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CREC move to go public seen to test IPO market

By Sheldeen Joy Talavera, Reporter

CITICORE Renewable Energy Corp. (CREC), the parent company of listed Citicore Energy REIT Corp. (CREIT), has sought regulatory approval to conduct an initial public offering (IPO) to develop its pipeline of projects.

In a statement on Monday, the company said it had filed a registration statement with the Securities and Exchange (SEC) Commission for its proposed IPO of its common shares.

The company intends to offer up to 2.9 billion shares, at a price of up to P3.88 each from March 4 to 8 next year, and may exercise an over-allotment option of up to 435 million additional shares.

Maximum gross proceeds of P11.25 billion may be raised from the offer, CREC said, assuming a final price offer of P3.88 per share and a final offer of 2.9 billion firm shares.

This excludes proceeds from the exercise of the over-allotment option.

“Net proceeds from the Offer are intended to be utilized for CREC’s and its subsidiaries’ capital expenditures and pipeline development,” the company said.

It said that the offer, final offer price, final number of offer shares, and allocation of the proceeds “will depend on market conditions, the circumstances surrounding the offer, and will be subject to favorably securing the necessary regulatory approvals.”

The company filed a draft of the preliminary offering circular along with the registration statement for the review of the SEC and the Philippine Stock Exchange, Inc.

According to the company’s prospectus, the pricing will be finalized on Feb. 28, 2024.

As of Sept. 30, the company had a total installed capacity of 285.1 megawatts across Luzon, Visayas, and Mindanao.

Sought for comment, Juan Paolo E. Colet, managing director of China Bank Capital Corp., said that CREC’s IPO will test “whether the IPO market is back.”

“It remains a challenging market for large IPOs, but there is a chance for success especially if the final price is attractive and there is a clear dovish pivot in monetary policy,” Mr. Colet said in a Viber message.

April Lynn Lee-Tan, chief equity strategist of COL Financial Group, Inc., said the IPO is favorable for CREC as it belongs to the power sector, which has been an outperformer and resilient this year.

“However, the question is the sustainability of the market’s strong performance the past week. If the market weakens again, demand might not be there,” she said.

Ms. Lee-Tan said that some investors might prefer CREIT since it gives cash dividends.

CREIT, as the country’s first real estate investment trust listing focused on renewable energy, concluded its IPO in February 2022, which raised P6.4 billion.

On its debut, CREIT’s shares closed at P2.84 apiece, higher by 11.37% than its IPO price of P2.55.

In the third quarter, the company’s attributable net income climbed by 29.7% to P396.09 million from P305.32 million in the same quarter last year.

Gross revenues grew by 52.2% to P507.15 million while gross expenses increased by 31.3% to P507.15 million.

DoTr sticks to submission deadline for NAIA upgrade bidders

PHILIPPINE STAR/MIGUEL DE GUZMAN

THE Department of Transportation (DoTr) will not extend the bid submission deadline for the rehabilitation of the Ninoy Aquino International Airport (NAIA), the agency’s head said, citing the urgency to upgrade the country’s main gateway.

“The bid [submission] deadline is initially set on Dec. 27 and we want to stick to that deadline because we want to implement the program as soon as possible,” Transportation Secretary Jaime J. Bautista told reporters on the sidelines of a forum on Monday.

This comes after the Asian Development Bank (ADB), the project’s transaction advisor, has recommended extending the bid submission deadline for the rehabilitation of the NAIA until January next year.

“For now, we are requesting all the bidders to submit their bids [and] proposals by Dec. 27,” Mr. Bautista said.

In November, the ADB said its proposal to extend was meant to give potential bidders more time to prepare and submit their bids, which it said would result in “more competition and a better financial outcome for the Philippine government.”

The bank said the extension would also encourage new players and foreign investments as it warned that only two prospective bidders would be able to submit bids if the deadline is retained.

“There are actually four who requested the extension but I understand that they will still submit the bids by the deadline,” Mr. Bautista said, declining to name the requesting entities.

To date, the number of prospective bidders for the NAIA rehabilitation remained at eight, Mr. Bautista said.

The DoTr previously identified the eight potential bidders as the Turkey-based Limak Group; Incheon International Airport Corp.; San Miguel Holdings Corp.; Manila International Airport Consortium; Cengiz Insaat Sanayi ve Ticaret A.S.; GMR Airports International; Spark 888 Management; and Asia Airport Consortium.

The DoTr is expecting to announce the winning bidder by the first quarter of next year.

NAIA’s rehabilitation aims to decongest the airport by helping improve its annual passenger capacity to 62 million from the current 35 million.

