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More than 400 detained in Russia at events in memory of Navalny, rights group says

A still image taken from video footage shows Russian opposition leader Alexei Navalny in Moscow, Russia February 2, 2021. — PRESS SERVICE OF SIMONOVSKY DISTRICT COURT/HANDOUT VIA REUTERS

ST. PETERSBURG, Russia — More than 400 people have been detained at events across 32 Russian cities since the death of Alexei Navalny, President Vladimir Putin’s most formidable opponent, according to rights group OVD-Info, as Russians continued to gather and lay flowers.

It has been the largest wave of arrests at political events in Russia since Sept. 2022, when more than 1,300 were arrested at demonstrations against a “partial mobilization” of reservists for Mr. Putin’s military campaign in Ukraine.

Mr. Navalny, a 47-year-old former lawyer, fell unconscious and died on Friday after a walk at the “Polar Wolf” Arctic penal colony where he was serving a three-decade sentence, the prison service said.

OVD-Info, which reports on freedom of assembly in Russia, said the largest numbers of arrests occurred in St Petersburg and Moscow, where Mr. Navalny’s support had traditionally been strong. As of 2000 GMT on Saturday, more than 200 people were detained in St. Petersburg.

But there was no mention of the events on Russian state news agencies, which are under full Kremlin control. There were also no stories about the hundreds of people across Russia who have continued to defy authorities to lay flowers at impromptu Navalny memorials.

The death of Mr. Navalny robs the disparate Russian opposition of its most prominent leader as Mr. Putin prepares for the March presidential election — a rubber-stamp vote set to keep the former KGB spy in power until at least 2030.

Footage filmed by Reuters on Saturday in St Petersburg showed dozens gathering by a monument to the victims of repression. Protesters laid flowers and candles, while some sang hymns and others hugged each other, shedding tears.

“I felt very sorry for him and for our country,” said an 83-year-old woman attending the vigil who declined to give her name. “I’m scared.”

A Reuters reporter at the scene said some 30 people were arrested shortly after the singing finished.

OVD-Info also reported individual arrests in smaller cities across Russia, from the border city of Belgorod, where seven were killed in a Ukrainian missile strike on Thursday, to Vorkuta, an Arctic mining outpost once a center of the Stalin-era gulag labor camps.

The online news outlet SOTA reported that in Luhansk, a Ukrainian territory now under Russian control, residents laid flowers in Navalny’s honor at a monument commemorating the victims of the Soviet Union leader Joseph Stalin.

In another city, flowers were laid at a monument to the heroes of the early 20th century Russian Revolution.

“Despite the authorities’ attempts to remove the flowers, they keep appearing,” SOTA reported.

Footage filmed by Reuters in Moscow showed law enforcement bundling people to the ground in the snow, close to a spot where mourners had left flowers and messages in support of the dead opposition leader.

“In each police department there may be more detainees than in the published lists,” OVD-Info said. “We publish only the names of those people about whom we have reliable knowledge and whose names we can publish.”

Reuters could not immediately verify the count. Police declined to comment. — Reuters

Any rate cuts before Fed may hurt peso

BW FILE PHOTO

By Keisha B. Ta-asan, Reporter

THE PHILIPPINE central bank should cut borrowing costs at an off-cycle meeting before April to support consumer spending and investments, an economist said at the weekend, but others said any rate cuts before the US Federal Reserve starts its own easing could hurt the peso.

The Bangko Sentral ng Pilipinas (BSP) should have started cutting interest rates by 25 basis points (bps) last week to ease the effect of tight policy on consumption and investment, Enrico P. Villanueva, a senior economics lecturer at the University of the Philippines Los Baños, said.

“BSP’s mandate is not to quell inflation at all costs,” he said in a text message. “It is to promote price stability that is supportive of sustainable growth and employment. With more favorable data coming in, I hope BSP would start even a small rate cut at its next meeting, or even at an off-cycle meeting.”

After emerging as the most aggressive central bank in the region, the BSP kept the key rate at 6.5% — the highest in nearly 17 years — for a third straight meeting at its first policy review of the year.

The Monetary Board hiked borrowing costs by 450 bps from May 2022 to October 2023 to tame inflation and help support the peso against the dollar.

“I think BSP is being more conservative than its risk-adjusted inflation forecast,” Mr. Villanueva said. “That conservatism comes at a price.”

Last week, the BSP lowered its risk-adjusted inflation forecast for this year to 3.9% from 4.2% but raised its outlook for 2025 to 3.5% from 3.4%.

The central bank also cut its baseline inflation forecast for this year to 3.6% from 3.7% but kept its projection for 2025 at 3.2%.

