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BIR says it exceeded 2024 collection goal

TAXPAYERS line up to file their income tax returns at the Bureau of Internal Revenue office in Manila. — PHILIPPINE STAR/EDD GUMBAN

THE Bureau of Internal Revenue (BIR) on Tuesday said it exceeded its revised P2.85-trillion collection goal in 2024, mainly driven by value-added tax (VAT) collection.

“Although the numbers are still being finalized, the BIR confirmed that they have definitely reached the P2.848-trillion mark for 2024,” BIR Commissioner Romeo D. Lumagui, Jr. said in a press release.

The BIR’s collection target for 2024 was 22% higher than the P2.34-trillion collection in 2023, when revenue rose by 8% annually but missed its P2.64-trillion target.

“The exact figures will be finalized by around mid-February, and by then, the collection figures will only increase past the DBCC (Development Budget Coordination Committee) target,” he added.

The BIR said 2024 would mark the first time the agency surpassed its collection target in two decades, excluding 2020 when the target was significantly lowered due to the pandemic.

Last year’s target was lowered from the original P3.05-trillion goal.

The BIR said revenues were mainly driven by VAT collections, as it failed to hit the goal for other tax types.

“Moreover, this was accomplished despite the country’s gross domestic product (GDP) growing by a weaker-than-expected 5.2% in the third quarter,” the BIR said.

In the first 11 months of 2024, BIR revenue collections increased by 13.88% to P2.67 trillion, which already accounted for 93.64% of the full-year program.

Last year, the BIR implemented a 1% withholding tax on online sellers to address tax leakages in the digital economy. It also created a task force to go after taxpayers using “fake transactions” and “ghost receipts” to avoid the payment of income tax and VAT liabilities.

“Our dedication to good governance reforms, manifested by our shift to a taxpayer-oriented agency, has increased the voluntary compliance of taxpayers. This goes to show that if government agencies improve their services, processes and programs, our countrymen will do the right thing and pay their proper share of taxes,” Mr. Lumagui said.

Last week, the BIR told a Senate hearing its tobacco excise tax collections reached P134 billion in 2024, falling short of its P185.3-billion target by 28%.

The BIR attributed the lower excise tax collection to the illicit tobacco trade and consumer preference for vape products. Aubrey Rose A. Inosante

BMI forecasts 6.3% growth for PHL this year

High-rise buildings tower over shanties in Parola, Tondo, Manila, Jan. 11, 2025. — PHILIPPINE STAR/RYAN BALDEMOR

By Luisa Maria Jacinta C. Jocson, Reporter

FURTHER monetary easing is seen to prop up gross domestic product (GDP) growth in the Philippines, Fitch Solutions’ unit BMI said, as this would provide much-needed support to domestic demand.

“For the Philippines, we are expecting growth to accelerate from 5.8% in 2024 to 6.3% in 2025. The main driver is monetary policy loosening,” BMI Asia Country Risk Analyst Shi Cheng Low said in a webinar on Tuesday.

The government is targeting 6-8% GDP growth this year.

For the first nine months of 2024, growth averaged 5.8%. Preliminary fourth-quarter and full-year GDP data will be released on Jan. 30.

“Keep in mind that investment has been quite weak in the first quarter and third quarter. So about 150 basis points (bps) of cuts by the end of 2025 should help boost the Philippine economy going forward,” he added.

The Bangko Sentral ng Pilipinas (BSP) began its easing cycle in August last year, delivering 75 bps worth of cuts for 2024.

The central bank has signaled further easing this year as the current policy rate at 5.75% is still in “restrictive territory,” BSP Governor Eli M. Remolona, Jr. said.

Mr. Low said another growth driver is the rebound in private consumption as inflation continues to ease.

Headline inflation averaged 3.2% in 2024, within the 2-4% central bank target.

“We expect inflation to stay within the target for the rest of the year, obviously barring external shocks and also because the labor market has actually been improving,” he said.

This year, the BSP expects inflation to average 3.3%.

However, Mr. Low said their growth forecast for this year hinges on the expectation that US President-elect Donald J. Trump would not be aggressive in the implementation of his tariff proposals.   

“If that’s the case, we are going to lower our projections downwards. And I think that’s the biggest risk for the Philippines because the US is one of [its] biggest trading partners,” he said.

Mr. Trump, who is set to assume the presidency on Jan. 20, has pledged to impose import tariffs of up to 10% across the globe and 60% for Chinese goods.

“In sum, we expect the growth outlook to improve at least for the Philippines over the coming quarters,” Mr. Low added.

SERVICE BOOST
Meanwhile, HSBC in a separate commentary said the Philippines is expected to be one of the fastest-growing economies in Southeast Asia, mainly driven by a boost in services.

HSBC Global Private Banking and Wealth Chief Investment Officer for Southeast Asia and India James Cheo said the Philippine economy is “expected to deliver one of the strongest growths in the region this year.”