The winning bidder for the airport upgrade is required to pay an upfront amount of about P30 billion and an annual payment of P2 billion, plus a share of revenue, the draft concession agreement said.

According to the NAIA-Public-Private Partnership concession agreement, the contract term for the project is 15 years, extendable by another 10 years. The project will be a rehabilitate-operate-expand-transfer arrangement, as provided for under the Build-Operate-and-Transfer Law. — Ashley Erika O. Jose

Filinvest-ENGIE set to develop 13-MW solar power plants

PHILSTAR FILE PHOTO

FILINVEST-ENGIE Renewable Energy Enterprise, Inc. (FREE) is set to add more than 13 megawatts (MW) to its portfolio with new solar projects in the pipeline.

Among the projects is the 10.09-MW ground-mounted solar facility to be built with partner cement producer Cemex Holdings Philippines, Inc. through its subsidiary APO Cement Corp., the company said in a media release.

The project, which is located in Naga City, Cebu, is projected to prevent 9,000 metric tons (MT) of carbon dioxide (CO2) a year.

FREE is a joint venture company between FDC Utilities, Inc. (FDCUI), the power utility unit of Filinvest Development Corp. (FDC), and ENGIE Services Philippines, a unit of the French utility company ENGIE.

The company has also secured a contract with Dutch semiconductor manufacturer Nexperia to build around a 3 MW rooftop solar system.

FREE has also sealed a partnership with medical company Merasenko Corp. to develop a 0.53-MW-peak rooftop solar system for the latter’s facility at the Cebu Light Industrial Park.

Filinvest Land, Inc. (FLI), the real estate arm of FDC, also has a joint venture with ENGIE called Philippine DCS Development Corp. (PDDC).

PDDC is set to develop a low-carbon centralized cooling system (CCS) for Festival Supermall in Alabang, under a 20-year build, own, operate, and transfer contract.

FLI First Vice-President and Business Retail Head Michael Angelo A. Dumlao said that the CCS has a capacity of 11,400 refrigeration tons of sustainable cooling capacity and could prevent 47,500 MT of CO2.

With the target commissioning by 2025, the project is expected to complement Festival Supermall’s 2.8-MW rooftop solar system.

“With these projects, customers in complex industries like cement and semiconductor manufacturing are taking action to decarbonize, setting an example for others, without compromising on their bottom lines and customer satisfaction,” FDCUI President and Chief Executive Officer Juan Eugenio L. Roxas. — Sheldeen Joy Talavera

Worried about AI? Worry first if your organization is effectively using existing data.

UPKLYAK-FREEPIK

Today’s news, advertising, and daily conversations often discuss AI (artificial intelligence), generative AI, deepfake photos, and videos, and the mad scramble among technology companies jockeying for position with these disruptive developments. Almost every software vendor now proclaims that they embed AI in their offerings. As business leaders, we must remember that “… maturing digital businesses are focused on integrating digital technologies, such as social, mobile, analytics and cloud, in the service of transforming how their businesses work.” (MIT Sloan Management Review, Summer 2015, “Strategy, not Technology, Drives Digital Transformation”)

For all the talk and fascination about AI, an organization’s board of directors and executive management must reflect on whether their organization is making the best commercial use of the data they already have and constantly get. How would an organization begin to use analytics that results in commercial benefits?

Don’t get me wrong: I believe that AI is just beginning to disrupt the nature of work. AI is accelerating information dissemination, quickening judgments, creating new forms of entertainment, and even providing science with new tools for discovery. We may not be aware of it, but we encounter AI daily (for example, to discern interests when you use social media, when you go through immigration, or when you use your credit card). Whether for better or worse, only the future can tell.

That aside, let’s go back to the basics. In their groundbreaking 2007 book Competing on Analytics, authors Thomas Davenport and Jeanne Harris lay down the foundations: “By analytics we mean the extensive use of data, statistical and quantitative analysis, explanatory and predictive models, and fact-based management to drive decisions and actions. The analytics may be input for human decisions or may drive fully automated decisions.” There is continuing tension between the voices and opinions of those higher up in the corporate hierarchy versus the facts on the ground revealed by analytics. And evidence from analytics competitors show that the best decisions come from letting the data speak for itself.

From my experience as a telecom executive whose role included the creation of an enterprise data office, starting an analytics journey that benefits the business, and constantly evolving our capabilities, I can offer some starting point questions.

