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RFM sees 14% rise in income, expects to finish P1.5-B capex projects in Q1

RFM Corp. saw its profit surge by 14% to P1.2 billion in 2023, driven by robust sales, the listed food and beverage company said on Wednesday, citing its preliminary unaudited net income report.

In a regulatory filing, RFM said that its 2023 net income marked an improvement from the P1.07 billion net income in 2022, attributed to higher margins resulting from improved cost of raw materials like wheat and milk.

Sales in 2023 increased by 7% to P20.7 billion because of higher demand in the milk, pasta, flour, ice cream, and bread categories, the company said.

“The hefty raw material price increases seen in 2022 and early 2023 reversed through the year and helped RFM margins to recover although inflation dampened consumer demand to an extent,” RFM Chief Executive Officer Jose Ma. A. Concepcion III said. 

The company has allocated P1.5 billion as a capital expenditure (capex) budget for projects in its breadline and milk categories.

“RFM continues to invest in its future growth as it completes this first quarter of 2024 important capex projects in breadline and milk totaling P1.5 billion,” Mr. Concepcion said.

“This capex, alongside the regular payment of dividends, were all funded by internally generated cash and RFM parent company has no bank loans,” he added.

The company, he also said, expects “continued growth in top line and single digit growth in income” for 2024.

“There is greater competition in the ice cream sector but improvement in margins is seen on most business segments with the softer prices of raw materials coming in 2024 compared to early 2023,” he said.

“Our Selecta Milk brand is also seeing sustained growth over the years and we are supporting this with new capex and innovations, like what we are also doing with our new Fiesta carbonara sauce,” he added.

Shares of RFM closed unchanged at P2.90 apiece on Wednesday. — R.M.D. Ochave 

The Best Gastropub in the UK is the Unruly Pig in Suffolk

THE UNRULY PIG has reclaimed its top spot as Britain’s best gastropub. The drinking establishment, which has a classic pub vibe and a forward-looking menu in a 1500’s-era Suffolk inn about 100 miles northeast of London, won the accolade in the 2024 Estrella Damm Top 50 Gastropub awards, unveiled Monday.

The No. 1 position is not unfamiliar to the Unruly Pig: It was the top-ranked place on the list in 2022; last year it fell only to second place.

Chef-owner Dave Wall and executive chef Karl Green serve inspired dishes such as hare Wellington and parsley soup with smoked eel and lardo alongside a short list of beers and a longish list of wines. The eight-year-old gastropub, which last year fell to second place behind Parkers Arms (No. 7 this year), also ranked in the top 100 best dining spots in the UK for the 2023 Estrella National Restaurant Awards.   

The Cornish Arms in Devon took the No. 2 spot this year; chef John Hooker specializes in tweaked classics such as ham hock Scotch eggs with beer-infused onions. Third place went to noted UK chef Paul Ainsworth’s Mariners in Rock.

In London eight gastropubs nabbed honors, starting with the highest-ranking Red Lion & the Sun in Highgate (No. 6). Also representing London is the new entry the Parakeet at No. 36; the place is known for chef Ben Allen’s live-fire cooking, including a recently released option for Sunday roast.

But the bleak outlook for pubs took its toll on some high-profile spots. High inflation forced the closure of at least one spot in 2023’s top 20: The Cadeleigh Arms, in Tiverton, Devon, was No. 17 last year.  Soon after winning its award, it shut its doors because of its skyrocketing energy costs — an almost 500% increase, from £600 to £3,500 for one its final bills, reported The Morning Advertiser, the industry publication that launched the awards 16 years ago.

Other awards included special recognition to the Yorkshire-based chef Andrew Pern, whose pub, the Star in Harome, burned down in 2021 as the result of a suspected arson attack. Last year Pern relaunched the business, and it’s No. 8 this year.

The One to Watch award was won by the Bulls Head in Derbyshire; chef Mark Aisthrope took over the place in 2016. Chef of the Year went to Daniel Smith of the Fordwich Arms (No. 4) and the Bridge Arms (No. 15), both in Kent; the Bridge Arms was also the highest new entry on the list.

“We are seeing some new pubs from cities like Birmingham and Manchester rather than smaller villages,” says Ed Bedington, editor of The Morning Advertiser, which is owned by William Reed, Ltd., the company that also presents the myriad World’s 50 Best lists.

The awards are voted on by a group of food critics and journalists, chefs, and restaurateurs across the UK. The awards don’t have a specific definition for the term “gastropub,” but it essentially fuses the concept of a classic, drinks-forward British pub with an inspired menu. The model has been embraced by chefs as a less expensive alternative to opening up their own fine-dining spots.

Ironically, the place that kicked off the gastropub trend, the Eagle, which opened in London in 1991, fell off this year’s top 50 list; it ranked No. 48 last year. On the full list below, last year’s rankings are listed in parentheses; restaurants that newly made the top 50 this year are marked with a double asterisk.

