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Musk launches poll asking if Tesla should invest $5 bln in xAI, early votes in favor

DANIEL OBERHAUS-FLICKER

SAN FRANCISCO – Tesla CEO Elon Musk has launched a poll asking users on social media platform X whether the electric carmaker should invest $5 billion in his artificial intelligence startup xAI – with early votes showing most in favor of the move.

“Board approval & shareholder vote are needed, so this is just to test the waters,” Mr. Musk said of the poll which came on the heels of Tesla posting its lowest profit margin in five years on price cuts and increased spending on AI projects.

During Tesla’s earning conference call, Mr. Musk said xAI would be “helpful in advancing full self-driving and in building up the new Tesla data center,” adding that there are opportunities to integrate xAI’s chatbot, Grok, with Tesla’s software.

Nearly 3 hours after the poll was posted, roughly 386,000 people had participated with 70% voting in favor of the investment.

Tesla did not immediately respond to a Reuters request for comment, while xAI could not be reached for comment.

Mr. Musk, the world’s richest person, launched xAI last year, hoping to build an alternative to ChatGPT. The startup raised $6 billion in a series B funding in May, attaining a post-money valuation of $24 billion. Backers include Andreessen Horowitz and Sequoia Capital.

Mr. Musk has previously said that he plans for a quarter of xAI to be owned by investors in X, formerly known as Twitter, which he bought for $44 billion although the social media firm’s value has plunged since then.

On the earnings call, Mr. Musk also dismissed concerns that he may be diverting resources from Tesla to some of his other companies.

In June, CNBC reported that he had ordered Nvidia to ship thousands of AI chips destined for Tesla to xAI and X. Musk said Tesla’s data center was full and there was no place to put the chips.

Mr. Musk is a frequent poller on X. In 2021, he asked Twitter users about whether he should sell 10% of his Tesla stake and commenced selling shares just days after the poll. – Reuters

Japan protests Russia’s decision to ban entry of 13 business executives

ROMEO A Z8JC-UNSPLASH

TOKYO – Japan protested to Russia on Wednesday over curbs denying entry to 13 Japanese business executives, including the Toyota Motor chairman, as part of counter-sanctions measures.

The Russian foreign ministry published the list of 13 Japanese citizens on Tuesday, saying Moscow would permanently ban their entry into the country.

“The decision announced by Russia would restrict legitimate Japanese corporate activities and that is totally unacceptable,” Chief Cabinet Secretary Yoshimasa Hayashi told a media briefing in Tokyo, the Japanese capital.

Others on the list include Rakuten Group founder Hiroshi Mikitani, Toyobo Co President Ikuo Takeuchi and Toray Industries 3402.T President Mitsuo Oya. – Reuters

In Bangladesh, frequent floods leave government playing catch-up

DHAKA (Thomson Reuters Foundation) – Junayed Ahmed had bought cows to sacrifice and was looking forward to celebrating Eid-al-Adha with his parents in the city of Sylhet in eastern Bangladesh. But then rain started pelting down, the river Surma began to rise and his house was flooded.

“With knee-deep water in our single-story house and its yard, we just had to postpone the important ritual,” said the 25-year-old mechanic.

Monsoon rains are to be expected in this part of northeastern Bangladesh, and the government has improved its ability to deal with any resulting floods, but as climate change accelerates, authorities seem trapped in a relentless game of catch-up.

Climate change has led to a four-fold increase in rainfall levels during the monsoon season in Bangladesh and northeast India, according to a 2023 study published in the Quarterly Journal of the Royal Meteorological Society.

“Rain does not follow the calendar anymore and we see sudden, unprecedented downpours that leave us with no preparation time,” said Farzana Raihan, professor of environmental science at Shahjalal University of Science and Technology in Sylhet.

In June, when Eid-al-Adha is celebrated, torrential rains – up to 240mm in just one week in some northeastern districts – combined with upstream water from India to trigger flash floods that left more than 2 million people stranded.

Bangladesh, a low-lying country where floodplains cover more than 80% of the land, is also still recovering from a cyclone that hit its southern coastal belt in May.

Since flash floods killed around 140 people two years ago, the government has tried to boost its preparedness – it has strengthened its warning systems, arranged more shelters for people, and prepared better aid distribution.

Working with international and local development organizations, the government set up stronger, more localized weather forecasting systems that issued timely warnings, said Jyotiraj Patra, program director at Concern Worldwide, which has been working with the government on flood response.

His organization alerted 10,000 households and provided cash assistance to 1,120 vulnerable households during the June floods.

Thanks to that early alert, more than 50,000 people were able to take refuge in upgraded flood shelters.