1. What data do we have? Organizations need to realize they already have massive amounts of data and collect more of it daily: customer information, details of transactions, visits to stores, POS data, customer support information, supply chain data such as POs, invoices, and payments. You would also include internal process documents, regulatory filings, and employee and partner data. They even have phone numbers and addresses of customers, employees, and suppliers. And in this era, you can include people using your website or mobile app, and posting feedback or reviews on social media.

2. Is our data clean and up-to-date, and how do we get, record, and process that data? An organization would set up “data governance,” which relates to the roles, responsibilities and processes for data accuracy, integrity, completeness, security, and compliance with regulations.

3. Have we started with a few projects demonstrating the commercial value of data and analytics? You do not have to wait for clean data and data governance to kick in. You can solicit ideas from various parts of the organization and different roles. All they need to do is to ask, “What if I could have x so that I could do y?” Examples might be, “What if I could segment my customer base to target the top customers with an offer that increases their spend?,” “What if I can understand the reasons for customers leaving so that I can improve retention?,” “What if I can watch payments in near real-time to better prevent fraud with abnormal behavior?,” “What if I can improve my B2B leads generation and closing success rate?,” “What if I can predict how many other customers are unhappy based on current hotline calls?,” “What if potential fraud or cybersecurity events that are humanly impossible to filter can be prioritized for review or immediate action?” Analytics is an excellent tool for examining the revenue and cost sides of an organization and finding answers to such questions will show its business value.

4. What are our next steps after becoming more adept with analytics? Do you now go “big bang” and create an enterprise-wide team armed with various platforms? Or do you move forward based on use cases?

5. Do we have the tools to begin an analytics journey? Don’t just shop for consultants or software platforms. Organizations can start with simple processes: find ways to extract the data and find analytical software to begin answering questions. You can even start with spreadsheet software that already has decent analytics tools. As the organization progresses, you might move to “canned” data management and analytics software, evolving to even more powerful tools that demonstrate the power of analytics. With greater sophistication or scale, you might develop your data architecture to consider batch and real-time data, machine learning, and automated decisions and actions. Advanced organizations use open-source software and cloud-based platforms for speed, scale, flexibility, and cost advantages.

6. Do we have the people with the skills for this analytics journey? You can start with a working team from the technical and commercial units. For the best results, set up a cross-functional team composed of IT, data engineers, analytics experts, and customer-facing or revenue people to begin answering questions. As the journey continues, you may have to complement your people with outside experts and even data scientists, albeit these are highly sought (expensive) skills.

7. Have we decided on the organizational model? Will we have decentralized analytics teams embedded in various groups or departments, or will we have a centralized team serving everyone, or will we adopt a hub-and-spoke model with analytics teams in various areas supported by a center of excellence?

The business value of an organization’s analytical journey arises from its nature as a never-ending and constantly evolving journey. Strategies, capabilities, technology, and customer and transaction data change with time. Making the best use of data is an iterative process, one where we are constantly learning about our customers, supply chain, and internal processes, asking questions about our data, and finding out if there is any commercial value to answering our questions.

Remember, starting small, demonstrating business value early, and progressively advancing your analytics capabilities are essential. Regularly reassess your analytics strategy to align with evolving business objectives and technological advancements.

And what about AI? Being better at analytics in business decisions will result in a better understanding of AI and what it promises (or does not).

 

Gil B. Genio is a retired Ayala and Globe executive. His last role was Globe’s chief technology and information officer from 2015 to 2021, which included the Enterprise Data Office, and Information Security and Data Privacy. He is currently an independent director at publicly listed companies GT Capital Holdings and Puregold Price Club. He is a member of the Management Association of the Philippines and a fellow of the Institute of Corporate Directors.

map@map.org.ph

iamgilgenio@gmail.com

Philippine property to benefit from REIT expansion, diversification

DAVID MILMONT-UNSPLASH

COLLIERS Philippines has been seeing exciting and innovative developments in the Philippine real estate investment trust (REIT) sector.

Property firms are maximizing REIT benefits and we see more property firms utilizing REITs to fuel their expansion within and outside Metro Manila as well as extend their exposure into other property segments.

The Philippine REIT market is primed for further diversification and developers should be on the lookout for other assets that can be divested into their REIT companies. Colliers believes that the further diversification of the Philippine REIT market bodes well for property firms, investors, and the Philippine property market in general.

Moving forward, Colliers sees an aggressive expansion of REIT companies in the Philippines. We even see some firms exploring the feasibility of divesting other asset classes including business parks, data centers, as well as co-working and co-living facilities. We even recommend that firms explore the viability of infrastructure and renewable energy projects.

In our view, further expansion and diversification of the Philippine REIT landscape is likely to benefit the country’s infrastructure development plan. We even see it supporting the Marcos administration’s push to ‘Build, Better, More.’

