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Bangladesh, Pakistan and India remain the world’s smoggiest countries in 2023, air quality data show

A MAN rides a motor tricycle, loaded with sacks of recyclables, amid dense smog in Lahore, Pakistan Nov. 24, 2021. — REUTERS

SINGAPORE — Pakistan remained one of the world’s three smoggiest countries in 2023, as Bangladesh and India replaced Chad and Iran, with particulate matter about 15 times the level recommended by the World Health Organization (WHO), data published on Tuesday showed.

Average concentrations of PM2.5 — small airborne particles that damage the lungs — reached 79.9 micrograms per cubic meter in Bangladesh in 2023, and 73.7 micrograms in Pakistan. The WHO recommends no more than 5 micrograms.

“Because of the climate conditions and the geography (in South Asia), you get this streak of PM2.5 concentrations that just skyrocket because the pollution has nowhere to go,” said Christi Chester Schroeder, air quality science manager at IQAir, a Swiss air-monitoring organization.

“On top of that are factors such as agricultural practices, industry and population density,” she added. “Unfortunately, it really does look like it will get worse before it gets better.”

In 2022, Bangladesh was ranked as having the fifth-worst air quality, and India was eighth.

About 20% of premature deaths in Bangladesh are attributed to air pollution, and related healthcare costs amount to 4%-5% of the country’s gross domestic product, said Md Firoz Khan, an air pollution expert at Dhaka’s North South University.

Indian pollution also increased last year, with PM2.5 levels about 11 times higher than the WHO standard. India’s New Delhi was the worst-performing capital city, at 92.7 micrograms.

China also saw PM2.5 rise 6.3% to 32.5 micrograms last year, after five consecutive annual declines.

Only Australia, Estonia, Finland, Grenada, Iceland, Mauritius and New Zealand met WHO standards in 2023.

The IQAir report was based on data from more than 30,000 monitoring stations in 134 countries and regions.

Chad, the world’s most polluted country in 2022, was excluded from the 2023 listings because of data issues. Iran and Sudan were also taken off the 2023 list.

Christa Hasenkopf, director of the Air Quality Life Index at the University of Chicago’s Energy Policy Institute, said 39% of countries have no public air quality monitoring.

“Considering the large potential benefits and relatively low cost, it’s stunning that we don’t have an organized global effort to deploy resources to close these data gaps, especially in places where the health burden of air pollution has been largest,” she said.  — Reuters

Japan saw record 2.79 million visitors in February due to Lunar New Year boost

EMRAN YOUSOF-UNSPLASH

TOKYO – Japan welcomed 2.79 million visitors in February, a record for the month and the most for any month since the COVID-19 pandemic began, boosted by travel during Lunar New Year holidays.

The number of foreign visitors for business and leisure was up from 2.69 million in January, data from the Japan National Tourism Organization (JNTO) showed on Tuesday.

Arrivals in February were 7.1% higher than in 2019, when the Lunar New Year also fell in the second month of the year rather than the first. For all of 2019, Japan welcomed a record 31.9 million visitors before the pandemic struck.

Tourism to Japan all but stopped for more than two years during the pandemic. Since then, the industry has received a major boost from a weak yen that has made Japan a bargain destination for foreign travelers.

Current account data in January showed a record gain attributable to inbound tourism, illustrating the sector’s widening role in the economy. Visitors spent more than 5 trillion yen ($33.3 billion) in the country last year for the first time, exceeding the government’s goal.

Travelers from 19 of 23 countries and territories, including South Korea and the United States, set records for February, the JNTO said.

Japan is the top destination for travelers from 12 countries on Agoda’s online booking platform, said Agoda Chief Executive Omri Morgenshtern.

“Demand for Japan is very strong,” Mr. Morgenshtern said. “I assume, overall, you will see 2024 in the 2019 levels or slightly above.” – Reuters

Mainland Chinese surge into Hong Kong property after stamp duties scrapped

CITYSCAPE view of the Victoria Harbour region in Hong Kong. —MANSON YIM-UNSPLASH

HONG KONG – After a pandemic-induced lull spanning more than three years, mainland Chinese are snapping up homes in Hong Kong, accounting for up to a third of new property sales weeks after the city removed all additional stamp duties on foreign buyers.

