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Marcos set for Europe next week

PHILIPPINE STAR/KRIZ JOHN ROSALES

PRESIDENT Ferdinand R. Marcos, Jr. will visit Germany and the Czech Republic next week, his office said on Thursday, a few days after his return to Manila from a back-to-back trip to Australia.

His trips to the two central European nations from March 11 to 15 “seek to strengthen bilateral relations,” the presidential palace said.

“The President will also meet with prominent business leaders to bolster trade and investment opportunities,” it added. Mr. Marcos will meet with German Chancellor Olaf Scholz in Berlin.

In the Czech Republic, he will meet with the four heads of the Czech government — President Petr Pavel and Prime Minister Petr Fiala, Senate President Miloš Vystrčil and President of the Chamber of Deputies Markéta Pekarová Adamová.

“The visits come at a significant juncture as the Philippines just celebrated the 50th anniversary of bilateral relations with the Czech Republic last year and will commemorate the 70th anniversary of diplomatic relations with Germany this year,” the palace said.

Mr. Marcos, 66, has already made over 20 international trips since assuming office in June 2022.

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

House awaits Senate on ‘Cha-cha’

PHILSTAR FILE PHOTO

LAWMAKERS on Thursday said that passing economic Charter change is now in the hands of Senate as the Resolution of Both Houses (RBH) No. 7 has already passed in the House.

House lawmakers said that the pressure is now on Senate President Juan Miguel Zubiri to pass Resolution of Both Houses No. 6 as he would need 18 votes calling for the approval of the resolution for economic “Cha-cha” to materialize.

“Now it is a challenge to his leadership because this time, people now understand the importance of ‘Cha-cha,’” Quezon City Rep. Marvin D. Rillo spoke in mixed Filipino and English at a media conference.

RBH No. 6 is the counterpart measure of economic “Cha-cha” in the upper Chamber. It contains the same provisions outlined in RBH No. 7, with a sole difference being how senators would vote on the proposed constitutional amendments. 

“He (Zubiri) has all the available techniques, strategies to come up with this number (of votes),” Lanao del Sur Rep. Zia Alonto Adiong said in a media briefer. “In fact, that he’s still there as the Senate President proves that he has the numbers to deliver.”

Talk was rife last month of a coup plot to remove Mr. Zubiri as senate president. However, the supposed plot to unseat him seems to have died down as senators signed a resolution supporting his leadership.

House lawmakers remain confident in Mr. Zubiri’s ability to deliver the votes to pass RBH No. 6 amid statements from fellow senators earlier this week that they would strike down the proposed economic “Cha-cha.” — Kenneth Christiane L. Basilio

DA plans KADIWA in Bataan

DA.GOV.PH

THE DEPARTMENT of Agriculture (DA) said on Thursday that it has opened another permanent location for its KADIWA market project within a trading center in Bataan.

In a statement, the DA said the trading post is expected to benefit 28 farmers’ cooperatives and associations with a total 3,826 members. The project costs around P5 million.

“A permanent KADIWA store in Limay, Bataan promises affordable, fresh, and safe food for local consumers while providing farmers with increased income opportunities,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. said.

KADIWA stores were rolled in various localities at the height of the coronavirus pandemic to facilitate access between growers and buyers amid mobility restrictions.

The agency said that it would provide interest free loans to local producers from the province in partnership with the local government of unit.

“This is just the beginning: more initiatives are needed to sustain this momentum,” he said.

Additionally, the DA said that it had launched a project promoting healthier food, while minimizing cost and impact on the environment.

This is through consuming locally-grown fruits, vegetable and other agricultural products, it said.

“This grassroots approach fosters a deeper understanding, better planning, and effective management of our food systems,” Mr. Tiu Laurel added. — Adrian H. Halili

House members vow to shun political amendments 

MEMBERS of the majority in the House of Representatives assured the public on Thursday that no new political provisions will be introduced in the Resolution of Both Houses (RBH) No. 7 when the Charter change (“Cha-cha”) measure is taken up at the plenary.  

