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The EU and the Indo-Pacific: Partners for a more stable and prosperous world

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AT the start of 2024, Europeans are of course deeply concerned by the ongoing Russian war of aggression against Ukraine and by the conflict that has broken out again in the Middle East. However, we are not forgetting the broader picture: the center of gravity of the world’s economy has shifted to the Indo-Pacific region, with close to 50% of the world’s GDP and 60% of the world’s population. Peace and stability in this region are crucial for Europe and the world.

In recent years, the European Union (EU) has worked steadily to improve its cooperation with the region, in particular by becoming in 2020 a strategic partner of the Association of Southeast Asian Nations (ASEAN), launching its Indo-Pacific strategy in 2021, holding a successful EU-ASEAN Summit in 2022, and adopting the Samoa Agreement with Pacific countries in 2023. We will accelerate the path in 2024.

The economic links between the EU and the Indo-Pacific region have reached an impressive level, unimaginable 40 years ago. Maritime routes in the region have become the arteries of the world: every day 2,000 ships transport goods across the Indian Ocean and the South China Sea to Europe and back. However, the security environment is deteriorating. Major tensions are rising, from the South China Sea to the Taiwan Strait, the Korean peninsula, and the Red Sea. There is less trust among the main global and regional players; less respect for international law and multilateral agreements; force and coercion are on the rise. We are at risk of going back to a world where “might makes right.”

The EU intends to counter this trend. Multilateral solutions and regional approaches are in our DNA and we will always defend international law, including the United Nations Convention on the Law of the Sea (UNCLOS) and the non-proliferation regime. To defend the rules-based world order, we want to cooperate more closely with our partners committed to multilateralism in the Indo-Pacific region.

The EU maintains regular security and defense dialogues with China, Japan, India, Australia, South Korea and other nations. However, our cooperation increasingly extends beyond dialogue to concrete and operational activities.

Under our Strategic Partnership with ASEAN, security cooperation is also becoming more and more a major component. We are participating with members of ASEAN in regional navy exercises and the navies of our Asian partners are cooperating with us in Operation Atalanta, near the Horn of Africa. These are good examples of what we can do together.
To go further, we propose to use our member states’ advanced capabilities to become a “smart security enabler,” helping to build the capacities of our partners in the region on maritime security, cybersecurity, counterterrorism and foreign information manipulation and interference.

We need each other to help stabilize this world. The challenges we are facing do not allow us any other way than to cooperate closely to help avoid conflicts and ensure respect for international law. To protect freedom of navigation, EU member states are already increasing their deployments between the EU and the Indo-Pacific. The region can count on us as a reliable partner.

On the economic side, Russia’s aggression against Ukraine has shown us the high cost of the EU’s excessive dependency on Russian gas. We are therefore focusing on improving the EU’s economic security by reducing this type of excessive dependency. However, this does not mean closing our borders. On the contrary, it should lead to developing our economic ties with many countries in the Indo-Pacific region, in order to de-risk our economy and diversify our supply chains.

In this context, the EU has recently signed a free trade agreement with New Zealand and negotiations are ongoing with India, Indonesia, and Thailand. We are engaging also with Japan, South Korea, Singapore, and India to ensure stable and diversified supply chains in the field of digital technologies and have proposed to our Indo-Pacific partners to work together on the sustainable extraction and processing of critical raw materials, necessary for green and digital transitions.

The EU also wants to cooperate more actively with Indo-Pacific countries towards a green and sustainable future. The Green-Blue Alliance with the Pacific islands is helping to strengthen their climate resilience. Together with our G7 partners, we have also agreed to Just Energy Transition Partnerships with South Africa, Indonesia, and Vietnam and the European Investment Bank is already investing €500 million to accelerate Vietnam’s green transition in a way that benefits both people and the planet.

In short, we are well aware of the crucial importance of the EU’s engagement with the Indo-Pacific region. We are demonstrating it with a Pacific Day in the European Parliament on Feb. 1, highlighting our burgeoning cooperation with our Pacific island partners. The next day, our 3rd Indo-Pacific Ministerial Forum will bring together Foreign Ministers from the region and the EU. We will then hold our biennial EU-ASEAN ministerial meeting.
In a world of geopolitical turbulence and great power rivalry, these three high-level meetings illustrate the strong and shared interest that the EU and the Indo-Pacific countries have to cooperate more closely in order to enhance their security, prosperity, and resilience.

