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Crickets get crunchy as Singapore approves edible insects amid food security push

NAMCHA PH-UNSPLASH

 – At Singapore’s House of Seafood restaurant, the fish-head curry comes with a side of crunchy crickets, the tofu has bugs crawling out of it and the patrons can’t get enough.

The seaside restaurant is the first eatery to put insects on the menu after the city state’s stringent food authority this month approved for human consumption 16 species ranging from crickets to grasshoppers, grubs and mealworms after two years of deliberation.

Crickets and other insects have long been enjoyed as street food in Southeast Asia, but not in the wealthy financial hub, where food imports come with strict restrictions for safety and hygiene purposes.

Francis Ng, chief executive of House of Seafood, said customers love it when the dishes play up the insects, like that tofu dish he plated to look like bugs were crawling out of it, and a dish of glutinous rice balls studded with silkworms.

“It looks scarier so customers can film for their Tiktok,” said Mr. Ng, adding that his phone has been ringing off the hook with customers eager to book a tasting.

The restaurant has drafted a menu with 30 dishes that feature insects, which they can sell to the general public once their importers are approved by the food authority. For now, Ng is offering free samples.

In 2019, Singapore declared it was aiming to produce 30% of its nutritional needs by 2030 instead of the current model where 90% of food is imports, and food security expert Paul Teng said insects could certainly help move towards this goal – if people got over “the yuck factor”.

“Most insects are almost all protein,” said Mr. Teng, who works at the Nanyang Technological University’s S. Rajaratnam School of International Studies, adding that there needs to be local production to make this alternative protein source affordable.

“Getting people to accept insects in their diet is a challenge. But really, it’s a normal food item. Let’s do something about it to prepare the consumer for it,” he said. “Me personally, I have no problem eating insects.”

The United Nations has deemed bugs a sustainable source of protein to feed a global population estimated to swell to 9.7 billion by 2050 and global food security issues due to extreme weather and conflicts have also increased the interest in the high-quality, economical nutrition that bugs provide.

In Singapore, all insects approved for human consumption must be farmed in a controlled environment and not harvested from the wild, and cannot be fed contaminants like manure or rotten food, according to the food agency.

In tandem, the Food and Agriculture Organization has been promoting farming of insects for human consumption and animal feed, and there has been local interest to import insects, but cost remains a barrier for now: Ng said insects make up 10% of his costs at the House of Seafood, and they are all imported.

“The price is definitely higher than eggs,” he said.

It’s too early to tell if insects will become a feature of the Singapore diet or whether demand will fizzle out as it has for fake meat products.

But for now, some diners say they are happy to develop a taste for bugs.

“If they have a higher source of protein, why not? I’ll add it to my daily meal and daily food intake,” said Bregria Sim, a 23-year-old a logistics executive, adding she would pay around S$40 ($30) for the novelty dishes. – Reuters

US anti-Muslim incidents rose about 70% in first half of 2024 amid Gaza war

STOCK PHOTO | Image by Steve Bidmead from Pixabay

 – Discrimination and attacks against Muslims and Palestinians rose by about 70% in the US in the first half of 2024 amid heightened Islamophobia due to Israel’s war in Gaza, the Council on American-Islamic Relations advocacy group said on Tuesday.

Human rights advocates have reported a global rise in Islamophobia, anti-Palestinian bias and antisemitism since the eruption in October of the Israel-Gaza war which has killed tens of thousands and caused a humanitarian crisis.

In the first six months of 2024, CAIR said it received 4,951 complaints of anti-Muslim and anti-Palestinian incidents, a rise of nearly 70% compared with the same period in 2023.

Most of the complaints were in the categories of immigration and asylum, employment discrimination, education discrimination and hate crimes, CAIR said.

In 2023, CAIR documented 8,061 such complaints in the whole year, including about 3,600 in the last three months after the war broke out.

Alarming US incidents in the last nine months include the fatal October stabbing of a 6-year-old Palestinian-American child in Illinois, the February stabbing of a Palestinian-American man in Texas, the shooting of three students of Palestinian descent in Vermont in November and the attempted drowning of a 3-year-old Palestinian-American girl in May.

There have been numerous protests in the U.S., Israel’s key ally, against the war in Gaza since October. The CAIR report noted the crackdown by police and university authorities on pro-Palestinian protests and encampments on campuses.