“There is strong evidence that early warnings save lives,” Patra said.

 

FRAYED RESILIENCE

But even if lives were saved this time, the floods took a heavy toll on the livelihoods of some vulnerable groups, including the fish farmers of the Sylhet region.

Thousands of fish ponds, mostly used to farm carp, were flooded with financial losses reaching 1.34 billion Taka ($11.45 million), according to the Divisional Fisheries Department.

As well as destroyed livelihoods, the floods affected people’s health, with children being particularly vulnerable.

The U.N. children’s agency UNICEF said more than 772,000 children were in urgent need of assistance after last month’s floods and faced heightened risks of drowning, malnutrition, deadly waterborne diseases, the trauma of displacement, and potential abuse in overpopulated shelters.

Mohammad Paplu Miah, who works for the international development organization BRAC delivering aid to those affected by the floods, said his two-year-old son got bad diarrhea during the last flood in 2022.

“We went from one hospital to another wading through floodwater and everyone refused to admit my son as the hospitals were flooded – until we found one that could provide him with saline and saved his life,” he said.

Floods also affect children’s education – more than 800 schools in the Sylhet district were flooded in June and another 500 were used as flood shelters. In July, dozens of schools were submerged in the northern Kurigram district.

 

TOO MUCH PLASTIC, NOT ENOUGH DATA

Patra from Concern Worldwide said there was a need for more fine-grained data to identify those most at risk from floods. He said since flooding in the northeast was particularly linked to rainfall and river systems in India, there should also be more data-sharing between the two countries.

Raihan, of Shahjalal university, said authorities also needed to look at why rivers like the Surma and Kushiyara, on the India-Bangladesh border, burst their banks and were unable to channel heavy rainfall.

“Sedimentation and plastic waste hamper the water flow in these rivers that are rarely dredged,” she said.

The unplanned expansion of built-up areas has also blocked water bodies so that even a few metres rise in water levels can submerge entire sections of Sylhet city, she added.

“We need a proper mapping of the flood risk hotspots and to align the way we build homes and cities in these flood-prone zones,” she added.

Such measures might come too late for those already affected – people like mechanic Ahmed – but they would at least offer hope that future climate change-related events might not cause such destruction.

Ahmed was forced to spend 700,000 Taka (nearly $6,000) – the family’s entire savings – to rebuild their house after the 2022 flood only to see it damaged again just two years later.

“What’s the use of rebuilding, if we face the same losses year after year?” he asked. – Reuters

Primeworld Land Holdings, Inc. celebrates turnover of Primeworld District Tower H

Primeworld Land Holdings Inc. proudly marked a significant milestone with the turnover ceremony of Primeworld District Tower H. The event, held at the resort community’s central amenity area, embraced a vibrant Caribbean theme, adding a festive flair to the proceedings.

Nestled in the heart of Brgy. Agus, Lapu-Lapu City on Mactan Island, Primeworld District stands out as a resort-inspired community, offering a unique blend of comfort and practical luxury. This turnover ceremony signifies the upcoming handover of the Primeworld District’s second residential tower to its homeowners in the coming months, showcasing Primeworld Land’s commitment to delivering exceptional living spaces to its investors.

Primeworld District has quickly established itself as a prime investment choice for both locals and international buyers. With only a few units remaining for sale at turnover date, the project’s strong demand and investor confidence are clear. Ready-for-occupancy units are available with affordable payment plans, making Primeworld District a compelling value-for-money option. Its combination of high-quality living, affordability, and a prime location makes it an ideal choice for those seeking both a home and a solid investment opportunity.

The project has garnered prestigious accolades, including the Best Mid Range Condominium Development at the Dot Property Philippines Awards 2023 and the Grand Winner for Best Affordable Condominium of the Year for Visayas and Mindanao at The Lamudi Real Estate Awards 2023. Additionally, Primeworld Land has been recognized as the Best Boutique Developer for Visayas and Mindanao at the Lamudi Real Estate Awards for the years 2022-2023.

The evening was a delightful celebration of great food, lively music, and camaraderie. Guests enjoyed a spectacular fire dancing performance that enhanced the Caribbean ambiance. The ribbon-cutting ceremony, a highlight of the event, was led by Primeworld Land’s CEO Sherwin Uy. In his welcoming speech, he expressed excitement about welcoming new Tower H homeowners and gratitude for the hard work of the Primeworld team and its partner sellers. He was joined by Primeworld Land’s executives and directors, including Ar. Alex Tan, Mycah Tan, Meche Tan, Nina Tan, Talexis Tan, Nelba Pangilinan, and Jami Lee Laniba.

