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Cebu Pacific targets to resume China route by October

CEBUPACIFICAIR

BUDGET CARRIER Cebu Pacific is planning to defer the resumption of its Manila-Beijing flights to October as the company weighs the current market demand, its president said.

“It looks like it’s going to be [October] 2024 and again, it is because China’s been so soft. Until we see a rebound in terms of our forward bookings, I think we have to take a deliberate approach on China,” Alexander G. Lao, Cebu Pacific president and chief commercial officer, told reporters in a media gathering last week.

Cebu Pacific’s Manila-Beijing route was initially set to resume in 2023 but was then deferred to early 2024.

The budget carrier is working to increase its international source market by intensifying its frequencies in other existing networks, Mr. Lao said. 

“International though our tourism numbers are still far behind and one of the key reasons is China, I think it was our second largest source market and today it’s not even within out top five or six,” he said, adding that the potential contributions of China’s market was not as large as its share pre-pandemic level.

Last year, Cebu Pacific launched its Manila-Da Nang flight, which operates three times a week. 

“I think Da Nang is probably the most recent route we’ve opened. We’re looking at maybe one to two routes to come back. Our strategy is to try to bring back our international capacity to pre-COVID level which we should see this year,” he said.

The company is planning to bring its wide-body aircraft to routes where there is a strong demand, he added.

“Whether it is Japan, Thailand, or Hong Kong. So not a lot of new routes this year, but we will try to open routes selectively, whether through more frequencies or higher capacity,” he said.

The company is expecting to complete its aircraft purchase by the first half of the year, allowing it to increase its network capacity. — Ashley Erika O. Jose

Indonesia’s Valentine’s Day vote

PRANANTA HAROUN-UNSPLASH

On Feb. 14, Indonesians will vote in parliamentary and presidential elections in what is likely to be the country’s most consequential elections since the fall of Suharto in 1998. Indonesia is Southeast Asia’s largest country by population, area and economic output. It is among the top global exporters of thermal coal, processed nickel, copper, bauxite, and palm oil, among others. Indonesia supplies almost all of the coal for Philippine power plants, while its mineral export policies affect our own nickel and copper sectors. Indonesia is also one of the largest consumers of rice, and occasionally imports from Vietnam and Thailand in competition with the Philippines.

Indonesia is also a regional political leader. The Bandung conference held in West Java in 1955 eventually became the basis for the Non-Aligned Movement that was formed in the early years of the Cold War, and which became the single largest grouping of countries outside the nuclear superpowers. Until today Jakarta continues to have a strong voice across many regional foreign policy issues, from ASEAN cooperation to the region’s stand on the many crises in the Middle East to the return of democracy in Myanmar.

Politically and socially, if the Philippines wanted to find a country today that faces many of the same challenges and seemingly unfulfilled potential, none in Asia comes closer than Indonesia, as it faces many of the same challenges. Its institutions are weak, and corruption is a pervasive problem that has discouraged foreign investors and destroyed economic value, with the most visible effect being Indonesia’s decline as an oil and gas exporter. Patronage politics is rife. Deforestation, land rights disputes, and plastic waste in the rivers are common environmental and social problems. The moniker “land of broken investor promises” could be applied as much to the Philippines as to Indonesia.

The country is also attempting to move a large part of its population out of agriculture into the manufacturing and service industries, with a particular emphasis now on manufacturing for renewable energy, batteries, and autos. And like us, many of its citizens work abroad as ours do — on cargo and cruise ships, as caregivers in Singapore and Hong Kong, and in the service sectors in the Middle East. Like us, its overseas workers give hope to their families, and it is similarly concerned with how to protect its own OFWs from maltreatment, abuse, and war. And Indonesia’s creation of its own sovereign wealth fund, the Indonesia Investment Authority, was one of the models for the Maharlika Investment Fund.

Therefore, what happens to Indonesia as a country not only affects the Philippines through trade and commerce but makes for an interesting mirror for our country and could provide additional context for what we are trying to do to lift our country to the next stage of development. Its industrialization mistakes today could serve as lessons for us.

The vote next week is therefore more than a passing interest. What makes it especially consequential is that the leading candidate is a retired general with a checkered human rights history, who occasionally voices his impatience for democratic politics and has, through three election campaigns, railed against foreign investor participation in the economy.

THE PERSONALITIES INVOLVED
Indonesian presidents are limited to two terms, which makes President Joko Widodo ineligible to run again, having won in 2014 and 2019. Should none of the three candidates win a majority next week, a runoff between the top two vote-getters will be held in June.

Leading the race is the country’s defense minister, Prabowo Subianto, a retired general who spent most of his career in Indonesia’s special forces command, Kopassus, during the Suharto era. Prabowo is estimated to have around 46%-48% voter support, which puts him within range of winning it all next week. Trailing him are the former governor of Jakarta, Anies Baswedan (with roughly 26%-27%), who is running as an independent, and the former governor of Central Java province, Ganjar Pranowo (with 20%-21%), who belongs to the Indonesian Democratic Struggle Party (PDI-P) of Widodo. Should Prabowo fall short of a majority, he is still the strong favorite to defeat either of the two in June.

