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Spain to roll over 2023 budget for rest of this year and focus on 2025, source says

STOCK PHOTO | Image by Dominick Vietor from Pixabay

MADRID – Spain’s government has decided not to send an already delayed budget bill for 2024 to parliament and will focus instead on next year’s spending plan as it keeps rolling over the 2023 budget, a government source told Reuters on Wednesday.

The source confirmed earlier reports by El Pais newspaper and several other outlets saying Prime Minister Pedro Sanchez made the decision after the Catalonia region called an early election earlier on Wednesday that could throw his support in parliament into disarray.

Mr. Sanchez’s minority leftist government is dependent on unstable parliamentary backing from Catalan pro-independence and other regional parties to pass legislation.

The 2024 budget process was delayed last year as it took Mr. Sanchez four months to secure another term in office after an inconclusive general election in July.

The source said in a pre-election climate, pushing the budget through parliament quickly was no longer considered feasible, adding that “budgets in June don’t make much sense”.

Budget Minister Maria Jesus Montero earlier told Cadena Ser Radio the Catalan election “could change the political chessboard” and “the sensible thing, being realistic, is to make use of all the technical work and political pre-agreements as a starting point for the 2025 (budget) proposal”.

The government has targeted reducing the budget deficit to 3% this year from 2023’s 3.8%. The central bank projected on Tuesday it would drop to 3.5% this year, noting that for Spain to meet the EU recommendation that nominal growth in expenditure does not exceed 2.6%, additional measures may be necessary. – Reuters

Yellen says US aims to ensure domestic EV maker success as China boosts exports

PHILSTAR FILE PHOTO

ELIZABETHTOWN, Kentucky – US Treasury Secretary Janet Yellen on Wednesday said President Joe Biden’s administration is taking steps to ensure success of the domestic electric vehicle (EV) industry in the face of China’s growing exports in the sector and heavy government subsidies.

Asked whether the United States needs new tariffs on Chinese EVs, Ms. Yellen told reporters at a new battery materials plant in Kentucky: “I don’t want to get ahead of where we are, but it is a commitment that President Biden has made … that we’re going to want our domestic industry to be successful.”

As Chinese demand flags at home amid economic turmoil, its growing exports of EVs to global markets have raised alarm bells in Washington over the potential to inflict harm on US automakers, just as its excess capacity in steel and aluminum decimated US metals producers in past decades.

Current US tariffs of 25% on all Chinese vehicles imposed by former President Donald Trump effectively keeps Chinese EVs out of the US market for now. But China’s largest producer, BYD, has started to export to Mexico and is scouting locations for a Mexican factory.

Some US senators have urged the Biden administration to increase tariffs on Chinese EVs further.

The US Commerce Department has opened a probe into whether Chinese vehicle imports pose national security risks because of the data they transmit, an effort that could lead to additional restrictions on both EVs and conventional cars and trucks.

Another avenue for higher US trade restrictions on Chinese EVs would be a long-running review of the Trump tariffs on hundreds of billions of dollars worth of Chinese imports being conducted by the US Trade Representative’s office.

Ms. Yellen and other administration officials have called for those “Section 301” tariffs to be made more “strategic” to better protect industries important to US economic security while lowering costs elsewhere.

“It is true that China is investing very massively in this industry and the United States is taking steps to ensure that our industry is successful,” Ms. Yellen said, without specifying such actions.

A key objective of the 2022 Inflation Reduction Act clean energy incentives, Ms. Yellen said, was to cut US dependence on Chinese supply chains for batteries, and associated minerals and components.

Provisions including “foreign entity of concern” rules will make it increasingly difficult for US made EVs to include Chinese content and still qualify for consumer purchase tax credits of $7,500.

Ms. Yellen said the US approach aimed to balance “both climate goals and also concern about jobs and having meaningful presence in industries that are going to be driving our economy.” – Reuters

Japan’s overworked, underpaid truckers left behind in wage bonanza

STOCK PHOTO | Image by Solihin Kentjana from Pixabay

TOKYO – As Japan’s big companies prepare to hand out their heftiest pay hikes in decades, trucking firm owner Ikuko Sakata feels like she inhabits a different reality.

Despite facing some of the country’s tightest labor markets and no shortage of demand, small delivery companies like Sakata’s can barely afford to make ends meet.

The Tokyo-based company that she runs pays its approximately 80 employees the minimum wage, putting their base salaries at around 280,000 yen ($1,900) a month before overtime.

“That’s the best we can do,” said Sakata, who took over the 73-year-old family business from her father in 1995. She hopes to do better for the coming year but is afraid that might be difficult.

Sakata’s predicament contrasts starkly with the rosy picture emerging for workers’ pay at brand-name companies such as Toyota Motor and Nippon Steel.

It also raises questions about whether the time is right for Japan’s central bank to finally normalize monetary policy, with sustainable wage increases seen as one of the conditions for an end to negative interest rates.

Most economists expect the Bank of Japan to raise interest rates – for the first time in 17 years – either this month or next.