 

Josep Borrell Fontelles is the high representative of the European Union for Foreign Affairs and Security Policy and vice-president of the European Commission.

Suits sets new streaming record in 2023, eclipsing The Office

GABRIEL MACHT (R) and Patrick J. Adams in a scene from Suits. - IMDB.COM

LEGAL drama Suits took the top spot as the most streamed title ever from another audience favorite The Office in 2023, while shows on Netflix dominated overall streaming charts, according to Nielsen data.

Suits racked up 57.7 billion viewing minutes in 2023, thanks to its availability on both Netflix and Comcast-owned Peacock. The Office had generated 57.1 billion viewing minutes in 2020 amid pandemic-induced lockdowns, according to the report.

Some of the other widely streamed shows last year were Bluey, NCIS, Grey’s Anatomy, and The Big Bang Theory.

Overall, Americans streamed 21 million years’ worth of video in 2023, a 21% jump from a year earlier, as streaming firms continued to pour billions of dollars into new and licensed content to keep audiences hooked to their platforms.

Shows on Peacock, Disney+, Paramount+, and Warner Bros. Discovery’s Max were also among those that were widely watched.

Last year was particularly challenging for the US entertainment industry, as strikes from writers and actors stalled production for months.

Despite the strikes, a handful of originals still managed to make it to the market, with Ted Lasso on Apple TV+ leading the charts in the original category and Netflix’s Night Agent coming in a close second.

In the movie category, seven out of 10 were animated features that topped streaming charts, with Disney’s Moana and Encanto leading the way.

The report also highlighted the dominance of streaming in the United States, especially as high-profile sporting events like the recent NFL playoff game between Kansas City Chiefs vs. Miami Dolphins, become exclusive to streaming services. — Reuters

AREIT says 8 office buildings awarded green certification

AYALA LAND, Inc.’s real estate investment trust subsidiary AREIT, Inc. has obtained EDGE Zero Carbon certification for eight office buildings, the company announced on Tuesday.

These buildings comprise Glorietta 1 and 2 Corporate Center, Solaris One, McKinley Exchange Corporate Center in Makati, Vertis North Corporate Centers 1, 2, and 3 in Quezon City, and The 30th Corporate Center in Pasig, AREIT said in a regulatory filing.

The buildings were awarded certification on account of a 45.33% improvement in energy efficiency, 49.07% in water efficiency, and 61.88% in embodied carbon material reduction, the company said.

EDGE Zero Carbon is the highest certification given to properties that have neutralized their carbon emissions via renewable energy.

The certification requires a minimum of 40% energy savings and 20% savings in water and embodied carbon in materials compared to the base case.

“Our commitment to EDGE Zero carbon is a testament to the value we see in developing environmentally conscious developments to ensure a more sustainable future for the country,” Ayala Land Senior Vice-President and Group Head for Leasing and Hospitality Mariana Zobel de Ayala said.

In September, Ayala Land and AREIT forged a memorandum of understanding with the International Finance Corp. (IFC) to achieve EDGE Zero Carbon certification across 1.5 million square meters (sq.m.) of office space by 2025.

The two companies said they have moved 88% of their office portfolio to renewable energy, corresponding to 1.2 million sq.m. of gross leasing space.

EDGE is a green building standard and certification developed by the IFC, which is a member of the World Bank Group. The certification helps property developers to build and brand “green” developments in a fast, easy, and af-fordable manner.

On Tuesday, AREIT stocks rose by P1.20 or 3.8% to P32.70 each while Ayala Land shares fell 50 centavos or 1.49% to P33 apiece. — Revin Mikhael D. Ochave

The attack on the Mona Lisa’s smile

THE FREE BIRDS - UNSPLASH

“MAIS NON!” gasped at least one visitor recorded on video Sunday morning as two women splashed orange liquid — or soup, as several news accounts had it — at Leonardo da Vinci’s Mona Lisa. Immediately, the splatterers slipped under the semicircular barrier the Louvre has in place to keep onlookers at a distance from the 16th century masterpiece. Removing their overcoats, the women revealed T-shirts reading “Riposte Alimentaire” (Food Response, an organization that’s part of a broader alliance of environmental activists). One shouted: “What’s more important? Art or the right to healthy and sustainable food?” They were both arrested.