Curiously, Widodo supports Prabowo, not Ganjar of his own PDI-P party. Until early this year, Widodo had backed Ganjar, strongly lobbying PDI-P leader and former president Megawati Sukarnoputri to select him as the party nominee. Megawati preferred that her daughter, Puan Maharani, be PDI-P’s presidential candidate. But Puan was not popular and Widodo eventually prevailed.

However, while Widodo was lobbying Megawati to choose Ganjar, his inner circle was apparently also considering that their political future might be better served by siding with Prabowo. Ganjar was a PDI-P loyalist after all, assuring that Megawati would have a strong, if not dominant, voice in a Ganjar administration. Meanwhile, Prabowo was also open to an alliance with the popular Widodo, due to the electoral boost that it would give. Eventually, Gibran Rakabuming Raka, Widodo’s son and Solo city mayor, became Prabowo’s vice-presidential running mate. Widodo has not openly endorsed Prabowo yet, but his support for the defense minister is the worst-kept secret in all of Indonesia.

WHY THIS VOTE MATTERS
Foreign investors are hoping that Widodo’s influence in what is likely to be a Prabowo government and the fragmented nature of Indonesia’s politics make it unlikely that there will be a major shift in policy, and that continuity will largely prevail, from the shift of the capital to Nusantara to the development of domestic manufacturing sectors. What gives them hope is that Prabowo has proven to be a team player in the Widodo cabinet and a largely uncontroversial defense minister since 2019.

But Prabowo has another side. He admitted to having played a role as head of the strategic forces (Kostrad) in the abduction and torture of pro-democracy activists during the last days of the Suharto regime, with at least a dozen of those taken still missing. He has also been accused of leading violent crackdowns in what was then East Timor while he was in the special forces. But Prabowo puts this as being in the context of him as a soldier in the autocratic Suharto regime.

It is Prabowo’s combination with Widodo that makes some local political analysts uncomfortable, because Widodo has shown a willingness to also disregard democratic guardrails, as could be seen indirectly in his lieutenants’ efforts over the past year to take over the Democrat Party, a half-hearted attempt to postpone the elections or to let his son Gibran run as VP despite the fact that the Constitutional Court decision that lowered the age for vice-presidential candidates (and which directly benefited Gibran) was decided while Widodo’s brother-in-law was chief justice. An ethics panel later removed him from the chief justice post. Widodo oversaw the passage of a law in 2019 that weakened the Anti-Corruption Commission.

As presidential candidate in 2014, 2019, and 2024, Prabowo has railed against foreign investor participation in the economy; he believes that foreigners have extracted much of the wealth in the economy, with benefits only trickling down to the citizens. He described Indonesians partnering with foreign investors as “lackeys” and “puppets,” while ordinary Indonesians become employees who only get “small salaries.” Recently, he said that “a neoliberal economy cares only about profit and… we cannot be like that.”

Regardless of Prabowo’s framing, if his administration adopts more nationalist policies and is successful in advancing Indonesian industry forward in the short-term, then this could add to the clamor in other countries such as the Philippines to adopt industrial policy and for the government to intervene more in the economy and to have national champions.

But it could also lead to a turn away from broader party-based politics and the democratic institutions such as the anti-corruption agency KPK that had been seemingly strengthened after the fall of Suharto — a backsliding that warns that democracy’s move forward should never be taken for granted.

Widodo has gained international recognition for how far forward he has brought Indonesia’s economy, including the development of Morowali for its nickel industry and the construction of Southeast Asia’s first high-speed rail service. But the country and its people deserve a deeper look because its political and economic evolution could also serve as both cautionary tale and model for the Philippines.

 

Bob Herrera-Lim is a managing director at Teneo, a New York-based consulting firm that advises companies and investors globally. He covers all of Southeast Asia for the firm’s clients. He is also a fellow of the Foundation for Economic Freedom.

Lexus cornered 42% of premium auto market in ’23

The Lexus LBX on display at the recent Singapore Motor Show — PHOTO BY KAP MACEDA AGUILA

Toyota’s luxury brand is now a leader as well

AT THE RECENT media thanksgiving party of Toyota Motor Philippines (TMP), Chairman Alfred Ty looked back at 2023 as a “remarkable year,” and outlined some of the many highlights for the company.

“On the occasion of our 35th anniversary, we were fortunate to have President Ferdinand Romualdez Marcos, Jr. visit our Sta. Rosa factory. (Toyota Motor Corp. Chairman) Akio Toyoda and I hosted him during his visit, and we were very encouraged by his high level of interest in our operations. In fact, PBBM mentioned that he felt like he was visiting an automotive factory in Japan given the level of quality he observed,” shared Mr. Ty.