The Top 50 Gastropubs in the UK

1. The Unruly Pig, Woodbridge, Suffolk (2)
2. The Cornish Arms, Tavistock, Devon (12)
3. The Mariners, Rock, Cornwall (11)
4. The Fordwich Arms, Canterbury, Kent (9)
5. The Sportsman, Seasalter, Kent (4)
6. The Red Lion & Sun, London (10)
7. Parkers Arms, Newton-in-Bowland, Lancashire (1)
8. The Star Inn, Harome, Yorkshire**
9. Freemasons at Wiswell, Wiswell, Lancashire (3)
10. The Hand & Flowers, Marlow, Buckinghamshire (8)
11. Heft, High Newton (43; Highest Climber)
12. The Harwood Arms, London (13)
13. The Angel at Hetton, Hetton, Yorkshire (6)
14. The Rat Inn, Anick, Hexham, Northumberland (26)
15. The Bridge Arms, Canterbury** (Highest New Entry)
16. The Dog at Wingham, Canterbury, Kent (29)
17. The Shibden Mill Inn, Halifax, Yorkshire (14)
18. The Gunton Arms, Norwich, Norfolk (46)
19. The Pack Horse, Hayfield, Derbyshire (18)
20. Pyne Arms, Barnstaple, Devon (19)
21. The Coach, Marlow, Buckinghamshire (15)
22. The Beehive, Great Waltham, Essex (16)
23. The Broad Chare, Newcastle (44)
24. The Edinburgh Castle, Manchester**
25. The Three Horseshoes, Batcombe**
26. The Baring, London (23)
27. The Kentish Hare, Tunbridge Wells, Kent (5)
28. The Pipe & Glass, Beverley, Yorkshire (27)
29. The White Swan at Fence, Fence, Lancashire (7)
30. The Longs Arms, South Wraxall, Wiltshire (28)
31. The Bull & Last, London (33)
32. The Black Bear Inn, Usk, Wales (42)
33. The Dog & Gun Inn, Skelton, Cumbria  (39)
34. The Woolpack, Stroud**
35. The Barrington Boar, Barrington**
36. The Parakeet, Kentish Town, London**
37. The Masons Arms, Knowstone, Devon (24)
38. The Abbey Inn, Byland**
39. The Black Bull, Sedbergh, Cumbria (35)
40. The Cadogan Arms, Chelsea**
41. The Bulls Head, Craswell**
42. The Loch and the Tyne, Old Windsor, Berkshire (32)
43. The Guinea Grill, London (22)
44. The Dew Drop Inn, Hurley**
45. The Killingworth Castle, Wootton**
46. Canton Arms, London (25)
47. The Double Red Duke, Cotswolds**
48. The Duncombe Arms, Ashbourne, Staffordshire (41)
49. The Scran & Scallie, Edinburgh  (38)
50. The Bull, Charlburya**

Yields on BSP’s term deposits slip with inflation seen to slow

BW FILE PHOTO

YIELDS on the Bangko Sentral ng Pilipinas’ (BSP) term deposits slipped on Wednesday amid expectations of slower inflation this month. 

The central bank’s term deposit facility (TDF) attracted bids amounting to P281.954 billion on Wednesday, below the P340 billion on the auction block and the P329.014 billion seen a week ago for a P360-billion offer.

Broken down, tenders for the seven-day papers reached P136.488 billion, lower than the P180 billion auctioned off by the central bank and the P171.408 billion in bids for a P185-billion offer seen the previous week.

Banks asked for yields ranging from 6.56% to 6.612%, a tad narrower than the 6.55% to 6.613% band seen a week ago. This caused the average rate of the one-week deposits to decline by 0.09 basis point (bp) to 6.5847% from 6.5856% previously.

Meanwhile, bids for the 14-day term deposits amounted to P145.466 billion, failing to beat the P160-billion offering as well as the P157.606 billion in tenders for a P175-billion offer on Jan. 17.

Accepted rates were from 6.6% to 6.6499%, also narrower than the 6.59% to 6.65% margin recorded a week ago. With this, the average rate for the two-week deposits inched down by 0.03 bp to 6.6187% from the 6.619% logged in the prior auction.

The BSP has not auctioned off 28-day term deposits for more than three years to give way to its weekly offerings of securities with the same tenor.

The term deposits and the 28-day bills are used by the central bank to mop up excess liquidity in the financial system and to better guide market rates.

TDF yields were slightly lower on Wednesday as inflation is seen to continue its downward trend in January, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

On Monday, BSP Governor Eli M. Remolona said inflation is projected to slow further in January from the 3.9% print in December due to base effects, which could also drive inflation down in February or March.

Inflation peaked at 8.7% in January last year as food prices soared. It has since come down to a 22-month low in December.    

For 2023, inflation averaged 6%, slightly higher than 5.8% in 2022. This marked the second straight year that inflation breached the BSP’s 2-4% target.

However, despite inflation’s downtrend, Mr. Remolona said the Monetary Board may keep the current policy settings sufficiently tight until the consumer price index is firmly within the BSP’s 2-4% annual target.

He also said a rate cut is possible but unlikely to happen in the first semester of the year given lingering upside risks to inflation.

