Home Blog Page 2270

China warns Taiwan ruling party presidential candidate is dangerous

CHESS PIECES are seen in front of displayed China and Taiwan’s flags in this illustration taken Jan. 25, 2022. — REUTERS

 – China on Thursday said it hopes the majority of Taiwanese “make the right choice” ahead of pivotal elections, warning of the “extreme danger” of Taiwan’s ruling party presidential candidate Lai Ching-te in triggering cross-strait conflict.

Taiwan holds a pivotal presidential and parliamentary election on Saturday that is being closely watched internationally amid geopolitical tensions.

China has not publicly nominated a preferred candidate or specified what the right choice is.

Chen Binhua, a spokesman for the China’s Taiwan Affairs Office under the State Council, said in a statement that the ruling Democratic Progressive Party’s (DPP) Mr. Lai is a “Taiwan independence worker” and that if he came to power he would further promote separatist activities.

“I sincerely hope the majority of Taiwan compatriots recognize the extreme harm of the DPP’s ‘Taiwan independence’ line and the extreme danger of Mr. Lai Ching-te’s triggering of cross-Strait confrontation and conflict, and to make the right choice at the crossroads of cross-Strait relations,” the statement cited him as saying.

Beijing claims Taiwan as its own territory and has cast the island’s presidential and parliamentary elections on Saturday as a choice between peace and war across the Taiwan Strait.

Beijing has repeatedly warned any attempt to push for Taiwan’s formal independence means conflict. Taiwan’s government rejects China’s sovereignty assertion.

Earlier this week, Mr. Lai said in a press conference that he would maintain the status quo in the Taiwan Straits and pursue peace through strength if elected, remaining open to engagement with Beijing under the preconditions of equality and dignity.

Referring to Mr. Lai’s comments, Mr. Chen said Taiwan independence is “incompatible with peace” in the Taiwan Straits.

Both the DPP and the main opposition Kuomintang (KMT) party parties support Taiwan’s sovereignty but offer different views on the island’s relations with China.

The KMT argues that both Taipei and Beijing belong to one single China but each can interpret what that means under something called the “1992 consensus”, a tacit understanding reached between the then-KMT government and China in 1992.

On Thursday, the KMT’s presidential candidate Hou Yu-ih, told reporters that he wouldn’t touch the issue of reunification during his term of office if elected, while maintaining the status quo and encouraging exchanges with China.

The DPP rejects Beijing’s sovereignty claims, saying Taiwan’s future should be decided by its people.

The United States, in a clear signal to China, opposes any outside interference or influence in Taiwan’s upcoming presidential and parliamentary elections, a senior Biden administration official said on Wednesday. Read full story

In a move that might stoke tensions with China, the United States said it plans to send an unofficial delegation to Taiwan following the election, according to a US senior official. – Reuters

US SEC approves bitcoin ETFs in watershed for crypto market

KANCHANARA-UNSPLASH

 – The US securities regulator on Wednesday approved the first US-listed exchange traded funds (ETFs) to track bitcoin, in a watershed for the world’s largest cryptocurrency and the broader crypto industry.

The Securities and Exchange Commission said it approved 11 applications, including from BlackRock, Ark Investments/21Shares, Fidelity, Invesco and VanEck, despite warnings from some officials and investor advocates that the products carried risks.

Most of the products are expected to begin trading Thursday, issuers said, kicking off a fierce competition for market share.

A decade in the making, the ETFs are a game-changer for bitcoin, offering investors exposure to the world’s largest cryptocurrency without directly holding it. They provide a major boost for a crypto industry beset by scandals.

“It’s a huge positive for the institutionalization of bitcoin as an asset class,” said Andrew Bond, managing director and senior fintech analyst at Rosenblatt Securities.

Standard Chartered analysts this week said the ETFs could draw $50 billion to $100 billion this year alone. Other analysts have said inflows will be closer to $55 billion over five years.

The market capitalization of bitcoin stood at more than $913 billion as of Wednesday, according to CoinGecko. As of December 2022, total net assets of US ETFs stood at $6.5 trillion, according to the Investment Company Institute.

Bitcoin BTC= was last up 3% at $47,300. The cryptocurrency has soared more than 70% in recent months in anticipation of an ETF, and hit its highest level since March 2022 this week.

Success in the battle for inflows will mostly depend on fees and liquidity, analysts say. Some issuers slashed their proposed fees in new filings this week, including BlackRock and Ark/21Shares. Those fees range from 0.2% to 1.5%, with many firms offering to waive fees entirely for a certain period of time. For short-term speculators looking to buy in and out of the products, liquidity could be more important.

Companies expect a flurry of online advertising and other marketing. Some issuers, including Bitwise and VanEck, have already released ads touting bitcoin as an investment.

“It is pretty unprecedented, so we’ll see how it works. I’ve never been in a situation where 10 of the same ETF was launched on the same day,” said Steven McClurg, chief investment officer at Valkyrie, whose ETF was among those approved on Wednesday.

The approvals come a day after an unauthorized person published a fake post on the SEC’s account on social media platform X, saying the agency had approved the products for trading. The agency quickly disavowed and deleted the post.

On Wednesday it said it is coordinating with law enforcement and the SEC’s own internal watchdog to investigate the incident.

That incident, and a confused announcement on Wednesday afternoon in which the SEC appeared to publish the formal regulatory approval and then remove it from its website, did not dampen the crypto industry celebrations.

“We believed that bitcoin could change the world, and we were and remain excited at the prospect of democratizing access to this asset,” said Grayscale CEO Michael Sonnenshein.

Douglas Yones, head of exchange traded products at the New York Stock Exchange, where some products will be listed, said the approval was also a “milestone” for the ETF industry.

Cynthia Lo Bessette, head of digital asset management at Fidelity, said the new products should provide “increased choice for investors who want to engage with” crypto.

Some regulatory experts believe the bitcoin ETFs could also pave the way for other innovative crypto products. Several issuers, for example, have filed for ETFs tracking either, the second-largest cryptocurrency.

“Once the dam has been breached, it’s going to be really hard for the SEC to continue its ‘just say no to crypto’ approach,” said Jim Angel, associate professor at Georgetown’s McDonough School of Business.

 

SPECULATIVE, VOLATILE’

Cryptocurrencies were created as an alternative to fiat currencies — currencies established by and backed by a government such as the US dollar and the euro — but cryptocurrencies are largely used as speculative investments due to their volatility.

The green light marks a U-turn for the SEC, which had rejected bitcoin ETFs due to worries they could be easily manipulated. SEC Chair Gary Gensler is a fierce crypto skeptic.