HSBC expects the Philippines’ GDP to expand by 6.3% this year and 6.7% in 2026.

“Philippine economic growth in 2025 will be driven by robust domestic consumption, a thriving business process outsourcing (BPO) sector, and increasing investments in digital services.”

“The country’s unique strength in service exports, including IT and BPO services, provides a buffer against global trade uncertainties and tariff risks.”

Data from the BSP showed the Philippines booked $37.4 billion worth of services exports in the first nine months, up 6.25% from a year earlier.

“Service exports and overseas remittances, which remain key economic pillars, will continue to contribute significantly to economic resilience and stability in the Philippines,” Mr. Cheo said.

He also said the country’s monetary and fiscal policies are “aligned to support growth while managing risks.”

Mr. Cheo said the central bank would likely deliver further rate cuts this year.

“We forecast the BSP to cut the policy rate to 5% in the third quarter of 2025, as it cautiously navigates external risks like potential volatility in the peso and the US Federal Reserve’s easing cycle.”

“On the fiscal side, the government’s infrastructure agenda remains a key growth driver, supported by revenue-enhancing measures,” he added.

Meanwhile, HSBC expects the peso to “face volatility from a stronger dollar but its high carry will be a buffer.”

“We are bullish on the peso and expect it to stay resilient at P59.8 against the US dollar by end-2025.”

The peso closed at P58.62 a dollar on Tuesday, strengthening by eight centavos from its P58.70 finish on Monday. Last year, the peso fell to a record-low P59-a-dollar level thrice.

MONETARY POLICY BUFFER
Meanwhile, Bank of America (BofA) Global Research in a separate report said economies in Southeast Asia might need to deploy varying policies to cushion the spillovers from Mr. Trump’s tariff plans.

“If trade shocks materialize, we reckon that the fiscal-monetary policy mix to cushion any softening of external demand may differ across countries,” it said.

“We think that policy mix may be more balanced in the case of Malaysia and Singapore, more skewed towards fiscal policies for Indonesia and Vietnam, and more skewed towards monetary policies for the Philippines and Thailand.”

For the Philippines, BofA said monetary policy “may have to play a greater role.”

“Inflation is at more manageable levels after the reduction of rice import duties in mid-2024, and BSP is less sensitive to FX (foreign exchange) movements compared with Bank Indonesia,” it said.

“As such, BSP could pursue deeper policy rate and RRR cuts. On the other hand, the government has less scope to raise spending significantly, with the fiscal deficit target for 2025 already above 5% of GDP and government debt at record high levels.”

Abstract dimensions

MECHANICAL KOMOREBI by Walther Ocampo

ABSTRACTION challenges people to examine and imagine, with the varying perceptions of shapes, colors, and forms in a painting reflecting the viewer’s inner thoughts. This interplay of ideas sets abstract works apart from the representational.

Conrad Manila’s first exhibit in its regular “Of Art and Wine” series this year features the works of The Authenticity Zero Collective (TAZC), a Filipino architect-artist-educator group focused on abstraction.

Titled Machine of Thoughts, the exhibit aims to transport viewers to different dimensions through the abstract works on display. Before this exhibit, the collective mainly showed their works at art fairs and galleries including Art Fair Philippines, Gateway Gallery, The Grey Space, and the Manila Bang Show.

The group’s five members — Cocoi Base, Gab Brioso, Almi Domingo, Walther Ocampo, and Robin Ravago — each contributed pieces to Machine of Thoughts. The show invites visitors to interact with the material and the immaterial present in their works.

There are 53 works on view at Conrad Manila’s Gallery C.

The Tiny Dwellings collection of acrylic-on-canvas paintings are by Cocoi Base. His use of lines and dots orient the viewer amid splashes of colors and shapes, evoking a kind of organized chaos. Then there’s the Hyper Proun series by Gab Brioso, utilizing acrylic on 3D-printed polyester and plaster, an interesting intersection of a digital process and a tactile, amorphous output.

Almi Domingo provided three acrylic panel etchings that explore geometric compositions, while the series of painted “constructionals” by Robin Ravago dives into the formal qualities of the wooden material.

Walther Ocampo’s Mechanical Komorebi collection of paintings is multi-dimensional in its elements. At the exhibition opening, he said that everyone in TAZC is curious about where abstraction can take them.

“For me, my interest lies in anything with contrast, for example absence and presence,” Mr. Ocampo told members of the press at the exhibit’s launch on Jan. 7.

“I see the dimensions in the contrasting colors and elements in each work. It’s exciting for us as artists,” he said.

Nestor O. Jardin, the hotel’s resident exhibition curator, added that he had set out to look for an abstract artist to feature in the “Of Art and Wine” series. Thanks to TAZC, he ended up with five.