The surge of mainland Chinese buyers into one of the world’s most expensive housing markets – reported by several property agents and developers – comes amid battered confidence in the mainland’s housing market due to a debt crisis and an uncertain economic outlook.

Mainland Chinese now account for 20% to 30% of new home sales, according to estimates by realtors, with some buyers recently purchasing up to eight apartments at once.

Hong Kong in late February removed all additional stamp duties, including those for purchases of second properties, as well as duties on those selling flats within two years of buying them. Foreigners, who had to pay 15% tax since October, from 30% previously, now pay around 4.25%, on par with locals.

The reversal of what was deemed an unsuccessful government push during the 2010s to cool housing prices came after Hong Kong housing prices plunged more than 20% from their 2021 peak due to higher mortgage rates, an outflow of talent and a weak market outlook.

But even though sales have risen, prices remain suppressed as developers offer discounts to clear inventory. S&P Global Ratings estimated transaction volumes this year would recover only moderately from 2023, as interest rates remain high.

Property remains a mainstay of the Hong Kong economy, and the share of purchases by mainland Chinese climbed to 17%, a record high, in the fourth quarter of last year, research by realtor Midland Realty showed.

The increase coincides with a bid by the Hong Kong government to attract talent by waiving an additional stamp duty for foreign buyers, unless they fail to gain citizenship after seven years.

Now, that share has risen further to around 30% in the primary market, Midland said, based on their internal sales.

At a new launch this month by Wheelock Properties and MTR Corp 0066.HK, mainland Chinese professionals planning to move to Hong Kong accounted for around 20% of those who had expressed an intention to buy, the developer said.

Some mainland Chinese are buying in bulk.

Two weeks ago, major property developer Henderson Land 0012.HK sold all 30 apartments on offer at a launch event, according to realtor Centaline. Two buyers bought eight apartments each, and one of them, who spent HK$42 million ($5.4 million) in total, was from mainland China.

In another Henderson development in Kowloon district, a mainland Chinese buyer bought five apartments totaling HK$25 million, according to media reports.

Developers including CK Asset and New World Development have also said they would do more marketing aimed at mainland Chinese.

Buyers in Shenzhen are particularly interested in Hong Kong, property agents say. The southern city and business hub borders the city.

Alan Cheng, CEO of southern China of Centaline Property Agency, said the company had received more than 1,500 enquiries from Shenzhen about Hong Kong property and completed eight transactions in the last two weeks.

“We have clients who have never cared about Hong Kong but are now asking about the threshold and yield for investing in a property,” he said.

“They heard Hong Kong is a good market.” – Reuters

Winners of ‘Sining Filipina’ national art competition announced

Winners of the Non-Figurative and Figurative categories: (L-R, front): Maria Gemma San Jose (1st place, Non-figurative); Ma. Christina Baltero (3rd place, Figurative); Hanna Joy Sayam (1st place, Figurative); Isabelita Rodillo (3rd place, Non-Figurative); Maria Melissa Sangoyo (2nd place, Non-figurative); and Luckyshia Jenielou Canonigo (2nd place, Figurative). At the awarding ceremony were (L-R, back): SM Supermalls’ President Steven Tan, Singapore Ambassador Constance See, British Ambassador Laure Beaufils, SM Hotels and Conventions Corp. President Elizabeth Sy, US Ambassador MaryKay Carlson, Zonta Club of Makati and Environs President Jeannie Abaya, and BDO Private Bank President Albert Yeo.

It was a celebration of Filipina artistry and women’s empowerment through art as SM Supermalls, BDO Unibank, Inc. and the Zonta Club of Makati and Environs (ZCME) announced the winners of the inaugural Sining Filipina art competition at an awarding ceremony and exhibition opening at SM Aura recently.

Distinguished members of the diplomatic corps, business sector, and the arts community gathered to celebrate the winners and participants of the Philippines’ very first all-female national art competition. ‘Sining Filipina’ aims to highlight Filipina artistry and creativity, and promote their wider participation in Philippine art.