The painting — in the past, the target of acid, cake, rock, and teacup as well as a 1911 abduction — has been displayed behind a bulletproof glass shield since 2005; it’s highly unlikely to have been harmed by the latest assault. The trauma was mostly borne by eyewitnesses, and by France itself, which is in the grips of nationwide protests by farmers who began besieging Paris this week. And the rest of the world? The ripple effects reach us in an inchoate, perhaps shoulder-shrugging way. No harm, no foul, right?

The Mona Lisa — or La Gioconda, the name many Europeans know it by — has been a touchstone of Western civilization for so long that we often forget why it’s important. No one can put a price on it because the Louvre would never sell it. (It’s been a French possession since King Francis I purchased it in the early 16th century, soon after Da Vinci died in France.) We believe it’s precious because people keep saying it’s precious — like being famous for being famous. Leonardo’s painting has become an icon in the worst possible way: It’s recognizable in its barest outlines, which makes it easily reproducible and marketable, emblazoned on everything from umbrellas to postcards to refrigerator magnets.

Mona Lisa is, thus, a very convenient goddess to worship. But a goddess of what? French artist Marcel Duchamp satirized this pop-commercial idolatry in 1919 by drawing a moustache on a postcard image of the painting (and giving it a title — L.H.O.O.Q — that is titillating when pronounced in French).

The Mona Lisa is everywhere in facsimile. But her real power is limited, palpable only when you see her in person, on that wall in the Louvre.

The wonder of Da Vinci’s classic is — as cliched as it sounds — the smile. It isn’t an accident of the paintbrush: It was consciously engineered from pigment and science via Leonardo’s mastery of sfumato, that borderless, smoke-and-mirrors melding of planes of color to create the appearance of multiple dimensions. The conceptual basis of it all was his pioneering study of human anatomy through the dissection of the dead. Studying corpses through three decades, he learned that the muscles the control the mouth follow a complex orchestration, not only of the minuscule tissues around our lips but the surrounding ones in the rest of the head. He identified anger muscles and pain muscles for the expressions they helped to generate.

Summarizing that forensic achievement, Walter Isaacson, the author of a bestselling 2017 Da Vinci biography (and my former boss at Time magazine), wrote: “He sketched head-on and profile drawings of retracted lips with the skin still on, then a row of lips with skin layer peeled off. This is the first known anatomical drawing of the human smile.”

But there was more than that to the painting. As Isaacson discussed in a November 2017 article in The Atlantic, anatomical insights had to be turned into art. It started with using lead white pigment (gesso) to prepare a white poplar wood panel for painting, all to maximize the reflection of light. The contouring of the surfaces of Mona Lisa’s face were craftily strategized with irregular strokes to make them appear as if they were skin. His deep knowledge of optics also allowed him to create a smile that changed as you looked at it from different angles, just as a real person’s expression shifts in emotional depth in relation to where you stand. “The result,” wrote Isaacson, “was a masterpiece that invites and responds to human interactions, making Leonardo a pioneer of virtual reality.”

All that is impossible to replicate in a postcard. It’s hard enough to experience at the Louvre where the large room dedicated to the Mona Lisa is packed with visitors and catching a full glimpse of the painting is difficult enough, much less seeing it from various perspectives. But Leonardo’s stunning feat — a divinely Delphic smile that is the product of the sweat of human genius — is what was threatened by the assailants on Sunday morning in Paris.

Is it art for earth’s sake? Or earth for art’s sake? We can debate those points but let’s not resort to savagery. Would it be worth living in a world that chose to wipe the smile off of the Mona Lisa? The assault on Sunday was toothless because of the glass barrier. But the semiotics if not the actions themselves were violent. Too many other works of art have been desecrated in the name of some greater good. There is much to be outraged about in the world. But we should not turn anger into destruction. That would be like trying to save the planet but destroying it in the process. – Bloomberg Opinion

Strong economic growth seen to boost PHL banks this year

DRAZEN ZIGIC-FREEPIK

Philippine banks may remain robust this year amid strong economic conditions that could drive double-digit loan growth, S&P Global Ratings said.