Mr. Base told BusinessWorld that their group usually shows in art fairs and art galleries. However, in hotels, there is a “well-established art market” that they’re able to penetrate.

“We venture into all kinds of platforms. This year you can also find us at the Xavier Art Fair, in February,” he said.

Of Art and Wine: Machine of Thoughts at Conrad Manila’s Gallery C runs until March 8. — Brontë H. Lacsamana

The best nonfiction books of 2024

By Stephen L. Carter

THE past year was a marvelous one for those who read serious nonfiction. As has been my tradition, I present (in random order) a baker’s dozen of the best nonfiction of 2024, with an emphasis on books that have taught me things I didn’t know. I end with my pick for the best book of the year.

The Invention of Prehistory: Empire, Violence, and Our Obsession with Human Origins by Stefanos Geroulanos

Was the excitement over prehistory and the “savage” just a cloak for colonialist oppression? This was, here and there, a bit polemical for my taste, but it was highly engaging and, for the most part, persuasive.

Combee: Harriet Tubman, The Combahee River Raid, and Black Freedom During the Civil War by Edda L. Fields-Black

Although Tubman has become an icon of the American narrative, we pay insufficient attention to her remarkable skill as a military leader and strategist. This book helps remedy that deficit.

The Right to Oblivion: Privacy and the Good Life by Lowry Pressly

Perhaps instead of our right to be left alone, we should conceptualize privacy as our right to be unobserved, unseen, untracked, exposing to the world only that which we choose to expose; we should be free, in short, to live in oblivion, a kind of hiding, where the world does not come questioning, pursuing, demanding, recording. (Pressly isn’t sure how to fix it, but a good start might be getting rid of those traffic cameras!)

Silk: A World History by Aarathi Prasad

I’m a bit surprised that this delightful tour through history, geography, archaeology, and entomology hasn’t received more attention. It even includes some chills, such as when the silk gown worn by a mummy sealed up for two millennia, upon contact with the air when her tomb is opened, immediately unravels and disappears.

Naples 1925: Adorno, Benjamin, and the Summer That Made Critical Theory by Martin Mittelmeier (translated by Shelley Frisch)

Perhaps a little forced in places, for the Frankfurt School or its equivalent was bound to come into existence one way or another. But this bright, clever portrait of a handful of young theorists meeting in one remarkable summer in one remarkable city taught me a great deal about how it did come into existence.

Life as No One Knows It: The Physics of Life’s Emergence by Sara Imari Walker

Imagine that the vast calculating machine we call the universe constantly assembles “objects” of various levels of complexity, all full of information.  Might what we call life be simply a label for an object created by a sufficient number of steps? For the past few years, scientists interested in the origins of life have been arguing vehemently over “assembly” theory. Walker, a physicist and astrobiologist, and one of the field’s founders, has crafted a provocative and informative defense.

Four Points of the Compass: The Unexpected History of Direction by Jerry Brotton

A fine compendium of just what the title promises, from the Mesoamericans who measured direction along three axes rather than two, to the European elites who seized upon east, west, north, and south to designate who was civilized and who not, to NASA’s panicked inversion of the “Blue Marble” photograph prior to release (the original image had the South Pole at the top). An intriguing account, too, of Mercator’s projection, which, apparently, was not related to assumptions about white supremacy.

The Notebook: A History of Thinking on Paper by Roland Allen

As this eclectic account reminds us, the story of the human race has been marked by the physical act of writing. Language and religion, war and peace, arts and sciences, all have been influenced by the process of making notes. If we change that, Allen worries, we change ourselves – and not necessarily for the better.

Why Machines Learn: The Elegant Math Behind Modern AI by Anil Ananthaswamy

Yes, much of the math is hard, and my undergraduate training in differential equations and linear algebra was too long ago to be much help. Yet the volume fascinates, both because of the many startling images (a penguin as a point in five-dimensional space!) and because of the way the author combines history and math, by showing us how one seemingly small discovery led to the next, until we reach today, when a neural net trained on images of wooden chairs quickly figures out that “wood” has nothing to do with “chair.” (John Hopfield, who just won the Nobel Prize in physics for his indispensable contributions to AI, figures prominently.)

The Rebel’s Clinic: The Revolutionary Lives of Frantz Fanon by Adam Shatz

One cannot understand the attraction of today’s intellectual to liberation movements without understanding the strange genius of Fanon, whose incisive studies of the colonized mind continue to influence scholars and revolutionaries alike. I’m long over my youthful love affair with Fanonist thought, but my awe for his oeuvre is no less. As fine a one-volume introduction to his remarkable life and work as we’re likely to find.