REIT firms and stakeholders should be mindful of the regulatory environment that they are operating in and should be updated of the proposed amendments to the REIT Law and how new measures and provisions are likely to stall or advance the sector.

Colliers encourages property firms to further test the market to capture opportunities from a constantly evolving and developing Philippine REIT sector. Diversification will be the name of the game.

Colliers encourages the government to be more supportive of developers’ REIT undertaking. The challenge for lawmakers and members of Executive department is to foster an accommodating and inclusive regulatory framework to ensure that  Philippine REITs become among the most competitive in the region. The advancement of Philippine REIT should not be stalled by any regulatory gridlock.

MONITOR REIT LAW AMENDMENTS
The House of Representatives has approved on third and final reading a bill seeking to amend the REIT Law of 2009. The bill’s features include requiring REITs to reinvest their proceeds “within one year from receipt of proceeds realized by the sponsor or promoter.” REITs are also required to submit a reinvestment plan to the Securities and Exchange Commission and Philippine Stock Exchange and secure a certification annually to prove that it is compliant with its reinvestment plan.

Colliers encourages REIT developers to constantly monitor the progress of these proposed amendments. A counterpart bill has yet to be filed in the Senate.

DIVERSIFY PORTFOLIO
Developers with REIT firms have been divesting other asset classes into their REIT vehicles to take advantage of the property market’s rebound. At the height of the pandemic, developers only divested office assets. As the government relaxed COVID-related restrictions and more economic segments reopened, other property sectors such as retail, hotel, and industrial also saw gradual recovery, making them viable asset classes to be utilized for REIT listing.

Non-traditional asset classes such as infrastructure projects (including toll roads), cold and self-storage facilities, data centers, and hospitals can also be infused into the property firms’ REIT vehicles to further attract more investors.

Developers should also explore the viability of other asset classes that generate recurring income such as co-working spaces and co-living facilities. Firms in other Asian countries even infuse business parks into their REITs and the feasibility of this asset class should also be explored moving forward.   

ASSESS OPTIMAL REIT PORTFOLIO MIX
Colliers believes that developers should assess the ideal portfolio mix that will provide the optimal yield for investors. Property firms should consider divesting asset classes that will provide highest dividend to investors based on these asset classes’ performance in the market.

Office and industrial are usually part of developers’ portfolio mixes but property firms should also look at other viable assets in the future, including retail and hotel.

LAUNCH OF RETAIL REITs
Colliers believes that property developers with retail footprint should consider divesting malls into their REIT portfolio especially now that the retail segment is recovering.

Malls generate recurring income and are now a viable REIT asset class as vacancies are declining and lease rates are starting to increase.

In our view, developers should carefully assess which retail outlets to add to their REIT portfolio and should consider projected mall space absorption as well as profiles of retailers willing to take up brick-and-mortar spaces.

Developers should take advantage of renewed interest from foreign retailers as well as continued growth of Philippine economy, mainly driven by personal consumption.

 

Joey Roi Bondoc is the research director at Colliers Philippines. Martin Aguila is a senior research analyst at Colliers Philippines.

JBL releases the ultimate party speaker

AUDIO EQUIPMENT manufacturer JBL has dropped a party essential that provides booming, crystal clear music in time for the holidays.

The JBL PartyBox Ultimate aims to shake up the floor and light up the night with its immersive surround sound, multi-dimensional light shows, splashproof design, and karaoke/private concert-enabling features. Now available in the Philippines, it will cater to a market of music enthusiasts and party lovers who want to elevate all private and public events.

“We have about 70% market share in the party speaker segment. Now, we are bringing you the king of our PartyBox line,” Larry Secreto, Harman Philippines’ country head, said at the launch on Dec. 14 in Grand Hyatt Manila.

He added that the new speaker can tackle up to two basketball courts, which is perfect for Filipinos who love to have very loud sound at very good quality.

“The PartyBox Ultimate really matches the kind of quality that Filipinos are looking for, that punchy and strong bass sound,” he said.

The new model, costing P79,999, boasts Original JBL Pro Sound featuring two drivers, mid-range speakers, dual tweeters, and subwoofers, boosted by a Dolby Atmos surround sound system. This results in a thunderous, 3D-immersive spatial experience.

It also includes starry night effects and cool light trails and strobes, accentuating every beat with a multi-dimensional light show. The visuals can be synced and controlled with the JBL One app.

Party playlists can be streamed in high definition over Wi-Fi or connected via Bluetooth when on the move. Though it is humungous in size, the PartyBox Ultimate is designed for mobility with its easy-to-grip handle, sturdy wheels, and simple and effective cable management setup.