In a highly unusual move, however, Gensler, a Democrat, joined the SEC’s two Republican commissioners in voting to approve the products, while the agency’s two Democratic commissioners voted against. One, Caroline Crenshaw, cited investor protection worries.

Hopes the SEC would finally approve bitcoin ETFs surged last year after a federal appeals court ruled that the agency was wrong to reject an application from Grayscale Investments to convert its existing Grayscale Bitcoin Trust into an ETF.

In a statement on Wednesday, Mr. Gensler said that in light of the court ruling, approving the products was “the most sustainable path forward,” but added the agency did not endorse bitcoin, calling it a “speculative, volatile asset” also used to fund crime.

Gensler also repeated his long-held position that bitcoin is a commodity not a security, and as such, Wednesday’s approval was in “no way” a signal that the SEC would be easing up on its crackdown on crypto players it says are flouting its laws.

To meet the SEC’s investor protection bar, several exchanges had proposed working with Coinbase, the largest US crypto exchange, to police trading in the underlying bitcoin market. But the issuers scrapped that partnership this week in favor of an existing arrangement with the Chicago Mercantile Exchange, which was at the core of Grayscale’s court victory.

The SEC is currently suing Coinbase for allegedly breaching US securities laws, which the company denies.

Dennis Kelleher, CEO of investor advocacy think tank Better Markets, warned that bitcoin was still vulnerable to crypto fraudsters and said approving the ETFs was a “historic mistake.”

“The SEC’s action today has changed nothing about this worthless financial product: bitcoin and crypto still have no legitimate use,” he said. – Reuters

Why a US bitcoin ETF is a game-changer for crypto

ANDRÉ FRANÇOIS MCKENZIE-UNSPLASH

The US Securities and Exchange Commission (SEC) on Wednesday approved exchange-traded funds (ETFs) that track the price of bitcoin in a game-changer for the cryptocurrency industry which has been trying for more than a decade to launch such a product.

Multiple asset managers have applied for bitcoin ETFs since 2013, but the SEC rejected them on the grounds they would be vulnerable to market manipulation. In August, however, a court found the SEC was wrong to reject Grayscale Investments’ bitcoin ETF application, forcing the agency to rethink its stance.

On Wednesday, SEC approved applications from ARK Investments, BlackRock and Fidelity, among others. Here is how the products work and why the approval is seen as a big deal:

 

HOW WILL THE ETFS WORK?

They will be listed on Nasdaq, NYSE and the CBOE. Their assets will comprise physical bitcoin purchased from crypto exchanges and held via custodians like Coinbase Global.

The products track a bitcoin benchmark. Some track an index provided by CF Benchmarks, a subsidiary of crypto exchange Kraken, which aggregates trading data from multiple Bitcoin-USD markets operated by big cryptocurrency exchanges.

To address the SEC’s manipulation concerns, Nasdaq and CBOE have created a market surveillance mechanism with Coinbase, the largest US cryptocurrency exchange.

Issuers plan to charge fees ranging from 0.20% to 0.8%, well below the broader ETF market average.

 

IS IT DIFFERENT TO BUYING BITCOIN OUTRIGHT?

Yes. A spot bitcoin ETF allows investors to gain exposure to the price of bitcoin without the complications and risks of owning bitcoin directly. Those include setting up crypto wallets and accounts with crypto exchanges, some of which have poor cyber security records and are prone to hacks.

The industry has also experienced a string of bankruptcies and scandals, including the implosion of crypto exchange FTX, whose founder Sam Bankman-Fried was found guilty of fraud.

Other exchanges have been accused of flouting US securities laws, while Binance, the world’s largest crypto exchange, recently pleaded guilty to breaking US anti-money laundering laws. All this continues to make many investors wary.

In contrast, ETFs are listed on tightly-regulated stock exchanges and are therefore accessible through retail investors’ existing brokerage accounts, which are also closely supervised.

The ETF structure also boosts the accessibility of bitcoin for institutional investors, some of whom are barred from investing directly in alternative assets.

 

WHY IS IT DIFFERENT TO EXISTING BITCOIN FUTURES ETFS?

The SEC in 2021 approved bitcoin futures ETF, which track agreements to buy or sell bitcoin at a pre-agreed price. But those products don’t track price movements precisely, and the cost of rolling over futures contracts can eat into returns, making them less desirable for many investors.

 

AREN’T THERE SPOT BITCOIN ETFS IN CANADA AND EUROPE?

Yes. But the United States is the world’s largest capital market, home to some of the globe’s largest asset managers and institutional investors.

 

HOW MUCH WOULD A BITCOIN ETF REEL IN?

It’s unclear. The ProShares Bitcoin Strategy ETF, the first bitcoin futures ETF approved by the SEC in 2021, saw around $1 billion worth of shares trading hands on its first day, and some experts believe a spot bitcoin ETF could net three times that much on its first day. That figure could balloon to $55 billion over five years, some expert estimate.

While bitcoin has gained 70% since the Grayscale ruling, analysts said it was unclear how much further it would rise, with some saying interest rates would play a bigger role.

 

BUT IT’S NOT JUST ABOUT THE MONEY

For the crypto industry, a spot bitcoin ETF is a big win, boosting the legitimacy of the cryptocurrency industry and pushing bitcoin further into the mainstream.

It also comes amid a broader tug-of-war between the crypto industry and SEC, which has been cracking down on the sector. When it comes to this particular battle, the industry can claim victory. – Reuters

Dozens of US lawmakers back resolution supporting Taiwan democracy -document

WINSTON CHEN-UNSPLASH

 – Dozens of US Congress members are backing legislation praising democracy in Taiwan, according to a copy of the resolution seen by Reuters on Wednesday, a measure likely to anger Beijing days before Taiwan’s elections.

“Resolved, That the Senate … is committed to supporting Taiwan’s self-defense and the liberty of its people through effective deterrence using all elements of United States power,” read the resolution, which has at least 28 Republican and Democratic sponsors in the Senate.

The resolution praises Taiwan’s “rule of law and vibrant civil society, diverse economy, and stable political system,” and contrasts that with the situation in China.

Taiwan’s voters head to the polls on Saturday for presidential and parliamentary elections that are taking place against a backdrop of a ramped-up war of words between Taiwan and China, which views the island as its own territory despite the strong objections of the Taiwanese government.

Taiwan’s government has accused China of an unprecedented campaign of election interference, using everything from military activity to trade sanctions to sway the vote toward candidates Beijing may prefer.