Guests of honor — women leaders themselves — were US Ambassador MaryKay Carlson, British Ambassador Laure Beaufils, Singapore Ambassador Constance See, Embassy of Denmark’s Madame Eva Fischer-Mellbin, Embassy of Nigeria Counsellor/Head of Chancery Charity Ekeadon Davidson, together with SM Hotels and Conventions Corporation President Elizabeth Sy and SM Foundation Executive Director Debbie Sy.

Leading the awarding and exhibition opening ceremonies were SM Supermalls President Steven Tan, BDO Private Bank President Albert Yeo, and ZCME President Jeannie Abaya.

Hanna Joy Sayam from Negros Occidental and her artwork entitled “Pira-pirasong Tela ng mga Marias,” and Maria Gemma San Jose from Ilocos Norte and her artwork entitled “Layers of Experience,” won top honors in the figurative and non-figurative categories, respectively, each taking home the grand prize of Php 250,000.00.

Winners of the Figurative category Luckyshia Jenielou Canonigo (2nd place) and Ma. Christina Baltero (3rd place); and Non-Figurative category winners Maria Melissa Sangoyo (2nd place) and Isabelita Rodillo (3rd place) were awarded a cash prize of Php 150,000.00 for second place and Php 100,000.00 for third. All winners also took home the ‘Sining Filipina’ trophy, specially created by sculptor and Zonta member, Charming Baldemor.

The Sining Filipina trophy, made from mango and narra wood, is a creative representation of everything that it means to be a woman. A play on contrasts presents a piece that is strong yet soft. The trophy was crafted from wood, artfully shaped to form smooth, flowing curves and brushstrokes. The female silhouette was also reimagined to look like a cornucopia — symbolizing abundance and the overflowing creativity in the arts.

The pioneering competition, which provides a platform for women to express their unique perspective and narratives through art, received an overwhelming response with 732 entries coming from women of all ages from all over the country. The esteemed panel of judges that took the formidable task to heart was composed of Metropolitan Museum of Manila President Tina Colayco, Ayala Museum Senior Curator and Head of Conservation Kenneth Esguerra, Ateneo Art Gallery Director and Chief Curator Victoria Herrera, renowned artist Mark Justiniani, and eminent sculptor Julie Lluch.

The awarding ceremony also marked the opening of the exhibition featuring the six winning works and those of the 72 finalists. Proceeds from the sale of the artworks will go towards the artist and ZCME’s charitable programs. The exhibition is ongoing until March 22, 2024 at the Upper Ground Level Atrium of SM Aura.

‘Sining Filipina’ is one of the highlights of SM Supermalls’ Women’s Month celebration this March and is also supported by Airspeed and Brittany Hotel.

 

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Philippines sees up to $6 billion of investments in casino sector in next 5 years

PHOTO BY ALICIA A. HERRERA

MANILA —  Foreign and domestic firms are expected to invest much as $6 billion in the Philippines’ casino sector in the next five years, the head of its gaming regulator said, bolstering its status among Asia’s top gambling destinations as competition increases.

At least one new casino-resort will open every other year including in areas outside Manila like Clark, a former U.S. military base north of the capital, and Cebu in the country’s central region, Philippine Amusement and Gaming Corp Chairman Alejandro Tengco said on Tuesday.

“We will have continued growth because of the opening of new casinos and the expansion in the electronic gaming segment,” Mr. Tengco told Reuters at the sidelines of the ASEAN Gaming Summit.

Mr. Tengco said the Philippines would likely hit its target of P450 billion to P500 billion ($8-9 billion) in total gross gaming revenue (GGR) by 2027, a year earlier than expected.

In 2023, the Philippines posted a record P285 billion in total GGR, a key industry metric representing the amount players wager minus their winnings, government data showed.

Gamblers from Japan, South Korea and Singapore, and domestic mass market players took up the slack from the absence of mainland Chinese high-rollers after the pandemic and tightening of rules on junkets.

That allowed casino resort operators like Bloomberry Resorts and Japan’s Universal Entertainment, and units of Philippine conglomerates SM Investments and Alliance Global Group to post strong performances last year, Tengco said.