“The most telling fact is that BSP itself states that its own risk-adjusted inflation forecast is already within target,” Mr. Villanueva said. “Risk-adjusted forecast is the extreme worse scenario compared with the baseline. This is a strong basis to begin rate cuts.”

BSP’s decision to keep rate steady last week reflects worries of inflationary pressures globally, Cid L. Terosa, a senior economist at the University of Asia and the Pacific (UA&P), said in an e-mail.

“Although domestic inflation has toned down in many countries including the Philippines, external pressures such as disruptions in trade routes and geopolitical tensions in Asia, the Middle East and Europe continue to bolster the possibility of inflationary pressures overflowing to many countries,” he said.

Inflation eased to its lowest in three years to 2.8% in January from 3.9% in December and 8.7% a year ago. It was the second straight month that inflation was within BSP’s 2-4% target.

‘PLAY IT SAFE’
The central bank will likely remain cautious before easing rates, Robert Dan J. Roces, chief economist at Security Bank Corp., said in a Viber message. “Base effects, elevated rice prices and potential minimum wage hikes could still threaten the rosy picture.”

Central bank officials earlier said inflation might pick up to more than 4% next quarter due to base effects, before it slows down again in the second half.

Despite the three-year low January inflation figure, rice inflation continued to accelerate to 22.6% from 19.6% in December, the highest since March 2009.

Rice was also the most significant contributor to January inflation, adding 1.3 percentage points. The commodity had the biggest weight in the overall inflation basket at 8.87%.

The House of Representatives is seeking to pass an across-the-board wage increase of as much as P400 for workers in the private sector, higher than the Senate’s P100 proposal.

Mr. Roces said the spike in US inflation in January has pushed market expectations of Fed rate cuts, with the US central bank likely to cut policy rates midyear.

“Locally, tight national savings and a wide current account deficit make pre-Fed cuts risky for the BSP,” he said. “Meanwhile, a robust gross domestic product and rising credit growth give the BSP room to wait.”

US inflation rose by 0.3% month on month in January after increasing by 0.2% in December. Inflation was 3.1% annually, slower than 3.4% in December. Economists polled by Reuters had forecast inflation at 0.2% on the month and 2.9% yearly.

Policy makers from the US Federal Reserve had said they want convincing evidence that inflation is on a sustained downward trend before they consider cutting borrowing costs. The Fed raised its policy rate by 525 bps to 5.25-5.5% from March 2022 to July 2023.

“We expect both the Fed and BSP to ease rates later this year, but BSP will likely play it safe and follow the Fed’s lead,” Mr. Roces said.

Ryota Abe, an economist from Sumitomo Mitsui Banking Corp. (SMBC), said in a note maintaining the 100-bp interest rate differential with the Fed would prevent the peso from depreciating.

“Many market participants now expect the Fed to start cutting rates in the second quarter of 2024,” he said. “If BSP cuts rates by 25 bps every meeting starting at the June 27 meeting, it could cut rates by 100 bps this year.”

The BSP may not cut rates before the fourth quarter, assuming the Fed’s easing cycle starts a quarter earlier, ANZ Research economists Debalika Sarkar and Sanjay Mathur said in a separate note.

“BSP needs to remain patient with its current monetary policy setting amid double-digit consumer credit growth, renewed current account pressures and still-elevated household inflation expectations,” they said. “Our year-end 2024 policy rate forecast of 6% assumes a 50-bp rate cut in the last quarter of 2024.”

The BSP will hold its next policy review on April 4.

Economists see inflation within target until 2026 — BSP survey

A wide variety of fish at the Marikina Public Market. — PHILIPPINE STAR/ WALTER BOLLOZOS

ECONOMISTS expect inflation to stay within the Philippine central bank’s 2-4% target until 2026, but supply shocks and second-round effects continue to pose risks to the outlook, the Bangko Sentral ng Pilipinas (BSP) said last week.

Analysts’ average inflation estimates this month for 2024 and 2026 were 3.9% and 3.4%, unchanged from BSP’s January survey, it said. Their mean inflation estimate for next year rose to 3.5% from 3.4%.

“Analysts expect inflation to remain manageable this year and settle within the target range,” the central bank said in its latest monetary policy report. “However, risks to the inflation outlook continue to be dominated by upside pressures owing to supply-side shocks and second-round effects.”

Inflation slowed to a three-year low of 2.8% in January from 3.9% in December and 8.7% a year ago, the second straight month it fell within the BSP’s target.

The BSP’s baseline inflation forecast for this year is 3.6% and 3.2% for 2025. Full-year inflation may hit 3.9% and 3.5% this year and in 2025 if risks materialize, it said.