Speaking of Mr. Toyoda, he also attended TMP’s first-ever GR Festival last August and got behind the wheel of a WRC-spec Toyota GR Yaris — assuming his motoring nom de guerre Morizo to showcase his drifting skills in front of a Quirino Grandstand crowd. That was certainly a particularly unforgettable moment for me personally, as I was among only a handful of individuals who rode shotgun as the smiling executive pushed the vehicle to do donuts and more.

“To this day, Morizo is all smiles when he recalls his visit to Manila last year,” Mr. Ty continued.

Arguably the centerpiece of TMP’s embarrassment of riches is the company’s 22nd consecutive “triple crown.” It again led auto companies in passenger car, commercial vehicle, and total sales. “I am also very happy that we set a new all-time sales record in 2023, with sales shattering the 200,000-unit barrier,” he told the attendees. The exact figure, 200,031, represents 46.54% of total vehicle sales, per the reckoning of the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) and Truck Manufacturers Association (TMA).

If the triple crown has perennially been a foregone conclusion owing to the utter domination in sales numbers, TMP added a welcome feather on its cap through Toyota’s luxury brand. You could even say it’s a now a quadruple crown as Lexus annexes the luxury auto market sales title with a sum of 1,843 units — good for 41.92% of the total.

“What this tells me is that the Filipinos are on their way to a higher quality of life and standard of living, in line with the government’s goal of making the Philippines an upper middle-income society,” stated Mr. Ty.

The executive additionally noted that, “carbon neutrality is gaining ground with sales of our hybrids and Lexus RZ BEV increasing their representation in our lineup to 3.6% from 1.2% in 2022.”

As vehicle production across the industry has largely returned to its pre-pandemic state, Lexus Philippines can surely gird for more growth this year. As the table above suggests, there is healthy demand (and, surely, supply) anew for its popular MPV model, the LM — outpaced only by the RX (also in all-new guise).

On the horizon, too, is the opening of a new, bigger Lexus facility at the Bonifacio Global City, this one near Mitsukoshi and a breath away from its original location. That one, we’ve heard, will revert back to Federal Land control.

But surely, all eyes must be on the LBX crossover, slated to debut locally in the first quarter, according to Lexus Philippines. Even smaller than the UX, the LBX will effectively become the new entry point into the Lexus stable. This, of course, will make the brand even more accessible to more people seeking admittance into the luxury segment.

Treasury bill, bond rates may climb as Fed remains hawkish

BW FILE PHOTO

RATES of Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week could rise amid hawkish signals from the US Federal Reserve.

The Bureau of the Treasury (BTr) will auction off P15 billion in T-bills on Monday, or P5 billion each in 91-, 182-, and 364-day papers.

On Tuesday, it will offer P30 billion in reissued five-year T-bonds with a remaining life of four years and 11 months.

T-bill and T-bond rates could track the increase in secondary market yields last week after Fed Chair Jerome H. Powell signaled that the US central bank is unlikely to cut borrowing costs at their March meeting, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

At the secondary market on Friday, rates of the 91-, 182-, and 364-day T-bills went up by 2.02 basis points (bps), 6.18 bps, and 0.32 bp week on week to end at 5.4422%, 5.8126%, and 6.044% respectively, based on PHP Bloomberg Valuation Service Reference Rates data published on the Philippine Dealing System’s website.

The yield on the five-year bond likewise rose by 1.01 bps to end at 6.0864%.

The Federal Open Market Committee last week held its target rate steady at the 5.25-5.5% range for a fourth straight meeting.

It raised borrowing costs by a total of 525 bps from March 2022 to July 2023.

Mr. Powell, speaking after the end of a two-day policy meeting, declined to declare victory in the US central bank’s two-year inflation fight, vouch that it had achieved a sought-after “soft landing” for the economy or promise that rate cuts would come as soon as the Fed’s March 19-20 meeting, as investors had hoped in the run-up to last week’s policy decision, Reuters reported.

Mr. Powell said rate cuts would come once the Fed becomes more secure that inflation will continue to decline from a level it still characterizes as “elevated,” at least on a one-year basis, with the personal consumption expenditures price index, a key measure used by policy makers, at 2.6% on an annual basis as of December.

Market expectations of a near-term rate cut dimmed, with futures tied to the Fed’s main policy rate reflecting a 70% chance of the central bank lowering borrowing costs at its May 1 meeting, from over 90% on Thursday, according to the CME FedWatch Tool. The probability of a March cut stood at about 20%, from just under 50% a week ago.

Last week, the BTr raised P15 billion as planned from its offering of T-bills as total bids reached P38.137 billion, or more than twice the amount on the auction block.

Broken down, the Treasury made a full P5-billion award of the 91-day papers as tenders for the tenor reached P11.46 billion. The average rate of the three-month T-bill rose by 9.2 bps from the previous week to end at 5.398%. Accepted rates ranged from 5.300% to 5.424%.

