Meralco switches on new substations in Taguig City

February 12, 2024 | 12:04 am

MANILA Electric Co. (Meralco) has energized two new smart substations in Taguig City to cater to the growing demand in the business center, the power distributor said on Sunday.

Meralco has invested P413.98 million for the Fort Bonifacio Global City-2 gas insulated switchgear (GIS) substation to improve the power quality in Bonifacio Global City and nearby areas, the company said in a statement.

It involves the construction of a new 0.3-kilometer, 115-kilovolt (kV) line, and a new 34.5-kV distribution feeder.

Meanwhile, a total amount of P440.06 million was allocated to the McKinley Hill GIS substation. This includes the construction of underground 115 kV lines and two new 34.5 kV distribution feeders.

“As we energize these new substations, we also strengthen our commitment to continue delivering quality electricity service by strategically investing in projects to further improve our distribution system,” Meralco Executive Vice-President and Chief Operating Officer Ronnie L. Aperocho said.

The company stated that among the communities and establishments that will benefit from the new substations are St. Luke’s Medical Center, Shangri-La The Fort, Arthaland, Uptown Mall, One Residences, Venice Grand Canal Mall, Enderun Colleges, Inc., Commerce & Industry Plaza, Science Hub, One Le Grand Tower, 8 Upper McKinley Towers, and One World Square.

In September last year, Meralco energized a 115-kV–34.5-kV GIS substation worth P597 million to provide power supply to Ayala Land, Inc.’s South estate and nearby communities in Taguig City.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

Rustan’s Zenaida ‘Nedy’ Tantoco, 77

February 12, 2024 | 12:04 am

RUSTAN Commercial Corp., SSI Group, Inc., and Rustan Marketing Corporation Chair Zenaida Tantoco (“ZRT” to Rustan’s and SSI staffers; “Nedy” to friends, family, and the society pages) passed away on Feb. 8, 2024. The death was confirmed through a statement sent out by the Tantoco family through Viber.

“It is with profound sadness that we announce the passing of Zenaida ‘Nedy’ R. Tantoco. The retailer, philanthropist, patroness of the arts, loving mother, and grandmother passed away last night, Feb. 8, 2024, at 11:42 p.m. She was 77 years old,” said the statement.

Ms. Tantoco would have been about five years old when her parents founded their retail empire in 1952 from their house in San Marcelino, Manila. Her parents were entrepreneurs Bienvenido Tantoco, Sr. (who would be appointed Ambassador to the Vatican in 1983) and Gliceria Rustia Tantoco, a close associate of former First Lady Imelda Marcos. While her father passed away in 2021 at the age of 100, her mother had died much earlier in 1994.

The senior Tantoco couple changed the face of Philippine retail by bringing in some of the world’s most prestigious brands to the country through their department store chain, Rustan’s. Their operations in franchising, licensing, and distribution expanded through sister company, Stores Specialists Inc. (SSI), founded in the 1980s. While some brands may have changed distribution channels in the Philippines through the years, the brands brought in by the Tantoco family have included Salvatore Ferragamo, Cartier, Bottega Veneta, Charriol, Oleg Cassini, Dior, Balenciaga, Givenchy, Loewe, Prada, Burberry, Montblanc, Tiffany & Co., and Hermès; among others.

Nedy Tantoco, even as a young woman, was already known for her style, dressed by the best designers here and abroad. With a reputation as an arbiter of taste, it seemed natural for Ms. Tantoco to ascend to her parents’ place to head the Rustan Group. Well into her 70s, Ms. Tantoco still cut a striking figure at Rustan’s events, usually in Ferragamo pumps.

Aside from her work as chair and chief executive officer (CEO) of the family business, Ms. Tantoco participated in society and patronized the arts, with a special interest in opera.

“The CCP (Cultural Center of the Philippines) and the art community in general grieves the loss of a strong ally in pursuing cultural endeavors and promoting artistic excellence. May her soul rest in peace and rise in glory,” said the CCP in a statement honoring its former long-time trustee. Ms. Tantoco had been part of the CCP Board of Trustees from 2002 until her resignation in 2021.

“During her 19 years as CCP Trustee, her accomplishments were defined by her integrity and reliability, as well as her unwavering love and inspiring passion for arts and culture,” said the statement, which highlighted her fundraising efforts for the cultural center. She raised funds for new musical instruments and repairs for the Philippine Philharmonic Orchestra (PPO), she underwrote several CCP opera productions including Gaetano Donizetti’s L’Elisir d’Amore in 2017 and Lucia di Lammermoor in 2020, and Giacomo Puccini’s Turandot in 2022.

Former PPO Musical Director Olivier Ochanine wrote in a Facebook post: “Up until her last messages to me days ago, she was always positive and inspiring. She helped me to organize the PPO reunion just a couple of weeks ago… Incredibly hard to think now that just days later, this superb, generous and kind woman — bigger than life, as they say — would leave this world.

“No words can adequately describe how important you are to me and to so many others.”