Savings and Trust: The Rise and Betrayal of the Freedman’s Bank by Justene Hill Edwards

Recent years have seen surging scholarly interest in the 1874 collapse of the Freedman’s Bank, an event that cost many of those liberated from enslavement their savings. Edwards neatly and persuasively summarizes the evidence for the proposition that the principal cause was the determination of the board to make the bank “a lending powerhouse,” together with self-dealing by directors who found the pot of money irresistible.

The Roads to Rome: A History of Imperial Expansion by Catherine Fletcher

The Roman Empire, the author tells us, built 100,000 kilometers of their famous roads — for trade, for the carrying of messages, and of course for the rapid movement of the ubiquitous legions. Ever since, the roads have excited explorers, archaeologists, and, intriguingly, dictators, who have cast their eyes at imperial Rome and decided that rapid construction of roads is crucial to staying in power.

Cosmic Connections: Poetry in the Age of Disenchantment by Charles Taylor

The great philosopher proposes that our uncommon divisions might be overcome by learning to experience poetry (particularly the Romantics) in the “interspace” between ourselves and the world. Beautifully written, as Taylor’s work always is, but tinged with a wistful quality that suggests he thinks liberal democracy may be over.

Finally, the best nonfiction book of 2024, and one of the most important I’ve read in many years:

Nuclear War: A Scenario by Annie Jacobsen

A forceful, sobering reminder of the existential risk hanging over our heads. Anyone in public life who isn’t thinking seriously about the six minutes the American president has to decide to launch upon learning that someone else appears to have launched… isn’t thinking seriously. In between history and the long-standing concerns of experts, Jacobsen embeds her warning in what she calls a “scenario” — essentially a chilling pre-apocalyptic novel of a possible near future.

Might I wish you peace, joy, and love in the new year — and lots of happy reading!

BLOOMBERG OPINION

Semirara Mining says coal shipments up 4.4%

REUTERS

SEMIRARA Mining and Power Corp. (SMPC) reported 16.5 million metric tons (MT) in coal shipments for 2024, a 4.4% increase from the previous year, driven by stronger demand from China and domestic markets.

Broken down, foreign shipments rose by 4% to 8.4 million MT, with exports to China increasing by 46% to 7.6 million MT, the company said in a statement on Tuesday.

SMPC shipped 8 million MT of coal within the Philippines, higher by 4% from the previous year, on the back of increased sales to local cement producers and Calaca power plants.

The company supplies the coal requirements of cement companies. Coal is used to fire the preheater cyclone and rotary kiln, which heat raw materials in the pyro-processing stage of cement production.

The company said that 20% of the 1.3 million MT sold to cement plants were supplied to associate company Cemex Holdings Philippines, Inc.

SMPC President and Chief Operating Officer Maria Cristina C. Gotianun said the company also hit its maximum coal production of 16 million MT under its existing environmental compliance certificate for the third consecutive year.

“This milestone underscores the SMPC team’s dedication and commitment to meeting rising local and global energy demand,” she said.

For the third quarter, SMPC saw its earnings drop by 8% to P3.1 billion due to reduced contribution from the coal segment amid stabilizing market indices.

Revenues grew by 12.5% to P13.08 billion from P11.63 billion in the previous year.

“While we anticipate market prices to further normalize in 2025, we remain focused on strengthening our customer network and enhancing operational efficiencies to effectively support national energy security and meet the growing demand from the industrial and cement sectors,” Ms. Gotianun said.

At the local bourse on Tuesday, shares in SMPC fell 0.86% to close at P34.70 apiece. — Sheldeen Joy Talavera

MVP Group companies partner with performer Dylan Menor

REVIN MIKHAEL D. OCHAVE

VARIOUS companies under the MVP Group have partnered with singer and actor Dylan Menor for several projects and endorsements this year.

Mr. Menor and his representative, Stages Talent Agency, signed partnership agreements with Pangilinan-led companies such as MediaQuest Holdings, Inc., Cignal TV, Inc., MQuest Ventures, Smart Communications Inc., MWell, and Kayana Solutions Inc. during an event in Mandaluyong City on Monday.

The event was also attended by key executives from the MVP-led companies as well as the Stages Talent Agency.

Mr. Menor previously signed partnership agreements with record label Universal Records Philippines, Inc. and fragrance company Blackwater Philippines.

Some of Mr. Menor’s previous projects include the 2024 Metro Manila Film Festival film The Kingdom, GMA Network’s youth-oriented show Maka, and the crime drama television show Almost Paradise.

Hastings Holdings, Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest, has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave

D&L in talks for sustainable technology

DNL.COM.PH

LISTED D&L Industries, Inc. said it is in talks with several potential partners for the application of a new plant fiber-plastic technology that provides a sustainable alternative to plastics.

The technology, developed by D&L through its subsidiary D&L Polymer & Colours, Inc. (DLPC), will have a wide range of uses, from consumer durables to industrial applications in the construction and automotive industries, the company said.