The resolution’s sponsors hope it will pass by unanimous consent this week.

Republican Dan Sullivan, who led the resolution with Democratic Senator Tim Kaine, said, “I think it’s really important for the United States in a bipartisan way to show steady, unwavering support and commitment to Taiwan’s democracy and continue to undertake policies to enhance cross-Strait deterrence.”

He stressed that the measure’s backers are not choosing sides in Taiwan’s presidential race. “There’s three strong candidates, three strong parties. Our commitment just needs to be to a fair process that’s not undermined by coercive activities by Beijing,” he told Reuters.

The United States is Taiwan’s most important international backer and arms supplier despite the lack of formal diplomatic ties with the island, which China views as its own territory.

Democratic President Joe Biden asked the Senate last year to approve billions of dollars in security assistance for Taiwan, but lawmakers have not yet voted on his request. Republicans insist that the aid package – which also includes money for Ukraine’s war with Russia – be tied to an overhaul of US immigration policy.

Mr. Sullivan said negotiators were “making progress” on the Taiwan component of the supplemental funding request, but that it depended on whether Democrats would agree to a significant border security component.

Republicans and Democrats in the House of Representatives planned to introduce a nearly identical measure on Taiwan. The House version of the resolution is led by Democratic Representatives Gerald Connolly and Ami Bera, and Republicans Andy Barr and Mario Diaz-Balart.

Taiwan’s de facto ambassador to the United States, Alexander Yui, met with House of Representatives Speaker Mike Johnson on Tuesday, prompting a complaint from China.

China routinely objects to any form of what it views as official contacts between Taiwanese and US officials, saying it is interference in internal Chinese affairs. Beijing says Taiwan is the most sensitive and important issue in Sino-US relations. – Reuters

NATO pledges further major military, economic aid to Ukraine

FREEPIK

 – NATO allies in a meeting with Ukraine have made it clear they will continue to provide the country with major military, economic, and humanitarian aid in the face of Russia’s almost two-year-old invasion, NATO said on Wednesday.

In a statement after the video conference, NATO added that member states had outlined plans to provide “billions of euros of further capabilities” in 2024 to Ukraine.

“NATO strongly condemns Russian missile and drone attacks on Ukrainian civilians, including with weapons from North Korea and Iran,” NATO Secretary General Jens Stoltenberg said.

“As Moscow intensifies its strikes on Ukrainian cities and civilians, NATO allies are boosting Ukraine’s air defenses.”

Ukraine was represented at the online gathering by Lieutenant General Mykola Oleshchuk, commander of Kyiv’s air force, and Deputy Interior Minister Oleksii Serhieiev.

Russia has intensified attacks over the New Year period and pounded Ukraine’s two biggest cities, Kyiv and Kharkiv, earlier this month in a new wave of heavy air strikes.

The NATO meeting on Wednesday was held at Ukraine’s request. – Reuters

Boeing’s latest MAX problem creates more headache for airlines

REUTERS

 – A cabin blowout at 16,000 feet and the grounding of more than 170 Boeing jets have rekindled frustration among airlines over the planemaker’s struggle to contain a series of safety and supply crises, industry officials and experts said.

Alaska Airlines, which operated Friday’s domestic US flight, and United Airlines together have 70% of the MAX 9 fleet and have canceled hundreds of flights.

And with provisional checks turning up loose bolts in some of the grounded planes, the return to service could be delayed, with implications for the earnings of both airlines.

Some analysts have already trimmed first-quarter profit estimates for both the carriers. However, the scale of impact depends on how long the planes remain grounded.

Boeing CEO Dave Calhoun on Tuesday acknowledged mistakes and told staff he and many customers had been “shaken to the bone.” Boeing must work to earn their confidence, he said.

“In the next couple of weeks, we will be under siege,” Mr. Calhoun warned, according to people familiar with his remarks.

The siege may be felt in the media, investigation labs or the corridors of Congress – but also in boardrooms of some of the world’s largest airlines, according to executives.

That could also increase pressure for further discounts to win new sales – though the market for new planes remains tight and long lead times additionally mean prices usually creep up again to cover inflation, airline and market sources said.

“Enough is enough,” said Dennis Tajer, a spokesman for American Airlines’= pilots union. “There’s a deeper systemic problem at Boeing.”

United, forced to ground 79 jets for which it had sold seats, is incensed with a supplier with which it shares corporate roots, people familiar with the matter said.

United declined to comment.

Boeing referred to Tuesday’s comments by Mr. Calhoun, who expressed confidence that customers would again show their confidence, but that Boeing would have to demonstrate this by its actions.

Industry frustration with the planemaker had been building up long before a so-called door plug of a 737 MAX 9 aircraft fell off during the Alaska Airlines flight last Friday.

A series of production problems has delayed Boeing’s aircraft deliveries, making it harder for airlines to capitalize on demand. It is not alone in facing supply struggles, however.

Airbus twice missed targets in 2022 but sprinted to a stronger-than-expected finish last year. Supply chains remain tight across the industry due to parts and labor shortages.

American Airlines CEO Robert Isom publicly asked Boeing’s senior management team last year to “get their act together.”

In private, some airlines have pondered direct approaches to the Boeing board or an industry-wide approach but have not gone ahead with any joint steps, industry sources said.

Southwest Airlines, one of Boeing’s loyal customers, had to trim growth plans last year due to the delivery delays. It may again have to adjust plans if the latest accident slows certification of the smaller MAX 7.

The delay in certification has already forced Southwest to convert some MAX 7 orders into the larger MAX 8 variant.

 

‘EGGS IN ONE BASKET’

While Southwest has been calling Boeing a “great partner,” a senior pilot representative said the airline needs to look beyond the US planemaker to reduce its business risk. Airbus has long tried to woo the airline with its smaller A220.

“Boeing has proven what happens if you put all your eggs in one basket,” said Tom Nekouei, vice president of Southwest’s pilot union.

Boeing and its MAX have been under scrutiny ever since crashes of the more widely-sold MAX 8 killed 346 people in 2018 and 2019. It led to worldwide groundings for 20 months.

Since returning to service, the MAX has faced a series of setbacks including loose or missing hardware, improperly drilled holes and incorrectly attached brackets.

Similarly, a fuselage issue led to a pause in deliveries of Boeing’s larger 787 last year.

Industry officials say delays have made it harder to plan schedules. “Airlines want certainty,” said one official, asking not to be named.

But airlines are in a bind as demand roars back from the pandemic. Airbus’ AIR.PA order book is full through 2030.