Opera singer Rachelle Gerodias wrote on Facebook, “Despite her social stature and power she was so humble, kind, and generous to everyone, especially to her family and friends. She sincerely loved the arts and generously supported classical music and opera in our country. She is a great loss to all of us.”

Fashion designer Puey Quiñones wrote “Thank you Tita Nedy Tantoco for the focus, the opportunity to be in Rustan’s. My heart is broken. We love you, Tita. Rest in paradise.”

She is survived by her partner Patrick Jacinto; her three children: Anton Huang (who sits as president at SSI) with wife Nina and daughters Nikki and Isabelle; Michael Huang (Rustan’s Senior Vice-President for Development and Support) with wife Kathy and children Kenzie and Kameron; and Catherine with husband David Endriga. She is also survived by siblings Rico and wife Nena Tantoco, Menchu and husband Jun Lopez, Marilou and husband Eddie Pineda, Marlien Tantoco, and Maritess and husband Renato Enriquez.

“Nedy uncompromisingly upheld the sacred values taught by their parents in running a family enterprise. Although known in the industry for her astute professionalism, Nedy will always be better remembered as a nurturing force in fostering family empowerment and unity. These, she believed, were key for their family’s future generations to thrive,” said the statement from the Tantoco family.

The wake will be held at 25B Tamarind Avenue, Forbes Park, Makati City, from 11 a.m. to 10 p.m. on Feb. 10-12. Ms. Tantoco’s remains will be transferred to the Heritage Park in Taguig on Feb. 13 to 15, from 9 a.m. to 9 p.m, with masses held at 5 p.m. The funeral mass will be held on Feb. 16 at 10 a.m. in the Santuario de San Antonio Parish in Forbes Park, Makati.
— JLG

T-bill, bond rates may rise ahead of BSP meeting

February 12, 2024 | 12:03 am

By Aaron Michael C. Sy, Reporter

THE RATES of Treasury bills (T-bills) and retail Treasury bonds (RTBs) are expected to go up this week ahead of the Philippine central bank’s policy meeting.

The government securities could track the slight increase in secondary market yields as the Bangko Sentral ng Pilipinas (BSP) is expected to mirror the US Federal Reserve and keep its key rate steady on Feb. 15, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said in a Viber message.

The Bureau of the Treasury (BTr) will auction off P15 billion in T-bills on Monday — P5 billion each in 91-, 182- and 364-day debt. On Tuesday, it will hold its rate-setting auction for five-year RTBs due in 2029.

The Treasury will cancel the auction for seven-year Treasury bonds on Tuesday due to the retail bond sale.

At the secondary market on Thursday, the rate of 91-day T-bills went up by 1.88 basis points (bps) week on week to 5.4610%, based on PHP Bloomberg Valuation Service Reference Rates data posted on the Philippine Dealing System’s website.

The 364-day T-bill rose by 1.37 bps to 6.0577%, while the 182-day debt fell by 0.31 bp to 5.8095%. The five-year bond rose by 4.49 bps to 6.1313%.

“The next local policy rate-setting meeting on Feb. 15 could match the Fed rate pause on Jan. 31 to maintain healthy interest rate differentials,” Mr. Ricafort said.

Fifteen of 17 analysts in a BusinessWorld poll last week expected the Monetary Board to keep the target reverse repurchase (RRP) rate at 6.5% on Thursday.

The Monetary Board raised borrowing costs by 450 bps from May 2022 to October 2023, bringing the policy rate to a 16-year high of 6.5%.

The Fed held its target rate steady at 5.25-5.5% for a fourth straight time at its Jan. 30-31 meeting. It raised borrowing costs by 525 bps from March 2022 to July 2023.

Last week, the Treasury bureau raised P15 billion as planned from its T-bills auctions as total bids reached P47.415 billion, more than thrice the amount on the auction block.

The Treasury fully awarded P5 billion of the 91-day T-bills as tenders hit P12.985 billion. The average rate of the three-month debt rose by 6.3 bps to 5.461% from a week earlier. Accepted rates were 5.425% to 5.495%.

The government also raised P5 billion from the 182-day debt as bids hit P13.94 billion. The average rate of the six-month debt rose by 5.1 bps to 5.861%, with accepted rates at 5.84% to 5.873%.

The Treasury also borrowed the programmed P5 billion via the 364-day debt as demand reached P20.58 billion. The average rate of the one-year T-bill shed 0.1 bp to 6.075%. Accepted yields were 6.05% to 6.098%.

The bureau plans to raise P210 billion from the domestic market this month — P60 billion in T-bills and P150 billion in T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 5.1% of gross domestic product this year or P1.39 trillion.

How to deal with too much clothing in the world

February 12, 2024 | 12:03 am

ACCORDING to Rey Eliseo Torrejos, Associate Scientist at the Department of Science and Technology – Philippine Textile Research Institute (DOST-PTRI), there’s way too much clothing in the world.

During the National Textile Convention on Jan. 31, Mr. Torrejos, in a talk called “Philippine Textile Recycling Frameworks,” brought out a graph showing the increase of gross domestic product (GDP), the rise in population, and increasing sales in clothing. A fainter line shows a drop in clothing utilization rate. “What this implies is that there’s actually enough clothing on the planet to clothe the next six generations of the human race,” he said.