Finally, people can try being a DJ with the speaker’s very own JBL PartyPad. Located on the PartyBox’s top panel, this interactive feature offers DJ-quality sound effects and remixes, co-designed by Australian DJ Tiger Lily.

“We DJs work with lots of different filters and effects on our mixer, like the echo and the roll. It was important to have these on our PartyPad,” said Ms. Lily at the speaker’s launch.

Aside from helping develop the various functions in the feature, her voice was also recorded for users to hear when using it.

“They recorded me saying party slogans so that there would be a DJ sort of in the speaker for everyone to experience at home,” she told reporters.

For more information on the model, visit JBL Philippines’ official website (www.jbl.com.ph) and social media accounts. — Brontë H. Lacsamana

Ortigas Land launches two residential tower projects  for completion in 2-6 years

BW FILE PHOTO

PROPERTY developer Ortigas Land Corp. broke ground for its two residential tower projects — Olin at Jade Drive and Empress at Capitol Commons — which it aims to complete in the next two to six years.

“These milestones signify Ortigas Land’s commitment to building great places for life by offering tranquil spaces within the bustling city with the Empress and delving into a wider market with Olin at Jade Drive,” Ortigas Land Assistant Vice-President and Residential Business Unit Head Jenna J. Belardo said in a statement on Monday.

Empress at Capitol Commons is a 56-storey residential tower that features smart home living to provide seamless and convenient living for its residents, the company said. Construction is expected to be completed and turned over to residents by the fourth quarter of 2026.

“The location and positioning of these residential projects, coupled with upcoming developments and infrastructure, offers considerable prospects for potential residents and investors alike,” Ms. Belardo said.

The company offers its first mid-market residential tower after Ortigas Land broke ground for Olin at Jade Drive in the fourth quarter of this year.

Olin at Jade Drive features modern and ergonomic interiors, Ortigas Land said. The project is projected to be completed by the fourth quarter of 2029.

Both residential towers are located within corporate, commercial and retail development centers, offering additional convenience to customers, the company said.

Established in 1931, Ortigas Land is a property developer with businesses in industrial, commercial and residential centers. — Ashley Erika O. Jose

BSP approves BPI-RBC merger

THE BANGKO SENTRAL ng Pilipinas (BSP) has approved the proposed merger between Bank of the Philippine Islands (BPI) and Robinsons Bank Corp. (RBC), which is expected to take effect next month.

“Please be advised that the Bangko Sentral ng Pilipinas, in its Monetary Board Resolution No. 1633 dated Dec. 14, approved the merger between Bank of the Philippine Islands and Robinsons Bank Corp., with BPI as the surviving bank subject to certain conditions. A copy of BSP’s letter of approval was received by BPI on Dec. 15,” the Ayala-led bank said in a disclosure to the local bourse on Monday.

Following the BSP’s green light, the transaction now only needs to be approved by the Securities and Exchange Commission (SEC) as it was already cleared by the Philippine Competition Commission in September

“The merger is expected to take effect on Jan. 1, 2024, subject to the approval of the SEC,” BPI said.

“Upon the effectivity of the merger, BPI will be able to unlock various synergies across several products and service platforms, expand the customer and deposit base of both banks through the merged entity, and, at the same time, by capitalizing on BPI’s expertise and network, enhance the overall banking experience of RBC customers. BPI will be able to expand its client base, accelerate growth, and ultimately increase shareholder value through partnerships with the Gokongwei Group,” the bank added.

The merger was approved by BPI’s board of directors in September 2022 and by its shareholders in January 2023.

Upon the transaction’s closing, RBC’s shareholders will hold approximately 6% of the resulting outstanding capital stock of BPI, the listed lender previously said.

Under the merger, BPI will also be taking over RBC’s 20% stake in digital lender GoTyme Bank, a joint venture between the Gokongwei Group and Tyme, which is one of the six entities granted an online banking license by the BSP.

BPI previously said it expects its net income to climb by 5-6% and its revenues to rise by around 7% once the merger with RBC takes effect.

The main advantage of RBC that was factored into the projected revenue growth is its customer base’s strong digital adoption, with over 35% of their retail clients enrolled in its online app, it said.

The merger is also expected to improve BPI’s industry ranking in terms of deposits to second place, with the Ayala-led bank seeing growth opportunities from RBC’s lending book, including in the housing, salary, motorcycle and teachers loan segments and its “unique” credit card portfolio.

BPI saw its attributable net income grow by 33.33% year on year in the third quarter to P13.47 billion amid higher revenues.