“How many times did we tell the public that the objective of RBH No. 7 or economic ‘Cha-cha’ is only to allow the entry of (foreign) investors in the country?” Deputy Majority Leader and Iloilo Rep. Janette L. Garin, speaking in Filipino, said at a media conference.

“It is political suicide if we clamor for the addition of political (amendments) to Charter change,” Quezon City Rep. Marvin D. Rillo said in the same press conference. 

Both lawmakers said most members of the House are only supportive of the economic amendments to ease the entry of foreign investors in public utilities, education, and advertising. 

 “Allowing the entry of investors will pave way for better lives (for Filipinos) as it will create jobs with competitive salaries and cheaper utilities due to (foreign) competition,” said Ms. Garin.  

On Wednesday RBH No. 7 was approved at the committee level and proposed amendments only to Articles 12, 14, and 16 of the 1987 Constitution. 

However, analysts and minority lawmakers share the same apprehension that this Cha-cha move could lead to the introduction of political amendments. 

“The proponents (of RBH No. 7), they want more than providing equity for foreigners,” Party-list Rep. France L. Castro said in Filipino at media conference held an hour earlier. “We are worried that they will float amendments to the committee report during the second reading (of RBH No. 7).” 

Lanao del Sur Rep. Zia Alonto Adiong said that as fellow representatives of the people, they must to trust one another in working on RBH No. 7, noting that no political experts were invited to the committee deliberations as a show of good faith that they are all focused on merely the economic provisions of the Charter. — Kenneth Christiane L. Basilio 

Peso strengthens as Fed remarks drag greenback

BW FILE PHOTO

THE PHILIPPINE PESO appreciated on Thursday after remarks from the US Federal Reserve chief dragged the dollar down.

It closed at P55.82 a dollar, five centavos stronger than a day earlier, according to Bankers Association of the Philippines data posted on its website.

The peso opened at P55.77 a dollar, weakened to as much as P55.90 and strengthened to as much as P55.75 against the greenback.

Dollars exchanged went up to $932.05 million from $905.5 million on Wednesday.

The peso gained as the dollar generally weakened, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

“The dollar drifted lower overnight after US Federal Reserve Chairman Jerome H. Powell’s statements,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said in a Viber message. “He said progress against inflation was not assured, but acknowledged the US Fed is ready to cut interest rates later this year.”

The dollar slipped across the board on Wednesday. The dollar index, which measures the currency’s strength against a basket of six currencies, was down by 0.41% at 103.36.

The Fed raised borrowing costs by 525 basis points from March 2022 to July 2023 to 5.25-5.5%.

Lower US treasury yields, which also dipped after Mr. Powell’s remarks, also supported the peso, Mr. Asuncion said.

Wall Street followed world shares to a higher close on Wednesday and the benchmark US Treasury yield dipped to a one-month low after the Fed chief reassured investors that while inflation is not quite tamed, rate cuts can be expected this year, Reuters reported.

All three major US stock indexes closed well below session highs, marking a partial rebound from Tuesday’s steep sell-off. The tech-heavy Nasdaq enjoyed the most robust gain.

Yields on 10-year US Treasuries hit a one-month low.

Mr. Asuncion expects the peso to trade from P55.70 to P56 a dollar on Friday, while Mr. Ricafort sees it a P55.75 to P55.95. — Aaron Michael C. Sy

PSEi continues slump after hawkish BSP remarks

PHILIPPINE STAR/KRIZ JOHN ROSALES

PHILIPPINE SHARES slumped for a third straight session on Thursday after the central bank governor said it was too early to cut interest rates, hurting investor sentiment.

The 30-member Philippine Stock Exchange Index (PSEi) fell by 0.59% or 41.20 points to close at 6,837.34. The broader all-share index dropped by 0.54% or 19.70 points to 3,567.89.