The Philippines’ freewheeling gaming industry is bracing for regional competition from Japan, which has approved its first casino, and Thailand, which is again considering legalising casinos.

“We have about five to six years to fortify and solidify so when they open, we are mature already,” Mr. Tengco said. — Reuters

Cryptoverse: AI tokens outpace record-breaking bitcoin

NICK CHONG–UNSPLASH

The artificial intelligence boom has hit the crypto market with a bang.

Coins linked to AI-focused crypto projects have jumped alongside tech stocks like Nvidia, driven by insatiable investor appetite for applications like machine-learning.

The rise of many AI crypto tokens has outpaced even that of bitcoin over the past year as the world’s biggest cryptocurrency has surged to record levels.

Their combined market value has ballooned to $26.4 billion, from just $2.7 billion last April, according to CoinGecko data. Tokens linked to these projects are up between 145% and 297% in the past 30 days.

If the more optimistic industry predictions come to pass, there could be more room to run, as some market watchers say crypto and blockchain technology could help solve some of the AI industry’s teething problems such as privacy and a need for computing power.

“As both AI systems and blockchain networks continue to grow, we will see more and more use cases fusing together the two industries,” said Markus Levin, co-founder of blockchain data storage firm XYO Network.

The CoinDesk Indices Computing Index, which includes AI-linked tokens, has leapt over 165% over the past 12 months, outpacing even bitcoin’s BTC= 151% rise to record levels.

Trading volumes in AI tokens have also risen sharply this year, Kaiko Research data showed, hitting an all-time high of $3.8 billion in late February.

“There is a significant chance that … AI applications will be crypto’s raison d’être,” fund manager VanEck’s Matthew Sigel and Patrick Bush said in a note.

Some of the top blockchain projects at the moment include the Render Network, a blockchain platform for peer-to-peer sharing of AI-generated graphics, Fetch.AI, a platform to build AI apps and SingularityNET, an AI services marketplace.

“Investors are starting to realize that if you want real value, you need products that are uncorrelated to the crypto market,” said Ahmad Shadid, founder of AI-focused blockchain startup io.net.

 

WINNERS AND LOSERS

AI-linked blockchain products include a wide variety of services including payments, trading models, machine-generated non-fungible tokens and blockchain-based marketplaces for AI applications where users pay developers in cryptocurrency.

Investment manager VanEck has predicted that revenue from AI crypto projects could reach $10.2 billion by 2030 in their base case, and over $51 billion in their bullish scenario.

VanEck pointed to the use of crypto tokens as rewards, developing physical computation infrastructure, data verification, and transparency in proving digital ownership as primary areas where blockchain technology lends real-world value to AI development.

Offering crypto tokens as incentives allows quick scalability, said io’s Shadid. His company plans to launch a token later this year.

“The reason we can scale fast is because of the token we have coming out,” he added. “The token incentivizes owners of physical infrastructure to bring their computers on to our network,” Shadid added.

Yet, just as with the AI boom itself, picking winners and losers could be fraught with peril.

“We’re still in the very early stages of AI networks integrating with blockchain-based networks, and the utility of a lot of tokens is still very much uncertain,” cautioned Levin. – Reuters

EU to impose tariffs on Russian grain imports, FT reports

REUTERS

The European Union is preparing to levy tariffs on grain imports from Russia and Belarus to placate farmers and some member states, the Financial Times reported on Tuesday citing people familiar with the plans.

The European Commission is in coming days expected to impose a duty of 95 euros ($103.26) per tonne on cereals from Russia and Belarus, FT said, adding that tariffs of 50% would also be placed on oil seeds and derived products.

The reported move comes as farmers across the European Union call for changes to restrictions placed on them by the bloc’s Green Deal plan to tackle climate change, and for the re-imposition of customs duties on imports of agricultural products from Ukraine that were waived after Russia’s invasion in 2022.

Farmers from neighboring Poland, Hungary and Slovakia, all of which are members of the EU, say the move undercut their prices. Ukraine is not part of the 27-member EU.

Like much of Europe, Poland has also been gripped by protests in recent weeks as farmers demonstrate against EU environmental regulations.