In the Philippines, 267,111 tons of textile waste are dumped in landfills each year, according to data gathered from the Solid Waste Management status report.

Mr. Torrejos said that the clothing industry is one of the world’s most polluting, with the industry contributing to 10% of global greenhouse gas emissions. Meanwhile, there are five million tons of microfibers found in the oceans every year, shed from washing and other clothing-related practices. “That’s why the DOST-PTRI (Department of Science and Technology – Philippine Textile Research Institute) promotes the utilization of natural fibers. Unfortunately, if we want to clothe all the people in the world, natural fibers are not enough. We really need to consider utilizing synthetic fibers as well,” he said. According to him, almost 80 million tons of synthetic fiber are produced every year (though he estimates it could go up to 100), while only 30% of the world’s production is natural or plant-based.

The rest of the world is gearing up on its recycling efforts: 15% of the textile waste in the US is currently being recycled. Around 39% of the textile waste generated in the world is from poly-cotton blends, which are harder to recycle, because in some cases, the natural and synthetic fibers must be separated chemically in a series of expensive procedures.

Philippine startups Wear Forward and Humble Sustainability collect clothes for recycling and upcycling, Mr. Torrejos pointed out, but the process gets more difficult when synthetics get in the way, because of the mentioned difficulty in chemically separating the fibers.

However, he said there is another approach. “You don’t need to separate the fibers, but you (use) a binder to bond the products together and then form new products.”

The DOST-PTRI is working on a few solutions: these include developing a Near-Infrared device with Mapua University to identify clothing by fiber to ease the segregation efforts, as well as binding together textile waste with fungi (a partnership with Central Luzon State University) to make things like alternative leather and new products.

In a partnership with Chonnam National University in South Korea, they’re studying a bioengineered cellulase to degrade cellulose fibers. “We really can’t do this without the help of other researchers,” he said. “Our goal is also to diversify.” — JLG

El Niño waning, La Niña to develop in H2 2024

February 12, 2024 | 12:03 am

THE La Niña weather pattern characterized by unusually cold temperatures in the Pacific Ocean could emerge in the second half of 2024, following a strong El Niño year, a US government weather forecaster said.

The pattern typically brings higher precipitation to Australia, Southeast Asia and India and drier weather to grain and oilseed producing regions of the Americas.

“Even though forecasts made through the spring season tend to be less reliable, there is a historical tendency for La Niña to follow strong El Niño events,” the National Weather Service’s Climate Prediction Center (CPC) said.

The current El Niño weather pattern, which caused hot and dry weather in Asia and heavier than usual rains in parts of the Americas, is likely to give way to the neutral conditions during April-June 2024, the CPC said.

CPC said in its monthly forecast there is a 55% chance that La Niña conditions develop between June and August.

“La Niña is likely to affect the production of wheat and corn in the US, and soybean and corn in Latin America including Brazil,” Sabrin Chowdhury, head of commodities at BMI said.

Last year India, the world’s biggest rice supplier, restricted exports of the staple following a poor monsoon, while wheat output in No. 2 exporter Australia took a hit.

Palm oil plantations and rice farms in Southeast Asia received less than normal rains. “The development of La Niña is beneficial for the Indian monsoon. Typically, the monsoon delivers abundant rainfall during La Niña years,” said an official with India Meteorological Department.

The June-September monsoon, which is vital for India’s $3-trillion economy, brings nearly 70% of the rain the country needs to water crops and replenish reservoirs and aquifers. — Reuters

Cemex shares surge amid DMCI acquisition speculation

February 12, 2024 | 12:03 am

THE stock price of Cemex Holdings Philippines, Inc. doubled last week following an investor rally amid speculation regarding DMCI Holdings’ planned acquisition of the cement producer.

Data from the Philippine Stock Exchange (PSE) showed that Cemex’s shares reached 214.98 million, valued at P334.34 million, from Feb. 5 to 9.

The price per share of Cemex closed at P1.80 on Friday, more than double the closing price of P0.89 the week before. Its stock price has surged from its P0.94 finish on Dec. 29, 2023.

Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said the increase in Cemex stock prices was due to news circulating about DMCI’s negotiations to acquire Cemex Holdings Philippines, the local unit of Mexico’s Cemex S.A.B. de C.V.

“This news has ignited a flurry of market activity, with investors closely monitoring developments and assessing the potential impact on both companies involved,” Mr. Arce said in a Viber message.

According to a Reuters report, a source said that the Consunji Group’s DMCI Holdings was seeking to acquire Cemex for as much as $714.16 million or P40 billion. This exceeded the company’s current valuation of P21 billion ($374.93 million).

If the acquisition materializes, Mr. Arce said that it would provide a competitive advantage for the two holdings.

“Investors may interpret DMCI’s interest in diversification positively, seeing it as a strategic move to expand its business portfolio and potentially tap into new revenue streams. This could lead to increased confidence in the company’s long-term growth prospects, potentially driving up its stock price,” he said.