Analysts said supply-side pressures would likely come from El Niño and geopolitical tensions, which could spur price increases in basic commodities and services in the Philippines, the central bank said. “A few analysts also cited second-round effects from wage adjustments and higher electricity rates, as well as positive base effects as upside risks.”

Lawmakers are seeking to increase the minimum wage this year. The Senate wants a P100 minimum wage hike, while the House of Representatives said it is studying a proposal to increase wages by as much as P400.

BSP Senior Assistant Governor Iluminada T. Sicat earlier said the central bank’s baseline projections did not take these proposals into account.

In the report, the BSP said the baseline forecast includes the P40 minimum wage hike in the National Capital Region in July last year and 8.7% average wage increase for nonagricultural workers in areas outside Metro Manila.

The central bank also factored in a possible wage increase of P28 in August and P29 in September 2025. These could lead to an annual increase of 4.6% for both years, in line with historical wage increases.

“(If) the assumed increase in minimum wage is beyond what we have incorporated in the baseline… this could pose a threat to the inflation outlook,” Ms. Sicat told reporters last week.

Meanwhile, analysts expect a 68.2% probability from 63.4% last month that inflation will stay within the target this year, while there is a 31% chance that it will breach 2-4%.

The likelihood of inflation falling within the target next year increased to 78% from 65.9%, while the probability of inflation settling within 2-4% in 2026 rose to 82.9% from 64.2%.

“The results of the survey showed that majority of the analysts anticipate the BSP to keep the current policy setting until the second quarter before reducing the policy rate in the second half of this year by a range of 50 to 125 basis points (bps),” the central bank said. “For 2025, the BSP is seen to further loosen its policy stance by a range of 25 to 300 bps.”

The BSP kept the key rate at 6.5% for a third straight meeting at its first policy review of the year, the highest in nearly 17 years. The Monetary Board tightened borrowing costs by 450 bps from May 2022 to October 2023.

There were 24 respondents in the BSP’s survey of private sector economists, which was held from Feb. 6 to 12.

The BSP said it had lowered its risk-adjusted inflation forecast for this year by 0.5 point to 3.9% due to the lower baseline forecast and decreasing risks.

The central bank removed the impact of higher transport fares from a planned jeepney modernization and lowered the probability of jeepney fare hikes. It also sees less impact from high global oil prices.

It also removed the nonextension of lower tariff rates for pork, rice and corn as risk to inflation.

“While the risks to the inflation outlook continue to tilt toward the upside over the policy horizon, inflation risks in 2024 have eased compared with the previous round,” BSP said.

Still, the estimated impact of risks to the inflation outlook outweighs the possible impact of downside risks, it added. — Keisha B. Ta-asan

Higher-than-expected wage hikes may stoke prices, keep rates high

Workers are seen installing steel at a construction site in Santa Cruz, Manila. — PHILIPPINE STAR/EDD GUMBAN

By Luisa Maria Jacinta C. Jocson, Reporter

HIGHER-THAN-EXPECTED minimum wage increases could spur prices to spiral out of control and prompt the central bank to keep rates tighter for longer, according to analysts.

“Although raising the minimum wage might boost household spending via higher real disposable income, such a hike would not be ideal from a price stability view,” Oxford Economics economist Makoto Tsuchiya said in an e-mail.

“Higher wages could potentially raise inflation expectations, which might start a wage-price spiral, requiring the central bank to keep rates higher for longer,” he added.

Lawmakers are seeking across-the-board minimum wage hikes for workers in the private sector.

The Senate last week approved on second reading a bill that seeks an across-the-board wage increase of P100. The House of Representatives said it is studying a proposal to increase wages by P350 to P400.

Bangko Sentral ng Pilipinas (BSP) Senior Assistant Governor Iluminada T. Sicat earlier said the central bank’s baseline inflation projections did not take these into account.

In June, the National Capital Region Tripartite Wages and Productivity Board approved a P40 increase in the daily minimum wage for Metro Manila.

“To the extent the assumed increase in minimum wage is beyond what we have incorporated in the baseline, and if you notice, it’s not part of the risk adjustments we presented, this could pose a threat to the inflation outlook,” Ms. Sicat told a news briefing last week.

BSP’s baseline inflation forecast for this year is 3.6% and 3.2% for next year. Inflation may average 3.9% and 3.5% this year and next year if the risks materialize.

Inflation eased to 2.8% in January from 3.9% in December, the second straight month it fell within the central bank’s 2-4% target.

“In the absence of wage hikes, subsiding inflationary pressures and softer economic activity should lead the bank to ease monetary policy as soon as the second quarter in our view,” Mr. Tsuchiya said. “A minimum wage hike would jeopardize this process.”