The index dropped as rate cut hopes were tempered by Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr.’s remarks that there was no assurance yet that inflation would settle within their 2-4% target, Philstocks Financial, Inc. trader Mikhail Philippe Q. Plopenio said in a Viber message.

“Additionally, investors digested the statement from US Federal Reserve Chairman Jerome Powell overnight that the Fed is not yet ready to cut rates,” he added.

Philippine inflation quickened to 3.4% in February from 2.8% a month earlier due to higher food and transport costs.

The BSP has kept the benchmark rate steady at a near 17-year high of 6.5%. It raised borrowing costs by 450 basis points from May 2022 to October 2023 to tame inflation.

“Philippine shares continued to be sold down as investors digested Mr. Powell’s testimony before the US House financial services committee,” Luis A. Limlingan, sales head at Regina Capital Development Corp., said in a Viber message. “Later, Wall Street awaits the release of the latest jobless claims data, and trade balance and consumer credit data for January.”

Global oil prices rose on Wednesday as Mr. Powell indicated that interest rates would likely come down this year, though the central bank is moving cautiously, he added.

Almost all of the PSEi’s sectoral indices fell, led by property which declined by 2.4% or 68.96 points to 2,793.83. Financials shed 0.89% or 17.90 points to 1,988.49, while mining and oil dipped by 0.48% or 41.33 points to 8,475.34. Holding companies fell by 0.16% or 10.90 points to 6,523.16, while industrials shed 0.09% or 8.38 points to 9,068.64.

Services added 0.8% or 14.19 points to 1,778.13.

Among the index members, International Container Terminal Services, Inc. was at the top, climbing by 2.74% to P300. Metropolitan Bank & Trust Co. lost the most, dropping by 4.78% to P59.70.

Value turnover rose P4.99 billion with 652.03 million shares switching hands, compared with 503.78 million stocks worth P4.85 billion on Wednesday.

Decliners beat advancers 109 to 64, while 44 stocks were unchanged. Net foreign buying dropped to P4.65 million from P50.33 million a day earlier. — Revin Mikhael D. Ochave

UN data: Global patent filings drop nearly 2% as innovation falters

SANJITBAKSHI-FLICKR

GENEVA – Patent filings slipped last year by nearly 2% in the first fall in 14 years amid economic uncertainty, the U.N. patent agency said on Thursday, in a move it described as “concerning”.

The World Intellectual Property Organization, which oversees a system for countries to share recognition of patents, reported 272,600 filings in 2023 which was a 1.8% decline from the previous year.

The top two countries China (69,610) and the United States (55,678) both reported fewer filings than 2022, falling 0.6% and 5.3% respectively. In the case of China, it was the first drop since 2002.

“I think it is really a broader reflection of what’s going on in the innovation economy. And I think to some extent, it is concerning…,” WIPO chief economist Carsten Fink told reporters.

“Innovation, technological progress is what generates future economic growth, future jobs, and I think, policymakers need to make sure that there is an innovation ecosystem that is vibrant and…generates the, the seeds of future growth.”

Japan and Germany, number 3 and 5 in the rankings, also filed fewer applications in 2023 although South Korea which is ranked fourth had a slight increase.

The Patent Cooperation Treaty which has 157 signatory states allows inventors to seek patent protection simultaneously in a large number of countries. It accounts for around 60% of non-resident patent applications, WIPO said. – Reuters

Experimental Novo obesity drug more effective than Wegovy in early trial

STOCK IMAGE | Image by Mohamed Hassan from Pixabay

COPENHAGEN – Novo Nordisk said on Thursday early trial data for its highly anticipated experimental obesity drug amycretin showed a higher weight loss compared with its popular Wegovy treatment, sending its shares to new record highs.