Wrapping up their annual wage negotiations on Wednesday, Toyota, Panasonic, Nippon Steel and Nissan were among major firms that agreed to fully meet union demands.

Workers at major firms have asked for annual increases of 5.85%, topping the 5% mark for the first time in 30 years, according to Japan’s biggest trade union grouping, Rengo.

The government is counting on such wage hikes to trickle down to smaller and medium-sized firms, which account for a whopping 99.7% of all enterprises and about 70% of the country’s workforce. Wage talks for the bulk of small- to mid-sized companies are expected to conclude by the end of March.

 

FEEBLE BARGAINING POWER

However, among smaller delivery companies, only 57% are planning any wage hikes in the fiscal year from April, according to a Japan Chamber of Commerce survey published last month. Of those, less than a third plan to raise wages by 3% or more.

Experts say the proliferation of players in the industry due to a wave of deregulation in the 1990s was partly to blame for the sector’s unique strains.

“There are many small companies in the freight industry and as a result, they have weak bargaining power,” said Uichiro Nozaki, an economist at Nomura Securities.

The government has recognized the problem and is taking steps to crack down on the strong-arming of subcontractors. It has also put in place policies to raise standard freight rates and make sure workers are compensated for non-driving duties, in a bid to raise the industry’s wages by around 10%.

But another law change taking effect next month to limit overtime to improve truckers’ notoriously grueling hours is feared to, ironically, drive away workers who have long relied on the extra hours to make a living, exacerbating the staffing crunch, industry insiders have said.

Tetsuyasu Kondo, who heads a trucking company in the northern prefecture of Akita, said companies like his need to pass on rising costs to their customers to be able to afford higher pay.

After offering an industry-beating base salary hike of 4.5% last year, Kondo said he hopes to raise wages by a margin that would at least exceed inflation this year.

For smaller businesses like Sakata’s in Tokyo, though, asking shippers to pay more could mean losing business.

“We do try to negotiate price increases, but they’re never met in full,” she said. “At best it’s 50%, and most of the time, it’s 20% to 30%.” – Reuters

SpaceX’s third Starship test flight gets FAA green light

REUTERS

WASHINGTON – The FAA on Wednesday granted SpaceX a license to test-launch the company’s Starship rocket system from Texas, according to the agency’s website, paving the way for another early demonstration of a spacecraft crucial to Elon Musk’s satellite launch business and NASA’s moon program.

“The FAA determined SpaceX met all safety, environmental, policy and financial responsibility requirements,” the Federal Aviation Administration (FAA), which oversees launch site safety, said in a statement.

The regulatory sign-off came less than 24 hours before Starship’s targeted launch time of 7 a.m. CDT (1200 GMT)on Thursday from SpaceX’s Boca Chica, Texas, launch facilities, where the rocket’s first two attempts to reach space blasted off from last year.

Starship, a towering two-stage rocket system that will become the centerpiece of Mr. Musk’s space launch business, will aim to fly farther and clinch more testing objectives than its last two flight tests, including the reignition of the system’s upper stage engine and opening its payload door in space.

Unlike the last two tests, both which ended in explosions before reaching a planned splashdown target in the Pacific Ocean near Hawaii, the Thursday test flight will launch on a trajectory bound for the Indian Ocean, a flight profile picked by SpaceX to enable the mission’s new test objectives, the company said.

Starship’s window to launch on Thursday – and on Friday, as a backup – is from 7 a.m. to 8:51 a.m. CDT (1200 GMT to 1351 GMT), SpaceX said.

NASA, under a roughly $4 billion contract with SpaceX, plans to use Starship in the next few years to send the first crew of humans to the moon’s surface since the Apollo era more than half a century ago.

The upcoming Starship test is an early demonstration on a long path to prove itself capable of safely getting astronauts to the moon, a feat that will involve other NASA spacecraft and require extra fuel for Starship supplied in space by a fleet of “tanker” refueling Starships.

SpaceX CEO Musk has said the rocket should fly “hundreds” of uncrewed flights before humans climb aboard. NASA officials in recent months have stressed a need to see faster progress on the rocket’s development as it races with China, which envisions its own crewed moonshot by around 2030.

The FAA’s commercial space office issued the license with a tight workforce that has struggled in recent years to keep pace with an uptick in private launch activity driven mainly by SpaceX and its novel Starship tests.

The agency this week proposed a $57 million budget for its space office for fiscal year 2025, a 36 percent increase largely meant to grow its regulatory staff and kickstart development of potential regulations for more novel private space activities. – Reuters

Puregold CinePanalo Film Festival showcases stellar upcoming and veteran actors in full-length films

Puregold CinePanalo Film Festival screening schedules

Excitement is reaching an all-time high as the much-anticipated Puregold CinePanalo Film Festival draws near. With Puregold CinePanalo at the forefront of supporting the Philippine movie industry, the festival will spotlight emerging and established artists through its films.