The BSP kept its benchmark rate unchanged at 6.5% at its third straight meeting on Thursday. It last raised borrowing costs by 25 basis points (bps) in October. It hiked rates by 450 bps from May 2022 to October 2023.

“If the hike materializes, the central bank’s inflation forecast will also likely rise, possibly making them more cautious to unwind tight monetary policy depending on the magnitude of the wage hikes,” Mr. Tsuchiya added.

Diwa C. Guinigundo, country analyst for the Philippines at GlobalSource Partners, said any wage adjustments should not fan inflation.

“Our workers deserve some adjustment in their daily wage,” he said in a Viber message. “The issue is the amount. Less than their own productivity contribution, the resulting final wage should not be inflationary. Higher than that, people argue it could be inflationary.”

A family of five needs at least P13,797 a month or P460 a day to meet basic food and nonfood needs, according to data from the local statistics agency.

Labor groups and employers should negotiate to help achieve fair adjustments, Mr. Guinigundo said. Congress should involve wage and job experts in the debates so that wage increases are “neither inflationary and anti-capital nor meaningless to workers themselves.”

“An increase in wages can help households cope with rising prices,” Nicholas Antonio T. Mapa, a senior economist at ING Bank N.V. Manila, said in an e-mail. “However, it might be best to go through the current practice of regional wage boards precisely in order to tailor-fit wage increases to the cost of living per region.”

Gov’t told to expand funding sources, rein in spending to hit growth targets

ICTSI

By Beatriz Marie D. Cruz, Reporter

THE GOVERNMENT of Philippine President Ferdinand R. Marcos, Jr. should expand its funding sources and manage spending to meet economic growth targets this year, according to lawmakers.

This was after analysts said the dry spell brought by El Niño could temper growth this year.

“We need to strike a balance between… [what is] realistic and [what is] aspirational,” Marikina City Rep. Stella Luz A. Quimbo told BusinessWorld on the sidelines of a House of Representatives hearing last week.

Ms. Quimbo, who is also a senior vice chairperson of the House Committee on Appropriations, noted that growth slowed last year due to a huge contraction in state spending in the second quarter.

Government spending slowed to 4.3% amid red-hot inflation and rising interest rates.

Albay Rep. and House Committee on Ways and Means Chairman Jose Ma. Clemente S. Salceda brushed off calls to revise growth targets but cited the need to manage government spending.

“We saw that (slow government spending) coming,” he said in a Viber message. “That’s why the House initiated a policy of broadening the sources of funding for unprogrammed allocations in the 2024 General Appropriations Act.”

Congressmen in November approved on third and final reading a bill that would allow the government to tap excess funds of government-owned and -controlled corporations (GOCC) in funding unprogrammed budgets.

Finance Secretary Ralph G. Recto said last week the government might have to adjust its fiscal targets for the year to be “more realistic.”

Economic managers are targeting 6.5% to 7.5% GDP growth this year under the Development Budget Coordination Committee’s (DBCC) latest macroeconomic assumptions.

It also projects a growth target of as much as 8% in 2028 under its medium-term fiscal and growth goals. Philippine economic growth slowed to 5.6% last year, falling short of the state’s 6-7% goal.

Mr. Recto said DBCC’s entire medium-term fiscal framework is under review. “The fiscal plan was made when (Mr. Marcos) became president in 2022,” he told reporters. “There was no war in the Middle East, the Ukraine war had just begun. Thereafter, prices of food and oil rose.”

Former Finance Secretary Margarito B. Teves in an interview last week said the government should revisit its economic growth targets “to have more conservative assumptions.”

“We have to really go back to the assumptions that brought about the target of the government,” Mr. Teves separately told BusinessWorld on the sidelines of the hearing.

Raul V. Fabella, a retired professor from the University of the Philippines School of Economics, said the government might miss its fiscal goals this year due to El Niño.

“We might not meet the target because of the many issues,” he told reporters last week. “We have El Nino, floods in Mindanao, a dry spell in Negros, etc.”

The economy shrank by 0.5% in 1998, when the country experienced the worst El Niño dry spell in history.

Economic managers expect that the National Government’s budget deficit to hit P1.39 trillion this year, or 5.1% of GDP.

Under its fiscal framework, revenues are expected to account for 15% to 16% of GDP, while expenditures will be about 20%.

“Overall, especially in view of the prospect of lower Fed rates, I think this year will be better for growth,” Mr. Salceda said.

SMC-led group told to show financial projections for NAIA

Passengers disembark from their vehicles in front of the Ninoy Aquino International Airport (NAIA) Terminal 1 in Pasay City, Oct. 6, 2023. — REUTERS

By Ashley Erika O. Jose, Reporter

THE offer of San Miguel Corp. (SMC) consortium to rehabilitate and operate the Ninoy Aquino International Airport (NAIA) may face challenges as the financial viability of the project will heavily depend on the changing market environment, an analyst said.