“Philippine banks are well placed to ride the country’s robust economic growth in 2024,” S&P Global Ratings credit analyst Nikita Anand said in a statement on Tuesday. “We believe improving macroeconomic con-ditions will offer good growth opportunities along with stable asset quality.”

The debt watcher expects loan growth of 10-12% this year, driven by a pickup in corporate demand, from its estimated 5-6% expansion in 2023.

Meanwhile, it sees Philippine gross domestic product (GDP) expanding by 6% this year and next, faster than its 5.2% forecast for 2023.

“Higher economic growth, along with lower inflation and interest rates, will support credit demand,” S&P said.

“S&P Global Ratings also believes earnings are likely to normalize with lower asset yields, given our expectation of policy rate cuts in the second half of the year,” the debt watcher added.

The Bangko Sentral ng Pilipinas (BSP) hiked borrowing costs by 450 basis points (bps) from May 2022 to October 2023, bringing the policy rate to a 16-year high of 6.5%.

It is widely expected to begin cutting rates this year, especially once the US Federal Reserve eases its own policy stance.

Even as loans are expected to grow, credit losses are expected to be at just 0.5%-0.7% of gross loans this year, S&P said.

“We forecast a manageable deterioration in the nonperforming loan (NPL) ratio to 3.5% from 3.4% as of end-November 2023 because of rapid growth in riskier segments such as credit card loans and other unse-cured consumer loans in the past two years,” the debt watcher said.

Consumer NPLs may rise, but risks “should stay contained, given the Philippines’ low household leverage of 10% of GDP and stable employment conditions,” Ms. Anand added.

The digital banking sector’s asset quality is expected “stay significantly weaker” than the entire banking industry due to their large consumer loan portfolios, S&P said.

“This reflects their heavy exposure to unsecured consumer loans and the largely untested credit profile of their target customers. We expect these banks to continue making losses because of very weak asset quality and high costs,” it said.

Some 64.8% of the loans of digital banks as of Nov. 30, 2023 were consumer loans, BSP data showed.

Elevated inflation and interest rates could also affect households’ and small firms’ ability to repay their loans, S&P said.

“The sector’s good capital position (15.5% Tier 1 ratio) and provisioning should help absorb higher asset quality risks,” it said.

Meanwhile, return on average assets “could normalize to a long-term average of 1.2%-1.3% over the next two years after peaking at about 1.4% in 2023,” S&P said.

“This is because net interest margins will decline in line with policy rate normalization. Lower operating expenses and an increasing share of unsecured retail loans could provide an upside to our profitability forecast,” it said.

“In our view, banks will continue to invest in digital capabilities to drive efficiency. The banking sector’s cost-to-income ratio has declined sustainably to 55%-57% as of end-2023 from 64%-65% as of end-2016, thanks to rapid dig-italization of banking services,” S&P said.

Philippine banks’ funding is also expected to remain healthy, with the sector’s loan-to-deposit ratio projected to be at 70-75%, with low-cost current and savings account deposits making up about 70% of total deposits, the debt watcher said.

“Whereas the deterioration in metrics has been more pronounced for regional peers, there’s only been a small decline from the 2021 peak for Philippine banks,” it said.

“We have not seen irrational deposit pricing in response to the high rates offered by new digital banks. These banks’ operations are nascent and reflect initial struggles, with a market share of just 0.4% of sector deposits,” S&P added

Planters Products, Inc. to hold Special Stockholders’ Meeting on Feb. 22

 

 

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Estates of Jimi Hendrix bassist, drummer can sue Sony for album rights

ARE You Experienced (US Sleeve) - AMAZON.COM

LONDON — The estates of the British bassist and drummer in Jimi Hendrix’s band can sue Sony Music Entertainment seeking a share of the rights to three classic 1960s albums, London’s High Court ruled on Monday.

Noel Redding and Mitch Mitchell joined The Jimi Hendrix Experience in 1966 and played on the group’s three studio albums Are You Experienced, Axis: Bold As Love, and Electric Ladyland, released in 1967 and 1968.

The recordings feature “Hey Joe,” “Purple Haze,” “Foxy Lady,” “The Wind Cries Mary” and other hits that helped usher in the psychedelic music age and made Hendrix a rock icon before his death in 1970 aged 27.