With a theme centered on Mga Kwentong Panalo ng Buhay, the festival promises to deliver powerful narratives celebrating Filipino strength, success, and joy in movies that aim to foster Filipino talent through filmmakers, actors, and actresses.

Scheduled from March 15 to 19 at the Gateway Cineplex 18 in Araneta City, Cubao, the inaugural run of Puregold CinePanalo Film Festival will show six compelling full-length movies and 25 short films.

Each full-length film has a carefully selected cast that perfectly embodies the messages it wants to highlight. Here are the six Puregold CinePanalo full movies and the upcoming and well-known actors and actresses who form their ensemble.

1) “Pushcart Tales” (Director Sigrid Bernardo)

“Pushcart Tales” stars the iconic Nonie and Shamaine Buencamino, who are recognized for their stellar work in television, film, and theater. Nonie portrayed memorable roles in Philippine Cinema in movies like “Barber’s Tales” (2013) and “Heneral Luna” (2015), and Shamaine has appeared in more than 100 movies and television series, like “Niño” (2011), “Prinsesa” (2017), and “When the Waves are Gone” (2022).

Also in the film are Carlos Siguion-Reyna, a multi-talented actor and director, with notable movies like “Where I am King” (2014), “Azucena” (2000), and “Ikaw Pa Lang ang Minahal” (1992); the award-winning Therese Malvar who was also in Bernardo’s “Ang Huling Cha-Cha in Anita” (2013); Elora Españo, who starred in “Tandem” (2015), “Sea Serpent” (2017), “Love and Pain in Between Refrains” (2021), and in Puregold’s hit TikTok series, “My Plantito” (2023); and Harvey Bautista, son of former Quezon City mayor and actor Herbert Bautista.

2) “Boys at the Back” (Director Rayn Brizuela)

For “Boys at the Back”, director Rayn Brizuela takes on a role in the film, with Cinemalaya Best Actor Noel Comia Jr. (“Kiko Boksingero,” 2017) and Nicole Omillo, who was recently cast as Basha in the “One More Chance” musical.

The cast is completed by Bani Baldiserri, Michael Berces, Bob Jbeili, Merry Chris Rodriguez, and Nyle Libranza.

3) “Road to Happy” (Director Joel Ferrer)

In “Road to Happy,” actor VJ Mendoza, known for “Mano po Legacy: The Family Fortune” (2022), “Love vs. Stars” (2021), and “Last Fool Show” (2019), will play the lead role in his first full-length film.

Joining him is veteran comedian and actor Smokey Manoloto, who was in iconic shows and movies like “Magic Kombat” (1995), “Ang Probinsyano” (2015), and “Home Along da Riles” (1992). This film also stars It’s Showtime Mini Miss U’s former contestant, eight-year-old Darlyn Izabelle Salang, in her first lead role in a film.

4) “A Lab Story” (Director Carlo Obispo)

“A Lab Story” is headlined by Uzziel Delamide (“Here Comes the Groom,” 2023; “Mercury is Mine,” 2016) and Potchi Angeles (“Huling Sayaw,” 2023; “Dok,” 2022) in the lead roles; and stars Donna Cariaga, Ely Cellan, Barbara Miguel, and Krystle Valentino Air in supporting roles.

Arnold Reyes, an award-winning actor known for his performances in “Birdshot” (2016), “Condo” (2008), and “Astig” (2009), has a special participation in the movie.

5) “Under a Piaya Moon” (Director Kurt Soberano)  

“Under a Piaya Moon” introduces up-and-coming actors Jeff Moses and Pau Dimaranan, alongside established actors Chart Motus (“Sonata,” 2013; “Oro, Plata, Mata,” 1992; “Ligaw Liham,” 2007); and Joel Torre (“Miracle in Cell No.7,” 2017; “On The Job,” 2013; “Third World Hero,” 2000).

6) “One Day League: Dead Mother, Dead All” (Director Eugene Torres)

Producer’s Choice “One Day League: Dead Mother, Dead All” stars a colorful ensemble: featuring Drag Race PH Season 1 Ms. Congeniality, Lady Morgana, stand-up comedian Negi Molina, influencer Macoy Dubs, drag queen Omiko “Barbie-Q” Madali, social media sensation Ryan “Matabang Setter” Revita, actor Tommy Alejandrino, and actress Via Antonio.

The film also has a special appearance from international drag queen and host of reality competition Drag Den, Manila Luzon.

The feature-length and short films will be recognized at the prestigious Puregold CinePanalo Film Festival Awards Night on March 16, 7 p.m., at Cinema 5 of the Gateway Cineplex 18 in Araneta City, to be attended by actors, filmmakers, representatives from Puregold and notable personalities in the Philippine film industry.

For more updates, like @puregold.shopping on Facebook, follow @puregold_ph on Instagram and X (Formerly Twitter), and @puregoldph on TikTok.

 

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Vista Shaw, The Spectrum, Wil Tower, and Laureano di Trevi Towers unveil big-cut units

Four prestigious condo developments recently unveiled their big-cut units at an exclusive event called “Plethora.”