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

At its December meeting, the BSP’s risk-adjusted inflation forecast stood at 4.2% this year and 3.4% for 2025. Meanwhile, its average inflation baseline forecast is at 3.7% for 2024 and 3.2% for next year.    

The BSP will hold its first policy review of the year on Feb. 15.

TDF yields slipped on Wednesday after less dovish statements from the US Federal Reserve, Mr. Ricafort added.

In the last comments before Fed officials entered a blackout period ahead of their Jan. 31 policy decision, San Francisco Fed President Mary Daly said Friday she believes monetary policy is in a “good place” and it is premature to think rate cuts are imminent, Reuters reported.

Earlier that week, Fed Governor Christopher Waller said policy makers would move “carefully and slowly,” which traders took as pushing back at pricing for a speedy fall in rates. 

The US central bank hiked borrowing costs by 525 bps from March 2022 to July 2023, bringing the fed funds rate to 5.25% to 5.5%. — Keisha B. Ta-asan

Building strong foundations in education: The path to prosperity in East Asia and the Pacific for all

PEXELS-PIXABAY

AS EDUCATORS and students celebrate the World Education Day this week, this moment provides an opportunity to reflect on the transformative power of education. And East Asian countries have a particularly relevant historical experience. The remarkable economic growth of this region since the 1970s, often called the “East Asian miracle,” was based on a combination of policies that promoted outward-oriented, labor-intensive growth while investing in education. This emphasis on literacy and numeracy has equipped countless people, from farmers adopting new agricultural technologies to workers thriving in export manufacturing, with the skills necessary for economic advancement.

However, the progress made in education in the region has been uneven. Recently released data from OECD’s Program for International Student Assessment (PISA), which measured the proficiency of 15-year-olds in reading, mathematics, and science, shows large differences in the student performance across countries in East Asia, even though this region has the best-performing education systems in the world. While some nations have made significant progress, others are struggling with the basics.

In the Pacific Island countries, there are still too many children and young people failing to develop basic literacy and numeracy, despite high enrollment rates in primary and secondary education. Furthermore, according to a new World Bank report, “Fixing the Foundation: Teachers and Basic Education in East Asia and Pacific,” the roots of the problems observed at age 15 lie in the first years of schooling: more than half of 10-year-old children in most middle-income countries in the region struggle with basic reading and mathematics.

This gap in foundational skills is not just an education issue; it is an economic one. Most middle-income countries in the East Asia and Pacific (EAP) region aspire to grow faster and join the knowledge and technology-based economy. However, the lack of foundational skills will make it challenging for countries to develop graduates with advanced digital literacy and skills in Science, Technology, Engineering, and Mathematics. Yet it is exactly these types of highly skilled graduates who are needed to incubate entrepreneurship and attract high value-added industries.

Because skills development is a cumulative process, there are no short-cuts for developing the more sophisticated skills that modern economies increasingly demand. Students need the ability not only to read and understand written texts, but to also evaluate information, make judgements about competing facts, and act. In addition, they need to develop the capacity to interpret and apply knowledge to everyday problems. These are the type of foundational abilities that people need to respond to unfamiliar situations and introduce innovations.

And how can countries tackle this challenge? There is good news: there is a growing body of evidence to illustrate that once children are in school and ready to learn, teachers have the greatest impact on the learning of these foundational skills. Countries could focus on three mutually reinforcing areas.

First, make teaching an attractive and selective profession, through reforms in salaries — particularly entry salaries —working conditions, and rigorous screening, as in Shanghai-China, Korea, and Singapore.

Second, improve teacher capacity through training and tools that improve subject knowledge and teaching skills. International evidence shows the most effective programs focus on content knowledge, provide opportunities to practice with colleagues, offer ongoing coaching support, and link training to career incentives.

Third, motivate greater teacher effort in areas like attendance and use of class time through accountability mechanisms and addressing poor and under-performance. Vietnam has achieved low absenteeism rates through teacher evaluations and accountability.

Countries will also need to promote the participation of industries in skills development. By involving leading companies from the manufacturing and services sectors in curriculum design, hiring instructors with practical experience, and providing work-based learning opportunities, countries can effectively align skills supply with demand. South Korea provides excellent examples of the role that leading companies played in establishing demand-driven programs in TVET and higher education institutions.

The World Bank has long supported successful EAP reformers, such as Vietnam, in strengthening their education and training system to achieve economic prosperity and learned from their success. We will continue to work closely with countries in the region to strengthen their education systems, focusing on foundational skills, teacher development, and industry-academic partnership. Together, we can unlock the full potential of education in the EAP region, fostering a future where every child can thrive in an increasingly complex and technology-driven world. The future begins right now by ensuring that all students attend school, learn, and achieve, and develop an ethos of responsibility and collaboration.

 

Alberto Rodriguez is the World Bank regional director for Human Development, East Asia and Pacific.