A Phase I trial of amycretin pill version showed participants lost 13.1% of their weight after 12 weeks, the company said at an investor meeting. That compares to a weight loss of about 6% after 12 weeks in a trial for Wegovy, its blockbuster obesity drug.

Investors welcomed the news as indicating Novo had more in its pipeline beyond its hugely successful Wegovy. Its shares have soared since launching the weekly injections in the United States in 2021 and are now Europe’s most valuable listed company, ahead of LVMH.

“Novo has made clear that the amycretin molecule likely will form the foundation of the company’s rapidly growing pipeline,” said Guggenheim analyst Seamus Fernandez.

Novo’s shares surged 5.1% to a record peak following the announcement. Shares have risen more than three-fold since June 2021 when it launched Wegovy in the United States.

Nearly half of Novo’s current valuation is based on the company’s pipeline of new experimental drugs such as amycretin, according to calculations by Berenberg analysts last week.

Wegovy, which showed an overall weight loss of 15% after 68 weeks, belongs to a class of drugs known as GLP-1 agonists, originally designed to treat type 2 diabetes, that have been shown to reduce food cravings and empty the stomach more slowly.

Following the success of these drugs, companies are working on other promising weight-loss therapies such as amycretin which targets a hormone called amylin in the pancreas that affects hunger.

Wegovy was the first of a new group of highly effective weight-loss drugs to be launched. Novo and Eli Lilly LLY.N are so far the leaders in the obesity drug market, forecast by analysts to be worth $100 billion by 2030.

 

HEART DISEASE

CEO Lars Fruergaard Jorgensen also announced the company was expanding its focus on diabetes and weight-loss therapies to include cardiovascular disease treatments.

The change comes after the drugmaker last August said a large study had shown Wegovy also had a clear cardiovascular benefit, boosting efforts by the company to move Wegovy beyond its image as a lifestyle drug.

“Any company that is so heavily exposed to one therapeutic area needs to try to develop other pillars to stand on,” said Wolfgang Lickl, portfolio manager at KB-Vermögensverwaltung.

“The sheer success in diabetes and obesity will make that difficult, but the cardiovascular field makes sense because of the many synergies,” he said.

Following the August trial, Novo has been trying to convince skeptical medical insurers that the long-term benefits of Wegovy are enough to reduce the overall burden on healthcare systems and the cost of treating heart disease in overweight and obese people. – Reuters

India AI crackdown expected to steer IT investment to PHL

REUTERS

By Justine Irish D. Tabile, Reporter

MORE artificial intelligence (AI) investment could find its way into the Philippines if the Indian government continues to stiffen regulations on the deployment of AI tools, the Information Technology and Business Process Association of the Philippines (IBPAP) said.

“Basically, if the Indian government makes it harder for AI to be deployed, the Philippines, as the second-largest destination for outsourcing, can get a larger share of the AI investment,” Dominic Vincent Ligot told BusinessWorld via Viber.

In an advisory issued March 1, the Indian government asked technology firms to seek approval before releasing AI tools to the public, Reuters reported.

Mr. Ligot said that the Philippines ranks first in terms of monthly search volume for AI tools and fourth in terms of AI usage, which suggests a potential opportunity should other jurisdictions make things difficult for AI developers.

“We have encouraging statistics on interest in and usage of AI. We should step up our own position to be open and supportive of AI innovation but also be wary of risks,” he said.

“Misuse of AI is the top risk, such as deepfakes and fake news,” he added. “There are also other discussions like copyright infringement, privacy, and, of course, the fear of job displacement.”

“We’re supportive of risk management regulation and incentives, but we are worried about a blanket ban,” he said, citing Rep. Juan Carlos C. Atayde’s House Bill 9448, which aims to regulate the use of AI and automation to protect jobs.

“That’s a little bit more worrisome because it seems like a blanket ban that you can’t use AI for HR or something like that, or you can’t necessarily replace people with automation, which is already being done,” he added.

He said the industry is seeking incentives for developing AI tools or for technological innovation.