Similarly, Aniceto K. Pangan, an equity trader at Diversified Securities, Inc., said in a Viber message that due to the speculation, “[Cemex] moved up as book value at P3.19 per share, higher than the current price.”

With this trend, Mr. Pangan saw that the acquisition price might exceed the current price.

Last week’s closing price of P1.81 was the highest in 38 months, or since it reached P1.83 on Nov. 23, 2020.

According to Mr. Arce, Cemex’s downturn in 2023 was due to oversupply in the industry, resulting in a downward spiral in prices.

“However, amidst these adversities, the potential acquisition presents an opportunity for synergy between Cemex and DMCI Holdings,” he added.

Despite this, both analysts said that the issue remained subject to validation.

“With no definitive stance, the acquisition issue remains speculative and thus bound to correct,” Mr. Pangan said.

In separate disclosures on the stock exchange, the two parties clarified that there was still no definitive transaction.

The building materials company also emphasized that they had not authorized nor issued any of the circulating information.

“While Cemex continues to explore any divestment opportunities as disclosed in the 2023 Tender Offer Report of Cemex Asian Southeast Corporation (the principal shareholder of the Corporation), the Corporation is not privy to any discussions by its shareholders and is not aware that there is any definitive transaction at this time,” the disclosure said.

Although speculations increased investor interest for the week, without any definitive transaction nor assurances, volatility was to be expected, said Mr. Arce.

He added that “some investors may have adopted a wait-and-see approach, preferring to observe further developments before making significant investment decisions.”

Mr. Pangan projected Cemex’s fourth-quarter income to be at a loss similar to the third quarter. For the full year, he foresaw a P2 billion net income, higher than in 2022.

The company’s net loss totaled P582.58 million for the third quarter of 2023, exceeding the loss of P552.07 million incurred from July to September 2022.

For the first nine months of 2023, the net loss totaled P1.24 billion, compared to the P818.77 million loss recorded in the corresponding period of 2022.

Mr. Pangan projected Cemex’s fourth-quarter income to be at a loss like the third quarter. For the full year, he foresaw a P2 billion net loss, higher than in 2022. — Andrea C. Abestano

Note: This article has been updated to correct figures.

Mitsubishi brass bullish on PHL

February 12, 2024 | 12:03 am

VELO_PAGE1_image4 — The Mitsubishi Xforce SUV, which debuted globally in Indonesia last year, will enter the Philippine market this June. -- PHOTO BY KAP MACEDA AGUILA

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New releases to underpin growth this year

By Kap Maceda Aguila

MITSUBISHI MOTORS Philippines Corp. (MMPC) had a banner year in 2023, selling 78,371 units to retain second place among auto marques here. That figure allowed it to corner 18.23% of the market, paced only by perennial leader Toyota.

Buoyed by that performance and, perhaps, a handful of exciting models in key segments just around the corner, MMPC is looking toward outdoing itself this year — to the tune of 19% to 20% market share. This, of course, helps to underscore the importance of our market — as does the recent visit of Mitsubishi Motors Corp. (MMC) Executive Vice-President for Sales Tatsuo Nakamura.

The official, along with MMC ASEAN (Association of Southeast Asian Nations) B Division General Manager Minoru Kinoshita, recently met with some members of the media and content creators to convey their gratitude for the support, as well as to provide some insight into what’s in store.

MMPC President and CEO Takeshi Hara led off by reporting that the recently launched Mitsubishi Triton pickup was performing “great,” and that the company has been getting a lot of reservations for the model. “We’ll try to get more (vehicles), but there’s no problem with supply,” he stated. Mitsubishi reports that the Triton already has mustered a booking total of 3,000 units here, which stretches back to last year since people first got wind of the model’s arrival.

The bullishness of Mitsubishi’s business is apparently being centered in this region. Mr. Nakamura revealed, “In our relentless pursuit of excellence, we have strategically aligned our business overseeing the dynamic ASEAN market… We are concentrating our resources in ASEAN, of course including the Philippines, and keep preparing the introduction of new models year by year.”

He stressed that the Philippines is one of the most important and strategic countries in the region, and the business momentum is expected to be kept or even accelerated by the debut of the Mitsubishi Xforce in June.

The five-seater crossover has been specifically developed for the ASEAN market — as well as customers in Latin America, the Middle East, and Africa — and will come from the production line of Mitsubishi’s Krama Yudha Indonesia plant. Fittingly, it debuted globally in that country — specifically at the 30^th GAIKINDO Indonesia International Auto Show in August of last year, which “Velocity” had attended as a guest of Hyundai Motor Philippines to witness the debut of the Stargazer X MPV.

“The all-new Xforce is a five-passenger compact SUV that was developed with a focus on the way compact SUVs are used in the ASEAN region,” said MMPC in a release shortly after the global launch. Based on the concept “best-suited buddy for an exciting life,” the all-new model is said to feature “stylish yet robust, authentic SUV styling as well as comfort and practicality including a spacious cabin and versatile storage spaces well-balanced in a maneuverable, compact body size, and road handling that allows safe, secure ride in a variety of weather or road conditions.” In addition, the model boasts a Yamaha premium audio system developed with Yamaha Corp. in Japan.