“The consortium should provide detailed financial projections outlining their expected revenue streams, operating expenses, capital expenditures, and cash flow forecasts over the duration of the contract,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message to BusinessWorld on Sunday.

“These projections will help assess whether the proposed revenue share is feasible and sustainable in the long run,” he added.

He said the financial viability of the project will depend on the travel demand in the region, competition from other airports, and the changing economic environment that could influence travel patterns.

Last week, the Department of Transportation (DoTr) awarded the contract to rehabilitate, operate, and maintain NAIA to a consortium led by SMC.

The SMC SAP & Co. Consortium, composed of San Miguel Holdings Corp., RMM Asian Logistics, Inc., RLW Aviation Development, Inc., and Incheon International Airport Corp. (IIAC), has proposed to allocate 82.16% of NAIA revenues to the government.

The 15-year concession agreement for NAIA can be extended for a further 10 years based on the consortium’s performance.  The SMC-SAP group plans to invest a total of P122.3 billion over a 25-year period.

The group, based on the concession agreement, will pay an upfront payment of P30 billion and P2 billion annuity pay aside from the revenue share.

With this, the government is expected to receive a payment of P36 billion a year or about P900 billion for the period of the concession agreement.

“Our proposal is designed not only to elevate NAIA to world-class standards but also to ensure that the government benefits from the most advantageous revenue-sharing agreement. This aims to secure a favorable outcome for our shareholders while prioritizing fairness and long-term sustainability over immediate profits,” SMC said in a statement.

The company is also constructing an international airport in Bulacan.

“The payment to the government consists of three things: the P30-billion upfront payment, P2-billion annuity, and the 82% of revenues. If you add these up that’s a total of P900 billion for the duration of 25 years,” Transportation Undersecretary Timothy John R. Batan said in a media briefing.

The notice of award for the NAIA-PPP project was issued to SMC-SAP on Feb. 16, Transportation Secretary Jaime J. Bautista said, adding that the two other bidders were informed of the decision.

Mr. Batan said the bidders had submitted challenges and disputes regarding the bidding but all of the disputes put forward had already been resolved by the pre-qualification bids and awards committee (PBAC).

“Offering an 82% revenue share to the government suggests a significant commitment to public benefit and potentially a lucrative deal for the government. However, the sustainability of this offer depends on various factors such as the total revenue generated by the upgraded NAIA, operating expenses, maintenance costs, and profit margins,” Globalinks Securities’ Mr. Arce said.

He said the group’s ability to efficiently manage and operate the airport will directly impact its financial performance.

“Assessing and mitigating potential risks such as construction delays, cost overruns, regulatory changes, and geopolitical factors is crucial for ensuring the sustainability of the project,” he said.

Nigel Paul C. Villarete, senior adviser on PPP at the technical advisory group Libra Konsult, Inc., said the Philippines will certainly benefit from the capability of SMC’s partner, South Korea’s IIAC, the operator of Incheon International Airport.

“As far as operating airports are concerned, Incheon Airport has been operated well by IIAC so we should expect NAIA to be operated properly as well. With respect to sustainability (of the revenue share offer), the concession agreement should have addressed this well [covering] all possible scenarios and eventualities that might happen within the concession period,” he said.

For his part, Rene S. Santiago, former president of the Transportation Science Society of the Philippines said with SMC-SAP’s offer being significantly higher than the other bidders, the DoTr has no choice but to award the concession agreement to the group.

“Let us assume that the bid evaluation committee did their job, and cleared the capability of  SMC’s bid. With such a price bid, the same committee has no other option but to award. Else, a court challenge,” Mr. Santiago said.

The NAIA upgrade project aims to increase the current annual passenger capacity of NAIA to at least 62 million from the current 35 million.

For 2024, the Manila International Airport Authority has earlier said that it is expecting domestic and international passenger service charge revenue to reach P5.29 billion this year, a 25% increase over the estimated P4.22 billion for 2023.

The revenue from rental fees is expected to increase by 4% to P2.08 billion, concession privilege fees by 16% to P1.46 billion, and aeronautical fees by 19% to P5.32 billion.

A 24% increase to P7.36 billion is expected in the maintenance and other operational expenses.

The Tourism department reported 5.45 million international visitors in 2023, surpassing the year’s target of 4.8 million. For 2024, the department aims to attract 7.7 million international visitors.