Dining In/Out (01/25/24)

The Farm gets Halal certification

The Farm at San Benito has attained Halal certification, marking a significant step towards becoming a globally recognized inclusive healing sanctuary. It has Halal certification for its Alive! vegan restaurant and also for its villas, marking The Farm as a Muslim-friendly accommodation destination.

Swagat gets an upgrade

Swagat, known for its authentic home-style Indian Cuisine, recently marked its 20th year with the opening of its new and bigger restaurant in Makati City. Located at the RCI Building along Rada St. in Legazpi Village, it prides itself as authentically Indian with a modern flair, with its mix of traditional cuisine, eclectic flavors, and eye-catching interiors. The new Swagat boasts of an enhanced and streamlined menu with individual appetizers, kebabs, or the more diverse platters including the vegetarian starter platter (an assortment of vegetarian specialties). There is also the chaat platter which features a teaser version of street food favorites from New Delhi, Bangalore, and Mumbai; the non-vegetarian tandoor platter of clay oven-cooked specialties, such as murgh (chicken), mutton, and seafood, which are all meant for sharing. The biryani rice meals are made of basmati rice layered with meat or vegetables marinated in spices, saffron-infused milk, caramelized onions, and aromatic herbs, slow-cooked in the dum style. Staples like tandoor-baked naan, roti, and paratha are still on the menu. For main courses, there’s a variety to choose from including dishes with seafood, masala, paneer, mutton, curries, dal, vegetables, and chicken. A new section is the bar, with the usual Indian beverages, mocktails, and signature cocktails. The meal can end with Komal ki Kulfi, a popsicle-shaped home-made ice cream, named after the woman behind the resto. Visit Swagat on Facebook and Instagram or log on to www.swagatph.com for more information.

Ramen Nagi marks 10th year

In a continuation of its 10th anniversary celebration, Ramen Nagi is launching Series 5 showcasing a collaboration with Musashi-Ya from Japan. Headed by chef Fujisaki, Musashi-ya first opened 25 years ago in Kichijoji, Japan, and has since grown to 10 additional stores, four are in Tokyo and one in Shanghai, China. A major player in the Japanese ramen world, their Iekei-Style Pork Bone Ramen will be available at Ramen Nagi from Jan. 22 to Feb. 28. For updates and announcements, follow @ramennagimanila on Instagram and Ramen Nagi PH on Facebook.

Kenny Rogers brings back Chimichurri Roast

Kenny Rogers Roasters’ Chimichurri Roast is coming back to the menu after its first introduction in 2019. It blends Kenny Rogers Roasters’ Roasted Chicken with the flavors of chimichurri (a green herbal sauce from Latin America). Now available at all Kenny Rogers Roasters branches as Chimichurri Roast Solo B (P305), with quarter roast chicken with chimichurri sauce poured overit, served with a choice of two side dishes including the new Grilled Pineapple, rice, and their signature corn muffin; Chimichurri Grilled Pork Chop Solo B (P400), a marinated pork chop with chimichurri sauce and two side dishes. Kenny Rogers Roasters’ Chimichurri is available for dine-in, takeout, or delivery through www.kennyrogersdelivery.com.ph, phone number 8-555-9000, or via Grab Food and Food Panda.

Saladstop! brings back Saikō

To kickstart the year, SaladStop! has brought back Saikō, a Japanese-inspired protein bowl. It has quinoa, romaine, red and white cabbage, carrots, pickled daikon, edamame, mandarin oranges, and furikake, topped with teriyaki dressing for an umami kick. It’s a protein powerhouse, that is heart-healthy, nut-free, and free from added sugars. Originally launched as a seasonal bowl in July 2023, Saikō quickly became a fan favorite, but will now be part of the Daily Bowls Exclusives menu. Other exclusive creations in the Daily Bowls platform include Cauli-fornia Dreamin’, Yam Thai, and The Refresher. These are available exclusively for Friday deliveries as part of all Daily Bowls subscription plans. To join, visit saladstop.pickup.ph for daily deliveries of SaladStop! Signatures (available as three or five-day meal plans).

Shake Shack Shake returns shake flavor

Shake Shack’s best-selling Chocolate Covered Strawberry shake makes a return to Shake Shack in Manila. It combines chocolate and strawberries in a velvety vanilla frozen custard, and topped with whipped cream, chocolate cookie crumble, and fudge sauce. Customers have a chance to win a prize if they post a selfie or reel of themselves enjoying a Shake Shack meal with the Chocolate Covered Strawberry Shake, with a caption explaining why these are their favorites. After posting, they must tag @shakeshackph along with four friends. Two winners will each get the chance to enjoy a Shack get-together with their four friends. Five consolation prizes of Shack merch will be awarded. The promo period ends on Feb. 25, and winners will be announced on Feb. 27.