Four prestigious condo developments—Vista Land’s Vista Shaw, The Spectrum, Wil Tower, and Laureano di Trevi Towers—recently unveiled their big-cut units at an exclusive event called  “Plethora,” which was held at the Brittany Hotel in Taguig City. The special occasion drew a distinguished gathering that included business partners, valued clients and investors, visionary architects, and dedicated employees.

The renowned architects that led the design team proudly informed the guests that they envision these expansive living spaces for larger families that need more spacious homes for fostering stronger social connections. Indeed, with more Filipinos inclined to entertain friends, kith, and kin at home, having generous space makes it more comfortable for them to do so.

The same architects likewise suggested that the extra space afforded by big-cut units may be used to accommodate a home office or a cozy children’s room—perfect for professionals who do remote work and for growing families.

At the event, Vista Land’s Vista Shaw, The Spectrum, Wil Tower, and Laureano di Trevi Towers announced the launch of their big cut units.

Even better, more spacious accommodations provide yet another exciting benefit: flexibility. Generous layouts give residents the freedom to express their unique style and design preferences when furnishing and decorating their living spaces.

It comes as no surprise, then, that Ms. Teresa Tumbaga, Division Head of Vista Land, shares everyone’s enthusiasm for the new big-cut units. “To create comfortable living spaces for all our homeowners is our constant objective,” she asserts. “We hope that these big-cut units will provide them the space to live comfortably through the years.”

Finally, Ms. Tumbaga reminds prospective homeowners that Vista Land is offering these capacious condo units at their premier projects in bustling central business districts: Vista Shaw in Mandaluyong, The Spectrum in the Ortigas Center; Wil Tower in the Quezon City CBD; and Laureano di Trevi Towers in Makati City.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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PHL secures $4B in German pledges

President Ferdinand R. Marcos, Jr. and German Chancellor Olaf Scholz answer questions from the members of the media during the joint press conference at the Chancellery in Berlin, March 12. — YUMMIE DINGDING/ PPA POOL PHOTO

By Kyle Aristophere T. Atienza, Reporter

GERMAN COMPANIES on Tuesday pledged $4 billion (P220 billion) worth of investments to the Philippines, President Ferdinand R. Marcos, Jr.’s office said, as the Southeast Asian nation seeks to boost economic ties with “like-minded” nations.

Mr. Marcos hopes companies seeking to cut risk and diversify their supply chains amid geopolitical tensions would consider the Philippines, which has been behind its regional peers in attracting foreign direct investments (FDI).

During a Philippine-German business forum in Berlin on Tuesday, Manila secured eight agreements, three of which were letters of intent, including one seeking the creation of an Innovation Think Tank hub.

There were two memoranda of agreement and three memoranda of understanding, one of which was a proposal to establish a fully integrated solar cell manufacturing facility in the Philippines.

The Philippines entered into a public-private partnership with a German company to rehabilitate, reclaim, and recultivate degraded farmlands, the Palace said in a statement.

There was also an agreement to expand potential collaborations in mobility solutions, software services, manufacturing, factory automation, logistics services, energy, security, and safety systems for buildings, consumer appliances, and healthcare, it added.

One of the three memoranda of understanding involved a plan by the German side to invest in a Philippine manufacturing facility that will modify automobiles into high-end one-of-one versions and armor protected cars, as well as manufacture military-grade personnel carriers for the Asian market.

Another memorandum of understanding involved a German company’s plan to put up data centers in the Philippines that will host a digital insurance platform for Southeast Asian markets.

Germany is the largest economy in Europe and is the third-largest economy in the world after the United States and China, which has been locked in a territorial dispute with the Philippines for decades.

At the business forum, Mr. Marcos positioned the Philippines as a regional hub for smart investments, even though the country has the highest electricity rate in Asia.

He said both Manila and Berlin have “aspirations for de-risked and diversified production and market value chains,” citing the need to “future-proof” economies in the face of “geopolitical vagaries.”

He recognized Germany as a global leader in energy storage technology for renewables, saying the Philippines seeks the European nation’s help in pursuing renewable energy projects.

In a joint press statement with German Chancellor Olaf Scholz following their meeting, Mr. Marcos said his country would like to cooperate with Germany in the areas of manufacturing, construction and infrastructure, information technology and business process management, innovation and startups, as well as renewable energy and minerals processing.

‘LIMITED’
Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said the pledges appear to be “mainly exploratory in nature.”

“Much depends on how well the country can ensure the viability of these projects,” he said in a Facebook Messenger chat. “Given very high energy costs and a largely unskilled labor force, the likelihood that these projects in this country will push through are quite limited.”

Last year, the Philippine Labor department said the country lacks about one million skilled workers in engineering, architecture, and construction.

Filipino students were still among the world’s weakest in math, reading and science, according to the 2022 Program for International Student Assessment, with the Philippines ranking 77th out of 81 countries and performing worse than the global average in all categories.