UAAGI springs an executive surprise

From left are Foton Philippines General Manager Levy Santos; United Asia Automotive Group, Inc. (UAAGI) Chairman Rommel Sytin; UAAGI Chief Marketing Executive Lyn Manalansang-Buena; and Chery Philippines Managing Director Froilan Dytianquin. — PHOTO BY MANNY N. DE LOS REYES

A Chinese New Year gathering turns out to be a double celebration

THE RATHER eleventh-hour invitations came straight from the father-and-son team of Rommel and Timothy Sytin — the former being the chairman of United Asia Automotive Group, Inc. (UAAGI), and the latter its marketing manager. UAAGi is the distributor of Foton trucks and commercial vehicles as well as Chery crossovers that are available with gasoline engines, as hybrids, and as pure EVs.

The date was Feb. 8 and the venue was the upscale Aurora Café at the Pacific Star building in Makati City. It was supposed to be a thanksgiving lunch to celebrate Chinese New Year — and it was. But what the assembled members of the media had no inkling about was the revelation of UAAGI’s new executive — make that executives.

After Rommel Sytin’s welcome remarks, Chery Auto Philippines Marketing Director Froilan Dytianquin followed up with a short speech, but just as he was wrapping it up, he segued to an announcement of a new member of the UAAGI family. The timing was perfect because as he mentioned the name of the new executive, the doors of the restaurant opened and in walked a car executive that needed absolutely no introduction.

She was none other than Lyn Manalansang-Buena, erstwhile executive vice-president of The Covenant Car Company, Inc. (TCCCI), the current distributor of Chevrolet and the founding (and now former) distributor of MG, which is now under SAIC Motor Philippines. Before TCCCI, she was with Volvo Philippines. Altogether, Lyn has more than a quarter century of automotive marketing experience.

The look of surprise and delight that lit up the faces of all the media attendees attest to the deep respect that this vibrant, hard-working lady commands from the automotive media. Foton Philippines General Manager Levy Santos was also on hand to welcome the newcomer.

Lyn is now the Chief Marketing Executive of UAAGI. She will handle the marketing operations of Chery, Foton, the upcoming Lynk & Co. premium Chinese brand, and any additional brand that UAAGI might introduce in the future. She reports directly to the chairman.

Expect big things from UAAGI with its veritable dream team of executives and staff from some of the most successful automotive brands in the country.

Airline fuel surcharge to rise in March

PHILSTAR

THE Civil Aeronautics Board (CAB) has increased the airline fuel surcharge for March.

The fuel surcharge, which is added to the base fare, was increased to Level 6 from Level 5 in February, the agency said in an advisory signed by CAB Executive Director Carmelo L. Arcilla.

“Airlines wishing to impose or collect fuel surcharge for the same period must file its application with this office on or before the effectivity period, with fuel surcharge rates not exceeding the above-stated level,” CAB said in an advisory over the weekend.

At Level 6, the domestic passenger surcharge ranges from P185 to P665, while the international surcharge ranges from P610.37 to P4,538.40.

The CAB said the applicable conversion rate for March is P56.14 to the dollar.

At the current Level 5, domestic passenger surcharge ranges from P151 to P542, while for international flights, the surcharge varies between P498.03 and P3,703.11.

Airline fuel surcharge is an optional fee, collected and imposed by airlines to recover fuel costs. It is based on the movements in jet fuel prices, using a benchmark known as MOPS (Mean of Platts Singapore).

Budget carrier Cebu Pacific has encouraged passengers to book their flights ahead to take advantage of the lower fuel surcharge.

“Despite the increase in fuel surcharge, Cebu Pacific will continue to offer great value to our passengers through our seat sales that help keep air travel affordable and accessible. We enjoin our passengers to book their flights ahead of time to take advantage of low fares,” Alexander G. Lao, Cebu Pacific president and chief commercial officer, said in a Viber message.

BusinessWorld sought comments from flag carrier Philippine Airlines and low-cost airline Air Asia but has yet to receive comments as of the deadline. — Ashley Erika O. Jose

Porsche comes to shove

Taycan her heart. Author Angel Rivero poses with the fully electric Porsche Taycan that was her favorite on the track. — PHOTO FROM PGA CARS

Extracting performance from the German brand’s models

By Angel Rivero

WHAT A SPECIAL DAY it was — a three-day extravaganza where speed, luxury, and precision converged in a celebration of four of the most illustrious car brands: Porsche, Audi, Lamborghini, and Bentley. They called it the PGA World of Supercars. And hurrah, I was one of the giddy invitees!

The event was held at the Clark International Speedway from Feb. 2 to 4, and it easily drew close to 300 participants. Guests were afforded the opportunity to test-drive these sophisticated vehicles, and among the driving exercises were a slalom, acceleration and braking, water-wading, and guided laps around the track.