The Xforce most recently debuted in Vietnam last January, and is said to have been getting a lot of interest. “In both countries, the Xforce has obtained high praise from the public,” revealed Mr. Nakamura.

Replying to a question from “Velocity,” MMPC EVP for Sales and Marketing Takanobu Suzuki said that the company is projecting annual sales of 7,000 units (or around 583 a month) for the model.

Concluded Mr. Nakamura, “We have full trust that the Xforce will be one of the pillars in the Philippine market… after the success of the new Triton.”

The Facebook I knew should not have left Harvard

February 12, 2024 | 12:03 am

When last week Meta Platforms, Inc. CEO Mark Zuckerberg shared a photograph of his Facebook page from 20 years ago — back when it was “thefacebook” — it was, for me, a little like the sponge cake that cast Proust back in time. The bare-bones profile page felt achingly familiar because I was one of thefacebook’s first few dozen users.

In those first weeks, with just 1,000 or so Harvard students registered, the website that would become Facebook was spartan in design and limited in what it promised. It hadn’t yet added all the compelling bells-and-whistles that have transformed the platform into the election-warping, government-shaking, memory-making behemoth it is today. In retrospect, though, some of its fatal flaws should perhaps have been obvious from the start.

Us early Facebookers used the site for three things. First, and most important, we could choose our own profile picture. This was vital, as our photos in the official school directory were often taken during our first days on campus, mostly with regrettable hometown haircuts. It also meant that the performative aspect of Facebook was its most distinctive feature from the get-go.

Second, we could create various groups of dubious utility (“people who think Harvard Square needs a greasy spoon diner”). While only half-serious, these communities helped us figure out what shared identities caught on and could become popular.

Finally, we could check up on who knew whom, and whether either of them was single. In the pre-smartphone era, getting such information when you needed it wasn’t easy. Some students I knew left parties midway to run to the computer lab, log on, check up on all the guests, and return armed with crucial intelligence.

What we never had to question was whether the other people on thefacebook.com were who they said they were, or whether they were telling the truth. We took that part for granted.

That’s because of where we were: Facebook was designed for people who already owed something to each other, simply by being part of the same campus community. The university was the real social network; Facebook was just a website that helped you navigate it. It was an addition to real life, not a replacement for it.

Regardless of its vast size and unparalleled reach, today’s 20-year-old Facebook seems as unprepared for the real world as us early adopters were when we were in our late teens and early 20s. In the real world, people do not have the mutual responsibilities that are taken for granted on a college campus. A university-centric model of networking isn’t designed for people who lie about who they are and what they want. Such users can create entirely false personas and narratives, and those can slowly take over the site.

Zuckerberg recognized the threat fairly early on; he famously insisted in 2010 that people have “one identity,” and that showing more than one face to the world was “an example of a lack of integrity.” But the 14 years since have proven that web-based social networks can’t impose integrity on their users. Only social networks in the real world can.

The links between Facebook and the real world were finally severed when what was once a “mini-feed,” showing you what the people you knew were doing, turned into a real “news feed,” in which over time you could share with people the news stories you were reading. This intersected neatly with the performative and identity-forming bits of Facebook’s DNA.

It also made the company and Zuckerberg himself a lot of money. Unfortunately, it was also deeply dangerous. It transformed the site into something more addictive but less functional, and much less grounded in real relationships. Early Facebook groups were designed to be, at worst, mean about professors. Now, in already divided societies such as India, they often spread religious and ethnic hatred, with harsh consequences.

One can only wonder what the world would have been like if another social network, one which did not assume mutual trust and responsibility from the start, had sprung up instead of Facebook. Another recent post from Zuckerberg — this time on Instagram — featured a clip from a very early interview where he pointed out, “When we first launched, we were hoping for 400, maybe 500 people; now we’re at 100,000 people, so who knows where we’re going next.” As one of those 400, maybe 500 people, I can’t say I am eager to find out.

BLOOMBERG OPINION

Philippine lenders’ earnings up 14% on lending, trading gains

February 12, 2024 | 12:02 am

By Keisha B. Ta-asan and Aaron Michael C. Sy, Reporters

THE NET INCOME of the Philippine banking industry rose by 14.4% last year amid higher interest income and trading gains, according to central bank data.

Banks’ net income rose to P354.93 billion from P310.12 billion in 2022, spurred by a 20% year-on-year increase in net interest income to P906.872 billion. Noninterest income fell by 15.8% to P218.93 billion from P259.89 billion in 2022.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., attributed improved profits to demand for loans despite high borrowing costs. The sector also had fewer bad loans, he said in a Viber message.

Outstanding loans issued by big banks rose by 7% to P11.701 trillion at end-December. It went up by 2.6% month on month. The December growth rate was unchanged from November, the slowest in three months.

