation renewable solutions in their home market,” BrightNight Chief Executive Officer Martin Hermann said.

“They have demonstrated success in scaling and operating large fleets of renewable assets through strategic partnerships across the region, and our existing India partnership is already delivering tremendous value. This is another successful step in our expanding relationship,” he added.

To date, ACEN has approximately 4,700 megawatts of attributable capacity spanning the Philippines, Vietnam, Indonesia, India, and Australia. — Sheldeen Joy Talavera

Philippine T-bills, T-bonds may track US job data

THE RATES of Treasury bills (T-bills) and (T-bonds) would move this week depending on the results of US nonfarm payroll data, traders said at the weekend.

A trader said in an e-mail the rate for the 10-year bond could range from 6.25% to 6.3% as US job creation for February was expected to slow.

The Bureau of the Treasury (BTr) will auction off P15 billion in T-bills on Monday, or P5 billion each in 90-, 182- and 364-day debt.

On Tuesday, it will sell P30 billion of reissued 10-year T-bonds with a remaining life of nine years and 10 months.

US job growth quickened in February, but higher unemployment and moderate wage gains kept on the table an anticipated interest rate cut in June by the US Federal Reserve.

US nonfarm payrolls increased by 275,000 jobs last month, the Labor department said on Friday. Data for January was revised down to show 229,000 jobs created instead of 353,000. Economists polled by Reuters had forecast 200,000 jobs would be added.

Philippine T-bill and T-bond rates could match the mixed movements on the secondary market after inflation picked up in February, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

On the secondary market on Friday, the rates of the 91- and 182-day T-bills rose by 3.6 basis points (bps) and 1.71 bps week on week to 5.7652% and 5.9746%, based on PHP Bloomberg Valuation Service Reference Rates data published on the Philippine Dealing System website. The 364-day T-bill fell by 0.39 bp to 6.1049%.

The 10-year bond gained 0.93 bp to 6.2528%.

Inflation quickened to 3.4% last month from 2.8% in January and 8.6% a year ago.

This was the first time that inflation picked up month on month since September. For the first two months, it averaged 3.1%, within the BSP’s 2-4% annual target.

Last week, the BTr raised P15 billion from its sale of T-bills as total bids reached P36.888 billion, more than twice the amount on the auction block.

The Treasury raised P5 billion from 91-day T-bills as tenders reached P9.428 billion. The average rate for the three-month paper rose by 6.8 bps to 5.778% from the previous week. Accepted rates ranged from 5.75% to 5.799%.

The government likewise fully awarded P5 billion of 182-day securities as bids reached P13.31 billion. The average rate for the six-month T-bill stood at 5.995%, up by 2.4 bps, with accepted rates at 5.989% to 6%.

The BTr also borrowed P5 billion via 364-day debt as demand totaled P14.16 billion. The average rate of the one-year T-bill rose by 1.5 bps to 6.1%. Accepted yields were 6.089% to 6.125%.

The reissued T-bonds to be offered on Tuesday were first offered on Jan. 23, when the government raised P35 billion, higher than the P30-billion program after the BTr opened its tap facility to take advantage of strong demand. The bonds fetched a coupon rate of 6.25% and an average rate of 6.218%.

The BTr is looking at raising P180 billion from the domestic market this month — P60 billion from T-bills and P120 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 5.1% of economic output this year. — Aaron Michael C. Sy

Paris Fashion Week: LV’s shimmer, Chanel’s tailored suits, and McCartney’s recycled wool

STELLA MCCARTNEY

PARIS — Louis Vuitton (LV) womenswear designer Nicolas Ghesquiere celebrated his 10th anniversary at the LVMH-owned label with a fashion show that drew crowds to the Louvre Museum at nightfall last Tuesday, the last day of Paris Fashion Week. (Watch the show here: Women’s Fall-Winter 2024 Show | https://tinyurl.com/2974c4jh )

Guests crossed the famous museum’s sprawling Cour Carree — some pausing for photos in booths decorated with LV logos — to reach the venue, a tent that filled an inner courtyard.

It resembled a 19th century French covered market in iron and glass — but with a hulking, futuristic globe with blinking tubes in the center.

“This is a meaningful evening,” the designer wrote in the show notes, a letter to the audience tucked in an envelope left on each seat, recalling the joy of his first show for the label. “Ten years later, this evening is a new dawn.”

An atmospheric soundtrack with scratchy noises and buzzing neon sounds culminated in Mirwais’ “Disco Science.”