The government also raised P5 billion as planned from the 182-day securities as bids stood at P12.37 billion. The average rate for the six-month T-bill was at 5.81%, up by 4.4 bps week on week, with accepted rates at 5.795% to 5.843%.

Lastly, the BTr borrowed the programmed P5 billion via the 364-day debt paper as demand for the tenor totaled P14.307 billion. The average rate of the one-year T-bill went up by 3.9 bps to 6.076%. Accepted yields were from 6.02% to 6.10%.

Meanwhile, the reissued T-bonds to be offered on Tuesday were first offered on Jan. 9, where the government raised P30 billion as planned, with the papers fetching a coupon rate of 6.125% and an average rate of 6.073%.

The BTr plans to raise P210 billion from the domestic market this month, or P60 billion in T-bills and P150 billion through T-bonds.

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

World’s biggest jeweler Pandora stops using mined silver and gold

PANDORA.LUCERNELUXE.COM

LONDON — Pandora, the world’s largest jeweler by amount of products sold, has stopped using mined silver and gold and now only manufactures with recycled precious metals, which require less energy to produce.

The Danish company, known for its $65 to $95 charm bracelets, buys around 340 tons of silver and one ton of gold every year. Its supply chain generated 264,224 tons of CO2 in 2022, according to its annual report.

Using recycled, instead of newly mined, metals cuts Pandora’s indirect CO2 emissions by around 58,000 tons annually, said Mads Twomey-Madsen, its senior vice-president of communications and sustainability.

Recycled metal supply chains pose risks, as stolen gold can be sold as scrap to be recycled, and it is difficult to prove the origin of metals once melted down.

To mitigate the risks, Pandora uses a chain of custody standard developed by the Responsible Jewelery Council (RJC). That standard, for example, excludes gold coins and gold bars as a source of recycled gold.

Pandora, which said it reached 100% recycled silver and gold in December, is investing around $10 million a year into the switch, a cost it will absorb rather than pass on to consumers through price hikes, Mr. Twomey-Madsen said.

“We pay a premium for recycled, because we also need to help our suppliers make these transitions,” he said. Pandora declined to provide specifics on the premium.

Pandora requires its suppliers to be assessed against the RJC standard by independent auditors, including documenting the source of recycled silver. As part of the transition, Pandora suppliers had to segregate certified recycled metals from non-certified, Mr. Twomey-Madsen said.

Pandora, which sold 103 million pieces of jewelery in 2022, produces jewelery in two factories in Thailand and is building a third in Vietnam. Rivals like Monica Vinader and Missoma also advertise their use of 100% recycled silver and gold.

Metal refineries recycle silver from industrial catalysts, X-rays, electronic equipment, and old silverware. They obtain recycled gold from jewelery manufacturing waste and old jewelery. — Reuters

CTA reverses denial of wind farm’s refund claim

CTA.JUDICIARY.GOV.PH

THE Court of Tax Appeals (CTA) has overturned its denial of EDC Burgos Wind Power Corp.’s refund claim for its excess P34 million value-added tax (VAT) traced to zero-rated sales from Jan. 1 to June 30, 2014.

In an 11-page decision dated Jan. 31, the CTA full court said that the wind farm is not required to present a Certificate of Compliance (CoC) from the Energy Regulatory Commission to prove that its sales qualified for a 0% VAT.

“Given the foregoing, there is a need to ascertain whether the petitioner’s (EDC Burgos) claimed VAT zero-rated sales comply with the invoicing and substantiation requirements under Section 113 of the National Internal Revenue Code of 1997,” Associate Justice Lanee S. Cui-David said in the ruling.

The tax court remanded the case to the CTA Third Division to determine the amount entitled to EDC Burgos.

It noted that as a renewable energy (RE) developer, the firm only had to present its Department of Energy and Board of Investments registration certificates.

In a June 2 decision last year, the tribunal denied the refund claim citing the firm’s failure to present a CoC required under the Electric Power Industry Reform Act of 2001 (EPIRA).

Under EPIRA, RE developers must secure a CoC from the ERC before their operations start to categorize their sales as 0% VAT, which does not translate to output tax.

The CTA noted that the claim of EDC Burgos was anchored on the Tax Code and not on EPIRA, which does not require it to submit a CoC.

“As ruled by the Supreme Court, where zero-rated VAT incentive invoked is not based on the EPIRA, the taxpayer-claimant cannot be required to comply with the requirements under the EPIRA,” it said. — John Victor D. Ordoñez

Protecting COP10 from tobacco industry interference

SHAUN MEINTJES-UNSPLASH

The 10th meeting of the Conference of the Parties to the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC), or COP10, will take place from Feb. 5 to 10 in Panama City this year.

COP, which holds regular sessions every two years, provides a platform for 182 member countries, including the Philippines, to discuss the implementation of the WHO FCTC, the world’s first modern-day global public health treaty and the first treaty negotiated by the WHO.