Its shares climbed by 60 centavos or 0.59% to close at P102.20 apiece on Monday. — AMCS

Warner Bros. is feeling generous this holiday season with Wonka, two other releases

TIMOTHÉE CHALAMET in Wonka —IMDB.COM

AT LEAST one Hollywood film studio thinks it will be a Merry Christmas.

Warner Bros. Discovery, Inc. is releasing three films in theaters in the closing days of 2023, starting with Wonka, a musical about the fictional chocolatier, last Friday.

The picture, starring Timothée Chalamet, is expected to take first place in US and Canadian theaters last weekend, with ticket sales of as much as $45 million, according to Boxoffice Pro. Aquaman and the Lost Kingdom, a DC superhero sequel, follows on Dec. 22, and The Color Purple, a remake of the 1985 picture, opens Christmas Day.

No other studio plans to release as many movies this month. Universal Pictures and Sony Pictures are each putting out one film, respectively, the kids animated picture Migration and the romantic comedy Anyone But You, respectively. Walt Disney Co. and Paramount Pictures have no movies until 2024.

“Warner Bros. commitment to theatrical moviegoing has never been stronger,” Mike De Luca and Pamela Abdy, the co-chairs of the company’s film business, said in a joint statement.

That Warner Bros. and its chief executive officer, David Zaslav, would emerge as saviors for cinemas this holiday season is an unusual plot twist. The company angered filmmakers and theater chains when its previous management decided to release all of its major 2021 pictures online the same day as in cinemas.

Mr. Zaslav, a TV executive who merged his company, Discovery, Inc., with the fabled Warner Bros. film studio last year, has earned a reputation for ruthless cost-cutting, including canceling near-finished pictures such as Batgirl. Still, he’s also been a supporter of releasing films in theaters, including Barbie, which became the highest grossing picture in Warner Bros. history this year.

The COVID-19 pandemic delayed the completion of numerous films. Twin strikes by Hollywood actors and screenwriters also slowed movie debuts, partly because stars weren’t allowed to promote them. The industry has released 86 films through Dec. 10 of this year, down from 105 in the same period of 2019, according to Comscore, Inc.

Box-office revenue, at $8.5 billion, is 18% below prepandemic levels.

Wonka and Aquaman II were both scheduled to come out earlier but had their debuts pushed back. Warner Bros. executives said they can reach a broad range of audiences with the three different films.

That would help cinema chains including AMC Entertainment Holdings, Inc. and Regal owner Cineworld Group, which emerged from bankruptcy in July. Attendance has fallen at US and Canadian theaters — from more than 1.5 billion tickets sold in 2002 to less than half that in 2022, according to data from the Numbers.

Other pictures coming out this month include The Boys in the Boat, a sports drama directed by George Clooney and distributed by Amazon.com, Inc.’s Metro-Goldwyn-Mayer, Ferrari, a biography of the auto-racing legend from STX Films, and The Iron Claw, a wrestling film from A24. Bloomberg

Vladimir Putin is watching, so is Xi Jinping

Responding to Ukraine’s President Volodymyr Zelensky’s urgent request for additional aid to help Ukraine defend itself against Russia’s aggression, US President Joe Biden asked the US Congress for a $61-billion package of military assistance for Ukraine. US administration officials say a vote against aid for Ukraine would make it easier for Russian President Vladimir Putin to win the war.

“Putin is very closely watching what’s happening in Congress and the United States. Whatever the US Congress decides with regard to the Ukraine funding issue will send a critical message to the rest of the world — including would-be aggressors,” a White House official warned the other week. I am sure China’s President Xi Jinping is also watching what the US Congress is doing as it would be an indication of how the US will respond if the Philippines is attacked.

Some pundits say Xi Jinping would not liken Ukraine’s situation to that of the Philippines because he knows that unlike the Philippines, Ukraine has no mutual defense treaty with the US. They cite the assurances of high-ranking US officials. In 2021, after the Philippines filed a diplomatic protest over a new Chinese law that could endanger Filipino fishers, US Secretary of State Antony Blinken reaffirmed the US’ commitment to that treaty. In a 2022 meeting, US Vice-President Kamala Harris assured President Ferdinand Marcos, Jr. that “an armed attack on the Philippines armed forces, public vessels, or aircraft in the South China Sea would invoke US mutual defense commitments.”

The Mutual Defense Treaty (MDT) between the Philippines and the United States, signed on Aug. 30, 1951, dictates that both nations would support each other if either the Philippines or the United States were to be attacked by an external party. Article V defines the meaning of attack, which includes all attacks by a hostile power on a metropolitan area or on the island territories under either party’s jurisdiction in the Pacific or on its armed forces, public vessels, or aircraft in the Pacific.