The turnover of Primeworld District Tower H represents another significant step in Primeworld Land’s vision of creating exceptional living spaces that blend elegance with resort-style living. The community looks forward to welcoming its new residents and continuing its legacy of success.

For more information about Primeworld District and future projects, visit www.primeworldland.com.

 

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Flood disrupts PHL transport

photo by Ryan Baldemor, Philippine Star

Typhoon Carina and the Southwest monsoon disrupted the Philippine transportation system by causing floods in some areas in the National Capital Region (NCR) and surrounding areas. 

Based on the flood update today at 9:35 AM, the Metropolitan Manila Development Authority (MMDA) announced flooding in Manila, Marikina City, Quezon City, Pasay City, Taguig City, and Valenzuela.  

As of 10:18 AM, Marikina River’s water level reached 18.2, raising the third alarm, Marikina Public Information Office said on a Facebook post.  

Balintawak North and Southbound, Valenzuela North and Southbound, Meycauayan North and Southbound, Meycauayan Northbound Entry, and Marilao Southbound of the North Luzon Expressway (NLEX) are also not passable to all types of vehicles.

Class 1 vehicles cannot pass through the NLEX Connector C3 and España entry ramps. 

Marilao Southbound Entry, Meycauayan Southbound Entry, Paso de Blas Northbound Entry, Lawang Bato Northbound Entry, Tambubong Southbound Entry, Tabang Southbound Entry, Balagtas Southbound Entry, and Sta. Rita Southbound Entry toll plazas are temporarily closed due to the typhoon. 

According to a Facebook post from the NLEX Corporation, U-turn slots are open in Meycauayan Interchange Northbound (going to Marilao/Bocaue), Valenzuela Northbound (Torres Bugallon area and Mapulang Lupa – going to Balintawak), and Balintawak Northbound (near Skyway Stage 3). 

Meanwhile, the MMDA Pasig River Ferry Services suspended its operations due to rising water levels that caused the rise in the pontoon of the stations. 

Rescue vehicles are on standby to offer free rides for stranded commuters, MMDA said. 

 

Flight cancellations and delays 

Cebu Pacific Air announced delays and flight cancellations due to the impacts of the typhoon. 

“The Ninoy Aquino International Airport (NAIA) Terminal 4, where our Cebgo (DG) flights operate, is closed and inaccessible due to flooding. All arriving DG flights will be diverted to NAIA Terminal 3,” the airline said in a Facebook post. 

Passengers were advised to monitor their flight statuses via https://www.cebupacificair.com/flight-status. – Almira Louise S. Martinez

Flooding in Metro Manila and parts of Luzon

(JULY 24, 2024) Residents of barangays in Proj. 4, Quezon City wade through heavy flooding on Wednesday due to continuous rain brought by Typhoon Carina and Habagat. (PHOTO BY MIGUEL DE GUZMAN)

Flood advisories are raised in different areas in Metro Manila and parts of Luzon as heavy rains continue to impact the region.  

The weather bureau raised a red rainfall warning on Wednesday morning due to heavy rains caused by the Typhoon Carina-enhanced southwest monsoon.  

Areas under the Red rainfall warning, including Metro Manila, Rizal, Bataan, Pampanga, and Bulacan, are expected to experience “serious flooding.” 

Meanwhile, areas under the orange warning level including Cavite and Zambales, are expected to experience moderate to heavy rainfall with a risk of “threatening” flooding.  

The areas under the yellow rainfall warning, where flooding is expected in flood-prone areas, include Laguna, Batangas, Tarlac, and parts of Quezon (General Nakar, Infanta, Real, Mauban, Sampaloc). 

 

Floods Advisories in Metro Manila 

Metro Manila Development Authority (MMDA) has announced flooding on some major roads in Metro Manila. 

Here are the roads with knee-deep or deeper flooding that are impassable for light vehicles: 

  • Quezon Ave. Capitol Westbound and Eastbound 
  • A. Bonifacio Balintawak Cloverleaf Northbound 
  • C5 Katipunan C.P. Garcia Southbound 
  • EDSA Northbound Dario 
  • EDSA Northbound Balintawak 
  • Elliptical Visayas Ave. D.A.R.
  • Mindanao Ave. Congressional Westbound

– Edg Adrian A. Eva

Typhoon Carina forces Philippines to halt work, market trading

PHILIPPINE STAR/MIGUEL DE GUZMAN

MANILA – Typhoon Gaemi (Carina locally) and a southwest monsoon brought heavy rain on Wednesday to the Philippine capital region and northern provinces, prompting authorities to halt work and classes, while stock and foreign exchange trading were suspended.