The special opportunity to test the limits of these beautiful machines were carried out under the guidance of seasoned professionals, namely: Filipino race drivers Georges Ramirez and Louis Ramirez, French race driver Benjamin Rouget, and Macanese race driver Rodolfo Avila.

As my participation at the busy PGA World of Supercars event started off with slalom rounds, I got to test the precision and agility of the handsome Porsche Cayman and the Porsche Macan — doing some speedy maneuvering, and using different drive modes. They clearly did not disappoint.

After all, the Cayman is some kind of a slalom virtuoso, because at the heart of its prowess lies a meticulously engineered chassis and suspension system that is calibrated to deliver excellent agility and responsiveness; not to mention that it also carries near-perfect weight distribution.

Meanwhile, the Porsche Macan, even with its larger stature compared to the Cayman, is delightfully adept at maneuvering through slaloms with confidence. Its relatively compact dimensions and finely tuned suspension system allow it to navigate through tight courses with delightful precision and poise.

Following the slaloms were acceleration and braking tests of the Porsche Cayenne V6 and the all-electric Porsche Taycan. The Cayenne V6 accelerates with authority, and its high-performance brake systems allow me to modulate the braking force with control and confidence. But I have to say that the all-electric Taycan was my favorite — as it instantaneously surged forward and upon reaching high speed, still provided the most reassuring and confidence-building stopping power as soon as I stepped on the brakes.

Furthermore, there were also water-wading driving exercises for customers, using the Audi Q7, Porsche Cayenne S Coupe, and the Audi e-Tron 55 Q8. Prospective clients who preferred to test-drive and experience the newest models’ latest features were also given the chance to do so along roads within the vicinity of Clark International Speedway. There were also open-track sessions for car owners who craved for the thrills of pushing their own cars to its limits on the racetrack.

It truly was an awesome experience to explore the varying limits of performance in the cockpits of some of the most revered vehicles. Certainly, these exciting memories will linger even long after all the race tires had cooled.

Power blooms in Carolina Herrera’s show at New York Fashion Week

NEW YORK — Carolina Herrera aimed to highlight the powerful and resilient side of its clientele at its runway show at New York Fashion Week.

The collection was filled with streamlined silhouettes that were both precise and clean, speaking to the clarity and focus of the modern woman. Ruffles took on a new architectural dimension, adding dramatic flair. (See the show here: http://tinyurl.com/42y5u6ku)

“This season, more than ever, I wanted it to be about beauty as power, power as beauty,” said creative director Wes Gordon. “I wanted her to dress powerfully, and I wanted every look to be an embodiment of power.”

This year marks Gordon’s sixth at the New York fashion house, and he has learned in that time how to keep Ms. Herrera — who ran her eponymous line for nearly 40 years — happy.

“At the beginning it was more of a challenge to try to reconcile and make sure that decisions were something she would maybe agree with or not. But I’ve since learned that there may be things she doesn’t agree with, but at the end of the day, I am seeking to address the same woman that she sought to dress.

“I’m chasing what does elegance mean today in the same way she chased that,” he said.

This season’s primary motif came from a 19th century gouache painting of a pink peony, on a small scale on a yellow gown and life-size on a purple gazar. — Reuters

URC shares pick up on rosy outlook

STOCKS on Universal Robina Corp. (URC) inched up last week as analysts saw better performance with taxes on junk food and sweetened beverages scrapped and inflation easing.

A total of 8.07 million shares amounting to P932.39 million were traded from Feb. 12 to 16, data from the Philippine Stock Exchange (PSE) showed, with URC closing as the 10th most actively traded stock last Friday.

Shares of the Gokongwei-led food and beverage company went up by 6% week on week, closing at P118 apiece last Friday from its P111.30 closing on Feb. 8.

Year to date, however, URC’s stock slipped by 0.2%.

Mercantile Securities Corp. Head Trader Jeff Radley C. See said in an e-mail exchange that aside from overall market sentiment boosting URC’s stock last week, the abolishment of the tax reform on junk food and sweetened beverages was also bullish news for the company.

Finance Secretary Ralph G. Recto announced in January that the department would refrain from introducing new taxes to keep inflation from spiking. Instead, it would focus on improving its collection system to achieve its target revenue of P4.3 trillion this year.

“Aside from that, the company still has a buyback program with a remaining balance of P4.7 [billion] as of [Feb. 16],” Mr. See said.

On the other hand, China Bank Securities Corp. (Chinabank) Research Associate Stephen Gabriel Y. Oliveros said that URC’s gain last week was mainly due to the net foreign buying on the stock and better margins this year as raw material costs normalized on easing inflation.

“With respect to its planned capacity expansion, we think this is a welcome development for URC as this would allay investor fears on capacity constraints, enable URC to develop new products, and position them to capitalize on incremental demand for its products going forward,” he said in a separate e-mail.