Taco Bell offers new savings

Taco Bell offers savings through it’s Bell Bundle which comes with two Crunchy Tacos, one Nachos Supreme, two Cinnamon Twists, and two 12-ounce servings of soda, all for P459 — originally priced at P549. The Crunchy Taco is made with Taco Bell’s signature crunchy tortilla shell, filled with Mexican-style ground beef, shredded lettuce, and shredded cheddar cheese. Nachos Supreme has tortilla chips topped with Mexican-style ground beef, diced tomatoes, refried beans, nacho cheese sauce, and sour cream. These come with Cinnamon Twists, which are crispy, puffed corn twists sprinkled with cinnamon and sugar. The Bell Bundle is available until Jan. 31 only. Available at Taco Bell stores for dine-in and take out or call 8911-1111 for delivery.

Oreos in Dairy Queen’s new Blizzard of the Month

Dairy Queen is focusing on the Oreo cookie for its Blizzards of the Month: Oreo Mudpie Blizzard, made with creamy vanilla soft serve mixed with crushed Oreos and coffee concentrate, and then topped with a whole Oreo cookie; Oreo Caramel Craze Blizzard, vanilla soft serve mixed with crushed Oreos, caramel sauce, cheesecake bits, and a whole Oreo cookie on top; and, Oreo Choco Loco Blizzard,v anilla soft serve mixed with crushed Oreos, brownie pieces, and a whole Oreo cookie on top. There are three more new Oreo-based treats this January: the Oreo Caramel Craze Parfait, made with layers of vanilla soft serve, crushed Oreos, cheesecake bits, and caramel sauce, topped with whipped cream and one whole Oreo cookie; the Oreo Blizzard Cake (available in six-inch and eight-inch variants), a 100% ice cream cake made with layers of vanilla soft serve and DQ’s signature fudge and crunch center, finished with white icing, crushed Oreos, and Oreo cookies on top; and the Oreo Blizzard Tin Cake, a 100% ice cream cake made with vanilla soft serve on a crushed Oreos base, and then topped with white icing and even more crushed Oreos. Dairy Queen products are available for take out and delivery via the 8911-1111 hotline and www.dairyqueen.com.ph.

Alliance Française hosts wine tasting

Alliance Française de Manille will host a wine tasting on Jan. 31, 5:30 p.m., at its Bistro Le Coude Rouge, featuring wines imported by Flota Mil. Guests can compare and contrast two red wines from the Languedoc region and learn about wineries in France. Entrance to the event costs P1,680.

AirAsia Philippines still working to restore pre-pandemic fleet

REUTERS

LOW-COST airline AirAsia Philippines said it plans to increase its operational aircraft to 24 from 16 as part of its recovery efforts this year.

“Hopefully, by the end of the year, we will have 24 to 25 operating aircraft,” AirAsia Philippines said in a statement to reporters on Tuesday.

 AirAsia Philippines operated 24 planes in 2019, or before the pandemic. Currently, the airline has 16 operating aircraft, with another one set to be operational by the first or second week of February, the company said.

“It’s a bit challenging because of the MROs (maintenance, repair, and overhaul services) since there is a long line of airlines. Our goal for the first and second quarters is the reactivation of our fleet, returning to pre-pandemic levels,” the airline said.

The airline is looking to reopen and add more domestic and international routes this year,  according to AirAsia Philippines President and Chief Executive Officer Ricardo P. Isla.

These include flights to Dumaguete and Zamboanga, as well as international flights such as Manila-Taipei-Okinawa and vice versa, Vietnam, Australia, and Fukuoka in Japan.

“We just have to do our basic task of bringing back as many aircraft as we can at least on a 2019 level. That’s the most important. Right now, we haven’t fully maximized the international market,” Mr. Isla said.

The airline is awaiting the delivery of two Airbus A321s scheduled in November and December to bolster its current fleet.

“The additional 321s will allow us to have more capacity in the routes that we fly,” AirAsia Philippines said. — Revin Mikhael D. Ochave

PHL laptop market expected to rebound this year, IDC says

PHILIPPINE STAR/MICHAEL VARCAS

By Miguel Hanz L. Antivola, Reporter

THE Philippine laptop market is forecast to grow to 1.69 million shipments this year, according to the International Data Corp. (IDC), a rebound from 2023’s drop that came amid a decrease in demand and a slowing global economy.

Data from IDC showed shipments are expected to go up from the 1.32-million forecast for last year. However, this is lower than the 1.87 million in 2022.

“Vendors were taken by surprise with the abrupt downturn in 2023, leading to inventory challenges in the first half and the subsequent management of setbacks in the second,” Roben Victor M. Dispo, associate research analyst for client devices at IDC Philippines, said in an e-mail interview with BusinessWorld.

“Same with the global economic growth, anticipate a market rebound by 2024 following adjustments made in response to the challenges of 2023,” he added. “Although vendors maintain a cautious outlook.”

Philippine laptop shipments for 2023 were forecast to post a year-on-year decline of at least 28% due to the shift to face-to-face setups, according to Mr. Dispo.

“When the pandemic started, it was the opportunity for laptop sales [to increase] as it was paralleled with [work from home] setups, online classes, and online leisure due to the restrictions,” he said.

“For 2023, it was the plummet of those momentum of sales, coupled with the overall economic downturn,” he added.

From the fourth quarter of 2022 to the third quarter of 2023, Acer Group was the leading laptop brand with a 30.56% market share, according to IDC.