However, the tobacco industry seems to be using the forthcoming COP as a battleground for its offensive. Pro-vape groups have not been hiding their desire to participate in the COP, ostensibly in the name of “harm reduction.”

According to a Guardian article from Oct. 12, 2023, a leaked e-mail from Philip Morris International (PMI) senior vice-president for external affairs Grégoire Verdeaux revealed the tobacco industry’s campaign to intervene at COP10 to prevent countries from strictly regulating heated tobacco products (HTPs) and electronic cigarettes.

The leaked e-mail instructed staff to find “any connection, any lead, whether political or technical” to the COP, urging its agents in “every country, regardless of its size” to carry out their campaign. Verdeaux, who did not deny the veracity of his message when asked for a statement, called the COP10 agenda “nothing short of a systematic, methodical, prohibitionist attack on smoke-free products.” He also called the exclusion of tobacco companies from the public health event “absurd,” claiming that PMI was “undoubtedly the most helpful private partner WHO could have in the fight against smoking.”

Meanwhile, in the Philippines, it has come to light that one of the members of the country’s delegation to COP10 is SAGIP Party-list Representative Rodante Marcoleta, one of the primary sponsors of Republic Act 11900, the deregulatory Vape Law which made e-cigarettes and HTPs more accessible to the youth by lowering the age of access from 21 to 18 years old.

Civil society is concerned that the presence of industry-linked COP10 delegates could jeopardize the tobacco control policies of the government. The Philippines, which ratified the WHO FCTC in 2005, has passed monumental policies, including the Graphic Health Warnings Law and several laws increasing tax rates on tobacco, e-cigarettes, and HTPs, cementing our place as a global leader in tobacco control. Given the gravity of the COP10’s forthcoming discussions on regulation of e-cigarettes and HTPs, delegates representing the Philippines should be committed, not only to public health, but to protecting the Philippines from the damage to our international reputation that could arise from further loosening regulation of these products or even becoming a purveyor of these harmful products.

Globally, tobacco industry interference has been worsening. According to the Global Tobacco Industry Interference Index 2023 by the Global Center for Good Governance in Tobacco, the tobacco industry has recovered rapidly post-pandemic and has stepped up its interference by signing more agreements with government offices and engaging in diplomatic missions.

In the Philippine context, since the 2022 elections, there has been a series of events and interactions involving the tobacco industry which call to mind the question: how does the tobacco industry engage national government? Further: is their goal to roll back tobacco taxes?

Just a few months into the Marcos administration, on Nov. 24, 2022, President Ferdinand Marcos, Jr. and the First Lady hosted a luncheon with officials from Philip Morris International in Malacañang, posting their photo on the First Lady’s Facebook page. It is worth noting that the president hails from Ilocos Norte, a tobacco-producing province.

On Aug. 2, 2023, the Department of Trade and Industry (DTI) released a statement encouraging manufacturers to make the Philippines a manufacturing hub for e-cigarettes and HTPs and welcoming PMI’s investment to build a modern HTP factory in Batangas worth P9 billion. The Department of Health (DoH) cautioned against this, noting that the “economic burden resulting from premature sickness and deaths [due to the use of e-cigarettes and HTPs] outweigh the potential economic gains from investing in these industries.”

The industry narrative in recent years has been focused on the argument that illicit tobacco trade will worsen if tobacco taxes are increased. Japan Tobacco International (JTI) has partnered with Economist Impact to legitimize its participation in policy discourse on tobacco taxes, as seen in its Global Anti-Illicit Trade Summit in Shangri-La The Fort in May 2023, which likewise took place in different cities across the world.

JTI has noted: “With higher taxes, however, the government risks losing revenue as legal products become unaffordable, leading to unintended consequences such as a corresponding surge in illegal trade.”

These industry arguments are echoed even in the academe. The University of Asia & the Pacific, with the Federation of Philippine Industries (FPI), published a study entitled “Illicit Cigarette Trade in the Philippines: Economic and Social Impacts of Weak Regulatory Enforcement” in October 2023. The study found that “There is a direct correlation between the imposition of new taxes and the rise of illicit trade,” adding that the government must leave no stone unturned “to provide legitimate industry players with a level playing field and to preserve consumer rights.” However, it must be noted that the tobacco industry, notably JTI, has published FPI’s position on tobacco smuggling on its website, suggesting a possible conflict of interest.

Further, independent studies, both global and local, have long proven that there is no evidence on causality that shows illicit trade being driven by higher tobacco taxes. A 2020 gap analysis study by Lavares, Francisco, Ross, and Doytch, published by the Ateneo School of Government, concluded that: “In spite of the large tax increases by the Philippine government through the Sin Tax Law starting from 2013 until 2018, the illicit share in 2018 remains similar to its 1998 level of 16% of the total market. Hence, our study finds no evidence of a positive relationship between tobacco taxes and the size of the illicit cigarette market in the Philippines.”