Polish Prime Minister Donald Tusk has also called for an EU ban on imports of Russian and Belarusian agricultural products. – Reuters

EU, Philippines resume stalled trade negotiations

REUTERS

BRUSSELS — The European Union and the Philippines said on Monday they would resume negotiations on a free trade agreement as the EU seeks to tap into Asia’s faster economic growth and gain access to critical raw materials.

Free trade negotiations stalled in 2017 over EU concerns about the human rights record of then Filipino President Rodrigo Duterte, who was succeeded in June 2022 by Ferdinand Marcos.

EU trade chief Valdis Dombrovskis said the bloc welcomed the “positive change of direction” taken by the Philippines’ new administration, while encouraging further progress on human and labour rights.

The European Union is the Philippines’ fourth largest trade partner. Trade in goods was worth 18.4 billion euros ($20 billion) in 2022 and 4.7 billion euros ($5.1 billion) in services in 2021. A trade deal could increase trade by 6 billion euros, Mr. Dombrovskis said.

The EU has targeted agreements with southeast Asian countries and has accords with Singapore and Vietnam and is in negotiations with Indonesia and Thailand.

The EU is eying Filipino raw materials such as nickel, copper and chromite that it needs for its green transition and for which it is currently heavily reliant on China.

The Philippines’ Commissioner for Trade Alfredo Pascual said his country wanted to secure capital and know-how from EU companies to engage in more domestic processing.

His country already benefits from the EU’s tariff-free GSP+ system for developing countries, but aims to rise to upper middle class income status, when GSP+ would no longer apply.

“We want to be able to lock in the benefits of GSP+, plus more,” Mr. Pascual said.

The Philippines currently benefits from tariff-free access to the EU for about two-thirds of products, including coconut oil, vacuum cleaners, tuna and pineapples.

A free trade deal could allow exports of seaweeds, tobacco, wood and ornamental plants, Mr. Pascual said. — Reuters

Bank of Japan ends negative rates, farewells era of radical policy

BANK OF JAPAN Osaka Branch

TOKYO – The Bank of Japan (BOJ) ended eight years of negative interest rates and other remnants of its unorthodox policy on Tuesday, making a historic shift away from a focus of reflating growth with decades of massive monetary stimulus.

While the move was Japan’s first interest rate hike in 17 years, it still keeps rates stuck around zero as a fragile economic recovery forces the central bank to go slow in any further rise in borrowing costs, analysts say.

The shift makes Japan the last central bank to exit negative rates and ends an era in which policymakers around the world sought to prop up growth through cheap money and unconventional monetary tools.

“The BOJ today took its first, tentative step towards policy normalization,” said Frederic Neumann, chief Asia economist at HSBC in Hong Kong.

“The elimination of negative interest rates in particular signals the BOJ’s confidence that Japan has emerged from the grip of deflation.”

In a widely expected decision, the BOJ ditched a policy put in place since 2016 that applied a 0.1% charge on some excess reserves financial institutions parked with the central bank.

The BOJ set the overnight call rate as its new policy rate and decided to guide it in a range of 0-0.1% partly by paying 0.1% interest to deposits at the central bank.

The central bank also abandoned yield curve control (YCC), a policy that had been in place since 2016 that capped long-term interest rates around zero.

But in a statement announcing the decision, the BOJ said it will keep buying “broadly the same amount” of government bonds as before and ramp up purchases in case yields rise rapidly.

The BOJ additionally decided to discontinue purchases of risky assets like exchange-traded funds (ETF) and Japanese real estate investment trusts.

“We judged that sustainable, stable achievement of our price target came in sight,” the central bank said in a statement explaining the decision to dismantle former Governor Haruhiko Kuroda’s massive stimulus program.

With inflation having exceeded the BOJ’s 2% target for well over a year, many market players had projected an end to negative interest rates either in March or April.

In a sign any future rate hike will be moderate, the BOJ said in the statement that it expects “accommodative financial conditions will be maintained for the time being.”

The language compared with the more dovish guidance that was removed from the statement, in which the BOJ pledged to ramp up stimulus as needed, and keep increasing the pace of money printing until inflation stably exceeded 2%.