Boeing this week reported its third-best annual aircraft sales as airlines scramble for capacity. Indian airlines Akasa has been fine-tuning an order for 150 MAX, sources have said.

Longer term, airlines want competition since the industry is dominated by two suppliers.

In 2019, as Boeing reeled from the wider MAX groundings, the then head of British Airways parent IAG, Willie Walsh, stunned the world’s largest air show with a Paris order for 200 MAX.

The order was later downscaled to 50, but the influential airlines boss, who now runs industry association IATA sent out a signal that airlines prefer a choice of suppliers.

Patience is however wearing thin, analysts said.

Addison Schonland, partner at AirInsight, said a strong and stable duopoly is the most desirable outcome for commercial aviation.

“Each MAX event impacts that stability negatively,” Mr. Schonland said. – Reuters

November trade gap widens to $4.7B

The Philippines posted a trade deficit of $4.69 billion in November, government data showed. — PHILIPPINE STAR/WALTER BOLLOZOS

By Andrea C. Abestano, Researcher

THE PHILIPPINES’ trade-in-goods deficit hit $4.69 billion in November, the widest gap in seven months due to flattish import growth and the continued decline in exports amid sluggish global demand.

Preliminary data from the Philippine Statistics Authority (PSA) showed the deficit jumped by 26.3% from the $3.72-billion gap a year ago. It was also wider than the revised $4.39 billion in October.

November marked the widest trade deficit since the $4.84-billion gap in April. The last time the country swung to a trade surplus was in May 2015 with $64.95 million.

Philippine Merchandise Trade Performance (November 2023)

Merchandise exports contracted by 13.7% to $6.13 billion, the third straight month of decline, though slower than the 17.5% drop in October. This was a reversal from the 13.1% growth a year ago. 

November also saw the smallest export value since $4.9 billion  in April.

On the other hand, the value of the country’s import bill inched up 0.02% year on year to $10.82 billion.

November saw the first growth in imports after nine straight months of annual decline. The flattish growth was still better than the 2.4% decline in October and the 1.5% drop in November 2022.

The month’s import bill had the biggest value in three months or since the $10.83 billion in August.

For January to November, the trade deficit narrowed to $48.98 billion from the $53.72-billion gap a year earlier.

Exports fell by 8.4% to $67.03 billion at end-November, while imports declined by 8.6% to $116.01 billion. The government expects exports to have declined by 4% in 2023, and imports to have dropped by 3%.

Analysts attributed the wider trade gap to the continued decline in exports, particularly semiconductors.

In a Viber message, Security Bank Corp. Chief Economist Robert Dan J. Roces said the November data showed the “export slump overshadowing steady imports.”

Outbound sales of manufactured goods, which made up 81.4% of the total exports, sank by 17.5% to $4.99 billion.

“Exports declined for the third consecutive month mainly due to the weakness in the sales of semiconductors, the country’s largest export,” China Banking Corp. Chief Economist Domini S. Velasquez said in a separate Viber message.

Electronic products, accounting for the bulk of the manufactured goods and more than half of the total exports, slumped by 24.7% to $3.44 billion.

Semiconductors, making up 80% of electronic products and 45.3% of November exports, slid by 25.7% to $2.78 billion.

Mr. Roces noted imports were “unexpectedly flat” in November, ending nine straight months of decline.

“Consumer goods accelerated for a second month thanks to holiday spending, while capital goods (+0.1%) were flat, albeit halting seven months of contraction,” he added.

Imports of raw materials and intermediate goods, which accounted for 36.2% of the total import bill, fell by 3.8% to $3.92 billion in November.

Mineral fuels, lubricants, and related materials also dropped by 7.8% annually to $1.56 billion.

Meanwhile, capital and consumer goods rose by 0.1% and 15.4%, respectively, to $3.03 billion and $2.27 billion.

The United States was the top destination of locally made products in November with a 16% share worth $1.14 billion.

Japan was the Philippines’ second-biggest export trading partner with a 13.2% share worth $938.3 million. Exports to China were valued at $876.27 million, equivalent to a 12.3% share.

On the other hand, China remained the Philippines’ main source of imported goods with a value of $2.6 billion, accounting for 24% of the total. Imports from Indonesia were valued at $1.15 billion (10.6% of the total), while imports from Japan reached $943.57 million (8.2%). 

“Overall, the trade balance remained in substantial deficit. This development suggests that the current account is likewise in shortfall and points to sustained pressure on the peso in the coming months,” Nicholas Antonio T. Mapa, senior economist at ING Bank N.V. Manila, said in a note.

Mr. Roces said the trade deficit likely further widened in the fourth quarter.

“Weaker trade could derail economic growth. The lack of capital goods imports is worrisome given that this is a leading indicator of investments and GDP (gross domestic product) growth. Hopefully, we see this improve this year as the government undertakes more infrastructure projects,” Ms. Velasquez said.

For the first nine months of 2023, Philippine GDP expanded by 5.5%, below the government’s 6-7% full-year target.

October FDI net inflows drop by 29%

Foreign direct investment (FDI) recorded $655 million in net inflows in October, central bank data showed. — REUTERS

By Keisha B. Ta-asan, Reporter

NET INFLOWS of foreign direct investment (FDI) slumped in October amid heightened global economic uncertainties, the Philippine central bank said.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday showed FDI net inflows dropping by 29.6% to $655 million in October from $930 million a year earlier.

Month on month, it was 55.2% higher than the $422-million net inflows in September.

Net Foreign Direct Investment (Octoberber 2023)Despite the year-on-year decline, the October figure was the highest monthly net FDI inflow in two months, or since $790 million in August.

“FDI continues to come into the country. However, the pace has admittedly been on the decline,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.   

“Slower FDI inflows can be tagged to the global slowdown in growth, linked to substantial policy tightening both here and abroad,” he added.

In late October, the BSP delivered a 25-basis-point (bp) off-cycle rate hike, bringing the benchmark interest rate to 6.5%, the highest in 16 years. The BSP tightened rates by 450 bps from May 2022 to October 2023 to curb inflation.

“With rates at these levels, financing costs will be more difficult and thus we can expect overall investment activity to moderate,” Mr. Mapa added.

In a statement, the BSP said the annual drop in FDI net inflows was due to the drop in net investments in debt instruments.

Nonresidents’ net investments in debt instruments of local affiliates fell by 26.1% to $504 million from $682 million a year earlier. 

Investments in equity and investment fund shares slid by 39.3% to $150 million from $248 million a year ago.