Article VII of the MDT states that the treaty shall be ratified in accordance with the constitutional processes delineated by the Constitution of the Philippines and the Constitution of the United States. Both constitutions state that all treaties with a foreign country must be ratified by their respective Senates. The MDT was ratified by the Philippine Senate but not by the US Senate.

Not having been ratified by the US Senate, the MDT was reduced to a mere executive agreement on the part of the US. That means the MDT only binds the US president to exert his best efforts to persuade the US Congress to approve support in case the Philippines is attacked. Therefore, support for the defense of the Philippines is not assured as it is contingent on the approval of both chambers of the US Congress.

Many prominent personages including past and present public officials, notably Richard Gordon, former mayor of Olongapo, the city by Subic Bay, rue the pullout of military bases from the Philippines. They curse the senators who rejected the treaty that would have extended the American military presence in the country for at least another 10 years. They say China would not be pursuing its expansion agenda if the US 7th Fleet had remained in Subic Bay.

The defenders of the US military bases here may have been too young, or had not been politicized in the 1950s, to have read or heard the pronouncements of US officials on American military bases overseas. In 1955, then US Undersecretary of State for Political Affairs Robert Murphy said, “American troops are not present in the countries that are our allies as a favor to those countries. It would be absurd for America to pretend that our troops were stationed in allied countries for no other reason than to help them.”

In 1958, US President Dwight D. Eisenhower, who assisted Gen. Douglas MacArthur in the reorganization of the Philippines’ army from 1935 to 1939, declared: “Everything we do in the foreign field has for its basic purpose our own national security, our own national prosperity. We are not doing those things in the foreign field as a matter of altruism and charity.” The US ambassador to the Philippines from 1957 to 1959, Charles Bohlen, practically reiterated his president’s pronouncement when he said, “We in the US Embassy are here to protect American interests. We expect your officials to protect your own interests.”

We can infer from Mr. Bohlen’s statement that the US military bases were also here to protect American interests. And the US military bases in foreign field are there to also project to the whole world America’s military might in order to deter would-be aggressors from launching hostile actions against America.

Going back to the MDT, Article II states that each party either separately or jointly through mutual aid may acquire, develop, and maintain their capacity to resist armed attack. As Mr. Bohlen said 65 years ago, “We expect your officials to protect your own interests.” Sadly, past administrations failed to develop the country’s capacity to resist armed attack. The country depended solely on hand-me-down military equipment from Uncle Sam.

In 1995, President Fidel V. Ramos signed into law the Armed Forces of the Philippines (AFP) Modernization Act. Part of the P263-million proceeds from the sale of a former military camp in Metro Manila (Fort Bonifacio) was to fund the program. The law provided a budget of P50 billion for the first five years of the program. However, the financial crisis of 1997 forced the government to discontinue funding the program. Succeeding administrations neglected to resume the program.

But in 2014, the Philippines and the US executed an Enhanced Defense Cooperation Agreement (EDCA). It was designed to promote the following between the Philippines and the US:

• Interoperability

• Capacity building towards AFP modernization

• Strengthening the AFP for external defense

• Maritime Security

• Maritime Domain Awareness

• Humanitarian Assistance and Disaster Response (HADR)

The agreement allows US forces access to, and use of designated areas and facilities owned and controlled by the AFP at the invitation of the Philippine Government. It contains clear provisions that the US will not establish a permanent military presence or base in the Philippines, and a prohibition of entry to the Philippines of nuclear weapons. The EDCA has an initial term of 10 years, and thereafter will continue in force until terminated by either party after having given a one-year notice of intention to terminate.

In October this year, Congress vowed to amend the modernization and procurement laws of the AFP, according to Department of National Defense Secretary Gilberto C. Teodoro, Jr. For 2024, the defense budget is P233 billion. It includes P144 billion for personnel expenses, P69 billion for maintenance and other operating expenses, and P17 billion for capital outlay.

Capacity building takes years. In the interim, the Marcos administration has to deal delicately with China’s bullying tactics. It can adopt the schemes used in dealing with the school or neighborhood bully. They are:

• Avoid as much as possible any encounter with the bully,

• If encountered, move away,

• If provoked, keep cool,

• If bullied, report the incident to a higher authority,

• Move around the campus or neighborhood with other classmates or neighbors,

• Make very well-known you have a big friend,

• Devise ways to embarrass or frustrate the bully,

• Build strength and develop skills to erase the weakling or pushover image.