Japanese shares were volatile on Tuesday. The yen fell JPY=EBS to almost 150 per dollar, as investors took the BOJ’s dovish guidance as a sign the interest rate differential between Japan and the United States likely will not narrow much.

Markets are now focusing on Governor Kazuo Ueda’s post-meeting news conference for clues on the pace of further rate hikes.

The stakes are high. A spike in bond yields would boost the cost of funding Japan’s huge public debt which, at twice the size of its economy, is the largest among advanced economies.

An end to the world’s last remaining provider of cheap funds could also jolt global financial markets as Japanese investors, who amassed overseas investments in search of yields, shift money back to their home country.

Under previous Governor Kuroda, the BOJ deployed a huge asset-buying programme in 2013, originally aimed at firing up inflation to a 2% target within roughly two years.

The central bank introduced negative rates and YCC in 2016 as tepid inflation forced it to tweak its stimulus program to a more sustainable one.

As the yen’s sharp falls pushed up the cost of imports and heightened public criticism over the demerits of Japan’s ultra-low interest rates, however, the BOJ last year tweaked YCC to relax its grip on long-term rates. – Reuters

Indonesia fishing village grapples with piles of trash brought in by tides

STOCK PHOTO | Image by Sergei Tokmakov, Esq. https://Terms.Law from Pixabay

TELUK, Indonesia – Solikah, an Indonesian housewife living in the fishing village of Teluk, was in tears as she pointed to piles of trash strewn on a beach close to her home of 40 years.

Teluk, in the Indonesian province of Banten on the western edge of Java island, has one of the country’s dirtiest beaches as villagers said that heavy rain has led to stronger tides, bringing more trash to shore.

“You can’t predict the weather,” 58-year-old Solikah said.

Indonesia is expecting a milder dry season this year, its meteorological agency said, starting later than usual in May and June for Java.

Fikri Jufri, who leads a community focus on cleaning beaches in Teluk, said the rain had led to the pile-up of trash.

“Every year, the rain and wind carries trash from the sea to the shore,” he said, adding mountains of plastic waste have for years made their way to the sea through rivers, but the tides bring them back ashore.

Biscuit and toothbrush cases, instant noodle packages or even sandals are regularly strewn on the beach, where villagers live on the shore.

Indonesia is one of the world’s biggest contributors of plastic waste that ends up in the sea.

A video of a group of young environmentalists raking up tons of trash in Teluk last year went viral on social media app TikTok.

Despite the waste, the biggest complaint of local fishermen is how the weather unpredictability affects their livelihood.

Jayadi, 33, said high tides during the rains have prevented him from going fishing, lamenting that income will be hit just as his family prepares to celebrate the Islamic Eid al-Fitr festival next month.

“Many villagers will cry because they cannot buy rice if the weather continues like this,” he said. “Last year around this time the sea was calmer, so we could find fish, squids.” – Reuters

US IRS chief sees workforce topping 100,000 within three years

Image of Internal Revenue Service (IRS) Building in Washington, DC, showing the quote “Taxes are what we pay for a civilized society” via Adam Fagen/Flickr/CC BY-NC-SA 2.0

WASHINGTON – Internal Revenue Service Commissioner Danny Werfel said on Monday that the tax agency will need to boost its workforce to over 100,000 people over the next three years to achieve its modernization, service and enforcement goals and additional funding will be needed to maintain that extra capacity.

Mr. Werfel told reporters on his first anniversary in the IRS’ top job that near-term hiring will focus on improving taxpayer services and on handling complex audits.

He added that the IRS will detail its hiring plans next month in an update to its strategic operating plan for deploying some $60 billion in supplemental funding over a decade from the 2022 Inflation Reduction Act.

“We’re at 90,000 now. I think to get into a right-size position over the next two to three years, we need to be above 100,000, but not that much above 100,000,” Werfel said.

That figure would represent a more than 20,000 full-time-equivalent staff increase over the fiscal 2022 level of 79,070, which was about 9.1% below the 2013 level of 86,974, according to IRS data. IRS employment dipped to 73,519 in 2019 after years of budget cuts, mostly passed by Republican-controlled Congresses.