“There are no incentives, which is what created the BPO (business process outsourcing) industry, which, with tax breaks and the lifting of the foreign ownership limit, suddenly created a middle class.”

“If you want to do AI, you cannot get funding, and even one of our members was complaining that the Bureau of Customs would even give you a hard time importing GPUs (graphics processing units) and data center equipment,” he added.

“I don’t know if the India thing will stick… but since that’s the signal right now, the number two Philippines can swoop in to take the AI jobs,” he added.

Mr. Ligot said that around 45% of IBPAP members already experimenting with the use of AI, while less than a third are at deployment cases.

“Most of the use cases are Agent Assist (technology). So what that does is it doesn’t eliminate the agent; it just allows the agent to do five to 10 times more calls faster,” he added.

La Niña effects expected to be more pronounced toward late 2024

REUTERS

THE government weather service, known as PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), said on Thursday that rains associated with La Niña may become more pronounced towards the end of the year, even though the weather phenomenon’s onset could come as early as June.

“We are seeing a higher possibility of La Niña to develop in June, but its effects may be seen during the later parts of the year,” Nathaniel T. Servando, PAGASA administrator, said in a briefing.

Mr. Servando added that the likelihood of La Niña occurring is 55% in June, July, and August, triggering the issue of a La Niña Watch bulletin.

According to PAGASA, La Niña is characterized by “unusually cooler than average sea surface temperatures (SSTs) in the central and eastern equatorial Pacific (CEEP).”

He added that El Niño has started to weaken as it transitions to an ENSO-neutral (El Niño-Southern Oscillation) state in April, May, and June.

Weather conditions that are neither El Niño nor La Niña are considered to be ENSO-neutral.

“Despite the weakening of El Niño, we are expecting its effects to still be felt in the next few months,” he said.

In an advisory, PAGASA said 25 provinces in Luzon and five in the Visayas have the potential to develop drought conditions, while 22 may potentially experience dry spells. A further 15 may experience dry conditions.

“The warm and dry season will commence in March… The rainfall forecast for March shows that most parts of the country will likely experience way below to below-normal rainfall conditions,” PAGASA said.

The effects of drought and dry conditions threaten agricultural production, with a follow-on-impact on food security.

Agricultural damage resulting from El Niño has topped P1.06 billion, with Western Visayas hit hardest, according to a report by the National Disaster Risk Reduction and Management Council. — Adrian H. Halili

ADB to authorize port dev’t studies for use by offshore wind industry

THE Asian Development Bank (ADB) said it is set to authorize consulting contracts to study the redevelopment of ports for use by the offshore wind power industry, adding that 10 candidate sites have been identified.

“I am to issue notice to proceed for selected consultants towards the end of the month or early next month so that I can meet the tight government deadline by October,” ADB Principal Energy Specialist Shigeru Yamamura said in a virtual forum on Thursday.

The bank provides technical assistance to the Department of Energy (DoE) to determine via a pre-feasibility study port readiness for offshore wind projects.

“We recently completed offshore wind regulatory framework development for the DoE and ERC (Energy Regulatory Commission),” he said. “We are also going to supply recommendations for environment and social safeguard standards for offshore wind sometime next month.”

For the study, the DoE has identified 10 sites — the Port of Currimao, Ilocos Norte; Port Irene, Sta. Ana, Cagayan; Port of Subic; Port of Tabaco, Albay; Bulalacao RORO Port, Oriental Mindoro; and Pulupandan and Banago Ports in Negros Occidental; the International Container Port Complex in Iloilo; the Batangas Energy Supply Base port facility of the Philippine National Oil Co.; and Bauan International Port, also in Batangas.

“The 10 ports we’ve submitted for ADB technical assistance are ports we’ve earmarked as marshaling ports — ports that require the highest investment,” Energy Undersecretary Giovanni Carlo J. Bacordo said.