DLPC is in talks with potential partners that are keen on using the technology to make their plastic products more sustainable.

While the company will initially use abaca fiber as the base material, the technology was also tested to use other locally available fibers such as pineapple, spider-lily or bakong, and vetiver.

“The Philippines has an endless supply of natural fibers that are mostly deemed as waste. About 25 years ago, even before the term sustainability became mainstream, we had already started exploring the possibilities of harnessing the potential of abaca fiber as an environmentally friendly complementary material or alternative to plastics,” DLPC President and Chief Executive Officer Lester A. Lao said in a statement on Tuesday.

“What we have developed is a totally new material that is arguably breaking the boundaries of polymer science. With its unique characteristics and sustainable aspects, we are convinced that it has the potential to revolutionize the plastics industry,” he added.

DLPC is currently in the sampling stage of the new plant fiber-plastics technology. Some of the sample finished products include vetiver and bakong chairs, vetiver crates, abaca floor mats, and abaca bins.

The fibers can help reduce plastic usage as they replace up to 40% of polymers in the formulation of different consumer and industrial products that are made of plastics.

Meanwhile, Mr. Lao said that DLPC is currently engaged in groundwork to make the technology available and used at scale.

“With the majority of the people in the industry not yet familiar with the technology and its potential applications, we believe that we are exploring uncharted territory with endless opportunities for innovators and pioneers like us. At this point, we believe that we are merely scratching the surface for a multitude of industries,” Mr. Lao said.

D&L has business interests in product customization and specialization for the food, chemicals, plastics, and consumer products original design manufacturer industries.

It is engaged in the manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use.

D&L shares rose by 0.5% or three centavos to P6 apiece on Tuesday. — Revin Mikhael D. Ochave

Arts & Culture (01/15/25)


Ayala Museum holds talk on ancestral home book

THE Ayala Museum will be hosting a book talk with Gina Consing McAdam about the book Houses that Sugar Built: An Intimate Portrait of Philippine Ancestral Homes which features award-winning images by Siobhán Doran. It will be held on Jan. 25 (Saturday) from 2-4 p.m. In the book, London-based writer Gina Consing McAdam explored the sense of home and identity manifested by the grand domestic architecture and interiors built by the sugar planters of Iloilo, Negros, and Pampanga during the sugar industry’s peak in the early 20th century. Drawing on the narratives shared by their owners and heirs and her own family history, McAdam will delve into how these homes, blending Art Deco, Neoclassical, and Modernist styles, served as expressions of personal, cultural and economic aspirations. The event will also showcase a selection of her co-author Siobhán Doran’s photographs from the book, including the “Sala Mayor” series that won first prize in the Professional Architecture & Design category of the 2024 Sony World Photography Awards. Limited slots to the talk are available. Tickets are P300 (regular price), with discounts for Seniors, PWDs, students, Ayala Group employees, Museum and Library members, and cultural workers with valid IDs. The ticket includes free one-day access to Filipinas Heritage Library valid until Feb. 25. Interested parties may register now: https://bit.ly/fhl-ginamcadam.


Into the Woods, A Chorus Line staged in the Philippines

THE producers of the wordless play Request sa Radyo which saw success in the Philippines last year have formed Theatre Group Asia and are set to stage several musicals soon. Clint Ramos and co-producers John and Joanna Echauz, together with venue host Samsung Performing Arts Theater, represented by its executive director Christopher Mohnani, have announced that they are bringing in two iconic musicals: Into The Woods and A Chorus Line. The former will be staged in August while the latter will be staged in March 2026. More details will be revealed soon.


Pinoy artists to show at Singapore’s Gajah Gallery

GAJAH Gallery will be presenting two exhibits this January — one at their Singapore space and another at the Art SG 2025 fair — both opening on Jan. 17. On their home turf, the exhibit Big Bang: A Myth of Origins features works by Agnes Arellano, I Gusti Ayu Kadek Murniasih, Jane Lee, Jitish Kallat, Jose John Santos III, Mahalakshmi Kannappan, Mark Justiniani, Miguel Aquilizan, Prajakta Potnis, Pam Yan-Santos, Susie Lingham, and Yunizar. The show delves into the mysteries of beginnings, beings, and becoming. Meanwhile, artists from Indonesia, Singapore, and the Philippines will be the focus in the gallery’s booth at Art SG, offering visitors perspectives on materiality and urban life. Participating artists include Jemana Murti, Marina Cruz, Mark Justiniani, and Yunizar, alongside pieces by Philippine National Artist Benedicto “BenCab” Cabrera.


Iligan’s IPAG reveals lineup

MINDANAO State University’s Integrated Performing Arts Guild in Iligan City has unveiled its calendar of productions for 2025. The first production is Sita: The Ramayana Revisited, a Philippine version of the classic Sanskrit epic which will have national and international tours. There is also the play MarLen and the dance-theater productions Tales from Mindanao and Tatlo sa Isa, also set to tour this year. For National Literature Month in April, the guild will be staging the poetry-theater production sugaTula.