“Recall that URC experienced capacity limitations in some of its products last year given the stronger-than-expected resurgence in demand,” he added.

URC announced last week its new production plant based in Malvar, Batangas, which aims to expand its production capacity.

With construction beginning this year to finish in 10 to 15 years, the “mega plant” is estimated to bring 3,000 jobs directly and indirectly.

“We also think that URC has the capacity to finance this investment given its healthy cash flows and relatively low gearing ratios,” Mr. Oliveros said.

The food and beverage firm’s net income increased by 5.8% to P10.29 billion in the third quarter last year from P9.72 billion in the same period in 2022.

Similarly, net attributable income rose by 4.2% to P9.74 billion from P9.35 billion in 2022.

However, URC’s attributable net income in the July-to-September quarter slid by 2.3% to P3.07 billion from P3.15 billion in the same period in 2022.

Additionally, the monetary board decided to keep its interest rates steady at 6.5% for a third straight meeting.

While companies expected the move and have factored in the possibility of elevated rates for a while, Chinabank’s Mr. Oliveros said that for URC specifically, movements in interest rates could affect its profitability as the stock’s borrowings are short-term in nature as of September last year.

“We project full-year 2023 net income to be at P13.3 billion,” he said.

For the week, Mr. See penciled his support at P155 and P110, while resistance at P122 and P124.

Meanwhile, Mr. Oliveros pegged his support and resistance levels at P114.4 and P121, respectively.

“A key headwind we are monitoring for the company is how the international business would fare following the price rollbacks it implemented last year in select markets in response to softer demand for its products,” he said. — Bernadette Therese M. Gadon

Come rough terrain or high water

PHOTO BY DYLAN AFUANG

Petron Philippine Overland Expedition 2024 to off-road from Quezon to Aurora

By Dylan Afuang

THE PHILIPPINE Overland Expedition (PHL-OX) — formally called Petron Philippine Overland Expedition on account of its titular sponsor — could very well be overlanding here at its most extreme form.

Overlanding, an activity that’s seen growing in popularity here and abroad, combines off-road driving and camping. Hobbyists, known as “overlanders,” drive through the roughest terrain, arrive at a remote location, then — while surrounded by nature — sleep, bathe, or cook in their SUVs or trucks equipped with huge wheels and camping needs.

Now in its second-year, PHL-OX 2024 will be participated in by about 30 adventure-seekers who will overland along untouched landscapes from General Nakar, Quezon, to Dingalan, Aurora, from today until the 25th. In between campsites, teams of adventurers will encounter jungle trails with deep ruts made of mud, gravel, and rocks, and river crossings three to four feet deep. The terrain could be baked by blazing sun or doused by pouring rain, whatever the weather would feel like bringing on those days. Onboard their 4×4, overlanding-ready vehicles, competing teams will pass through 10 stages designed to test their driving, navigation, and vehicle-recovery skills.

A grand prize of P500,000 awaits overlanders who will finish the stages in the fastest time and safest way. The second- and third-placers will receive P200,000 and P100,000, respectively.

Enthusiasts can also spectate the expedition by either tackling the terrain along with the competitors, or meet and camp with them at campsites in Masanga Point, General Nakar, and Dingalan, Aurora.

The event is co-organized by Mototesto Overland Equipment Philippines and All Traction Performance, and is supported by, of course, Petron Corp., along with Motolite, ARB 4×4 Philippines, Bushranger, and Second Air.

“This event is just not about earning, but it’s also (done) to show that there are (scenic) places to visit in the Philippines,” Mototesto Overland Equipment CEO and Founder, and PHL-OX 2024 Race Director Tim Tuazon expressed to the media on the sidelines of the competition’s press launch.

But at its inception, the purpose of the Philippine Overland Expedition was to bring a competitive edge to overlanding. “After the (COVID-19) pandemic, over a campfire, we (overlanders) wondered if we could level up Philippine overlanding events and make them more professional, so we opened a competition,” Mr. Tuazon said in Filipino.

Teams consisting of three vehicles and six members each are formed for PHL-OX 2024. The vehicles are divided into three groups, and each will be subject to scrutineering. Production cars are standard SUVs with the standard off-roading equipment installed. Production models that have been extensively tweaked, including changes to the engine and body, are known as modified vehicles.

Prototype cars are specially designed and have no relation to any production car. A minimum of one production vehicle and a maximum of one prototype vehicle are required for each team.

A release for PHL-OX added, “Each team must also be self-reliant, bringing with them provisions such as food, water, power source, as well as critical vehicle spare parts and supplies.”

For more information, visit the Mototesto Overland Equipment Philippines website (phox2022.mototesto.com/).

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