During Mr. Marcos’ visit, the Philippines’ Technical Education and Skills Development Authority and Germany’s Federal Institute for Vocational Education and Training signed a cooperation agreement aimed at upskilling and reskilling Filipino workers.

Mr. Marcos has already made over 20 international trips since assuming office in June 2022.

About P1.408 billion has been allocated for his domestic and international travels in 2024, a 58% increase from just P893.57 million last year.

In 2023, when Mr. Marcos left the country 11 times, the Philippines’ FDI net inflows hit only $8.9 billion, a 6.6% decline from $9.5 billion recorded in 2022.

China was the first country he visited last year, bringing home P22.8 billion in investment pledges from Chinese investors.

But his visit to the world’s second-largest economy didn’t stop China from harassing Philippine vessels within Manila’s exclusive economic zone in the South China Sea, with the Chinese coast guard using a military-grade laser against its Filipino counterpart in February 2023.

Amid uncertainties hounding Philippines-China relations on the economic front, Mr. Marcos said before leaving Manila for Germany that his country needs to step up economic ties with “like-minded nations.”

The Philippine leader, in a speech before the Filipino community in Germany on Tuesday night, said German investors should consider what the Philippine labor force can offer.

“I told them, if Germany lacks workers, why not establish factories in the Philippines? They will have many brilliant, hardworking and trustworthy Filipino workers to choose from,” he said.

“Setting up manufacturing companies in the Philippines will address the labor shortage Germany is currently facing,” he added, “and will provide our workers jobs which will keep them home with their families.”

Mr. Marcos was set to arrive in the Czech Republic on Wednesday, where he is expected to sign a deal on labor cooperation.

Metal production rises 4.8% by value in 2023

DAVID HELLMANN-UNSPLASH

By Justine Irish D. Tabile, Reporter

PHILIPPINE metal production by value rose by 4.8% in 2023 on improved prices and higher output, data from the Mines and Geosciences Bureau (MGB) showed.

In a report, the MGB said the value of production reached P249.05 billion in 2023, up by 4.8% from P237.66 billion in 2022.

Gold accounted for nearly half of the total production value or P106.64 billion, a 17% increase from P91.05 billion in 2022.

Nickel ore was valued at P65.84 billion, up by 7% from a year ago.

Together, nickel ore and other nickel byproducts were valued at P113.37 billion, accounting for 45.52% of the total production value, while copper was valued at P25.41 billion (10.2%), and the combined output of silver, chromite, and iron at P3.63 billion (1.46%).

The average price of gold increased by 7.8% year on year to $1,942.8 per troy ounce, while the price of silver went up by 7.85% to $23.47 per troy ounce.

Nickel ore prices fell to $9.93 per pound last year from $11.86 in 2022, while prices of copper slid to $3.85 per troy pound last year from $4 in 2022.

In terms of volume, gold output jumped by 7% to 31,046 kilograms in 2023 from 29,036 kilograms in 2022.

“The re-entry of Greenstone Resources into the production scene this year has also raised production. Said company has been under care and maintenance status since 2018,” the MGB said.

Greenstone produced 201 kilograms of gold with an estimated value of P680 million last year, it added.

On the other hand, silver production dropped 18% to 46,160 kilograms with a value of P1.86 billion in 2023.

“Out of 12 mining projects that reported silver production, only Philippine Gold Processing & Refining Corp. and Itogon-Suyoc Resources enjoyed increased mine output while all the rest suffered production shortfall,” the MGB said.

Copper and iron ore production both went up by 3% to 266,532 dry metric tons (DMT) and 78,213 DMT, respectively.

Chromite production increased by 17% year on year to 101,960 DMT, while nickel direct shipping ore rose by 19% to 35.14 million DMT.

“As a short-term outlook, the performance of the minerals sector will always be dictated by prices and price behavior, (which) will naturally depend on the world supply and demand patterns this year and into the next,” the MGB said.

The MGB noted that supply was affected by cuts in production and shortfalls arising from geopolitical conflicts, rising fuel prices and weather conditions.

“The entry of new players or the expansion of existing projects will also be a big factor. While demand is shaped by how robust or weak the global economy in the construction, and manufacturing sectors will be,” it added.

The MGB said there were several new players in the production scene last year, such as Gran Consolidated Mining, Inc. in Davao de Oro, ARC Nickel Resources and Hallmark Mining Corp. in Davao Oriental, and Kafugan Mining, Inc. in Surigao del Sur.

Out of the 9 million hectares identified to have a high mineral potential, only 751,432.75 hectares are covered by mining tenements, excluding those with local government-issued permits, it added.

“Only about 8.35% of the 9 million hectares considered to be highly mineralized areas are covered by mining tenements… The Philippines is one of the nations with the greatest mineral endowment, having an abundance of nickel, gold, copper, and other valuable minerals,” the bureau said.

Sought for comment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the rise in global mineral prices has helped lift the value of Philippine metal production.