The overall level of increase in the IRS’ staffing would be far less than Republican accusations that the agency is building an “army” of 87,000 agents, many of them armed. That figure was derived from a 2021 Treasury report that estimated gross hiring needs to overcome a wave of IRS retirements and rebuild the workforce, but it has motivated Republicans to try to claw back funding.

A top-line fiscal 2024 spending agreement is set to cut the original $80 billion in funds back to $60 billion.

As congressional negotiators wrangle over another partial government shutdown deadline on Friday, in the midst of tax filing season, Mr. Werfel warned of potential disruptions for taxpayers in receiving refunds. He said the agency would “work within the law to keep as much open as we can, but we can’t keep everything open.”

 

FUTURE FUNDS

President Joe Biden’s fiscal 2025 proposed budget includes a request for an additional $104 billion in IRS funding, which Werfel said would cover later years of the 10-year budget window. Even though the supplemental funding has been cut by $20 billion, IRS will continue making near-term investments in technology at the current pace, he said.

Mr. Werfel added that there would not be enough funding in the separate, annual operating budget for the IRS to support a “new baseline” for the IRS, with the additional employees, to continue to pursue sophisticated audits and continually upgrade technology.

“So we so if we don’t add funds, then at some point we’re going to hit a cliff and we’re going to have to lose some of that capacity,” he said. – Reuters

Gov’t, SMC-led group ink NAIA deal

San Miguel Corp. President and Chief Executive Officer Ramon S. Ang, Transportation Secretary Jaime J. Bautista and Manila International Airport Authority (MIAA) General Manager Eric Jose C. Ines hold copies of the signed concession agreement for the Ninoy Aquino International Airport (NAIA)-Public-Private Partnership (PPP) project in Malacañang, March 18. In the background are (from left) House Speaker Ferdinand Martin G. Romualdez, President Ferdinand R. Marcos, Jr. and Executive Secretary Lucas P. Bersamin. — PHILIPPINE STAR/KJ ROSALES

By Kyle Aristophere T. Atienza and Ashley Erika O. Jose, Reporters

THE PHILIPPINES is banking on the multibillion-peso makeover of its major international airport — one of the worst in the world — to boost the economy through increased flights and tourism receipts, according to President Ferdinand R. Marcos, Jr.

“This undertaking is not just about revenues that will be remitted to the Treasury alone,” he said in a speech during the signing ceremony in Malacañang on Monday. “It is an investment in our future.”

The upgrade of the aging and congested Ninoy Aquino International Airport (NAIA) is part of the Marcos government’s push to tap the private sector in improving the nation’s major infrastructure and ease the state’s fiscal burden.

The P170.6-billion public-private partnership (PPP) project, which took a record-breaking six weeks to be awarded to the consortium led by San Miguel Corp. (SMC), will increase the airport’s capacity by 77% to 62 million passengers yearly.

“But we did not sacrifice scrutiny for speed,” Mr. Marcos said. “It was fast, but it was also fastidiously examined at every step of the way. It was open, transparent, and competitive.”

The consortium, composed of San Miguel Holdings Corp.; RMM Asian Logistics, Inc.; RLW Aviation Development, Inc.; and Incheon International Airport Corp. has been given a 15-year concession that can be extended for another 10 years.

The National Government expects to earn P900 billion from the project in those years, or P36 billion a year. This is 20 times bigger than the P1.17 billion remitted by the Manila International Airport Authority annually in the 13 years through 2023, according to the Transportation department.

Efforts to rehabilitate NAIA had been stalled by various issues, denying the Philippine economy in tourism receipts, said Mr. Marcos, citing “bureaucratic inertia, political turbulence, [and] legal wranglings.”

“The reputation of this airport has been shredded, and let us be frank about it, not by bad press, but by its actual poor state,” Mr. Marcos said, noting that “the postponed improvement of the airport has resulted in delayed and reduced number of flights.”

He lamented that NAIA has been operating beyond its capacity for almost a decade.

“And since that is the case, the restoration of this airport should go beyond its physical design and structure,” he said, calling for a “major overhaul.”

Mr. Marcos cited the need to rehabilitate the passenger terminals and airside facilities, develop commercial assets and utility systems, and put up intermodal and inter-terminal transport facilities.