The industry has been building up its arguments against tobacco taxes, which again begs the question: Are there possible intentions to roll back these taxes?

The industry’s public message is that their goal is to eliminate illicit tobacco trade to recoup government revenues.

Illicit tobacco trade is indeed a serious threat, both to public health and public finances. However, if the industry’s goal is to prevent government revenue leakages, rolling back tobacco taxes will be a most inefficient and counterintuitive strategy. Sin taxes have proven to be a significant source of revenue for Universal Health Care, promoting public health, and addressing the negative impacts of tobacco use. Tobacco taxes have been associated with a sharp decrease in the number of Filipino adult smokers.

If the tobacco industry is genuine in its campaign against illicit tobacco trade, it should support effective governance measures, rather than opposing revenue-raising policies like tobacco taxes. The Anti Agricultural Smuggling Bill, or Senate Bill 2432, which has been approved in both Houses of Congress and is awaiting a bicameral committee meeting, has garnered public support from the tobacco industry through statements and appearances in hearings. However, upon scrutiny and consideration of its potential impact, the bill, which simply raises penalties on tobacco smugglers, will be insufficient to increase the likelihood of apprehension. A more holistic approach, which includes the integration of a track and trace system for tobacco and stronger coordination with local governments, is needed to reduce illicit tobacco trade in the country.

It is crucial for policymakers, public health advocates, and the Filipino public to remain vigilant against tobacco industry tactics. Through an intricate and sophisticated media campaign promoting “smokeless” products, the tobacco industry is masquerading as an ally for public health. However, the evidence tells us that e-cigarettes and HTPs bring with them the potential of a new epidemic — one that targets the innocent, non-smoking youth.

It is high time we paid closer attention to keeping our youth away from these deceptive products and countering the industry’s narrative of harm reduction. We urge our Filipino leaders at the WHO FCTC COP10 to represent us well and champion public health and evidence-based policymaking by countering the false narratives of the industry.

All views above are their own.

 

Emmanuella Iellamo is an advocate for tobacco control and sin taxes and Pia Rodrigo is strategic communications officer at Action for Economic Reforms.

Two doors up

PHOTO BY DYLAN AFUANG

Suzuki PHL brings in a longer, ingress/egress-friendly Jimny

By Dylan Afuang

A NEW VERSION of Suzuki’s famous off-road SUV recently made its local debut. Called simply the Jimny 5-Door, it’s the lengthened version of the current Jimny 3-Door, both of which will be retailed by Suzuki Philippines, Inc. (SPH).

The current Jimny, launched in 2018, boasts the squared appearance and off-road abilities of its predecessors that date back to 1970. For its distinctive styling and rough-and-ready reverence alone, throughout its four generations the Jimny has attracted a following here and abroad.

The SUV’s widespread appeal grew stronger still when it spawned two extra doors behind its two front ones last year.

The range starts with the Jimny 5-Door GL MT (P1.558 million), continues with the GLX AT (P1.698 million), and tops at the GLX AT Two-Tone whose color-combination options command a P10,000 premium over the standard GLX.

Over the 3-Door — and owing to its two rear passenger doors — the Jimny 5-Door is longer by 340mm for an overall length of 3,985mm. Between the two Jimnys, however, the total width (1,645mm) and height (1,720mm) remain the same.

The Jimny 5-Door retains the 3-Door’s styling cues, too, such as the upright and square body that features expansive windows to improve driver visibility. Similarities continue to the new model’s round headlamps and the chrome highlights on the grille that draw attention to its five-slot layout.

Supported by the existing body-on-frame construction and 15-inch alloy wheels, the new SUV keeps its counterpart’s 210mm of ground clearance.

While the standard model comes from Japan, the Jimny 5-Door is “manufactured in India, particularly by (Suzuki subsidiary) Maruti Suzuki,” SPH Managing Director Norminio C. Mojica confirmed to “Velocity” on the sidelines of the model’s press launch. “We chose India because of (Maruti’s) production capability to address the growing demand for this particular model,” the executive said, adding that Maruti’s production processes would enable the Jimny 5-Door to be “priced competitively” in the market.

Regarding demand, “We are expecting to sell 200 to 300 units per month this year,” Mr. Mojica said, noting that the target is taking into account the five-door model’s allocation for the Philippine market. “Depending on the market’s response, we’ll try to improve our allocation later this year… because, as you know, the Jimny is a ‘global phenomenon.’”

Behind the new doors that now feature power windows, the 5-Door’s rear seats accommodate two passengers, like the base SUV. The cargo hold (which now gets a power outlet and room lamp) has been bumped up in capacity to 211 liters, which can be accessed through the side-swinging tailgate.

Up front, new features such as a nine-inch touchscreen infotainment system with Apple CarPlay and Android Auto, automatic climate control, and cruise control on the Jimny 5-Door GLX, are introduced.