Equity other than reinvested earnings slumped by 54.4% year on year to $74 million from $163 million a year ago. Gross placements went down by 44% to $101 million, while withdrawals rose by 50.9% to $27 million.

Equity capital infusion mostly came from Japan, the United States and Singapore, the BSP said. These were mostly invested in industries such as manufacturing (54%), real estate (18%), as well as financial and insurance (15%).

Meanwhile, reinvestment of earnings declined by 10.3% to $76 million from $85 million a year ago.

“The lower net FDI inflow compared with last year was still likely due to challenging economic conditions. Hamas’ attack on Israel last October and subsequent concerns of regional escalation also added to global uncertainties,” China Banking Corp. Chief Economist Domini S. Velasquez said in a Viber message.

For the January-to-October period, FDI net inflows declined by 17.5% to $6.533 billion, BSP data showed.

Foreign investments in debt instruments slipped by 18.3% to $4.57 billion in the first 10 months from $5.59 billion a year earlier.

Investments in equity and investment fund shares declined by 15.7% to $1.96 billion.

Net foreign investments in equity capital decreased by 22.9% to $1.019 billion. Equity capital placements dipped by 2.8% to $1.494 billion, while withdrawals surged by 120% to $475 million. 

Most of the placements during the 10-month period were from Japan, the United States, Singapore and Germany.   

Reinvested earnings for January to October fell by 6.4% year on year to $945 million.

“Looking ahead, the continued slowdown of the global economy this year may keep FDI inflow to emerging markets such as the Philippines subdued,” Ms. Velasquez said.

“Hence, government support such as improving the ease of doing business, implementing investment-friendly policies, and further developing key infrastructure are crucial to boost the country’s prospects as an investment destination,” she said.

Ms. Velasquez added that the recently signed law simplifying tax payments and slowing inflation could boost investor sentiment in the coming months.

President Ferdinand R. Marcos, Jr. has signed into law the Ease of Paying Taxes bill, which seeks to update the country’s taxation system and boost government revenues.

Inflation slowed to 3.9% in December, bringing the full-year average to 6%, higher than 5.8% in 2022. It marked the second straight year that average inflation breached the BSP’s 2-4% target.

“We hope that the bevy of investment pledges collected over the past few months can eventually translate to actual FDI given the still robust growth prospects for the economy,” Mr. Mapa said.

The BSP expects FDI net inflows to have reached $8 billion at the end of 2023, and $10 billion by end-2024.

WB sees PHL as fastest-growing economy in Southeast Asia this year

Motorists drive along the Jose Abad Santos Avenue in San Fernando, Pampanga, Nov. 7, 2022. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Luisa Maria Jacinta C. Jocson, Reporter

THE WORLD BANK (WB) expects the Philippines to be among the fastest-growing economies in Southeast Asia this year.

In its latest Global Economic Prospects, the multilateral lender projected Philippine gross domestic product (GDP) to expand by 5.8% in 2024, same as its forecast in December.

The Philippine growth projection is the fastest among Southeast Asian economies, tied with Cambodia (5.8%), and ahead of Vietnam (5.5%), Indonesia (4.9%), Malaysia (4.3%), Lao People’s Democratic Republic (4.1%), Timor-Leste (3.5%), Thailand (3.2%) and Myanmar (2%).

However, this is below the Development Budget Coordination Committee’s (DBCC) 6.5-7.5% growth target for 2024.

The World Bank’s growth forecast for the Philippines is also higher than its 4.5% projection for East Asia and the Pacific.

The multilateral lender sees slower growth in the region due to the “anticipated deceleration in economic activity in China.”

Other risks to the growth outlook include geopolitical tensions in the Middle East that could lead to higher oil prices, dampened global trade, tightening financial conditions and climate-related disasters, it said.

“Extreme weather events, the frequency of which has increased in recent decades as a result of climate change, also pose a downside risk to the regional outlook,” it added.

In the Philippines, the government is preparing for the potential impact of the El Niño weather event this year.

The latest bulletin from the state weather bureau showed that El Niño will likely persist from March to May, when dry season crops are often harvested.

National Economic and Development Authority (NEDA) Secretary Arsenio M. Balisacan earlier said El Niño would likely affect the agriculture sector and drive food prices higher, which could threaten the inflation downtrend.

On the other hand, the multilateral lender said resilient domestic demand could spur growth drivers in the East Asia and Pacific region.

“Modest inflation, and in many cases robust labor markets supported by buoyant service activity, are anticipated to sustain household spending,” it said.

“In some economies, increased government spending, including on social protection and public sector wages, will also support demand,” it added.

However, investment inflows may be dampened due to lagged effects from policy tightening and elevated public debt, the World Bank said.

For 2025, the World Bank maintained its GDP projection for the Philippines at 5.8%, the same as its previous forecast. This would be below the government’s 6.5-8% growth goal.

At 5.8%, the Philippines is expected to be the third-fastest growing economy in Southeast Asia next year, behind Cambodia (6.1%) and Vietnam (6%).

The bank also kept its growth forecast for 2023 at 5.6%, which would fall short of the government’s 6-7% GDP target.

The Philippine Statistics Authority (PSA) is set to release fourth-quarter and full-year 2023 GDP data on Jan. 31.

INFLATION
Meanwhile, the World Bank said headline inflation in the East Asia and Pacific region might ease slightly amid “moderating global commodity prices, improved food supplies and well-anchored inflation expectations.”

In its December update, the multilateral lender projected Philippine inflation to settle at 3.6% this year and 3% in 2025.

In 2023, inflation averaged 6%, the highest in 14 years. This also marked the second straight year average inflation breached the 2-4% target.

The Bangko Sentral ng Pilipinas (BSP) expects inflation to average 3.7% this year and 3.2% in 2025.

“Despite inflation receding below target in many economies, interest rates are expected to remain broadly unchanged in 2024 on account of tight monetary policy in major advanced economies, lingering concerns about weakening exchange rates and capital outflows, and the potential for a resurgence in inflation,” the World Bank said.

The Philippine central bank raised borrowing costs by 450 basis points from May 2022 to October last year, bringing the key rate to a 16-year high of 6.5%.

BSP Governor Eli M. Remolona, Jr. has said the central bank would only consider policy easing if inflation settles comfortably within the target.

Meralco rates to go up slightly in January

Linemen fix the electricity posts in Tondo, Manila. Customers of Manila Electric Co. can expect slightly higher electric bills in January. — PHILIPPINE STAR/ RUSSELL PALMA

By Sheldeen Joy Talavera, Reporter

TYPICAL HOUSEHOLDS served by Manila Electric Co. (Meralco) will see a slight increase in their electricity bills this month due to the higher cost of power from suppliers.