This was followed by Lenovo (21.56%), ASUS (15.61%), HP, Inc. (14.44%), and Dell Technologies (6.6%).

Mr. Dispo said Filipino consumers can expect processors such as Intel’s Meteor Lake and Qualcomm’s Snapdragon X Elite to boost the battery life of Windows machines this year to compete with Apple’s MacBooks.

Valuable use cases for artificial intelligence in personal computers would not emerge until 2025, he added.

CIMB launches time deposit with 7.5% savings rate

CIMB BANK Philippines, Inc. (CIMB Bank PH) on Wednesday launched a time deposit product that offers a savings rate of up to 7.5%.

“This will be the highest offering of time deposit rate in the country. We will be offering a trust rate of up to 7.5% and the tenors will range from six months to two years. Right now, we’re offering three tenor options at six months at 6.5%, 12 months at 7%, and 24 months at 7.5%,” CIMB Bank PH Chief Business & Strategy Officer Ankur Sehgal told reporters at an event last week.

The digital-only commercial lender expects its MaxSave Time Deposit product to significantly boost its customer base as the high savings rate can attract more users.

As of end-2023, CIMB Bank PH had 7.6 million customers.

“For time deposits, we are targeting to have one million time deposit customers taken in the first year. Based on our projection, I think in the next three years, we expect at least 50% of our customers to take up time deposits because of our current savings product…. This will be a very high rate of 7.5%, so we do expect very high pickup. It is also the highest time deposit rate in the market. So, because of that, we expect very high pickup in the coming year,” Mr. Sehgal said.

MaxSave Time Deposit is part of the bank’s bid to innovate digital banking product services in the country to promote financial inclusion, it said in a statement.

“With MaxSave Time Deposit, your hard-earned money can work even harder for you so you can maximize the returns on your savings and explore the many possibilities you can pursue to truly live your life’s purpose. This helps enable you to be ready for the future and bring you closer to financing and achieving your next big life goal,” CIMB Bank PH President and Chief Executive Officer Vijay Manoharan was quoted as saying.

MaxSave Time Deposit is only available on the bank’s mobile app and is insured by the Philippine Deposit Insurance Corp. for deposits up to P500,000. Customers will need an active and fully verified CIMB Bank PH deposit account to avail of the product.

The product’s rates will be reviewed on a quarterly basis and could be adjusted depending on the savings rate of competitors and when the Bangko Sentral ng Pilipinas begins its easing cycle, Mr. Sehgal said.

“The repricing will only apply for new time deposit customers. For existing customers, the 7.5% is flat,” he noted.

CIMB Bank PH had total assets of P33.52 billion as of end-September 2023, according to data from the central bank. — A.M.C. Sy

Bottled water tax

GEORGE BECKER-PEXELS

In 2018, the government imposed an excise tax on sweetened beverages. The State’s aim was to curb the consumption of sweetened beverages as a way of fighting diabetes and obesity. As of 2019, the tax rate was P6 per liter for nonalcoholic beverages using purely caloric sweeteners like sugar. The tax is P12 per liter for beverages sweetened with high fructose corn syrup.

The tax covered sweetened juice drinks and tea; all carbonated beverages; flavored water; energy and sports drinks; cereal and grain beverages; other powdered drinks not classified as milk, juice, tea, and coffee; and other non-alcoholic beverages that contain added sugar. Tax exempt were beverages sweetened with purely coconut sap sugar and purely steviol glycosides (stevia leaves extract); all milk products; 100% natural fruit and vegetable juices that do not have added sugar or caloric sweetener; meal replacement and medically indicated beverages; and ground instant and prepackaged powdered coffees.

While the tax was being considered in Congress, I opposed it for the simple reason that any tax on food and beverage will also raise the cost of food, and make them even less accessible particularly to the poor. I also argued that the government could tax everything else but food and beverage. Moreover, food and beverage consumption is already subject to 12% value-added tax.

To compensate for their “harm” to society, or the negative externality they cause, goods like cigarettes, alcoholic beverages, and sweetened beverages are imposed an excise tax. For these goods, the “harm” is related to public health. The tax makes up for public health costs related to treating lung cancer, emphysema, liver cancer, cirrhosis, obesity, diabetes, and cardiovascular disease, among others.

In the case of goods such as motor vehicles, which are also imposed an excise tax, the negative externalities involve mainly pollution, both noise and air. And their emissions contribute significantly to climate change. The consumption of oil, coal, and natural gas also has negative externalities related to pollution. But while oil and coal are subject to excise tax, at present, natural gas is exempt. It goes without saying that pollution can also result in harm related to public health.

Obviously, the use of plastic bottles for packaging drinking water also has negative externalities. Their improper disposal leads to widespread land and water pollution. On the production side, plastic bottle manufacture also has emissions. And based on recent reports, it seems that bottled water consumption also has health implications: the consumption of “nanoplastics.”

In a recent column, I cited a new US study that validated previous research that every time people drink water from a plastic bottle, they are also drinking very small bits of plastic along with it. The new research indicates that the number of nanoplastics in every liter of bottled water could go as high as 370,000 particles if not more.