Similar to the original, the Jimny 5-Door is powered by Suzuki’s K15B 1.5-liter gasoline engine with 102hp and 134Nm of torque. The manual transfer case, the Suzuki AllGrip Pro 4WD part-time four-wheel drive system, and transmission choices of a five-speed manual and four-speed automatic are also retained.

Billy Joel releases ‘Turn The Lights Back On,’ first new song in years

BILLYJOEL.COM

LONDON — US singer-songwriter and pianist Billy Joel released “Turn The Lights Back On” on Thursday, his first new single in 17 years.

The ballad is the Grammy Award winner’s first original song since 2007’s “All My Life,” which was followed that same year by “Christmas in Fallujah,” featuring Cass Dillon. Mr. Joel’s 13th and last studio album, Fantasies & Delusions, was released in 2001.

Joel, known for hits like “Piano Man” and “Uptown Girl,” had recently teased new material was coming on his social media pages.

In June, he announced he would end his record-breaking monthly Madison Square Garden residency — which had begun in 2014 — this year.

He will perform shows across the United States as well as in Cardiff, United Kingdom over the coming months. — Reuters

BSP still in talks with banks to waive fees on small transfers

THE BANGKO SENTRAL ng Pilipinas (BSP) is still in talks with banks on the permanent removal of fees for small-value transactions, with lenders saying this would be challenging as fund transfer services entail operational costs.

BSP Deputy Governor Mamerto E. Tangonan said the central bank is still working with the banking industry as the regulator wants transaction fees for transfers below P1,000 waived permanently.

“There are still some concerns, but we’re working on overcoming those concerns,” he told reporters during the annual reception for the banking community late last month.

Banks are worried about their operational costs, he said, which include the expenses incurred for the delivery of services like fund transfers.

“For [a bank] to operate it (fund transfer services) for free, they have to recover some of the costs somewhere else,” Mr. Tangonan said.

BSP Governor Eli M. Remolona, Jr. earlier said the central bank has been employing moral suasion to influence the banking industry to permanently remove charges for small-value person-to-person online transactions.

The BSP has been encouraging banks since February last year to formalize the removal of these fees to help boost digital payments.

Bank of the Philippine Islands (BPI), Metropolitan Bank & Trust Co. (Metrobank), and Union Bank of the Philippines, Inc. (UnionBank) are some of the lenders that have temporarily waived charges for InstaPay transactions below P1,000 since last year.

For BPI customers, InstaPay transfers of up to P1,000 using its app will be not be charged a transaction fee until March 1, while Metrobank has extended its own promo until June 30.

Sought for comment, BPI President and Chief Executive Officer (CEO) Jose Teodoro “TG” K. Limcaoco said banks should be able to charge what they want for transfers, like how they can impose fees on withdrawals from automated teller machines. 

“There’s a cost to making transfers. It’s not free for the banks,” he said, noting that these expenses are related to technology, cybersecurity, and charges from the switch and the provider.

“That’s why within the bank, BPI to BPI, it’s free because there are no costs for us. But when you go outside the bank, there is a direct cost, and it’s unfair to insist that it should be free. You have to leave it up to every bank,” Mr. Limcaoco said.

UnionBank President and CEO Edwin R. Bautista said while it is possible to waive transaction fees for small-value transactions, recovering losses could be difficult.

“If the customer transacts purely digitally, our costs are low, so I think that’s okay,” he said in mixed English and Filipino. “But I think the problem for this is if some of the banks have customers who are half digital, half branch-based as costs could eat into the resources of the bank.”

Banks that process bigger volumes of digital transactions would take a hit, Mr. Bautista said, noting that UnionBank has around nine million transactions monthly that are made through the BSP’s automated clearing house InstaPay.

Removing transaction fees may not necessarily motivate consumers to use digital payments more, Rizal Commercial Banking Corp. President and CEO Eugene S. Acevedo said.

“We’re not sure whether that’s exactly what will motivate people to use it more. We’re experimenting with it, but we’re looking for other ways to see how else we can increase the usage… A customer is not just somebody who does payments. A customer does other things. We have to think of the customer as part of an ecosystem,” he told reporters.

“What we’re challenging ourselves is what else we can do to increase usage beyond that… For example, incentives for usage. Another would be bundling it with other banking products,” Mr. Acevedo said.

Metrobank President and CEO Fabian S. Dee said there was a small increase in online transactions following the fee waiver.

“(Losses) are part of the whole equation. We’ll see how it goes,” he said.

The value of transactions done through InstaPay climbed by 41.8% year on year to P5.02 trillion in 2023 from P3.54 trillion previously, central bank data showed

Meanwhile, the volume of InstaPay transactions went up by 34.6% to 838.56 million from 548.66 million in 2022.