CCP’s Pasinaya expands program nationwide

THE Philippines’ largest multi-arts event, the Cultural Center of the Philippines’ (CCP) Pasinaya Open House Festival, returns this year with performances to be held nationwide. The 19th edition of the festival will take place on Feb. 1 and 2 at various venues around the country under the theme “CCP Pasinaya 2025 Open House Festival: Para sa Lahat!” Its regional partner sites include Clark in Pampanga, Batangas Province, Himamaylan in Negros Occidental, and Sorsogon City in Bicol. Pasinaya will also return to Tagum City in Davao del Norte and Iloilo City. In Metro Manila, the festival will unfold across multiple venues such as Circuit Makati, The Metropolitan Theater, Intramuros, Aliw Theater, and various partner museums and galleries. More details will be announced soon.

The demographic dividend of the Philippines: Lessons from China’s impending population collapse

FREEPIK

(Part 7)

Japan’s fertility rate started declining 50 years ago. It is possible that the circumstances the Land of the Rising Sun faced over the last half a century may be quite different from what we are facing now, thereby limiting the possible lessons we can learn from its demographic crisis today.

In contrast, the total population of China just started to decline two years ago, in 2022, by 850,000 people, falling to a level of 1,411,750 billion, the first decline in 60 years. As reported by Eleanor Olcott and Sun Yu in the Financial Times, the decline in birth rates in China has roots in the one-child policy imposed by the Communist government led by the late Mao Zedong, which limited the number of children a couple could have to below the replacement level of 2.1 babies per fertile woman. That period of population control under a dictatorial communist regime was notorious for serious human rights violations involving forced abortions. It also led to a huge problem of gender imbalance because the preference for male children resulted in the abortion of millions of female children. According to the US census bureau, the ratio of boys to girls at birth peaked at 118 to 100 in 2005.

After a new regime was introduced under the leadership of Deng Xiaoping, there was the realization of the terrible mistake made to limit births. So, in 2016, the Chinese authorities scrapped the one-child policy, replacing it with a two-child limit and, much later, to three children and even more. Unfortunately, as was in the case of other countries that realized much earlier their mistake in introducing population control policies, the number of births has fallen every year since 2016.

Yi Fuxian, a demographer at the University of Wisconsin-Madison, estimated that China’s population actually started to fall in 2018 but that the drop was obscured by “faulty demographic data.” Yi stressed that China is facing a demographic crisis that far exceeds the imagination of Chinese authorities and the international community.

Some China-watchers prefer to whistle in the dark by claiming that China can overcome this demographic crisis by turning to automation and other labor-saving technologies. Analysts, however, are largely in agreement that the country’s social welfare and medical infrastructure are ill-prepared for an ageing population.

The real problem is not the absolute size of the population. In the worst-case scenario, the Chinese population will fall to 1.31 billion by 2050 and 767 million by the end of the century. Even with such a precipitous decline, China will still have the second largest population in the world, after India. The real problem is not the absolute number of people.

As Elon Musk never tires of repeating, the real bomb today is the rapid ageing of the population. He just shocked the business world by tweeting that “Singapore will become extinct!” Just imagine a population of more than 700 million people, 40-50% of whom are over 65 years old. Social security systems will collapse since there will be too few young workers contributing to the system. Even more problematic is that there will be very few young workers who can take care physically of their ageing parents and relatives. In this regard, China will have no alternative but to turn to countries like Vietnam, Indonesia, and the Philippines (the VIP) who are still enjoying their respective demographic dividends, in the same way that Japan, Singapore, and South Korea are at present highly dependent on immigrant workers for their healthcare, tourism, and other still labor-intensive service sectors.

One important lesson we can draw from the Chinese demographic crisis is that once a contraceptive mentality has been drummed into the mindset of the population, especially among the women, even deeply held cultural practices may no longer work to reverse it. After more than 30 years of the one-child policy promoted by the Government, later reinforced by a materialistic or consumerist lifestyle, even certain possible counteracting cultural practices may be rendered ineffective in convincing couples to have children.

This was recently demonstrated at the beginning of 2024 — the Year of the Dragon for the Chinese, a year which has historically produced a surge of births in China and other countries in East Asia as potential parents try to time the births of their offspring with an auspicious zodiac sign. Instead, the population continued to decline last year, characterized by a gloomy outlook, an ageing society, and the lingering adverse effects on health and the economy of the coronavirus pandemic. The dragon babies, considered lucky and traditionally translating into a jump in births every 12 years, were nowhere to be seen in China last year.