Loan growth slowed for the most part last year amid the central bank’s aggressive rate increases.

The banking industry’s bad loan ratio fell 3.23% in December from 3.41% a month earlier, the lowest in a year, central bank data showed.

Lenders’ gross bad loans stood at P446.99 billion, 12% higher than a year earlier and 1.6% lower than the end-November level. A bank loan is classified as nonperforming when debt payments have not been made for 90 days.

“The higher income of banks was also due to higher trading gains and other investment income in view of the hefty gains in the global and local financial markets since November to December 2023,” Mr. Ricafort said.

Banks’ earnings from fees and commissions went up 12.4% to P138.637 billion from a year ago, while trading income climbed by 38.6% to P22.845 billion. Noninterest expenses rose by 13% year on year to P636.15 billion.

Noninterest expenses include compensation and fringe benefits, taxes and licenses, fees and commissions, and administrative expenses.

The operating income of Philippine banks grew by 11.9% to P1.13 trillion last year. Interest earnings rose by 39.7% to P1.27 trillion, while interest expense more than doubled to P366.254 billion.

The industry’s losses from financial assets slid by 5.8% to P83.465 billion. Provisions for credit losses fell by 12.8% to P91.83 billion, while bad debts written off plunged by 71.9% to P671.083 million.

The local banking industry’s assets increased by 9.1% to P25.147 trillion.

Possible policy rate cuts by the US Federal Reserve this year could lead to more trading gains and investment income for local lenders in the coming months, Mr. Ricafort said. Elevated interest rates in the Philippines and wider profit margins could also lead to higher earnings, he added.

The Fed raised rates by 525 basis points (bps) from March 2022 to July 2023, bringing its key interest rate to 5.25%-5.5%.

Back home, the Bangko Sentral ng Pilipinas raised interest rates by 450 bps from May 2022 to October 2023. It has kept the key rate at a 16-year high of 6.5% since November last year.

Meanwhile, banks’ bad loans could steady this year due to the delayed impact of BSP’s rate increases in the past year and the expected policy easing by the central bank, analysts said.

“These factors — the lagged impact of restrictive monetary policy and the anticipated easing of interest rates by the second half — may provide a cushion to nonperforming loans (NPLs) and cause levels to remain the same,” Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc., said in a Viber message.

BSP earlier said the full impact of the Monetary Board’s aggressive tightening might be felt this year, but authorities could still adjust borrowing costs if needed.

“The pause in policy interest rate adjustments has allowed the BSP to further observe and assess how firms and households continue to respond to tighter monetary policy conditions, as lagged effects of prior policy interest rate adjustments are expected to manifest fully in 2024,” BSP Governor Eli M. Remolona, Jr. said in his open letter to the President on Jan. 23.

“Rate cuts would help further ease the NPL ratio alongside improvements in business and overall economic conditions that would further improve borrowers’ ability to pay their debts as these become more affordable with lower interest rates,” Mr. Ricafort said.

Monetary policy easing could help contain debt pressures on companies and households, Mr. Asuncion said.

The central bank will hold its first policy meeting of the year on Feb. 15.

Uniqlo keeps things light for summer

February 12, 2024 | 12:02 am

UNIQLO takes summer lightly with the theme of its Spring/Summer Lifewear collection. It also is endeavoring to be light on the environment, with a repair studio to help lengthen the life of garments.

On Feb. 7, guests trooped to the Palacio de Memoria in Parañaque to see the new collection in the mansion’s garden, accompanied by celebrity couple, actor Matteo Guidecelli and singer Sarah Geronimo.

The items on display exhibited a cool and soft palette with soft greens, mauves, pinks, and ecru. Materials used include supima cotton and natural linen, allowing breathability in the coming hot months. Other factors considered meant pushing the Miracle Air, AIRism, UV Protection, DRY-EX and Blocktech lines, some of which have properties like waterproofing, water repelling, breathability, and quick-drying ability. Even layering has some room here: we spotted light olive-green knits and light, billowy jackets.

The new LifeWear collection was inspired by the call to “ease into lightness,” according to a company release. “The collection circles back to LifeWear’s central ideas of comfort and versatility and updated for the season with new fits featuring a clean and casual style for work and play.”

This season’s collaborations include one with their regular design partner model Ines de la Fressange, and also mid-century inspired pieces from J.W. Anderson, and a second collaboration with British designer Clare Waight Keller inspired by London artistic community Lavender Hill (available at the brand’s Manila flagship at Glorietta 5 on Feb. 23). Uniqlo T-shirts are also getting the animation treatment with prints from Naruto, Disney, and video game Metal Gear.

UNIQLO’s Manila Global Flagship Store will have a Color and Style Corner to help customers figure out their Spring/Summer looks. It is open until Feb. 15.

On a more serious note, Goergette Jalasco, Uniqlo Philippines’ Vice-President for Marketing, talked to BusinessWorld about their sustainability programs. These include a repair studio to mend or patch damaged Uniqlo clothes at the flagship store. “In the event that the items are beyond repair, we can also gather the clothes… and put them in our ReUniqlo box, which is located in all our stores. We will find ways so that we can reuse them,” she said. “What we do currently is just to fix clothes that are torn and give it a new life.”