Redding and Mitchell died in 2003 and 2008 respectively and their descendants later assigned any rights they might have had in the albums to two companies.

The companies — Noel Redding Estate Ltd. and Mitch Mitchell Estate Ltd. — sued Sony in 2022 and are seeking a declaration that they own a share of the sound recording copyrights of the three Jimi Hendrix Experience albums.

Sony sought to have the case thrown out, in part because Redding and Mitchell both signed releases in the early 1970s agreeing not to sue the estate of the Seattle-born legend or any record companies distributing the three albums.

Redding received $100,000 in 1973 and Mitchell received $247,500 the following year to withdraw lawsuits in New York, which Sony’s lawyers said offered a complete defense to the new case in London.

But Judge Michael Green ruled on Monday that the lawsuit should be heard at a full trial, likely in 2025.

Sony did not immediately respond to a request for comment.

Lawrence Abramson, a lawyer at Keystone Law who represented the two companies, welcomed the ruling.

“No one is denying that Jimi Hendrix was one of, if not, the greatest guitarist of all time,” he said in a statement. “But he didn’t make his recordings alone and they could not have achieved any success without the contributions of Noel and Mitch.” — Reuters

Examining foreseen hurdles in 2024

Image by pressfoto on Freepik

From the rapidly evolving facets of artificial intelligence (AI) to the enduring spectre of geopolitical tension, challenges, risks, and pressures continually affect how Filipinos live their lives. Navigating through these pitfalls requires a thorough understanding of their origins, manifestations, and potential ramifications as they loom large on the horizon.

According to multinational professional services brand PricewaterhouseCoopers (PwC) in their 27th annual Global CEO, top company officials in the Philippines and the Asia-Pacific region determined geopolitical conflict (40%), inflation (37%), macroeconomic volatility (29%), and cyber risks (29%) as the key threats that may affect the country in the next twelve months.

While the conflicts in Ukraine and the Middle East are on the other side of the globe and may not affect the Philippines directly, there are still some geopolitical issues that may cause concern here in the country.

Tensions in the West Philippine Sea are still heightened after previous face-offs between the Philippine and Chinese coast guards in parts of the area. Recently, Chinese vessels used water cannons to harass Filipino boats and ships on a humanitarian mission at Bajo de Masinloc.

The country’s inflation rate, meanwhile, settled at its lowest level in 2023, slowing down from 4.1% in November to 3.9% last December based on data from the National Economic and Development Authority (NEDA).

However, the NEDA also stated that there are still several threats that may affect the country’s inflation rate in the next twelve months. The El Niño that will persist in the country until May is expected to have a negative impact on the price of goods while an uptrend in international rice prices is also anticipated to increase the price of the produce in the country.

There is cause for cautious optimism that it may not be of concern in the country, nonetheless.

According to the Philippine Statistics Authority, the unemployment rate dipped once again in November 2023 lowering the number of Filipinos searching for jobs from 2.09 million in October to 1.83 million. In addition, the World Economic Situation and Prospects released by the UN forecasts a 5.8% economic growth for the Philippines this year compared to 5.4% in 2023. Additionally, the high interest rates offered by the Bangko Sentral ng Pilipinas are expected to remain steady until the second half of the year when policy rates are anticipated to lower.

Furthermore, cybersecurity is expected to get better this year after placing seventh in the ASEAN region in last year’s Internet resiliency index. Not too long ago, President Ferdinand R. “Bongbong” Marcos, Jr. reorganized the National Intelligence Coordinating Agency (NICA) and established the Office of the Deputy Director General (ODDG) for Cyber and Emerging Threats under the agency.

In addition, Mr. Marcos said in November that three bills seeking to boost cybersecurity efforts in the Philippines were on his list of priority measures: the Cybersecurity Act, which seeks to strengthen the Philippines’ cybersecurity resilience and safeguard critical information infrastructure; the Anti-Mule Act, which aims to bar money mules and fraudulent acts online; and the Online Site Blocking Act, which institutionalizes the blocking of websites displaying pirated content to protect the creative industry and consumers.