Mr. Bacordo said the study will likely include the estimated cost of repurposing of ports, as well as the investment’s potential “considering there are already existing service contracts.”

To date, the DoE awarded a total of 82 offshore wind energy service contracts, with a potential capacity of about 63.36 gigawatts (GW).

At least 10 offshore wind projects with 6.72 GW are expected to generate power by 2028.

Mr. Yamamura said that the ADB will also propose “the optimal financing arrangement” for each selected port in the final report.

Action plans will be prepared to facilitate the private-public investment in the port “for earlier deployment of offshore wind in the government-designated timeframe,” he said. — Sheldeen Joy Talavera

Last subway deals targeted for 3rd quarter award

PHILIPPINE STAR/ MICHAEL VARCAS

THE Department of Transportation (DoTr) said it is evaluating the remaining contract packages for the Metro Manila Subway, with the award target set for the third quarter.

“Bids have been submitted. The consultants are now in the process of evaluating the bid submissions,” Transportation Undersecretary Jeremy S. Regino said in a briefing on Thursday.

The three remaining contract packages were originally set to be awarded in the first quarter of 2024.

These include contract package 105 for Kalayaan Avenue and Bonifacio Global City underground stations, contract package 108 for the Lawton and Senate-Department of Education stations, and contract package 109 for the Terminal 3 station.

The subway will connect 17 stations. It is initially scheduled to start full operations by 2027, but was then delayed to 2029 due to right-of-way acquisition issues.

The 33-kilometer subway aims to cut travel time from Valenzuela to Ninoy Aquino International Airport from 1 hour and 30 minutes to 35 minutes, and carry over 500,000 passengers a day.

“We are expecting to have partial operations by maybe 2028 — from Valenzuela to Ortigas… but for the section from Ortigas up to Bicutan, the schedule is to complete it by 2029,” Transportation Secretary Jaime J. Bautista said.

The loan agreement for the third tranche of the financing, which is worth around P55.7 billion (150 billion yen), is expected to be approved sometime this March.

This will be funded by the Japan International Cooperation Agency (JICA). The loan agreement is targeted for completion this month, according to the Department of Finance (DoF).

“DoF is working with us, working with JICA, and so far, we don’t see any problem with the financing,” Mr. Bautista said.

The loan deal for the first tranche worth around P38.8 billion (104.5 billion yen) was signed in 2018, while the deal for the second tranche worth P94.1 billion (253.3 billion yen) was signed in 2022.

The loan agreements for the fourth and fifth tranches, worth a combined P151 billion (406.6 billion yen), are still under discussion.

The government has officially lowered the tunnel boring machine in Quezon City to build the subway’s North Avenue station.

“(We are) expecting that the fourth tunnel boring machine will start operations three months from now and hopefully, we should be able to finish tunneling up to Tandang Sora within 12 months,” Mr. Bautista said.

The tunnel boring machine will work on contract package 101, which includes the East Valenzuela, Quirino Highway, Tandang Sora and North Avenue stations.

The machine can dig up to 300 to 600 cubic meters per day which is equivalent to 6 to 12 meters in length.

Two more tunnel boring machines are expected to be delivered in 2024, Mr. Bautista said. There are currently five tunnel boring machines working on the project.

The country’s first subway system is currently making progress estimated at 40%, according to the DoTr, on works related to design, right-of-way, procurement, and construction.

The construction progress was estimated at 11%.

Mr. Bautista said that the project is facing major right-of-way issues.

“One of our stations will pass through a building owned by the Department of Education and that building is considered a heritage site… so we need to fix how to move the building or possibly move the station,” he said.

He added that some property owners do not want the project to pass under their properties.

“We’re negotiating with them to allow the government to operate under their properties… we’re expecting that we should be able to resolve all these right-of-way issues,” he said.

The government has acquired 55% of the right of way for the project, he said. — Sheldeen Joy Talavera

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