They also have a partnership with the Haribon Foundation, where the two-peso charge that comes with the paper bag goes to the foundation’s conservation efforts. “We are trying to make things more sustainable in our stores. For every purchase of a Uniqlo paper bag, we are now donating two pesos to the Haribon Foundation,” she said.

Onstage during the fashion show, Ms. Geronimo wore the Uniqlo UV Protection Pocketable Parka and AIRIsm Cotton Bra Tube Top. While she praises the parka for blocking out 90% of the harmful UV rays in the environment, about the top, she says, “This is actually a personal favorite.” Her husband said, “You always wear it.”

“When I’m reaching out for my bra, ay, hindi na pala ako magba-bra (it turns out I do not need to wear a bra). It’s already innerwear and a top in one. I wear this for my dance rehearsals, my recordings,” she said. Mr. Guidecelli, wearing the Miracle Air Jacket, said that he can take it from a casual morning to a more sophisticated evening. “The sophistication is very quiet,” he said, his wife agreeing, saying, “Understated.”

“When it comes to style, I always choose the classics,” said Ms. Geronimo, saying that she likes to pair Uniqlo dresses with either sandals or sneakers on trips abroad. — JLG

Polish farmers’ protests crank up pressure on EU agriculture head

February 12, 2024 | 12:02 am

WARSAW — Polish politicians called on the European Union (EU) Commissioner for Agriculture to quit as farmers blocked roads across his home country Poland and at border crossings with Ukraine, kicking off a month-long general strike to protest against EU policies.

Farmers in France, Belgium, Portugal, Greece, Spain and Germany have also been protesting against constraints placed on them by EU measures to tackle climate change, as well as rising costs and what they say is unfair competition from abroad.

Polish farmers are angry about the impact of cheap food imports from neighboring Ukraine and what they say is the “passivity” of their government.

EU Agriculture Commissioner Janusz Wojciechowski came under fire from all sides. “There is a man in Europe who united all European and Polish farmers against the reform he proposed. This is Janusz Wojciechowski. Resign!” said Deputy Prime Minister Władysław Kosiniak-Kamysz.

Mr. Wojciechowski was also criticized by the leader of the former ruling Law and Justice (PiS) party that proposed him for the position. Jaroslaw Kaczynski said he would call the commissioner to ask him to quit.

Mr. Wojciechowski told private broadcaster Polsat News that he had not answered or looked at his telephone, adding that he would make a statement on his future in a few days.

He defended his record, saying that he was the only commissioner to have opposed imports from Ukraine. About 100 farmers and 50 cars blocked the approach to Medyka border crossing, blocking traffic for all vehicles, Ukrainian border service spokesman Andriy Demchenko said on television.

The Ukrainian border service also said that traffic flow had been disrupted at two other crossings.

Elsewhere in central Europe, a farmers’ protest was taking place at the Zahony crossing on the border between Hungary and Ukraine.

In a comment to the Ukrainska Pravda outlet, Mr. Demchenko said there was no disruption for trucks during the day.

Polish media said there were over 250 blockades across the country. Images showed convoys of tractors clogging roads and banners such as “Without us, you will be hungry, naked and sober.”

“Today the whole of Europe is on fire. The Green Deal has arrived, which has destroyed our thinking about agriculture,” one of the protesters, Wieslaw Gryn, told private broadcaster TVN24 at the Hrubieszow border crossing.

“We are not against pro-ecological solutions, but they must be agreed with farmers.”

Poland’s agriculture minister said he understood the challenges farmers were facing but he hoped the protests could be organized in a way to be “the least burdensome for citizens.”

“Farmers have legitimate concerns, expectations and demands to limit the excessive inflow of goods from Ukraine, as well as from other non-European markets to the EU, especially to Poland,” Czeslaw Siekierski told public radio. — Reuters

The Israeli-Palestinian Conflict: What’s in it for us?

February 12, 2024 | 12:02 am

Images of displacement, deaths and destruction leave no doubt that Israel’s war on Gaza is the deadliest and most destructive in recent history. A large part of the city lays in rubble, over 40,000 dead, a quarter of a million at risk of dying due to hunger, homelessness and disease, and the dead excavated from graveyards in search for Hamas tunnels. Civility in war is gone, and the boundary between the right to defense and offensive warfare is being erased.

But what’s in it for Filipinos? Little is publicly heard of official policy other than caution against humanitarian impacts and specific concern for welfare of overseas Filipino workers (OFWs) in Israel. Unlike the west, the Philippines is not burdened with pro-Palestinian versus pro-Jewish lobbies, hate speech, and street protests. Lately, there is talk of opportunities for Filipino overseas work owing to Israel’s pronouncement that it is no longer eager to employ Palestinian Arabs in Israel and from those in the West Bank and Gaza.

Thinking of employment opportunities in Israel is one thing. Let us not forget that we have in our backyard a peace transition in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM) where the foundations of public expectations are drilled down by fear and insecurity of how the peace transition will end. We do not know what will happen in the 2025 elections.