Models marched down the runway briskly, in rhythm with the music, showcasing voluminous mini-skirts, shimmery dresses, jewel-encrusted jackets and sheer, light-weight trousers.

Some wore furry mittens, others had knit hats with a flat fold that bounced down the runway, while handbags came in various shapes and sizes.

CHANEL
Chanel designer Virginie Viard sent models down a boardwalk runway evoking the French seaside resort town Deauville, parading tailored suits in tweed, long overcoats and broad sun hats. (Watch the show here: Fall-Winter 2024/25 Ready-to-Wear Show | https://tinyurl.com/28tgpwqx )

The show kicked off with a short film starring Penelope Cruz and Brad Pitt — a nod to Claude Lelouch’s 1966 romantic drama A Man and a Woman. The pair stroll along an empty beach, order steaks and red wine in a restaurant — the scenes featuring shots of a prominently placed Chanel handbag — and the vignette closes with Ms. Cruz’s character calling to the waitress, played by model Rianne Van Rompaey: “Excuse me — sorry, do you have any rooms available?”

The audience burst into applause, and the first model marched out in a mini-skirt, thigh-high boots and long overcoat, her face framed by a wide hat, her handbag swinging.

A series of tweed ensembles followed, with wide-legged trousers and split skirts, as well as handbags of all shapes and sizes.

Adding a contemporary flair, the designer included a short puffer jacket, shearling coats and a shiny black leather jumpsuit in the lineup.

STELLA MCCARTNEY
Stella McCartney drew her audience to a giant greenhouse in a Paris park for her winter runway presentation, where she showed a collection made from recycled wool, nylon, cotton and polyester under bright sunlight. (Watch the show here: Stella McCartney Winter 2024 Runway Show | https://tinyurl.com/2b29u2pp)

Images of melting icebergs flashed on screens as Olivia Colman’s voice rang out on the soundtrack, meant to represent Mother Earth, asking “what will be left of me, after you?”

Models strode onto the runway parading loosely tailored suits with prominent shoulders and low-cut trousers, silky dresses cut asymmetrically, leather-like trench coats made from apple-based material, and hulking cape-like coats made with patchworks of wool.

After the show, Ms. McCartney paused for photos with a stream of guests, including her father Paul McCartney and Ringo Starr, model Paris Jackson, and actress Charlotte Rampling, before huddling with journalists.

Questions focused on the environment, and Ms. McCartney said she preferred positivity to anger when it came to messaging. “It is one of the most harmful industries on the planet and we’re acting like it isn’t,” she said of the fashion industry, noting the idea was to relay a “polite reminder” and offer some solutions.

LVMH group managing director Antonio Belloni described Ms. McCartney’s role in the luxury group as a sort of “muse” for the group on environmental topics, citing her long experience.

Ms. McCartney founded her label in 2001 with a pledge not to use leather or fur, and joined LVMH in 2019.

BALENCIAGA
Balenciaga designer Demna showed a lineup of new styles constructed from repurposed garments for his winter show in Paris, which he sent down a screen-lined runway to an audience that included Kim Kardashian and Serena Williams. (Watch the show here: Winter 24 | https://tinyurl.com/24qaznym)

Models paraded clothing that was pressed together into new shapes, including tops made from jeans, the legs wrapped around the neck, gowns pieced together from an assortment of lingerie and T-shirts layered with tank tops.

The front panel of a dress was a flattened backpack, while a pair of button-up shirts were affixed together with clear tape — one on the front, the other on the back.

“I wanted this show to represent a link between the past and the future of Balenciaga as a house based on creative value,” said Demna in a voice message, delivered to guests via a QR code.

The designer said it reflected an aesthetic he has been developing over the past decade, and that silhouettes were directly inspired by the fashion house’s founder Cristobal Balenciaga.

The Kering-owned label, which sells a large version of its Rodeo handbag for 4,200 euros and visor-like “24/7 Mask” sunglasses for 2,500 euros, is ramping up advertising investments this year after pulling back following a controversy linked to an ad campaign over a year ago that affected sales in the United States, Europe, and the Middle East.

Rising living costs have also prompted a pull-back in spending from fashion shoppers, particularly younger generations.

Balenciaga, has continued to grow sales in Asia, however, outperforming rivals in China, and plans to hold a runway show in Shanghai in May. — Reuters

Filipino engineering students from BatStateU secure 3rd place in World Engineering Day Hackathon

Team AdventURINE of BatStateU, 3rd place winners of World Engineering Day Hackaton 2024

Batangas State University (BatStateU) proudly announces the remarkable achievement of its BS Sanitary Engineering students at the World Engineering Day (WED) Hackathon on March 4. Amidst fierce competition from engineering talents worldwide, Team AdventURINE from BatStateU Alangilan Campus secured 3rd place, raising the flag of the Philippines high on the global stage.