In fact, the administration has adopted many of these schemes.

 

Oscar P. Lagman, Jr. has been a keen observer of Philippine politics and national affairs since the 1950s.

McDonald’s Philippines to open more Green & Good stores

MCDONALD’S Philippines is ramping up the opening of new Green & Good stores next year. — COMPANY HANDOUT

By Miguel Hanz L. Antivola, Reporter

MCDONALD’S Philippines said it will open its entire portfolio of 60 new stores next year with Green & Good elements, alongside an additional flagship store, as part of its commitment to environmental responsibility.

The company will have 160 Green & Good stores by yearend, surpassing its goal of 130, Adi T. Hernandez, assistant vice-president for corporate relations and impact at McDonald’s Philippines, told reporters on the sidelines of its seventh flagship launch at Ayala Cresendo, Tarlac last week.

“Green & Good is test and learn,” she said on creating tailor-fit environment-friendly innovations per store. “We get to really experiment around these stores to find which are the best stores to integrate certain solutions.”

Green & Good is a local McDonald’s sustainability initiative which considers green building solutions, utility efficient solutions, packaging and waste disposal, and sustainable active mobility (Bike & Dine areas), depending on store specifications, Ms. Hernandez noted.

Ms. Hernandez said the Green & Good stores are “very much a local platform and framework,” noting that other markets come here to learn from the example of McDonald’s Philippines.

The flagship store construction in Tarlac includes 25% recycled steel building frames, eco-pavers and bricks made from 1-2 kilograms of shredded plastic, and synthetic fiber for reinforcement bars.

John Jo Camacho, business development group manager at McDonald’s, noted how 7-8% of the store’s energy consumption is supplied by its 24 kilowatt-hour (kWh) peak solar panel rooftop, where 3,000 kWh is saved monthly.

The store also reduces electric consumption through its photo and motion sensors, solar lampposts (3,100 kWh/year), LED lights (3,625 kWh/month), a variable refrigerant flow aircon system (9,000 kWh/year), low-power water heater (530 kWh/month), and heat reflective glass panels.

Additionally, it minimizes water consumption through its low-flow urinals (46,000 liters/year) and rainwater harvesting tanks (6,000 liters/year).

Ms. Hernandez said sustainable solutions must be present in all segments of the value chain, from construction to actual operations. “If not, it’s going to be a one-off thing.”

“It’s not only better for the environment, it will also yield returns in the long run,” she added on McDonald’s way of business moving forward in the next year.

While a Green & Good store is about 15% more expensive than a regular store, Mr. Camacho noted the cost can be recovered in six to seven years.

Ms. Hernandez said McDonald’s is eyeing sites in mixed-use developments for its next stores.

“It’s more of the discipline needed to track, study, and learn from the data that we’re able to get from our Green & Good stores,” she noted as a primary challenge in fulfilling the company’s sustainability goals.

“There’s still a lot of opportunity from us to harness and process the data to make better solutions.”

However, she said Green & Good has made it easier for the company to onboard 80 crew members per store. “They understand the cause.”

McDonald’s Philippines is set to close the year with 50 new stores and 740 stores in total, according to Ms. Hernandez.

A Brown amends joint venture with GET Philippines

THE joint venture of listed A Brown Co., Inc. (ABCI) and GET Philippines, Inc. will issue five million shares for a 50:50 shareholding ratio of their total outstanding shares.

In a regulatory filing on Tuesday, A Brown said that its board had approved amendments to its joint venture company with GET Philippines.

“Unless otherwise agreed upon by the Parties, ABCI and GET shall continue to retain an equal shareholding ratio of 50%-50% in JV Co.,” the company said.

“Any dividends generated by JV Co. from available retained earnings after each fiscal year from both transport and advertising operations shall be split equally by ABCI and GET,” it added.

Upon subscription of incorporation of the joint venture company, each entity will subscribe to five million shares for P22.5 million.

Earlier this year, the company forged an agreement with GET Philippines, an operator of zero-emission buses, to form a new company that will own and operate Community Optimized Managed Electric Transport vehicles in Cagayan de Oro.

“The investment will increase the portfolio of the Company and will increase revenue from the return on the investment in the future,” ABCI said.

Last week, the company said that its board greenlit the reduction in the authorized capital stock of P30 million instead of the previously disclosed P100 million.

ABCI is primarily engaged in real estate development. Its subsidiaries are in power generation, manufacturing, and trading of palm oil and other palm products.

On Monday, shares in the company went down by one centavo or 1.45% to end at P0.68 apiece. — Sheldeen Joy Talavera