Besides PwC, the World Economic Forum (WEF) also released “Global Risks Report 2024,” where the organization defines global risk as the possibility of the occurrence of an event that would negatively impact a significant proportion of global GDP, population, or natural resources. The WEF report surveyed nearly 1,500 global risk experts across academia, business, government, the international community, and civil society about their biggest global concerns.

According to the report, two-thirds of respondents selected extreme weather (66%) as the top risk to face in the next twelve months with extreme heatwaves, drought, wildfires, and flooding anticipated all over the world.

Image from Freepik

AI-generated misinformation and disinformation (53%) and societal and/or political polarization (46%) follow in second and third place, respectively. Misinformation and disinformation, both online and in other media, spread quickly and lead to polarized communities as countries are still reeling from the progress lost during the pandemic.

“Artificial intelligence breakthroughs will radically disrupt the risk outlook for organizations with many struggling to react to threats arising from misinformation, disintermediation, and strategic miscalculation,” Carolina Klint, chief commercial officer for Europe at consultancy Marsh McLennan, which co-produced WEF’s report, was quoted as saying in a report by CNBC.

The cost-of-living crisis (42%) remains a major concern as inflation, not only in the Philippines, appears to be out of control. Cyberattacks (39%) are also seen to be a major problem globally with half of the world’s population going to the polls this year.

“An unstable global order characterized by polarizing narratives and insecurity, the worsening impacts of extreme weather and economic uncertainty are causing accelerating risks — including misinformation and disinformation — to propagate,” Saadia Zahidi, World Economic Forum’s managing director, said in the report.

On a wider period, misinformation and disinformation, extreme weather events, societal polarization, cyber insecurity, and interstate armed conflict are the five most cited risks for the next two years. Rounding out the top 10 are lack of economic opportunity, inflation, involuntary migration, economic downturn, and pollution.

The most cited risks for the next decade, on the other hand, are extreme weather events, critical change to earth systems, biodiversity loss and ecosystem collapse, national resource shortages, misinformation and disinformation, adverse outcomes of AI technologies, involuntary migration, cyber insecurity, social polarization, and pollution.

“These results point to a global risk landscape where economic, geopolitical, and societal vulnerabilities will continue to build. Worrying developments emerging today have the potential to become chronic global risks over the next decade,” the WEF report read.

“A multiplicity of different futures is conceivable over the next decade. Although this drives uncertainty in the short term, it also allows room for hope,” Ms. Zahidi stressed as she encouraged world leaders to take action to minimize global risks.

“Alongside global risks and the era-defining changes underway lie unique opportunities to rebuild trust, optimism, and resilience in our institutions and societies.” — Jomarc Angelo M. Corpuz

DTI to enable creative startups for industry growth

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By Miguel Hanz L. Antivola, Reporter

CREATIVE INDUSTRIES must foster an enabling startup ecosystem to propel its economic output and boost competitiveness, according to a government body.

The Department of Trade and Industry (DTI) has partnered with startup accelerator Launchgarage to launch programs providing tailored support for creative startups.

“By providing the much-needed support and platform, we are setting the stage for creative startups to not only thrive locally but also make a significant impact on the global stage,” Rafaelita M. Aldaba, DTI undersecretary said in an e-mailed press statement.

“The creative sector is a vital component of our economy and cultural identity, and through initiatives like these, we aim to foster an environment where ideas can flourish, talents are honed, and success stories are born,” she added.

The Philippine creative economy grew by 12.1% to P1.6 trillion in 2022, adding 7.3% to the gross domestic product and employing seven million Filipinos.

The industry includes those engaged in audiovisual and digital interactive media, creative services, design, publishing and printed media, performing arts, visual arts, traditional cultural expressions, and cultural sites.

The Incubation, Development, and Entrepreneurial Assistance for Creatives program is set to onboard 10 early-stage creative startups for enhanced capacity and market-readiness.

Program offerings include educational workshops, mentorship pairings, and a showcase event for ecosystem figures like angel investors and venture capitalists.

Meanwhile, the Accelerating Development, Valuation, and Corporate Entrepreneurship for Creatives program will hone five startups for intensive training and acceleration.

The chosen five will be pooled from an initial 10-15 startups after a preliminary screening based on “organizational capacity, business maturity, and readiness level,” according to the DTI.