The latest bloodshed in the decades-old Israeli-Palestinian conflict was triggered on Oct. 7 when Palestinian Islamist group Hamas attacked Israel, killing 1,200 and taking about 250 hostages, according to Israeli tallies.

The Gaza health ministry says that since then Israel’s military assault on the Hamas-governed enclave has killed nearly 40,000 Palestinians while also displacing nearly the entire population of 2.3 million, causing a hunger crisis and leading to genocide allegations that Israel denies.

CAIR says it compiles numbers by reviewing public statements and videos as well as reports from public calls, emails and an online complaint system. It also contacts people whose incidents are reported by media. – Reuters

Australian foreign minister condemns Russia-North Korea ties after DMZ visit

Australian Foreign Minister Penny Wong | Source: https://www.foreignminister.gov.au/minister/penny-wong
Australian Foreign Minister Penny Wong | Source: https://www.foreignminister.gov.au/minister/penny-wong

 – Australian Foreign Minister Penny Wong said on Tuesday that a security pact signed by Russia and North Korea was destabilizing the region, adding that North Korea was giving weapons to Russia in “flagrant violation” of U.N. Security Council resolutions.

Ms. Wong was speaking to reporters in the city of Paju after a visit to the nearby Demilitarized Zone (DMZ) separating the two Koreas, which remain technically at war.

“We see Russia behaving in ways which are not conducive to peace but are escalatory,” she said, referring to a security pact signed between the North Korean leader Kim Jong Un and Russian President Vladimir Putin in June.

Under the pact, North Korea and Russia agreed to provide immediate military assistance if either faces armed aggression.

Washington and its allies are also alarmed by the deepening military cooperation between Russia and North Korea, and have accused both nations of breaching international laws by trading in weapons for Russia to use against Ukraine.

Pyongyang and Moscow have denied conducting any arms transactions.

“The continued transfer (of) weapons from North Korea to Russia is a flagrant violation of U.N. Security Council resolutions,” Ms. Wong told reporters.

Ms. Wong will meet South Korean Foreign Minister Cho Tae-yul later on Tuesday to discuss matters including North Korea and bilateral cooperation for regional peace.

She arrived in Seoul after attending summits in Laos at a gathering of the ASEAN bloc and joining a meeting of Quad foreign ministers in Tokyo on Monday with counterparts from the United States, Japan and India.

In a statement ahead of her trip, Wong said Australia and South Korea aim to build on their strategic alignment with expanded bilateral and regional cooperation, including on energy transition and economic security. – Reuters

US-Philippines engagements help with ‘agile’ responses to China, says Marcos

PRESIDENT FERDINAND R. MARCOS, JR. — PCO.GOV.PH

 – Philippines President Ferdinand Marcos Jr told US cabinet secretaries Antony Blinken and Lloyd Austin on Tuesday that regular engagements between Manila and Washington were needed to ensure “agile” responses to his country’s maritime tensions with China.

US treaty ally the Philippines has repeatedly sparred at sea with China, the main US rival in the Indo-Pacific, this past year, but the two sides have now reached a “provisional arrangement” to ease tensions and manage differences.

Mr. Marcos greeted Secretary of State Blinken and Defense Secretary Austin at the Malacanang Palace on Tuesday morning ahead of meetings with their Filipino counterparts, the first such meetings hosted by the Philippines.

“I’m always very happy that these communication lines are very open so that all the things that we are doing together, in terms of our alliance, in terms of the specific context of our situation here, in the West Philippine Sea and in the Indo-Pacific, are continuously examined and re-examined so we are agile in terms of our responses,” Mr. Marcos said.

The Philippines has competing claims with China in the waters to its west also known as the South China Sea. China claims 90% of the sea as its sovereign territory.

State Department spokesperson Matthew Miller said Mr. Blinken and Mr. Austin discussed with Mr. Marcos “their shared commitment to upholding international law in the South China Sea.”

“The two secretaries underscored the United States’ ironclad commitments to the Philippines under our Mutual Defense Treaty,” Mr. Miller said in a statement following the meeting.

At the start of the meeting, Mr. Marcos said he was “a bit surprised” to see the two secretaries given how “interesting” the US political situation has become, a reference to President Joe Biden ending his re-election campaign this month and endorsing Vice President Kamala Harris to take on former President Donald Trump in a November election. Mr. Blinken offered Mr. Marcos greetings from Ms. Harris, as well as from Mr. Biden.