In a statement on Wednesday, Meralco said the overall rate would increase by P0.0846 per kilowatt-hour (kWh) to P11.3430 in January from P11.2584 in December.

Residential customers consuming 200 kWh must pay about P17 more in their January bill.

Meanwhile, households consuming 300 kWh, 400 kWh and 500 kWh will see their monthly electricity bills go up by P25, P33, and P39, respectively. 

Meralco said the minimal increase was brought by the P0.1136 rise in generation charge to P6.6468 per kWh, mainly due to higher charges from the Wholesale Electricity Spot Market (WESM) and independent power producers (IPP).

The generation charge accounted for about 74% of the total monthly electricity bill.

“We can’t actually have full control on what the generation cost will be based on the prices that will be sold to us both in the market and by our suppliers,” Joe R. Zaldarriaga, Meralco spokesperson and vice-president for corporate communications, said at a briefing.

During the month, WESM charges climbed by P0.5611 per kWh, which was attributed to the “higher average capacity on outage in the Luzon grid.” Some power plants are undergoing scheduled maintenance shutdown this month in preparation for the summer.

The distribution utility said charges from IPPs likewise inched up by P0.1384 per kWh due to higher fuel costs incurred by the Sta. Rita and San Lorenzo plants operated by First Gas in Batangas. The plants used more imported liquefied natural gas (LNG) in the testing and commission of its LNG terminal.

Charges from power supply agreements (PSA) dropped by P0.1522 per kWh.

“The increases in the WESM and IPPs were mitigated by the reduction from our power supply agreements due to lower cost of the emergency PSA of Meralco with Therma Luzon and South Premiere,” Mr. Zaldarriaga said in Filipino.

Higher excess energy deliveries from some PSAs also contributed to the decrease, Meralco said.

WESM, IPPs and PSAs accounted for 20.5%, 36.5% and 43% for the December supply month.

Meanwhile, transmission and other charges — including taxes and subsidies — fell by P0.0290 per kWh, the power distributor said.

The collection of feed-in tariff allowance (FIT-All) remained suspended, as directed by the Energy Regulatory Commission (ERC).

“Pass-through charges for generation and transmission are paid by Meralco to the power suppliers and the grid operator, respectively, while taxes, universal charges and FIT-All are all remitted to the government,” Meralco said.

Distribution charge has remained unchanged at P0.0360 per kWh since August 2022.

El NIÑO IMPACT
In preparation for the impact of El Niño, Meralco is encouraging  large business establishments to join its interruptible load program.

“The forecast of DoE (Department of Energy) so far is we will not have red and yellow alerts this year even with the El Niño, but even then, they reminded us to continue with our preparations including attracting more customers to join the interruptible load program,” Lawrence S. Fernandez, vice-president and head of utility economics of Meralco, said.

In 2023, the Philippines was placed under two red alerts and eight yellow alerts, data from the DoE showed. This was lower than the 12 yellow alerts it expected.

Meralco launched last week the bidding for interim power supply agreements (IPSAs) covering 260-megawatt (MW) peaking requirement and 400-MW baseload requirements in preparation for the expected increase in demand during the dry months.

Meanwhile, Meralco is urging qualified consumers, particularly the beneficiaries of the Pantawid Pamilyang Pilipino Program, to apply for the lifeline rate to continue getting discounts on electricity bills.

In December last year, the ERC, together with the DoE and the Department of Social Welfare and Development, announced that they will proceed with the full implementation of the program starting on Jan. 1.

The lifeline rate is a subsidy provided to customers with a monthly power consumption of 100 kWh and below.

Qualified consumers will be provided a percentage discount which usually ranges from 20% to 100%, depending on their power consumption.

As of Jan. 5, there are a total of 29,576 approved applications for the program, Meralco data showed.

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.

The best of Japan under one roof

Standard Hospitality Group’s John Concepcion plans expansion of Kiwami as he continues to honor tradition

SOME of the best restaurants in Japan can be found all under one roof in the Philippines, thanks to the efforts of The Standard Hospitality Group’s chief executive officer (CEO), John Concepcion.

Earlier this week, BusinessWorld got a taste of some of Japan’s best, right in Taguig’s Bonifacio Global City (BGC) where the food court Kiwami has operated since 2021. Another branch in Alabang opened late last year.

Kiwami isn’t playing around with the word “best.” The word kiwami (roughly translated from Japanese as “ultimate” or “extreme”) is subjective, but with the brands under Kiwami, heritage and talent try to reflect the definition. For example, Yabu, brought here in 2011, was made in partnership with Michelin Bib Gourmand chef Kazuya Takeda. Ippudo Ramen, meanwhile, has roots with “Ramen King” Shigemi Kawahara (a three-time Ramen Master Chef Hall of Famer), with the brand beginning in 1985. Hachibei, with a concentration on grilled meats (yakitori-style), began in 1983 and uses traditional Binchotan charcoal (made of hardwood). Finally, Hannosuke, an expert in tempura which attracts crowds in their Japanese outlets, was founded back in the 1950s.

“Many of these brands are heritage, family-run businesses that have been operating for decades. Most of them love the idea of expansion but are not necessarily geared for it due to the challenges of the language barrier and not having a technical team to transfer their technology,” said Mr. Concepcion in an e-mail. “However, the idea of sharing their work is certainly exciting for them, and that’s where we come in. As the Standard Group, we are able to work closely with these partners to bring the same quality work they do here to the Philippines.”

While most of these restaurants have standalone units, Mr. Concepcion discussed why it makes sense for them to be under one roof. “In the case of Kiwami, it became a more thoughtful idea on how we could offer the convenience of choice without losing the specialized kitchens. Hence, we came up with the idea of master kitchens within one large space,” he said. “The idea is quite simple, really. We wanted to honor the specialization and dish-specific nature that you find in Japan — doing one thing but doing it extremely well.”

FROM OYSTERS TO RAMEN
BusinessWorld sat down to lunch with at least one dish from all the outlets under Kiwami.

We started the meal with Hachibei’s Baked Hokkaido Miso Oysters, flown straight from Japan, and topped with Japanese mayo, yellow miso paste, and the Japanese spice mix togarashi. Dexter Supena, Back of House Technical Manager for Kiwami, described Hokkaido oysters as incredibly sweet: a credit to Hokkaido’s seas, for despite all the additions on top, the gentle oceanic flavors of the oysters still shone through.