Wang Feng, an expert on Chinese demography at the University of California, referred to a widespread economic pessimism that is a strong counterforce for improving the birth rate in China. It is increasingly evident that policymakers have limited tools to encourage Chinese women to give birth. Even when authorities loosened the one-child policy in 2016, the number of births has fallen every year since, and incentive schemes for new parents have largely failed to boost the birth rate. The lesson for Philippine policy makers is clear: let us abandon all state-sponsored measures to convince married couples to have fewer children.

Another social problem related to a demographic crisis we have to avoid is what the Japanese call hikikomori, a psychological condition consisting of feelings of failure and unbearable social pressure in young adulthood. As described by Gideon Rachman in his column “Global Affairs” in the Financial Times (Aug. 22, 2023), China — like Japan and South Korea — has a hyper-competitive exam-driven education system. As opportunities narrow, more young people are tempted to opt out of the rat race. In Japan, a recent study revealed that 1.5 million people, or more than 1% of the adult population, have withdrawn from society altogether and almost never leave their homes. Something similar is already happening in China, but at a much lower level of income and wealth than Japan.

As China wrestles with a slowing economy (from double digit GDP growth rates of 12% or more in the first decade of this century to 4-5% today), coupled with youth unemployment of more than 20%, a growing number of young people are also giving up on the rat race for a diminishing number of rewarding jobs and instead opting to “lie flat.” China’s demographic crisis could get worse, since young people who cannot find jobs or afford a flat are even less likely to start a family. In an effort to ease the pressure on Chinese youngsters and to reduce the cost of raising children, President Xi Jinping severely restricted the lucrative private tutoring industry. This, however, had the perverse effect of damaging one of the largest sources of employment for young graduates.

There is one common comment among those who have analyzed the roots of the demographic crisis now being faced by China.

As Yuan Yang wrote in her column in the Financial Times (Jan. 21-22, 2023), demographers opine that the decline in the Chinese population, although accelerated by the one-child policy, would have happened anyway, without the brutality and forced abortions, due to urbanization and increases in income. In her words, “In a post-agrarian China, one no longer needs to have children in order to have hands for the harvest. Financial risk-pooling through a national pension fund reduces the need to see children as old-age investments. Instead, perhaps we can see them as children. Maybe we can see women as humans, rather than incubators of future workers.” Touche.

Countries can avoid extinction if their leaders start promoting the basic truths about the true nature of marital love, marriage, and the family.

(To be continued.)

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

Axelum Resources sees strong demand this year

CHEN MIZRACH-UNSPLASH

LISTED coconut food product manufacturer and exporter Axelum Resources Corp. is banking on strong demand to drive the company’s growth this year.

The global coconut products industry is expected to see strong demand, upward pricing, and supply tightness this year based on independent publications, Axelum said in a regulatory filing on Tuesday.

This puts Axelum in a position to capitalize on the prevailing conditions amid supply volatility due to climate variability, it said.

“We have charted a clear path forward to expand our institutional business, while realizing the massive untapped potential of our consumer segment both domestically and overseas,” Axelum Resources Corp. President and Chief Operating Officer Henry J. Raperoga said.

“Last year, we were focused on redefining plans, establishing new customer touchpoints, building strategic capabilities, and strengthening our overall distribution network. For 2025, we will concentrate resources on strategy execution and optimizing efficiencies across the business to maximize value generation,” he added.

Axelum said it is on track to record all-time high shipped volumes for 2024, without providing specific figures.

“Following a sharp turnaround in 2024, Axelum is foreseeing record delivered volumes for most of its core product segments, primarily driven by rapidly-growing mainstream demand for plant-based eating, expanding commercial uses, innovative non-food applications, and other emerging market trends,” the company said.

To date, Axelum has fully commissioned its new filling line to increase coconut water production by over 30% annually.

It also installed new equipment to boost manufacturing yields and finished the renovation of existing warehouses to increase storage capacity for finished goods.

Last year, the company signed a multi-year renewal agreement with coconut water brand Vita Coco. It also extended its sourcing areas to ensure raw material supply for its daily operational requirements.

“We have identified unique opportunities that will help propel us into a new era of growth in the long term,” Mr. Raperoga said.

“As a company, we are positive that the current global macroeconomic backdrop will remain conducive and supportive of this ambition,” he added.

For the first nine months, Axelum returned to profitability with a P339 million net income from the P428 million net loss in the same period last year.

January to September sales increased by 20% to P5.1 billion on higher volume in segments such as coconut powder, desiccated coconut, and coconut water.

Axelum shares fell by 0.95% or two centavos to P2.08 apiece on Tuesday. — Revin Mikhael D. Ochave

Oscar nominations postponed for second time because of wildfires

WIKIPEDIA.ORG
WIKIPEDIA.ORG

LOS ANGELES — The Academy of Motion Picture Arts & Sciences has postponed the announcement of this year’s Oscar nominations for a second time because of the ongoing wildfires in Los Angeles, organizers said on Monday.