“[This is the] endeavor to transform innovative ideas into successful enterprises… part of a movement that celebrates and elevates Filipino talent and ingenuinty,” Ms. Aldaba said.

The Internet Transactions Act and Philippine e-commerce

NATALIYA VAITKEVICH - PEXELS

THE Philippine e-commerce market is experiencing continuous growth. E-commerce sales are expected to grow at a compound annual growth rate of 9%.* Against this backdrop, Republic Act No. 11967, or the Internet Transactions Act of 2023 (ITA) was signed into law on Dec. 5, 2023.

The ITA aims to promote and regulate the e-commerce market in the country, to protect consumer rights and data privacy, encourage innovation, promote competition, secure internet transactions, uphold intellectual property rights, ensure product standards and safety compliance, and observe environmental sustainability.

The ITA applies to all business-to-business and business-to-consumer internet transactions which are within the mandate of the Department of Trade and Industry (DTI), where one of the parties is situated in the Philippines, or where the digital platform, e-retailer, or online merchant is availing of and has minimum contacts to the Philippine market.

Online consumers, e-marketplaces, and other digital platforms are obliged under the ITA to exercise ordinary diligence in all internet transactions.

E-marketplaces and digital platforms must ensure that the internet transactions on their platforms, including promotional offers, are clearly identifiable. They must maintain a list of all online merchants with their relevant information. They are also required to protect the data privacy of consumers. E-marketplaces and digital platforms are directed to provide an effective and responsive redress mechanism for both online consumers and online merchants.

E-retailers and online merchants must indicate the price of goods and services offered consistent with the Consumer Act, ensure that the goods received by online consumers are in the same condition, type, quantity, and quality as described and shown by them in their online listing and are fit for the particular purpose required, and ensure proper and complete delivery of goods or services to online consumers.

The ITA grants regulatory jurisdiction to the DTI as to the use of the internet for conducting e-commerce by e-marketplaces, online merchants, e-retailers, digital platforms, and third-party platforms, ancillary to any duly constituted regulatory jurisdiction granted to an agency by existing laws.

The DTI Secretary is given the power to issue summons, subpoenas, and compliance orders to require conformity with the ITA. He may issue an ex parte takedown order to remove a listing/offer of a product upon investigation and verification that the same is in violation of the law, as well as establish a list of blacklisted internet platforms that fail to comply with a compliance order or are subject of a takedown order pursuant to the ITA.

The DTI is mandated to establish the E-Commerce Bureau within six months from the effectivity of the ITA, which shall be tasked to formulate policies, plans, and programs for the development of e-commerce in the Philippines, monitor compliance with the ITA, as well as to investigate any complaints on internet transactions and violations of the ITA. The E-Commerce Bureau is also mandated to establish an online business database of digital platforms, e-marketplaces, e-retailers, and online merchants engaged in e-commerce in the Philippines within one year from the effectivity of the ITA.

An online dispute resolution (ODR) platform shall also be developed by the DTI within six months from the effectivity of the ITA, to facilitate an alternative mode of dispute resolution for online consumers, online merchants, e-retailers, e-marketplaces and other digital platforms.

The ITA allows for extraterritorial application with regard to persons engaging in e-commerce who avail of the Philippine market, notwithstanding their lack of legal presence in the country. Under the ITA, an aggrieved party must avail of the internal redress mechanism of the digital platform, e-marketplace, or e-retailer prior to the filing of a complaint before any court or government agency, or resorting to alternative dispute resolution. Such mechanism is deemed exhausted if the complaint remains unresolved after seven calendar days from filing thereof.

E-retailers or online merchants are primarily liable for indemnifying the online consumer in civil actions or administrative complaints arising from internet transactions.

In contrast, e-marketplaces and other digital platforms are subsidiarily liable to the online consumer, to the extent of damages suffered by the online consumer as a direct result of the transaction, if it failed to: 1.) exercise ordinary diligence, resulting in loss or damage to the online consumer; 2.) act expeditiously, after notice, in removing or disabling access to goods or services that either infringe on another’s intellectual property rights or is subject to a takedown order by any appropriate government agency; or, 3.) provide its contact details despite notice, for those with no legal presence in the Philippines.