The next dish was Hachibei’s Sukiyaki Spinach Enoki — beef rolled around stalks of Japanese spinach and enoki mushrooms. It’s an innovation on the Japanese hotpot dish sukiyaki, so diners dip the rolls into a cured egg yolk as in the original dish before taking a bite. A Buta Bara platter followed, with Binchotan-grilled pork belly seasoned with shio (salt), tare (yakitori sauce), miso (sesame-flavored miso paste), then Yuzu Kosho (citrus and pepper). Uniformly, the sweetish and tender pork skewers were a hit, but the clear winner was the Yuzo Kosho, with bright flavors giving the pork some lightness.

We were excited to try Hannosuke’s recipe from the 1950s, and we were not disappointed. We’ve gotten too used to mediocre tempura with more flour than seafood, with a fried crust that turns chewy at the slightest drop in temperature. At Hannosuke, the casing simply becomes a complement to the seafood, and we marveled at how moist and tender the shrimp, squid, and scallop within the crispy breading still was.

Yabu, the oldest unit in the Philippines within group, offered up their Rosu Tornado Omelette Curry Set. This had a tornado-style omelet over rice, served with their signature curry sauce and classic Yabu katsu. Mr. Supena explained that the tornado-style omelet was achieved by swirling three eggs with long chopsticks as they slowly cooked in a ceramic pan. As for the katsu, he told us that the rosu (pork loin) had layers of meat, fiber, and fat (though a leaner version is available). The crispy coating was made with panko (breadcrumbs) which they make themselves. Aged for three days, the bread is shredded in a special machine and the crumbs are sifted. The spikiest bits are reserved for breading, while finer crumbs are used for other recipes.

We ended the savories with Mushroom Ramen, the vegetarian option at Ippudo. We lowered our expectations a bit and thought we’d have a calm sip of the broth, but this meatless option was not taking it easy. Made with seven types of mushrooms (three of them being shimeji, white button, and king oyster), it had a dairy base flavored with mushroom paste, and with tofu substituting for the pork chashu. The flavors were dense and intense, and not for one minute did we miss the usual pork.

“We want you to have a five-star experience for a three-star price,” Mr. Concepcion said. A lot of these brands aren’t exactly household names in the Philippines, and before Mr. Concepcion got his way, were to be experienced only in Japan.

“With the exception of Ippudo, these brands are not the chain-type restaurants, and that’s not what we want either. We like to focus on brands that have been practicing their craft for decades. We don’t prefer to work with the trendy, of-the-moment names; instead, we see ourselves as stewards of these brands and focus on building relationships with these artisans.”

GOODBYE SELECTA
Mr. Concepcion is so taken with the Japanese food experience that he is stepping down as Managing Director and CEO of the Selecta ice cream brand to concentrate on The Standard Hospitality Group.

Mr. Concepcion led Selecta for the last 33 years. He is also a member of the Concepcion cooling family, listed in Forbes collectively in 2016 in the country’s 50 Richest list.

According to a press release, “As Mr. Concepcion bids farewell to Selecta, he is set to embark on a new and exciting journey in his career. Leveraging his extensive expertise gained over three decades in the multinational company, he will focus his efforts on leading The Standard Hospitality Group to greater success in hospitality and restaurant management.”  Within the next three years, they expect to have a total of 100 outlets.

“Kiwami has been a great success, and you will be seeing two new locations within the next 18 months, as well as a strong rollout for Yabu this year with the introduction of our updated architectural look,” Mr. Concepcion told BusinessWorld.  “Exciting new spaces are on the horizon. Additionally, we are working on new concepts to add to the portfolio, which is super exciting.”

Kiwami has branches in Bonifacio High Street Central in BGC, Taguig, and in Alabang Town Center in Muntinlupa. — Joseph L. Garcia

Small plates are over, here’s what restaurants in NY and London are doing in 2024

WINTER Martini Garden at the Ham Yard Hotel —FIRMDALEHOTELS.COM

THERE’S good news for diners who don’t like to share: Those tapas-size plates loaded with mini bruschettas and spicy tuna-topped crispy rice are out. Individual portions are in this year.

That’s one of the top trends emerging in new restaurants across London and New York (NY). Another: When you order a drink, be prepared for bartenders to turn up the heat, literally.

The culinary capitals on either side of the Atlantic aren’t always in sync. Last year, new places in New York specialized in world-class noodles, from pasta to soba, and destination pizza spots expanded to prime locations. In London, the trend was to elevate classic dishes including snails, roast chicken and ice cream, and Caribbean restaurants and bars shone bright.

But this year, the restaurant stars aligned, and the top trends in the two cities have notable similarities. Among them is seafood, especially places where the buzzword isn’t “fresh” but “aged.” Another is the proliferation of wine bars. The concept makes sense for operators whether their places are small vino-focused spots or a counter at a restaurant — because you don’t need an expensive kitchen setup to make the drinkers happy.

Will devout drinks enthusiasts be ordering the hot Negroni at Jimmy in New York and the hot martini at the Ham Yard Hotel in London? These libations might be hard to avoid — as are these other food and drink trends you’ll see in New York and London in 2024.

SO LONG, SMALL PLATES
Small plates have taken up space on restaurant tables for years, offering diners the chance to turn a meal into a cocktail party as they share bowls of greasy Padrón peppers and a couple of fried arancini balls. Now chefs are cutting out the menus’ snack sections and giving customers more straightforward options of first courses and main dishes that don’t require an awkward negotiation over the last bite.

Among the new London spots where you can eat like a grown-up is Wolseley City, where the menu is essentially divided into single serving starters (goats curd tart and smoked mackerel salad) and mains. At the art deco palace Bébé Bob, there’s no room in the middle of the table for sharing platters. Instead, guests have starters like prawn cocktail, and the signature rotisserie chicken is plated by servers tableside. Star chef Tom Sellers has also had enough of small plates: His recently opened Dovetale eschews dishes that are passed around.

In New York, chef Angie Mar has flipped her buttoned-up French tasting-menu spot Les Trois Chevaux into the slightly more relaxed, à la carte affair, Le B. Among the dishes that aren’t made to be shared: one whole deviled egg, flecked with black truffle, and Bird’s Nest soup, the nucleus of which is a slice of foie gras with bok choy in a game bird consommé.

At the grand new Café Carmellini, chef Andrew Carmellini is also focused on first and second courses and entrées. One could kick off a meal with a delicate, three-tiered stack of crab mille-feuille before moving to a pasta course of five duck-filled tortellini in foie gras sauce, then ending with squab en croûte.