Finance Secretary Ralph G. Recto hopes the upgrade will finally help NAIA move from the “list of world’s worst airports to one of the best.”

“[It] aims to address the longstanding challenges of undercapacity, congestion, and underinvestment in the country’s main gateway,” he said in a speech.

The landmark deal, the fastest PPP project to progress from submission to an investment coordination committee for approval to concession agreement signing, sets a precedent for future initiatives between the state and the private sector, PPP Center Executive Director Ma. Cynthia C. Hernandez said in a speech.

NEW TERMINAL
Meanwhile, SMC President and Chief Executive Officer Ramon S. Ang said the consortium, now known as New NAIA Infrastructure Corp., has already secured funds for the NAIA project.

“We have separate funding [from SMC]. The funding has already been committed by the bankers and we have shown the bankers that we are fully financed, fully underwritten,” he said at a media briefing on Monday.

Mr. Ang said the funding source for the project “should not be considered a problem”  as banks, particularly the Sy-led BDO Unibank, Inc. have committed to provide funding.

New NAIA Infrastructure is planning to build a new passenger terminal building with a total capacity of 35 million passengers per year as part of its commitment to decongest the airport.

“In the future we will decongest the airport. Eventually when we build a new passenger terminal and a new multipurpose building with a carpark all of those offices can be relocated to this multipurpose building and it will add 30% more space in our existing terminals,” Mr. Ang said.

Mr. Ang said the proposed building, which will be constructed within three years after the approval of the Transportation department, will feature concourses and boarding bridges to allow seamless and efficient passenger transfers.

“With that signing, the consortium will be able to implement infrastructure projects, reform in the operations, which will redound to the benefit of the riding public,” Transportation Secretary Jaime J. Bautista said.

New NAIA Infrastructure will take over the operations of the airport by September.

“From September to next year, in March, I guarantee there will be no vehicular traffic. The Terminals 1 and 2, will be much easier to rehabilitate, starting September it will be under full maintenance,” SMC’s Mr. Ang said.

Analysts said the much-awaited NAIA upgrade will help boost the Philippines’ efforts to attract more tourists, especially as the airport has been consistently ranked among the worst in the world.

“The public is indeed frustrated with the state of our main airport, so any effort to rehabilitate both its services and image would be a major shift in perspective,” said Emy Ruth Gianan, who teaches economics at the Polytechnic University of the Philippines.

“A more efficient airport would give us an advantage alongside our competitive tourist spots,” she said in a Facebook Messenger chat.

Tourism accounted for 6.2% of the Philippine economic output in 2022, and the government hopes it will be a key driver of the country’s growth goals.

The Southeast Asian nation recorded 5.45 million international visitors in 2023, hitting the 4.8-million target but accounting for only 66% of total arrivals.

Regional airports may follow suit after the Marcos administration’s deal with the SMC-led consortium, said Terry L. Ridon, convenor of InfraWatch PH.

“We are expecting the same fast and efficient processing times in respect to the other regional airports around the country as well, particularly relating to the unsolicited proposal process currently being undertaken by a private proponent,” he said in a Facebook Messenger chat.

However, he noted there could be an increase in terminal fees.

“We are more optimistic that reasonable fees will be imposed during the NAIA concession given that an overwhelming share in revenue will be taken by the government,” he said.

If it happens, the government should delay any price hikes in travel expenses, “first as “compensation” for bad public service and second as a means to generate further interest in domestic tourism,” Ms. Gianan said.

A recent study by British business finance researcher BusinessFinancing.co.uk based on travelers’ accounts ranked NAIA as the fourth-worst airport in Asia for business travelers.

NAIA had been hounded by brownouts in recent years, and a severe power outage on the first day of 2023 jolted its air-traffic control and disrupted over 200 flights.

“The stability, development, and security of an airport represents how capable a country is in positioning itself in an increasingly globalizing world,” said security expert Don Mclain Gill, who teaches international relations at De La Salle University.

A modernized airport should have an “efficient security system that can adapt to emerging threats,” he said via Messenger chat. “This means that a modernized airport security must adopt a risk- based screening and the utilization of advanced technology to ease certain deficiencies in manpower.”

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