The winners were broadcast during a 24-hour global stream hosted by emcees in Australia and Lisbon, Portugal, substantially boosting the international acknowledgment of their impressive feat.

Organized annually by United Nations Educational, Scientific and Cultural Organization (UNESCO), in collaboration with Engineers Without Borders International (EWB-I) and The Big Creative, the WED Hackathon represents a global initiative for cooperation and innovation in engineering. With over 2,500 students from more than 35 countries participating, this year focuses on Climate Action, resonating with Sustainable Development Goal 12. The challenges were designed to stimulate inventive solutions to some of the world’s most pressing environmental issues.

Team AdventURINE, led by Jose Luis A. Valencia, Nathaniel M. Regodon, and Maureen H. Fadullo, and guided by their mentor Dr. Mark Sibag, showcased their innovative design, “Green Sustainable Phyto-fence Assembled using Cured Source-collected Urine for Urban Environmental Balance (SPACE).” Their solution, a sustainable phyto-fence constructed from treated source-collected urine, addresses Challenge 3: Protecting the Most Vulnerable from Extreme Heat in Refugee Camps and Temporary Shelters.

Their project ingeniously addresses the vital need for cooling in temporary settlements and improving hygiene and sanitation. By encouraging the use of designated urinals and treating collected urine for microalgae cultivation, they create a closed-loop system that promotes both urban living needs and ecological balance.

This solution is powered entirely by solar energy, reducing dependence on fossil fuels and enhancing climate-friendly initiatives. Through their approach, Team AdventURINE demonstrates the power of innovation to address complex challenges while prioritizing sustainability and environmental stewardship.

“The dedication and creativity exhibited by Team AdventURINE exemplify the spirit of innovation and problem-solving that we strive to cultivate at Batangas State University,” remarked BatStateU President Dr. Tirso A. Ronquillo. “Their success on the global stage upholds our commitment to nurturing excellence in engineering education and research,” he added.

Team AdventURINE was awarded a prize of €1,000, acknowledging their impactful work in advancing sustainable solutions for a better world. Following closely behind, Team EcoCool, comprising scholars from Hong Kong University of Science and Technology, University of Illinois Urbana-Champaign, Tokyo Institute of Technology, and Rice University (US), secured second place. Meanwhile, Team Somiant from Yachay Tech University, Ecuador, claimed the top position.

Philippine lenders may remain profitable in Q1 amid high rates

EDUARDO SOARES-UNSPLASH

By Aaron Michael C. Sy, Reporter

PHILIPPINE BANKS are expected to remain profitable this quarter as interest rates and demand for loans remain elevated.

“For the first quarter of the year, continued growth [is expected] amid a high interest rate environment also to be driven by better loan demand,” Luis A. Limlingan, sales head at Regina Capital Development Corp., said in a Viber message. “Improving economic conditions are expected.”

Bangko Sentral ng Pilipinas Governor Eli M. Remolona, Jr. earlier said the central bank is likely to cut interest rates until the second half of the year due to inflation risks.

The Monetary Board raised its key rate by 450 basis points to a near 17-year high of 6.5% from May 2022 to October 2023.

Some lenders hit record earnings last year.

“In 2023, banks with increased consumer segment growth and diversified revenue streams saw the biggest earnings gains,” Mr. Limlingan said.

The top gainers last year were BDO Unibank, Inc., Metropolitan Bank & Trust Co. and Bank of the Philippine Islands, whose earnings hit a record,

First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message.

She noted that competition among banks would be tough in terms of loans and deposits, given the high interest rate environment.

Banks may also find it difficult to surpass their earnings last year, she added.

“Banks will still perform well as loan spreads remain wide and enable loan repricing at elevated asset yields,” Ms. Ulang said.

Bankers Association of the Philippines (BAP) Managing Director Benjamin P. Castillo on Wednesday said banks are optimistic about earnings this year.

“At worst, banks could be at the same level this year,” he said. “But banks are very aggressive. I cannot quote a number but for sure everybody was pleasantly surprised with some very significant uptick in 2023.”

The industry could still face headwinds due to issues overseas including a slowing US economic growth and the war between Russia and Ukraine, Mr. Castillo said.

Mr. Limlingan added that aside from geopolitical tensions, lenders still have to deal with inflation and the need for digitalization.

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