“This may be attributed to record-high world gold prices recently, some pickups in copper and nickel prices in recent weeks, as well as some pickups in iron ore prices in most of 2023 amid continued demand for minerals used, especially in electric vehicles and for renewable energy,” Mr. Ricafort said in a Viber message.

He noted the reopening of China, which is the biggest importer of some global commodities, has also supported the growth in mining production.

However, he said a weaker Chinese economy, risk of recession in some countries, and elevated interest rates could hurt demand.

“For the coming months, possible Federal Reserve rate cuts later in 2024 that could be matched locally would help reduce borrowing costs, which could lead to some pickup in the global economy in terms of trade, investments, and other economic activities and somewhat support the pickup in demand for metals and other minerals,” he added.

Philippines improves one spot in global connectedness index

BW FILE PHOTO

NEW DELHI, India — The Philippines inched up a spot in the latest ranking of the most globally connected markets in the world, according to Germany-based logistics giant DHL.

In the DHL Global Connectedness Index, the Philippines ranked 65th out of 181 countries, with 2022 as its reference period. In 2021, it ranked 66th in the same index.

During a five-year period, Philippines dropped seven spots from its 58th ranking in 2017.

Philippines inches up in Global Connectedness Index

According to the report, the Philippines had an overall score of 52.1 out of 100 in 2022, slightly up from its score of 51.8 in the year prior.

The index measures the breadth and depth of a country’s integration with the rest of the world based on a measure of its international trade, capital, information, and people.

For depth, or the distribution of international flows relative to its activity, the Philippines scored 43.9 in 2022 and ranked 126th overall.

The Philippines’ distribution of international flows across countries or breadth received a score of 61.9, with a rank of 29th.

DHL Express Chief Executive Officer John Pearson said that for countries like the Philippines to attract and increase investments, they should continue to improve infrastructure and the ease of doing business.

“If countries just carry on the things they’re doing by making it attractive to invest in, making it easier to do business, and setting up the infrastructure for domestic and inbound logistics,” Mr. Pearson said at a media briefing.

The Philippines’ top global connections were the United States, China, Japan, Singapore, and South Korea.

The Philippines’ flow in trade received a score of 52.9 out of 100 with a rank of 60th in 2022. It was lower than the 61 score it received in 2021.

For information measure, or the flow of data across borders, the Philippines received a score of 51.5 and ranked 69th overall. This was lower than its previous score of 61 in 2021.

The Philippines scored 50.7 in capital investments, ranking 54th.

Meanwhile, Singapore topped the list as the most globalized out of 181 countries, unchanged from the previous year.

“As a city-state with major port operations and a thriving financial sector, Singapore is uniquely positioned to excel in globalization,” the report said.

Rounding out the top five were the Netherlands, Ireland, Luxembourg, and Malta.

Among Asian countries, Hong Kong ranked 10th overall, while Malaysia ranked 26th and South Korea ranked 34th. Taiwan ranked 35th, followed by Thailand (39th), Vietnam (45th) and Japan (50th).

Mr. Pearson said global connectedness was at a record-high level in 2022 despite the lingering effects of the coronavirus disease 2019 (COVID-19) pandemic and geopolitical tension from the Russian invasion of Ukraine, the trade conflict between the US and China, and the United Kingdom’s withdrawal from the European Union.

The report places the world’s globalization at 25%, on a scale from 0% (which means there are no flows across national borders) to 100% (meaning borders and distance have ceased to matter at all). — A.H.Halili

PHL among most at-risk countries to food security shocks — Moody’s

Farmers of onions and rice check the drying soil in Barangay Central, San Jose, Occidental Mindoro, which has resulted in 118 million pesos in agricultural damage province-wide. Drought may strike thirty areas nationwide by the end of March due to El Niño phenomenon, according to an official of the Philippine Atmospheric, Geophysical and Astronomical Services Administration (Pagasa). — PHILIPPINE STAR/EDD GUMBAN

FOOD SECURITY RISK in the Asia-Pacific region will remain elevated, as climate shocks are expected to persist in the coming years, Moody’s Investors Service said.

“Food security risk in Asia-Pacific (APAC) will remain elevated even if food prices fall. First, increasingly frequent and severe climate shocks will disrupt food production processes. This year, we expect the continuation of El Niño to impact crop yields in Asia and the Pacific,” it said in a report.

Moody’s said the region’s food security is at risk due to the rising global demand for food, geopolitical tensions and disruptions to agricultural trade and production. 

The Philippines and Laos are among Southeast Asian countries that show both “higher exposure to shocks and lower resilience to shocks,” it said.

“The proportional rise in food security risk in Asia has been smaller than other emerging markets, and this slower pace of deterioration partly reflects Asia and the Pacific being a major producer for primary crops,” it said.

“However, Asia and the Pacific is still home to some of the most populous economies, and as such still accounts for half the people facing moderate or severe food insecurity in the world,” it added.

The Philippines was the most at-risk country in the world in 2023, according to the latest World Risk Index (WRI).