The nominations for the film industry’s highest honors will now be announced on Jan. 23. They originally had been set for this Friday and then moved to Jan. 19.

“Due to the still-active fires in the Los Angeles area, we feel it is necessary to extend our voting period and move the date of our nominations announcement to allow additional time for our members,” Academy CEO Bill Kramer and Academy President Janet Yang said in a statement.

The academy also canceled the annual Oscar nominees lunch, which had been set for Feb. 10. The Academy Awards telecast is still scheduled to take place on March 2.

Organizers of the Grammys said the music industry honors also will take place as planned, on Feb. 2.

“This year’s show, however, will carry a renewed sense of purpose: raising additional funds to support wildfire relief efforts and honoring the bravery and dedication of first responders who risk their lives to protect ours,” Recording Academy officials said in a letter to members. Reuters

Governance and economic growth are deeply intertwined

FREEPIK

A new year is supposed to occasion introspection and a new way of seeing things. As we welcome 2025, it is time to change the mindset that good governance on one hand, and economic growth on the other, are mutually exclusive concerns. On the contrary, they are deeply intertwined, and one will hardly exist without the other.

It is always good to have our ears on the ground. What are our people saying and feeling? A November 2024 survey conducted by Pulse Asia made it clear that Filipinos are most pressingly concerned about economic issues. Seventy-four percent of respondents are primarily concerned with inflation, 36% with increasing workers’ pay, 31% with reducing poverty, 27% with creating more jobs as well as with fighting graft, theft, and corruption in government.

During the month that this survey was taken, the Philippine Statistics Authority reported that headline inflation slightly increased to 2.9% from the 2.5% registered the previous month. The uptick was driven by higher costs in housing, water, electricity, gas, and other fuels, as well as transport.

In the same survey, Pulse Asia also found that a majority of respondents — 61% — believe that controlling corruption leads to economic growth. Other beneficial consequences are good law enforcement (48%), effective delivery of public services (47%), improving the lives of ordinary citizens (46%), and the efficient utilization of government funds and resources (40%).

The people are dissatisfied with how the current administration is handling the rising prices of basic commodities, with 82% expressing disapproval. They are also not happy with the administration’s performance in fighting graft and corruption: 45% disapprove, 40% are undecided, with only 16% approving.

Another polling firm, Social Weather Stations, found that the people’s trust in President Ferdinand Marcos, Jr. dropped from 57% in September to 54% in December. The same trend is observed when it comes to the Vice-President, who has figured in controversies surrounding her use of confidential and intelligence funds, even as her numbers remain strong in her family’s bailiwick in Mindanao.

In fact, in the latter part of 2024, top national officials suffered declining approval and rising disapproval across the board, albeit to different degrees.

Our leaders must listen, and listen well.

The people are telling them something. Political noise notwithstanding, what Filipinos care about is that they are able to afford the basic needs of their families and enjoy a measure of security in their economic future. The trends observed last year, as demonstrated by the surveys, show a widening gap between public expectations and government action.

This indicates that the people want more. Their confidence in their leaders is waning and they are very much aware of the leadership and governance challenges that have been left unaddressed.

Perceptions of a nation governed well, with the principles of transparency and accountability in motion, create a ripple effect within the country and outside it as well. From outside our shores, foreign investors with their capital, infrastructure, and know-how, will be encouraged to establish their presence in a country with reasonable policies, evenly and consistently implemented. From within, our people will be driven to take part in economic activity, using their skills and upgrading them, because they are confident that the taxes they pay are spent wisely by their leaders acting as stewards of public resources.

These principles gain an even greater significance now that another election will be held in May.

Corruption has stunted our country’s growth for decades and has prevented us from realizing our true potential. This time around, the electorate is more conscious of how integrity should serve as the cornerstone of both the national and local governments. They will be able to see through the claims and promises of candidates and will be able to discern who among the candidates, judging from their actions and track record, really has their constituents’ best interests at heart. In addition, restoring public trust lies in the transparent and truthful disclosure of their Statements of Assets, Liabilities, and Net Worth (SALN), reinforcing collective commitment of the Filipino to accountability and ethical leadership.

Again, no single sector can effect such a big change. The government for its part has been too steeped in its own decades-old practices and mindsets, even as there are pockets of good intentions and beginnings of reform. The private sector, with its advantages in technology, access to capital, evidence-based measures of performance, and civil society with its long-held ideals and bias for participation and transparency, will always be good partners of the government as it strives to serve the people better.

The next leaders in government must prioritize national interests and ensure that efforts to combat corruption align with the broader goal of safeguarding the country’s future, promoting good governance, and addressing the pressing needs of the nation. It is not a case of making governance or economics a priority; it is addressing them both through strategic thinking, even implementation, and multi-sectoral collaboration.

 

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.

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