The presidential office suspended classes at all academic levels and work in most government offices in the capital region, which is composed of 16 cities and home to at least 13 million people, because of the tropical storm.

Gaemi, with maximum sustained winds of 155 kilometers per hour (96.3 mph) and gustiness of up to 190 kph, was heading towards Taiwan, the Philippines‘ state weather agency said in a 5 a.m. bulletin.

It did not make landfall but it is enhancing a southwest monsoon, resulting in heavy to intense rain in northern Philippines, the agency said. “Flooding and rain-induced landslides are likely.”

Gaemi and another tropical storm, Prapiroon, hit southern Philippines and caused floods last week, resulting in seven deaths.

The Philippine coastguard said 354 passengers and 31 vessels were stranded in ports while airlines cancelled 13 flights on Wednesday, Manila’s airport authority said.

The Philippines sees an average of 20 tropical storms annually, causing floods and deadly landslides. – Reuters

Property stocks slide amid POGO ban

A sign protesting the presence of Philippine offshore gaming operators (POGOs) is seen at a posh residential village in Muntinlupa City, July 13. President Ferdinand R. Marcos, Jr. announced a total ban on POGOs in the country during his third State of the Nation Address on Monday. — PHILIPPINE STAR/RYAN BALDEMOR

By Revin Mikhael D. Ochave, Reporter and Aubrey Rose A. Inosante

PROPERTY STOCKS slumped on Tuesday amid concern the ban on Philippine offshore gaming operators (POGOs) will leave many office and residential buildings empty.

At the Philippine Stock Exchange (PSE), the property index closed 1.62% or 44.24 points lower to 2,681.82, a day after President Ferdinand R. Marcos, Jr. ordered a total ban on POGOs in the country. The main PSE index rose by 0.61% or 41.07 points to end the trading day at 6,753.12.

In his State of the Nation Address on Monday, Mr. Marcos also instructed the Philippine Amusement and Gaming Corp. (PAGCOR) to wind down and cease operations of all POGO facilities by the end of 2024.

“(Tuesday’s) performance of the property index was largely influenced by the POGO ban. In the sector, we can see that DoubleDragon Corp. and DDMP REIT, Inc. were the biggest losers, plunging by 5.2% and 5.17% respectively, as these two have the most exposure to POGOs among the property firms in the market,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

DDMP REIT shares fell by 5.17% or six centavos to P1.10 apiece, while DoubleDragon stocks retreated by 5.2% or 62 centavos to P11.30 each.

Stocks of SM Prime Holdings, Inc. also dropped by 2.45% or 75 centavos to P29.90 per share, while Ayala Land, Inc. shares dipped by 0.94% or 30 centavos to P31.60 apiece.

“The ban will definitely have a negative impact on exposed firms, particularly DDMP REIT as 51% of their total rental income for fiscal year 2023 came from a mix of POGO and PAGCOR-accredited business process outsourcing firms,” AP Securities, Inc. Research Analyst Jose Antonio B. Cipres told BusinessWorld in a Viber message.

Some analysts noted that several developers have already made significant efforts to lower their POGO exposure during the pandemic.

Ms. Alviar said most property companies have “less than 5%” exposure to POGOs, so the revenue impact could be “minimal to insignificant for some.”

“It’s important to remember that all the major real estate players have already limited their exposure to POGOs, so any loss in lease income should not materially affect their earnings outlook or long-term prospects,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

Richard G. Laneda, COL Financial Group, Inc. research senior manager, said in a market note that the POGO ban will have a “minimal” impact on the companies being covered by the stock brokerage.

“While some listed companies still have POGO operations, their exposure to POGOs has significantly decreased since its peak in 2019. The direct impact on listed companies is now minimal, compared to in 2019 when Megaworld Corp.’s exposure was 10% and Filinvest Land, Inc. was 15%,” he added.

“However, industry-wide gross leasable area occupied by POGOs will significantly lower average occupancy rates,” he added.

However, Ms. Alviar said the decline in property stocks is just a “knee-jerk reaction.”

“Bargain hunting is anticipated especially to property firms with low exposure to POGOs,” she said.

IMPACT ON BAY AREA
Some real estate consultants said they expect office vacancy levels to rise in certain areas where POGOs are concentrated such as the so-called Bay Area.

“We anticipate an increase in vacancy levels in the office and residential markets in select areas of the Metro where they are concentrated,” JLL Philippines Head of Research and Strategic Consulting Jan-Loven C. de los Reyes told BusinessWorld on Tuesday.