Data from Moody’s showed that the Philippines scored a four out of five in its physical climate risk index. Along with Indonesia and Vietnam, it ranked the worst among its Southeast Asian neighbors. Singapore, Malaysia, Thailand and Cambodia scored a three out of five.

“Nearly half of the region has higher exposure to physical climate risk or water management risk. A significant proportion of the region also has lower resilience to respond to shocks, as reflected by higher social and governance risk scores,” it said.

Moody’s noted that countries with high exposure but low resilience to shocks also indicate there is a large portion of the population that is unable to afford a healthy diet.

“Climate-driven shocks will continue to drive food security concerns. The increased frequency and severity of extreme weather and climate related events including floods and storm-triggered landslides, will continue to have an impact on crops,” it said.

Moody’s also expects El Niño to impact crop production in the region.

The latest bulletin from the state weather bureau showed that the El Niño is expected to persist until May.

“While food prices have generally come down from their peaks in 2022, prices for a few crops — such as rice, a staple in this region — remain elevated,” Moody’s said.

“This comes on the back of a series of lower-than-expected rice harvests and a wave of export restrictions in the second half of 2023, which have kept rice prices high and renewed concerns about food security in the region,” it added.

Headline inflation accelerated to 3.4% in February amid high food prices, particularly rice. Rice inflation surged to 23.7% in February — the fastest since the 24.6% in February 2009.

Meanwhile, Moody’s said that the current policy measures in these countries can “mitigate but not fully offset food security risk.”

“Policy responses can partially offset food security shocks. Since COVID-19 (coronavirus disease 2019), a number of countries in the region have prepared themselves to ride out food supply disruptions and have been building up stockpiles,” it said.

“While cooperation on a multilateral basis is more limited and fragmented, negotiations still happen on a bilateral basis. Strong policy support will encourage new companies and financial institutions to enter the agri-related sectors, which is a credit positive for the sector, and will support farm productivity and crop yields,” it added. — Luisa Maria Jacinta C. Jocson

Ayala Corp. income surges to P38.1B; ALI plans merger with 34 units

AYALA CORP. (AC) saw a 39% rise in its 2023 net income to P38.07 billion, driven by stronger performances of its business units, the listed conglomerate announced on Wednesday.

The company’s core net income improved by 48% to P41 billion in 2023, driven by its banking, real estate, and energy businesses, AC said in a regulatory filing.

Consolidated revenues surged by 12% to P341.9 billion from P306.64 billion in 2022. The company’s total costs and expenses also increased by 7% to P262.48 billion from P245.2 billion in 2022.

“We succeeded in getting aggregate core earnings to exceed the pre-pandemic high. Now we focus on getting better operating and financial results from each of our businesses, and on rationalizing the portfolio where it makes sense to do so,” Ayala President and Chief Executive Officer Cezar P. Consing said.

For AC’s banking segment, the Bank of the Philippine Islands (BPI) had a 31% growth in net income to P51.7 billion in 2023. Total revenues rose by 17% to P138.3 billion due to better net interest and non-interest income.

BPI’s operating expenses climbed by 19% to P69.1 billion, led by larger spending on manpower, technology, and marketing.

On AC’s real estate business, Ayala Land, Inc. (ALI) saw a 32% increase in profit to P24.5 billion in 2023 “as resilient property demand and heightened consumer activity fueled revenue expansion.”

Property development revenues increased by 14% to P92.3 billion, while reservation sales improved by 9% to P113.9 billion.

ALI’s commercial leasing revenues rose by 25% to P41.7 billion due to higher occupancy and rents from malls, offices, and hotels and resorts.

The property developer’s real estate investment trust, AREIT, Inc., also saw a 43% jump in net income to P4.9 billion.

For AC’s energy business, ACEN Corp. saw a decline in its reported net income to P7.4 billion in 2023 due to the P8.6 billion net gain in 2022. The company’s consolidated revenues rose by 4% to P36.5 billion.

“[The decline] was primarily due to a remeasurement gain from the acquisition of the Australian platform, offset by provisions taken for a Supreme Court decision on administered/regulated pricing in the Philippines and the Lac Hoa and Hoa Dong wind farms in Vietnam,” AC said.

ACEN’s parent company AC Energy and Infrastructure saw a 71% increase in 2023 core earnings to P9.5 billion due to improved operating earnings from ACEN and higher contributions from GNPower Dinginin.

On conglomerate’s telecommunications business, Globe Telecom, Inc. saw a 29% drop in its 2023 net income to P24.6 billion due to the one-time gain on the partial sale of its data center business in 2022. 

Globe’s gross service revenues rose by 3% to P162.3 billion led by growth in mobile data, corporate data, and non-telco services.

AC said its healthcare business led by AC Health continues to scale its ecosystem, but saw a slightly negative net income  in 2023 due to one-offs and higher manpower and marketing expenses. 