REGIONAL OPEN-FIRE COOKING HEATS UP
Cooking over fire has been a longtime obsession of chefs. Credit goes to Patagonia’s Francis Mallmann, who in the early 1990s made flame cooking the sexiest way to serve meat. (And, more recently, vegetables.)

The trend is burning brightly, so to speak, at new places where the grills have a regional accent. In London, chef Tomos Parry and his protégés have opened restaurants around town featuring open fires, building on the success of his Basque-focused Brat. At his new place, Mountain, Mr. Perry puts a lot of the menu on the grill, from langoustines and John Dory to ribs of Jersey sirloin beef and the signature lobster caldereta casserole. Ben Allen, a Brat alum, has recently started serving a Sunday roast cooked over flames at the Parakeet, the fire-minded pub that he opened last spring.

At the Devonshire in Piccadilly, the buzzy pub’s custom-made grill employs embers that come from a wood fire to cook the aged British meat.

Over in the US, open fire is the main focus of the popular new Ilis in Brooklyn. Danish chef Mads Refslund had to wait 18 months to receive approval from the New York City Fire Department for his hearth-centered restaurant because of its tricked-out custom grill. It’s worth the effort, because many dishes are prepped over that grill, including brown trout that’s been bundled in grape leaves and birch wood and Refslund’s signature barbecued eels, inspired by ones he ate as a child, cooked over a mix of wood sourced from upstate New York.

When acclaimed New York chef Ignacio Mattos (of Estela) opens the 750-square-foot Amado Grill in downtown’s Nine Orchard hotel later this year, his $125 set menu will highlight simple, elegant dishes prepared over charcoal, such as quince-accented squab à l’orange.

SEAFOOD GETS OLDER
Chefs are employing more specialized techniques on seafood this year — especially dry aging, a practice usually confined to high-end sushi spots.

Later this year, chef-owner Tomer Blechman of Brooklyn’s Mediterranean staple Miss Ada will open Theodora, focused on dry-aged fish. Blechman ages local seafood for up to a week, controlling humidity and temperature. Among the dishes he plans to serve are a salmon belly that’s been aged three days and laced with lovage cream .

The first winner of Top Chef, Harold Dieterle, also sees the appeal of rested fish for his upcoming southern Italian restaurant, Il Totano, in Greenwich Village. In the center of the dining room is a temperature- and humidity-controlled fridge. Beyond the flavor-enhancing benefits, Dieterle notes that dry-aged fish is easier to cook: “It comes out moist every time.” His branzino in tuna collar sauce will be aged for a few days, he says, while bluefin tonatto vitello will mature for around two weeks. And at the popular, six-month-old Foxface Natural in the East Village, chef David Santos recently unveiled bluefin tuna crudo in a smoked chive oil. He ages the fish for around three weeks, one of those weeks in soy sauce, all to amp up its umami flavor.

In London, the innovative the Sea, the Sea has been pushing aged fish at its Hackney counter since it opened two years ago. Now, chef Leandro Carreira has turned his attention to shellfish, including line-caught squid that he keeps for almost a week, sometimes coated in beeswax to maximize the subtle sweetness. He’s also started aging scallops and cuttlefish. At Humo in Mayfair, where the South American-minded dishes are cooked on a four-meter (13 foot) grill, chef Miller Prada is serving 10-day aged yellowtail with citrus sauce, 11-day aged turbot with mole sauce, and 12-day aged wild Cornish monkfish with almond emulsion.

THE UBIQUITOUS WINE BAR
This will be a good year to be in the wine-glass business in London. A seemingly endless and exciting list of wine bars and wine-focused restaurants are opening their doors in the next few months. Coming soon to Borough Market: Camille, from Clare Lattin and Tom Hill, the team behind the popular natural wine bar Ducksoup. It will focus on small, French producers to accompany the Borough Market-driven menu.

July on Charlotte Street will also specialize in natural French vins that will complement the Alsatian-centered menu from chef Holly Hayes, an alum of the iconic wine spot 40 Maltby Street. Even the city’s notable new restaurants increasingly look like wine bars. When star chef Claude Bosi opens Josephine in a few weeks in Chelsea, he’ll adopt the bouchon wine program of his native Lyon, serving white and red by the meter so you pay for what you drink. The upcoming Morchella in East London will have a dedicated wine bar spotlighting the kind of rising-star producers the owners are known for at their cult favorite restaurant Perilla.

Across the pond, New York is also welcoming an array of wine spots. A few months ago, chef Flynn McGarry relocated his popular low-intervention bottle boîte Gem Wine from Nolita to the more spacious home of his Lower East Side tasting menu spot, Gem. (He promises Gem will return in a new location in 2025.) Nearby, popular Spanish spot Ernesto’s is flipping the cafe space into a wine bar called Ernie’s. Some nights there could be pintxos (snacks) to go with glasses and bottles, while others will feature guest chefs for ever-changing, wine-focused dinners.

Chase Sinzer and chef Joshua Pinsky, meanwhile, are expanding the drinking options on East 10th Street. Their new endeavor, Penny, will debut this spring in the 1,400-square-foot space right above their wine-and-food spot, Claud. It will focus on minimalist seafood preparations and small production Champagnes and whites.

HOT COCKTAILS ARE HOT
The latest frontier for playful bartenders is drink temperatures.

Jimmy, the splashy rooftop bar in SoHo in New York, has started serving Midnight Negronis, a comforting cold-weather variation of the Italian classic with gin, Campari, sweet vermouth and blood-orange spiced syrup that’s topped with steaming hot chamomile tea. “It was a hit from the first day,” says bar manager Sayora Khamidova, who created the hot Negroni to keep customers warm on colder al fresco nights. “Guests get a kick out of the fact that this traditionally icy cold and bracing cocktail is unexpectedly hot and soothing,” she says.

An even bolder innovation is the hot-and-cold toddy at Shinji’s in the Flatiron: This drink is a Johnny Walker Black-infused chamomile and ginger punch that’s served simultaneously hot and cold in a tea cup; a divider initially keeps the two sides separate.

At this season’s Winter Martini Garden at the Ham Yard Hotel in London, hot drinks rule the classic cocktail list. The Beekeeper’s Martini is a warm version of the gin-and-honey Bee’s Knees; it’s finished with a puff of smoke, courtesy of a bee smoker. Likewise, the Warm Charlie is a Charlie Chaplin (sloe gin, lime, apricot brandy) served hot, and the Paloma-tini is a heated-up offering of the gin-and-grapefruit classic, made with thyme syrup, too. — Bloomberg