In an e-mail to BusinessWorld, Prime Philippines said the Bay Area, which hosts a substantial number of POGO companies, is expected to be the most affected. Other areas that may experience “slight to moderate impacts” from the POGO ban include Makati, Cavite, Mandaluyong, and Clark, Pampanga, it added.

Mr. Cipres said one area that could see an uptick in residential vacancy rates is the Bay Area, where many condominiums are home to POGO workers.

Leechiu Property Consultants, Inc. Founder and Chief Executive Officer (CEO) David Leechiu said the POGO ban will be detrimental to the recovery of the local property sector.

“POGOs will vacate a million square meters of office space and probably the same amount of condominium space. The office spaces in the Bay Area will be affected and vacated at a time when there is still so much office space in the market. Rents will continue to come down and become softer,” Mr. Leechiu said.

Mr. Leechiu said the harder hit segment will likely be the midrange residential condominium market, which has many spaces for lease. He expects vacancies to be “quite high for a long time.”

“We have to see how the market will absorb the additional supply of office spaces and residential units from POGO tenants and landlords. A potential glut could put downward pressure on real estate rents and prices in certain locations with high POGO exposure,” Mr. Colet said.

Joe Curran, CEO of real estate brokerage and consultancy firm KMC Savills, said in a Viber message that the overall impact of the ban will be “minimal and manageable.”

“The advantages of the restrictions on this (POGO) industry could outweigh the associated risks. This could also further help position the country as a transparent and world-class destination for inward investment,” he said.

Mr. Leechiu also expects the recovery of the property sector to be delayed due to the POGO ban.

“The ban will delay the recovery of the office market by a year, with 2028 now seen as full recovery. For the residential market, it will be two more years, now in 2029,” he said.

“The biggest impact there is on sentiment because there’s supply overhang, many buyers will not want to buy. If people don’t buy, the developers will not build. This will hit the construction industry more,” he added.

Meanwhile, Maria Rochelle S. Diaz, executive vice-president for commercial of listed luxury developer Shang Properties, Inc., told reporters at a media briefing that the POGO ban will not affect the company.

“The profile of our buyers is mostly Filipinos. We have a healthy mix of foreign buyers which are not China-based, so we’re not as affected,” she said.

BENEFITS OF POGO BAN
National Economic and Development Authority Secretary Arsenio M. Balisacan told reporters that the benefits of banning POGOs outweigh its costs, citing its low contribution to growth.

“We are likely losing from the presence of these POGOs because of, for example, tourism. China has made it clear that cross-border tourism is likely to be regulated by them for countries that host those POGOs,” he said.

POGOs contributed less than 1% to gross domestic product in 2022 alone, Mr. Balisacan said.

“When I said that one-half of 1% of GDP is what the POGOs contribute, that already takes into account the properties,” he said. “The social cost and reputational cost to the country of hosting these kinds of businesses is not good at all.”

Mr. Balisacan said affected POGO workers could be absorbed by the information technology-business process management sector.

Meanwhile, Finance Secretary Ralph G. Recto said firms using legitimate internet gaming licenses will not be affected by the POGO ban.

“I don’t think they’re POGOs, that’s different,” he told reporters on Tuesday.

Mr. Recto had recommended the POGO ban to the President.

“It only shows that the President is also sensitive and listening, especially with regard to issues of this nature… criminality, and its reputational risks to us… so, it’s hard to quantify that,” he said. — with inputs from B.M.D.Cruz

Digital payments account for half of retail transactions at end-2023

The share of online payments in the total volume of retail transactions in the Philippines rose to 52.8% in 2023 from 42.1% a year earlier, central bank data showed. — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

THE PHILIPPINES achieved its target of digitizing 50% of all retail payments at the end of 2023, amid the rise in merchant payments, the Bangko Sentral ng Pilipinas (BSP) said.

The BSP’s 2023 Status of Digital Payments in the Philippines report released on Tuesday showed that the share of online payments in the total volume of monthly retail transactions rose to 52.8% in 2023 from 42.1% a year earlier.

This was slightly higher than the central bank’s target of digitalizing 50% of the volume of retail payments by end-2023.

“In 2013, if you recall, only 1% out of the 2.62 billion monthly retail payments was electronic. Ten years after, we are now more than halfway there,” BSP Deputy Governor Mamerto E. Tangonan said at a briefing.

Last year, the volume of digital payments stood at 2.62 billion, slightly higher than the 2.35 billion non-digital transactions.

“Out of 5 billion monthly transactions more than 2.6 billion transactions were successfully converted into digital form representing a substantial 28.1% increase from the previous year,” the BSP said in its report.

Meanwhile, the value of digital payments amounted to $110.5 billion in 2023, higher than the $89.3 billion non-digital transactions.