After the tax on sweetened beverages maybe the government can now consider a similar tax on bottled water. The argument against this is that bottled water is a necessary food, and more essential than a sweetened beverage. And such a tax will make bottled water more expensive, and thus limit public access to clean, safe, drinking water.

Perhaps this argument would be more persuasive if people did not have alternatives to plastic bottled water. But just like in the case of sweetened beverages, people have plenty of other options, water included. One can choose to drink water from the tap; buy filtered water in bulk; filter tap water at home; carry along house water in a reusable container, etc. In short, while water is essential, consuming it from a plastic bottle is not.

The issue, previously, was not the water but the plastic bottle. But now, the issue seems to cover the water as well. After being bottled in plastic, microscopic plastic particles reportedly end up in the water, and thus in people’s bodies. As early as five years ago, in 2018, scientists were already warning that people were also drinking nanoplastic when they drank water from plastic bottles.

As I noted in a previous column, I view nanoplastics in bottled water like carcinogens in cigarettes and processed foods that can cause cancer. And while there may not be enough studies out there to indicate harm, common sense dictates that even the most minute plastic particles have no place in the human body.

As such, perhaps in addition to a tax, plastic bottled water should also carry public health messages regarding the risk of consuming thousands of small plastic particles in every liter. While the public health impact of such consumption remains largely unstudied, the public should still be made aware of this fact, which is based on published research.

Although a spokesperson for the International Bottled Water Association has been reported as telling CNN that “there currently is both a lack of standardized methods and no scientific consensus on the potential health impacts of nano- and microplastic particles. Therefore, media reports about these particles in drinking water do nothing more than unnecessarily scare consumers.”

The safety of bottled water consumption will continue to be debated for some time. The same goes for whether water in plastic bottles should also be taxed like sweetened beverages. My counter to this is that the idea is to tax not the water but the plastic bottle. In this line, global practice should not be the basis but practical local application.

One possible guide is a recent study commissioned by Brita of UK, which found that “more than half (54%) of all bottled water in the UK is consumed either at home or at work, meaning it could be easily replaced by solutions such as water filters.” And this proves the point that while water is essential and necessary, drinking it from a plastic bottle is not. A similar study can be done here.

To my mind, the process starts with making a clear scientific data-based determination whether drinking water in plastic bottles is an essential or “necessary” food in the Philippines. The parameters for this can be set by scientists and experts. And based on this gauge, then Congress can consider whether water in plastic bottles should be taxed or should carry health and environment impact labels.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com

TMP: Tamaraw launch on track with 25% investment spent

PHILSTAR FILE PHOTO

TOYOTA MOTOR Philippines Corp. (TMP) has used 25% of the announced P5.5-billion investment for the production of its upcoming Tamaraw multipurpose vehicle, set to launch in the third quarter, the company’s chairman said.

“Rest assured, we’ve been preparing for the arrival of the Tamaraw, and by the time we launch it, the entire investment will have been expended,” TMP Chairman Alfred V. Ty told reporters on Tuesday.

 “We announced it in August last year, so it’s been about one year,” he added.

In December, Malacañang announced that TMP’s parent firm, Toyota Motor Corp., committed to investing an additional P1.1 billion on top of the P4.4-billion investment for the assembly of Tamaraw that was announced in August.

TMP has touted the next-gen Tamaraw as a utility vehicle that could be used for the businesses of micro, small, and medium enterprises (MSMEs) or as an ambulance, patrol car, and modernized jeepney.

“This is very much aligned with the program of government to expand manufacturing activity in the Philippines. It will create jobs, support local parts makers, and provide MSMEs with a viable and sustainable mobility solution for their business,” Mr. Ty said.

TMP was the market leader last year in terms of sales at 200,031 units, equivalent to a 46.5% market share, based on a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. and the Truck Manufacturers Association.

The joint report showed that the country’s vehicle sales climbed by 22% in 2023 to 429,807 units compared to the 352,596 units sold in 2022, led by “sustained consumer demand, easier access to credit, and improved supply conditions across all brands.” — Revin Mikhael D. Ochave 

Philippines slips in tobacco industry influence rankings

The Philippines slipped four places to 50th out of 90 countries with a score of 60 (out of a possible 100) in the 2023 edition of the Global Tobacco Industry Interference Index (GTIII) by Global Center for Good Governance in Tobacco Control. The index ranks how governments in each countries are responding to tobacco industry interference and protecting their public health policies from commercial and vested interests. This was the country’s lowest ranking since the index started in 2019.

 

Philippines slips in tobacco industry influence rankings

My Economic Forecast for 2024 – 6.5%

ALEXES GERARD-UNSPLASH

In this column’s piece “Economic Forecast 2024” (Nov. 21, 2023), I presented a table showing the 2024 GDP growth forecast for the Philippines by the IMF’s World Economic Outlook (October 2023) which was 6.2%, the ADB’s Asian Development Outlook (September 2023) which was 6.2%, and Trading Economics (November 2023) which was 6.4%. 