The combined value of transactions done via the InstaPay and PESONet grew by 29.3% to P12.86 trillion in 2023 from the P9.94 trillion seen in 2022. In terms of volume, transactions through these payment gateways climbed by 46.7% to 929.64 million last year from 633.47 million in 2022. — Keisha B. Ta-asan

PSE says VWAP transaction value should be no less than P500,000

REUTERS

THE Philippine Stock Exchange, Inc. (PSE) has announced that the value of a volume-weighted average price (VWAP) transaction should be no less than P500,000.

In a document dated Feb. 1 posted on its website, the local stock market operator said that its VWAP trading rules had already been approved by the Securities and Exchange Commission (SEC). However, the PSE has yet to provide the specific launch date for the new trading product.

“The exchange shall advise the public in due course of the official launch and implementation of the VWAP trading Rules,” the PSE said.

VWAP trading is among the products that will be launched by the PSE this year as part of improving market liquidity and expanding its portfolio. The PSE defines a VWAP transaction as “a pre-arranged transaction executed at the VWAP price of a security.”

VWAP refers to the average price at which a security has been traded during a trading day, allowing investors to observe the trend and value of the security.

In January, the PSE stated that VWAP trading improves market transparency, noting that institutional investors could utilize the tool to execute large orders and avoid artificially inflating the price of a security.

Aside from the value being no less than P500,000, the PSE’s approved rules state that VWAP transactions can only be executed within 15 minutes after the run-off/trading-at-last period.

VWAP transactions can only be executed by a single trading participant, provided that the PSE has the option to subsequently make the VWAP trading facility available for two-firm trading.

“Only authorized salesmen and traders of the trading participants shall be allowed to execute VWAP transactions,” the rules said.

The approved rules also provided that the execution price of VWAP transactions would be computed based on the VWAP for the security in a given trading day, while the VWAP should not exceed four decimal places.

“Except block sales, intentional cross and odd lot transactions, all other trades shall be included in the VWAP computation for the security,” the rules said.

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said the introduction of VWAP trading would help the local bourse become more attractive to large institutional investors.

“This is aimed at making our market more attractive to large institutional investors who would like to buy or sell a sizable amount of stock at its full-day VWAP,” Mr. Colet said in a Viber message.

“The facility allows those market participants to potentially improve the quality of their trade execution as they can transact at a price that is at least not worse than the VWAP,” he added.

Mr. Colet added that the entry of VWAP trading will help boost the local stock market in comparison to other markets.

“VWAP trading is offered in other markets, such as the stock exchanges of Thailand and Malaysia, so this product is another step in improving the value proposition of the PSE,” he said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that VWAP trading would boost market price transparency.

“This would promote greater market price transparency for the investing public, as well as greater price discovery. This is part of further capital market development,” he said. — Revin Mikhael D. Ochave

Fisheries output seen rebounding due to infra, supply chain upgrades

PHILSTAR

By Adrian H. Halili, Reporter

FISHERIES production is expected to rebound this year on the back of enhancements to supporting infrastructure and an initiative to develop agro-industrial estates focused on fisheries products, analysts said.

“This value chain approach is likely to increase production at all levels,” Asis G. Perez, convenor of advocacy group Tugon Kabuhayan, said in a phone call.

The Department of Agriculture (DA) has said that it was planning to invest in more infrastructure to support the agri-fisheries sector.

Agriculture Secretary Francisco P. Tiu Laurel, Jr. also sought to expand the functions of the Philippine Fisheries Development Authority to develop and manage marine-agro-industrial estates.

However, Philippine Association of Fish Producers, Inc. Chairman David B. Villaluz said that the aquaculture subsector will continue to face challenging conditions due to the increasing price of fish feed.

“Hangga’t hindi bumababa ang presyo ng feeds (until fish feed prices fall)…production will be significantly impacted,” Mr. Villaluz said by telephone.

He added that fish producers may reduce their use of feed by 50%, ultimately affecting output levels.

“If we are only using natural food in fish ponds, production may drop to 600 to 750 kilograms per hectare annually. But if we use (commercially produced) fish feed, production would be 2 to 2.5 metric tons per hectare a year,” he added.

In 2023, fisheries production dropped 6.5%, accelerating the 5% decline recorded in the prior year, according to the Philippine Statistics Authority.

Mr. Perez said that the DA’s plan to revive aquaculture in Laguna de Bay will improve output.

Laguna de Bay currently produces about 90,000 metric tons (MT) of freshwater fish annually and provides livelihoods to 13,000 fisherfolk, according to the Laguna Lake Development Authority.

“That can be an increased by over 30,000 MT a year… in bangus (milkfish) and tilapia production. When the previous administration froze Laguna de Bay new fish cultivation operations, we lost about 45,000 MT of production from the lake alone,” he said.

“The new initiative to build up output from Laguna de Bay will have a tremendous impact on production… 5% increase kaagad ’yan (output will immediately rise 5%),” he added.

Mr. Villaluz said the government should focus on fisheries research and developing low-cost feed.

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