The conglomerate also said that the losses of its AC Industrials, excluding one-offs, narrowed to P1.2 billion in 2023 from P1.7 billion in 2022 due to better results from the core operations of semiconductor manufacturer Integrated Micro-electronics, Inc. (IMI) and ACMobility’s four-wheel business.

“IMI saw higher earnings from its core business as margins improved and component shortages eased,” AC said.

The conglomerate’s mobility business led by ACMobility, previously named AC Motors, saw better core earnings from the sales of car brands such as Kia, Honda, and Isuzu. However, its motorcycle business saw wider losses led by weaker demand and write-downs on aging inventory. 

“ACMobility ventured into the electric vehicle space and has begun to distribute BYD and Kia electric vehicles (EV). It is utilizing the group’s ecosystem, particularly ALI, IMI, and Globe, to build out infrastructure that is supportive of an EV push,” AC said.

MERGER WITH 34 UNITS
Meanwhile, ALI announced that its board approved on March 12 the merger with 34 entities owned by the company as part of internal restructuring efforts.

In a separate regulatory filing, ALI stated that it will be the surviving entity following the proposed merger with the 34 entities. These entities are either directly owned by ALI or by its subsidiaries, AyalaLand Estates, Inc. (ALEI), and AyalaLand Hotels and Resorts Corp. (AHRC).

“The merger is an internal restructuring to simplify the ownership structure and is expected to result in operational synergies, efficient funds management, and simplified reporting to government agencies,” ALI said.

ALI stated that the planned merger will be presented for approval by its stockholders during their annual meeting on April 25.

“Based on the predetermined swap ratios, ALI will issue a total of 993,540,544 ALI shares, of which 883,171,005 will be treasury shares, 110,358,039 and 11,500 ALI shares will be issued to AHRC and ALEI, respectively,” ALI said. 

According to ALI, the entities to be merged are engaged in businesses such as landholding, leasing assets/hotels, leasing operations, property development, holding company, golf operations, investment in shares, cinema operations, hotel operations, real estate operations, and snack bar operations.

The entities to be merged with ALI include Ayala Hotels, Inc., Buendia Landholdings, Inc., HLC Development Corp., Redheap Holdings, Inc., Wedgemore Property, Inc., Crimson Field Enterprises, Inc., Red Creek Properties, Inc., Prima Gaedi Development Corp., ALI Triangle Hotel Ventures, Inc., Arcasouth Hotel Ventures, Seda College, Inc., and Asiatown Hotel Ventures, Inc.

Other entities included in the merger are North Ventures Commercial Corp., Westview Commercial Ventures Corp., Circuit Makati Hotel Ventures, Inc., Primavera Towncentre, Inc., Hillsford Property Corp., Sunnyfield E-Office Corp., Southportal Properties, Inc., Regent Horizons Conservation Co., Inc., ALI Capital Corp., Amorsedia Development Corp., Verde Golf Development Corp., and FIVE STAR Cinema, Inc.

Also part of the merger are ALO Prime Realty Corp., Enjay Hotels, Inc., One Makati Hotel Ventures, Inc., Integrated Eco-Resort Inc., Ecoholdings Co., Inc., Whiteknight Holdings, Inc., Ayalaland Medical Facilities Leasing, Inc., Altaraza Prime Realty Corp., Cebu Leisure Co. Inc., and Ayalaland Malls Synergies, Inc. 

ALI previously said that it secured the approval of the Philippine Stock Exchange to issue more shares following its merger with Cebu Holdings, Inc. 

On Wednesday, AC shares rose by 1.96% or P13 to P675.50 apiece while ALI stocks jumped by 4.33% or P1.40 to P33.70 each. — Revin Mikhael D. Ochave

Lower nickel ore prices drive 53% decline in NAC’s profit

NICKEL ASIA Corp. (NAC) saw a 53% decrease in its attributable net income to P7.9 billion for 2023, primarily attributed to the decline in nickel ore prices, the company announced on Wednesday.

Revenues from ore sales dropped by 16% to P21.4 billion from P25.5 billion in 2022, the company said in a regulatory filing.

Earnings before interest, taxes, depreciation, and amortization from mining operations went down by 24% on lower nickel ore revenues.

The weighted nickel ore sales price dropped by 20% last year to $23.30 per wet metric ton (WMT) from $29.17 per WMT the previous year. The company realized P55.78 per US dollar from nickel ore sales, up 2%.

“The reason for the lower nickel ore prices started since the second quarter of last year due to the oversupply of class 2 nickel from Indonesia and the weak Chinese stainless-steel demand,” Andre Mikael Lu Dy, NAC’s vice-president for treasury and investor relations and sales, said in a briefing.

Mr. Dy said that the lower ore sales revenue weighed down the positive impact from higher shipments.

The company’s five operating mines sold a combined 16.5 million WMT of nickel ore, up 3%.

About 8.9 million WMT of saprolite and limonite ore had been exported at an average price of $30.59 per WMT, higher compared to the 8.1 million WMT at $39.39 per WMT in 2022.

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