“In terms of value, the latest e-payments measurement also showed that the share of monthly digital payments to total transactions increased to 55.3% in 2023 from 40.1% in 2022,” the central bank said.

The top contributors to the rise in digital payments were merchant payments, which accounted for the bulk or 64.9% of monthly digital payments volume, equivalent to 1.7 billion transactions.

This was followed by person-to-person transfers (19.3% share or 505.3 million transactions), and business-to-business supplier payments at (6.1% share or 160 million transactions).

“Philippine digital payments volume is predominantly driven by high-frequency, low-value retail transactions such as merchant payments and person-to-person transfers,” Mr. Tangonan said.

“The growth is underpinned by the growth in QR PH person-to-merchant payments, which increased by almost three times compared to 2022,” he added.

Mr. Tangonan also attributed the rise in account-to-account transfers due to the efficiency and convenience of e-payment facilities PESONet and InstaPay.

“Another significant contributor which is slowly but surely catching up in digitalization is supplier payments. It grew substantially in 2023 at more than twice that of 2022. An observation that underscores the growing adoption and reliance on digital transactions in the business payment landscape,” he added.

The BSP is targeting to achieve a 60-70% share of digital payments over total retail payments volume by 2028, in line with the Philippine Development Plan.

“As you know, in any innovation life cycle, where we are right now, we’re over 50%. The next 20% would equally be challenging, if not more challenging than the first 50%,” Mr. Tangonan said.

He said that the BSP is working on ways to expand the user base of digital payments by reducing costs and increasing the trust of consumers in online platforms.

REQUEST TO PAY
“We have launched several initiatives and many more are underway in the advancement of digital payments and the promotion of financial inclusivity towards our end-goal of a cashlite society,” Mr. Tangonan said.

For example, the central bank is looking at launching new facilities to further boost digital payments.

“We’re continuously digitalizing person-to-person and person-to-business payments, and we’re working with the Philippine Payments Management, Inc. (PPMI) on having the request to pay (RTP) facility made interoperable,” BSP Payments Policy and Development Department Director Bridget Rose M. Mesina-Romero said.

The facility allows businesses and consumers to better control outgoing payments and enhanced monitoring of their cash flow.

“RTP is a payment overlay service that provides secure messaging between a payee and a payer,” the BSP said.

“Each payment request is automatically linked to a dialogue chain that allows the payer to either approve the request, and therefore authorize the payment to be made from their account, or decline the request, using the dialogue chain to explain the reason for said action.”

In December 2023, the BSP soft-launched the first use case for the facility, the InstaPay RTP cash-in service. It is targeted to be fully implemented within the year.

The cash-in service allows users to “fund their own accounts or e-wallets by sending a request for funds to the originating financial institution while using the digital platform of the receiving financial institution.”

The BSP is also working to implement the RTP facility for e-commerce platforms.

“As you know, e-commerce is growing very rapidly and so we would like to take advantage of that growth by making sure that there’s convenient digital payments,” Mr. Tangonan said.

Ms. Mesina-Romero added that this initiative would also lessen the need for cash-on-delivery transactions for e-commerce purchases.

Apart from RTP, the BSP is also developing a direct debit facility.

“Direct debit is a payment service that allows customers to better manage their recurring payments such as monthly rentals, loan amortizations and insurance premiums by simply authorizing billers to pull funds from the account of the payors,” the BSP said.

The facility will also help “streamline collection efforts and improve liquidity management” for payees.

“You would not have to maintain multiple accounts to be able to settle your different obligations to the different financial institutions,” Ms. Mesina-Romero added.

The BSP targets to launch the pilot for the direct debit facility this year.

TRANSIT PAYMENTS
Mr. Tangonan said the central bank is also currently working with the Transportation department to explore alternatives for transit payments.

“As you know, many of our Filipinos use public transportation and that is a very good opportunity for them to enjoy the benefits of digital payments by just using their phones to make the fare payment,” he said.

Apart from this, the central bank is also pursuing other measures to boost digitalization, such as its involvement in Project Nexus.

In March 2023, the BSP and four other central banks in the region announced they will connect their domestic instant payment systems through the Bank for International Settlements’ Project Nexus.

“While it has its origins in the ASEAN (Association of Southeast Asian Nations) region, the vision for Nexus is actually global. And we aim the platform to interconnect with other countries or other regional platforms, also in the Middle East, Europe, and North America,” Mr. Tangonan said.

The BSP also noted the PPMI’s latest initiative which includes a third settlement cycle for PESONet transactions.

“It introduces a third cycle of clearing and settlement within a business day, allowing recipients to receive funds at an earlier time than the usual end of banking day. What this means is heightened efficiency for individuals and businesses in managing their cash flows,” Mr. Tangonan added.