Borrowing from Horst Rittel and Melvin Webber (1973), one may describe Israel’s war on Gaza as a “wicked problem” that lacks inherent logic and signals when they are solved. Now on its third month, the war has not yet seen an end in sight. Neither does Israel nor Hamas know how to end this war, notwithstanding the fact that they are both aware of how it began. The backstory is longer than what broke out on Oct. 7, 2023.

If there is something that we can learn from Israel’s war on Gaza, it is about understanding the broader picture and the story behind it. In particular, how a non-problem has become a problem and how solutions have complicated the previous problem. Most importantly, how solutions tend to ignore the basics of property, rule, and revenues. It is here that wickedness comes into play — the lack of signals when a problem is solved.

Palestine did not become a problem because of interpretations of biblical text or the Q’uran. Similarly, the Moro rebellion in Mindanao is not about religion. Palestine became a problem because what was originally conceived as the State of Palestine with Jews inside it was not born. Instead, the State of Israel was midwifed without Palestine and Palestinians in the birthplace.

The problem began in World War I when Allied Powers aimed to rally the Jews against the Ottomans and the Central Powers. In exchange, the British offered a Jewish home in Palestine without serious consideration of the longer-term consequence. After World War I, the text of the 1922 British Mandate under the League of Nations sought to modify the promised homeland for the Jews. In Article 6, Annex V of the Mandate, the Administration of Palestine was supposed to ensure that the rights of other sections of the population were not prejudiced while facilitating Jewish immigration. In Article 7, the Administration of Palestine was supposed to enact a nationality law, including acquisition of Palestinian citizenship of Jews who take up permanent residence in Palestine. Yes, Palestinian citizenship for Jewish immigrants. Yet, the United Nations abandoned the promise of its predecessor.

Then came the new Arab states created after World War I. Like a big brother, they took up the cudgels for Palestine and wrapped Palestinian aspirations under the banner of Pan-Arabism. They rejected a partition plan (United Nations Resolution No. 181) to divide Palestine into a Jewish and Arab state. Instead, they chose to demolish Israel. The wars they launched in 1948-1949, 1967, and 1973 all ended in failure, with the perverse effect of Israel occupying the West Bank, Gaza, and a portion of the Golan Heights.

Fast forward to 1993. The 1993 Oslo Accords sought to provide a solution to a problem that had already become more complex since the conclusion of World War I. This time, Palestinians were at the front seat, represented by the Palestine Liberation Organization (PLO). Veering away from the 1948 UN Partition Plan, the new accord roadmapped a two-state solution. In the roadmap, Israel keeps its sovereign territory while Palestinians look towards Gaza and the West Bank as the would-be State of Palestine. The Fatah-controlled Palestinian National Authority was supposed to usher the transition for a period of five years after which the final status of the state would be established.

The formation of modern states is founded on rule, revenue, and property — on private and public property that is consolidated as the sovereign territory of the state. Israel had it since 1948, for the state and for its citizens. It also expanded the property regime by expanding Jewish settlements in Gaza and the West Bank, former territories of Egypt and Jordan that it occupied in the aftermath of the 1967 war.

Palestine did not have it. The Palestinian Authority focused on international diplomacy more than local governance. Without a property map, it could not collect revenues. It relied on the United Nations to provide welfare to Palestinian citizens. There was no effort to formalize property rights in the would-be Palestinian state and neither was there an effort to quantify, even to map out, Palestinian properties inside Israel. By 2006, the Palestinian Authority lost Gaza to Hamas.

Palestinian properties appropriated by Israel are objects of contention that feed into extremist programs: on the one hand, the abolition of Israel and on the other hand, the Zionist agenda to eliminate enemies that threatened the promised land for the Jews.

The two-state solution is being re-offered to conflict parties. However, this will only matter if the political solution includes not only negotiations on metes and bounds of sovereign territory of the two states but also property of citizens. There is no way for a Palestinian State to form without recognition of private property rights, including compensation for Palestinian properties appropriated by Israel for its citizens. Otherwise, Gazans will remain in refugee camps subsidized by the United Nations.

Property is also a crucial topic in the BARMM. While the Bangsamoro Organic Law (BOL) established the parameters of the BARMM territory and functions of the BARMM Transition Authority (BTA), the latter and the Regional Legislative Assembly (RLA) have not yet formulated a land policy. With the pendency of land policy, the implementation of the Indigenous Peoples Rights Act (IPRA) of 1997 for non-Muslim indigenous peoples is in limbo. So, too, is the resolution of competing land claims that often lead to violent clan feuds.

In the BARMM, the transition to peace will be difficult to conclude if both the BTA and the RLA ignore the problem of property. Political legitimacy of the BARMM government through elections alone will not strengthen autonomy.

Ed Quitoriano is a Chevening fellow on Conflict Resolution and specializes in peace and conflict studies. He works as senior advisor of the Council for Climate and Conflict Action Asia and principal consultant of Visus Consulting.