However, e-marketplaces or other digital platforms are solidarily liable if they fail, after notice, to act expeditiously to remove or disable access to goods or services appearing on its platform that are prohibited by law, imminently injurious, unsafe or dangerous.

The ITA empowers the DTI to impose administrative fines of up to P1 million as a penalty against online merchants, e-retailers, e-marketplaces, and other digital platforms, without prejudice to the civil or criminal liability of the offending party, and in addition to the penalty of takedown, by permanently removing any listing or offer on any internet platform.

As the establishment of the E-Commerce Bureau, ODR procedure, and the issuance of the implementing rules and regulations of the ITA are still pending, the impact of the ITA on e-commerce in the Philippines has yet to be seen. It is hoped that the ITA will further improve e-commerce in the Philippines and strengthen consumer confidence in online transactions.

* “E-commerce sales in PH may reach $24 billion by 2025: USDA,” Aug. 29, 2023, https://news.abs-cbn.com/business/08/29/23/e-commerce-sales-in-ph-seen-at-24-b-by-2025-usda.

The views and opinions expressed in this article are those of the author. This article is for general information and educational purposes, and not offered as, and does not constitute, legal advice or legal opinion.

 

Samantha Isabel A. Mendiola is an associate of the Corporate
and Special Projects Department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW)
samendiola@accralaw.com
(02) 8830-8000

How PSEi member stocks performed — January 30, 2024

Here’s a quick glance at how PSEi stocks fared on Tuesday, January 30, 2024.

Vietnam well-positioned as top PHL import source, EV investor

By Justine Irish D. Tabile, Reporter

THE PHILIPPINES could tap Vietnam as a major alternate source of low-cost imports as well as investment in its electric vehicle (EV) industry, with advantages conferred by the two countries’ proximity and membership in a regional free trade agreement, analysts said.

Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said that Vietnam can step in when the Philippines “diversifies away from traditional import sources such as China.”

He said that due to the ASEAN-China free trade agreement, most import tariffs were reduced to zero since 2010, except rice at 35% (with the Rice Tariffication Law) and sugar at 5%.

However, he said Vietnam is also a member of the Regional Comprehensive Economic Partnership, which promises even more advantages in terms of trade facilitation.

“The biggest opportunity for cooperation is still on the continued supply of rice imports from Vietnam,” Mr. Ricafort said in a Viber message, ahead of a state visit by President Ferdinand R. Marcos, Jr. to Vietnam, where he is due to sign a major rice supply deal.

“And given the proximity of Vietnam to the Philippines, that would also help in reducing transport and overall import costs,” he added.

He said the Philippines could also be a potential market for Vietnamese products due to low labor and production costs.

Aside from trade opportunities, Mr. Ricafort said the Philippines could seek investments from Vietnam, especially in the electric vehicle industry.

“One emerging big opportunity is importing or investment in electric vehicles from Vietnam, particularly VinFast, which is becoming a major global EV producer,” he said.
Trade Secretary Alfredo E. Pascual met with Vietnam’s Vingroup Co., the parent company of VinFast, on Monday at the sidelines of the state visit.

According to the Department of Trade and Industry, VinFast is planning to sell and launch its EV products with the launch of dealerships by April.

“The Philippines welcomes investments in the EV sector as we position the country as a hub for smart and sustainability-driven manufacturing and services industries in Southeast Asia. Hence, we encourage you to explore other investment opportunities besides EV sales and dealerships,” Mr. Pascual said.

Aside from encouraging EV investment, Mr. Pascual also invited Vietnam to look into the Philippines’ tourism and healthcare industries.

China Banking Corp. Chief Economist Domini S. Velasquez said Vietnam has been an important Philippine partner as a source of rice, giving it a key role in our food security.

“We now import the majority of rice from Vietnam. A relationship that assures consistent, affordable, and readily available rice supply to the Philippines would benefit Filipinos,” Ms. Velasquez said.

She added that the Philippines could also take advantage of the partnership by studying Hanoi’s practices in successfully attracting foreign direct investment (FDI).

“The Philippines can take inspiration from Vietnam in implementing various initiatives to attract FDI,” she said.

“Vietnam has been successful in attracting FDI, and the Philippines can learn from their strategies and best practices to enhance its own investment climate,” she added.

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