The BSP said that these initiatives for digital payments will help support  its target of onboarding at least 70% of adult Filipinos into the formal financial system.

Fiscal plan for Marcos’ 3rd year missed in SONA

President Ferdinand R. Marcos, Jr. walks through the plenary hall after delivering his third State of the Nation Address on Monday, July 22, 2024. — PHILIPPINE STAR /KJ ROSALES

By Kyle Aristophere T. Atienza, Reporter

PRESIDENT Ferdinand R. Marcos, Jr. failed to discuss plans to address the country’s fiscal situation in his third State of the Nation Address (SONA), despite his vows to pursue “aggressive” infrastructure projects and pushing for a wage hike for government workers and teachers, economists said.

“There were no concrete sources of funds from the President’s SONA,” Emy Ruth Gianan, who teaches economics at the Polytechnic University of the Philippines, said in a Facebook Messenger chat.

“There was also no reminder for the Bureau of Internal Revenue to beef up tax collections or other levying units to improve revenue generation,” she added.

In his third SONA on Monday, Mr. Marcos said his government is pursuing an “aggressive” infrastructure development in line with the country’s goal to become an upper middle-income economy by next year.

“Our power and internet services are continuously being upgraded in both capacity and connectivity,” Mr. Marcos said, adding that the government is building “essential infrastructure and linkages” to support artificial intelligence systems “for high-impact practical applications.”

He said the government will boost scholarships and research grants in line with the “agenda to foster startups” and “commercialize and mass produce research and development outputs.”

Mr. Marcos also vowed to pursue a wage hike for government employees and implement an expanded career progression system for public school teachers.

Even though these programs will require massive funding, the President did not call for new taxes or discuss other sources of revenues.

“The President’s declarations on infrastructure and other key initiatives cost money. If we adhere to the policy of simply improving our tax administration without new forms or higher rates of appropriate taxes, the only option is to increase our borrowings,” Diwa C. Guinigundo, a former central bank deputy governor, said in a Viber message.

The National Government (NG) borrows from both foreign and domestic lenders to fund its budget deficit as it spends more than its revenues to support infrastructure projects and boost economic growth. The budget deficit in the January-May period widened by 24.06% to P404.8 billion.

“In time, if borrowings are not translated into growth, debt servicing could even divert public money away from supporting more infrastructure and productive activities in the future,” Mr. Guinigundo said.

Economic managers are targeting 6-7% gross domestic product (GDP) growth this year.

Government debt hit a record high of P15.35 trillion at the end of May, according to the Bureau of the Treasury (BTr), which largely pointed to the weakening of the local currency against the greenback.

“Any form of public goods will require substantial amounts of funds. Hence, a good measure of how SONA should consider not just the type of public goods that will be delivered but also how the public will have to pay in order to acquire them,” said Leonardo A. Lanzona, Jr., who teaches economics at the Ateneo de Manila University.

“In the face of substantial debts and huge budget deficits, this dream that the government will supply for all of this infrastructure and higher wages for government officials will be impossible,” he said in an e-mail.

At a post-SONA briefing on Tuesday, Budget Secretary Amenah F. Pangandaman said the department had set aside some P9.5 billion for the new medical allowance for government employees announced by Mr. Marcos.

The appropriation was allocated under the Miscellaneous Personnel Benefits Fund for 2025, she noted, adding that government workers will each receive a medical allowance as a subsidy to avail themselves of Health Maintenance Organization (HMO) benefits.

The allowance covers employees under National Government agencies, state universities and colleges, and government-owned and -controlled corporations (GOCCs).

Ms. Pangandaman also said Mr. Marcos will issue an executive order detailing the four-tranche salary hike for government workers.

About P70 billion has been set aside under the 2025 National Expenditure Program to ensure the implementation of the first and second tranches, she said.

The last time government workers’ salaries were increased was in 2023, she said, referring to the fourth and last tranches of the Salary Standardization Law of 2019.

At the post-SONA briefing, Finance Secretary Ralph G. Recto said the government is targeting to double its revenue from nontax collections this year.

“Last year it was about P200 billion. This year, we will get about P400 billion… We are on track to hit our fiscal target for the entire year and that’s roughly about P4.25 trillion,” Mr. Recto said.

At its June meeting, the Development Budget Coordination Committee retained the P4.27-trillion revenue target, as well as the P5.75-trillion expenditure program for this year. The fiscal deficit ceiling is set at P1.48 trillion or -5.6% of GDP this year.