Recently, the ASEAN+3 Macroeconomic Research Office (AMRO) projected that the Philippines’ GDP growth this year would be 6.3%. See BusinessWorld’s story “PHL to grow fastest in the region this year — AMRO” (Jan. 19, 2024).

For the latest in my “Economic Forecast 2024” series (the second part came out on Nov. 24, 2023), I have produced my own forecast for the 4th quarter (Q4) of 2023 — hence full year 2023 — then my predictions for 2024. For the sake of brevity, I have taken the GDP by expenditure or demand and set aside GDP by industrial origin or supply side.

GDP by demand is composed of Household Consumption expenditure (C), Capital formation or Investment (I), Government consumption expenditure (G), and net exports of goods and services (exports minus imports, X-M). In short: GDP = C + I + G + (X-M).

A forecast is only as good as the assumptions made. Mathematical and econometric models may be beautiful and sophisticated but if the assumptions are not realistic, then unrealistic numbers (positive or negative) will be generated.

I have made the following assumptions:

Household consumption (C), which is 73% of GDP, would grow in both 2023 Q4 and all of 2024 due to high consumer confidence. There are two reasons for this: when it comes to electricity demand, data from the Independent Electricity Market Operator of the Philippines (IEMOP) showed that average demand was 10,444 megawatts (MW) in Q4 2022 and 13,107 MW in Q4 2023, or a big 25.5% increase year on year (yoy).

In addition, vehicle sales data from the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA) showed that total vehicle sales in 2023 reached 429,807 vs. 352,596 units sold in 2022, a big 21.9% increase yoy. See the report in BusinessWorld, “Vehicle sales surpass target in 2023” (Jan. 18, 2024).

Investment (I) is 23% of GDP. Foreign direct investment (FDI) and portfolio investment could tank but domestic investment would make up the gap. As reported in BusinessWorld, net FDI from Jan.-Oct. 2022 was $7.92 billion, and Jan.-Oct. 2023 it was $6.53 billion, a contraction of 17.5% yoy. Net foreign portfolio investment from Jan.-Nov. 2022 was $793.8 million, then contracted in Jan.-Nov. 2023 to $42.1 million.

But the decline in unemployment from 6.5% in November 2021 to 4.2% in November 2022, and 3.6% in November 2023 is a clear case that domestic investment is taking the weight when it comes to job creation.

Investments this year are projected to be high mainly due to the operation of the Maharlika Investment Fund and the attraction of more investments from other countries’ sovereign wealth funds and investment funds. I see about 5.5% growth over the 2023 level.

Government consumption (G) is 14% of GDP. It would keep a modest growth of around 2% yoy. Budget Secretary Amenah F. Pangandaman argued that “government needs to balance the gains from productive public spending especially infrastructure and safety net spending like Protective Services of Individuals and Families in Difficult Circumstances (PSIFDC) vs. the pains of heavy borrowings and high interest payment plus the need for higher taxation to retire those debt in the long-term.” That is a good and practical balancing act there, Madam Secretary. Thank you.

Exports of goods and services (X) would have minimal growth because of two things: merchandise or goods exports at $73.2 billion in Jan.-Nov. 2022 declined to only $67 billion in Jan.-Nov. 2023, a -8.4% change yoy. Meanwhile, OFW remittances from Jan.-Nov. 2022 of $29.4 billion increased slightly to $30.2 billion in Jan.-Nov. 2023, or growth of 2.8%.

Imports of goods and services (M) would have modest growth of around 3%. Merchandise or goods imports in Jan.-Nov. 2022 of $126.9 billion declined slightly in Jan.-Nov. 2023 to $116 billion. The net exports (X-M) is -10% of GDP.

The Top 5 export markets of the Philippines are the US, Japan, China, Hong Kong, and South Korea — they buy 61% of total Philippine merchandise exports. And all of them are experiencing economic hardships. Their growth performance in Q1-Q3 2022 and Q1-Q3 2023 respectively were: the US, 2.1% and 2.4%; Japan, 1% and 2.1%; China, 3% and 5.2%; Hong Kong, -3.5% and 2.8%; and, South Korea, 2.6% and 1.1%.

Such modest growth by our major trading partners is not conducive to the expansion of our exports. Luckily our neighbors in the ASEAN — like Indonesia, Malaysia, and Vietnam — are growing somewhat faster and they may purchase more of our excess exports.

The accompanying table shows the numerical results of these assumptions.

The Philippine Statistics Authority (PSA) will release the 2023 Q4 GDP data on Jan. 31. I will write about it and compare how the numbers in this exercise would fit or diverge from the actual performance of the Philippines economy.

Nonetheless, we should remain optimistic about the state of the country’s economy and business. The economic team remains intact despite the change in leadership at the Finance department. The new Finance Secretary, Ralph Recto, has the economics training, business partners, and a political network to advance market-oriented reforms.

 

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers. He is an international fellow of the Tholos Foundation.

minimalgovernment@gmail.com

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