A large portion of the nontax revenues collected by the government in the first six months of the year came from remittances from GOCCs, the privatization of government assets, as well as income from the National Treasury, he noted.

In his speech, Mr. Marcos said the Philippine financial system remains robust and resilient, adding that tax and nontax revenue collection was “also efficient.”

“Notably, for the past two years, our GOCCs remitted dividends to the National Government with a combined tally exceeding their contributions in 2022,” he said.

BUDGET
Mr. Marcos also called on Congress to ensure that the proposed budget for 2025 — pegged at P6.352 trillion, which is higher than this year’s P5.768 trillion — is not just approved in a timely manner but also “be adhered to as closely as possible.”

“We expect all agencies to ensure that every centavo allocated will be judiciously spent for our urgent priorities and socially impactful programs,” he said.

The Budget department is scheduled to submit its proposed 2025 National Expenditure Plan to Congress on July 29.

Mr. Lanzona said the government should have a strategy also in terms of financing its programs and plans.

“This means priorities need to be instituted first and then as the time progresses as resources become available, then other promised goods can be obtained until towards the end of the President’s term,” he added.

“Without such a strategy, none of these become feasible unless greater debts and more budget deficits are incurred.”

Recto says PHL on track for rate cut

FINANCE SECRETARY RALPH G. RECTO — DEPARTMENT OF FINANCE FACEBOOK PAGE

MANILA — Philippine Finance Secretary Ralph G. Recto said on Tuesday the country is on track for a cut in policy rates this year due to easing inflation, though the timing would be up to the central bank.

Mr. Recto, who is also a member of the Bangko Sentral ng Pilipinas’ Monetary Board, said he hoped second-quarter growth in gross domestic product would be at 6%, driven by household consumption and government spending.

The central bank, which has kept interest rates steady at 6.5% in its last six meetings, has previously flagged a possible cut of 25 basis points at its Aug. 15 meeting as it sees inflation easing in the second half when a rice import duty is slashed to 15% from 35%.

The government has set a 6% to 7% growth target for 2024. — Reuters

Ballet Philippines turns romantic

BALLET Philippines (BP) is opening its 55th season with one of the oldest surviving romantic ballets in history.

For La Sylphide, the classical and contemporary dance company gives the choreography by Filippo Taglioni a distinct Filipino twist, according to BP artistic director Mikhail “Misha” Martynyuk.

Recalling why they chose it as the season opener, Mr. Martynyuk told the press at the launch on July 16 at Solaire Resort that the ballet will bring BP to a different level. “A new level of technique and purity of execution,” he said.

The Russian choreographer then went on to detail La Sylphide’s place in history — when it premiered in Paris in 1832, it revolutionized the art form as the first to be performed entirely en pointe. It also came about in the period when the diaphanous, calf-length skirt called the tutu became iconic in ballet.

“This performance is difficult for ballet dancers. It involves incredible stamina and a special technique of their feet, which our dancers have been training very, very hard to master,” he said.

The story unfolds in Scotland, where James Ruben, a humble farmer, is enchanted by a forest fairy (otherwise known as a sylph). Despite already being engaged, James is enthralled by the sylph’s otherworldly beauty and confession of love, leading him to follow the fairy into the forest.

BP’s rendition aims to “intertwine the ballet’s original charm with Filipino romanticism and mysticism.”

With a libretto by Adolphe Nourrit and music by Jean-Madeleine Schneitzhoeffer, La Sylphide was also created by its original choreographer Taglioni to showcase the talent of his daughter, ballerina Marie Taglioni.

This time, BP’s dancers will use the material to showcase their own talents.

At the preview, principal dancers Jemima Reyes and Ian Ocampo took the stage to perform the introduction piece, one that captures viewers’ attention with mesmerizing movements.

Principal dancers Regine Magbitang and Rudolph Capongcol also performed an excerpt from the show titled The Promise, another piece drawing on the strong chemistry between the two characters.

Ballet Philippines president Kathleen Liechtenstein told BusinessWorld that everyone should get ready to “immerse in a tremendous show.”

“Bringing this oldest romantic ballet to life is part of our commitment to pushing the boundaries of ballet in the Philippines,” she said.

La Sylphide inaugurates the season’s theme of relevé, which in ballet means “to rise onto the tips of the toes,” Mr. Martynyuk said. It will run from Aug. 9 to 11 at The Theatre at Solaire, Parañaque.

Other productions in BP’s 55th season are the holiday offering Peter Pan which will have performances from Dec. 6 to 8, and the original Filipino production Ang Panaginip from Feb. 28 to March 2, 2025.

Tickets are available at http://www.ballet.ph and via Ticketworld. — Brontë H. Lacsamana

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