Mr. Blinken, the top US diplomat, said a “steady drumbeat of very high-level engagements in our countries that are covering the full range of issues and opportunities that bring us together not only security, but also economic.” – Reuters

Fridays Puerto Galera announces plans to upgrade resort facilities

The multimillion expansion project is set to redefine the experience of guests by merging modern conveniences set within a stunning natural backdrop

Fridays Puerto Galera, a leading luxury resort found inside the lagoons of the UNESCO-protected Muelle Bay in Boquete Island, Mindoro, is gearing up to unveil a multi-million expansion of its resort facilities by 2025.

The said improvements are set to redefine the experience of guests by merging modern conveniences set within a stunning natural backdrop.

Helmed by DXL Architectural Design Services, the expansion project includes the construction of the Fridays Puerto Galera Conference Hall, Fridays Beach Club, Pool Bar, Wellness Cabanas, as well as a Game Room and a Jungle Gym for kids.

Also in the pipeline is the construction of the resort’s very own and exclusive Pier Dock for guests arriving from Berberabe or the Batangas City Main Port.

“This expansion project is made to combine modern conveniences with sustainable principles reflecting a contemporary Filipino aesthetic,” says Romeo Co, General Manager of Fridays Puerto Galera. “Our aim is to be a preferred MICE (meetings, incentives, conferences and exhibitions) resort in Puerto Galera, Mindoro Province.”

Fridays Puerto Galera is popular for its unique positioning as a “quiet luxury” resort.

The picturesque property offers visitors a chance to immerse themselves in nature while enjoying utmost comfort and privacy.

“Our aim is to enhance further the resort’s offerings. The construction of a new Conference Hall is set to host corporate meetings, group gatherings and where special occasions can take place amidst the beauty of the landscape. Surrounded by hills and the commanding views of the waters of Puerto Galera, this new conference facility (which can accommodate up to 150 guests with flexible space solutions) promises to cultivate a peaceful and secure atmosphere for our valued guests to make memories that last.”

Fridays Beach Club (formerly Fridays Crusoe Restaurant) is also set to offer an entirely new Filipino-themed dining experience; while the addition of a Game Room is intended to host guests looking for a mix of work and play.

“After long meetings or during breaks, guests can relax and have fun amidst various recreational activities aimed at promoting team building and camaraderie,” explains Co.

“Fridays Puerto Galera also intends to provide a holistic experience through various wellness offerings such as yoga and meditation sessions; as well as improving our spa facilities for guests’ total relaxation and well-being.”

Fridays Puerto Galera which opened in 2018 currently has 24 rooms and suites. It is located inside the lagoons of UNESCO-protected Muelle Bay known as the best spot in Mindoro.

The resort is situated in the island of Boquete, otherwise known as Paniquian Island, which is surrounded by powdery white and pink sand and teeming blue water.

Visit fridayspuertogalera.com to know more.

 


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NG debt to rise to P17.35-T in 2025

BW FILE PHOTO

THE NATIONAL GOVERNMENT’S (NG) outstanding debt is projected to hit a record P17.35 trillion at the end of 2025, the Department of Budget and Management (DBM) said.

The 2025 Budget of Expenditures and Sources of Financing showed the NG’s debt stock is expected to  increase by 8.08% from the projected P16.06-trillion debt at the end of 2024.

The bulk will come from outstanding domestic debt, which is expected to rise by 9.64% to P11.98 trillion by end-2025 from P10.92 trillion by yearend.

Outstanding external debt is also seen to jump by 4.76% to P5.38 trillion by end-2025 from P5.13 trillion by end-2024.

Budget Undersecretary Joselito R. Basilio said the debt reflects the massive borrowings incurred by the government during the coronavirus pandemic, which means debt will likely peak in the next few years.

However, he said the government has a fiscal consolidation plan and could repay the debt as the economy continues to grow.

For 2025, the NG set its borrowing program at P2.55 trillion, 0.97% lower than P2.57 trillion this year.

National Treasurer Sharon P. Almanza said next year’s gross borrowings are lower as it expects fewer refinancing requirements.

“The decline is on the refinancing requirement. Refinancing requirements for both external and domestic are lower,” she told BusinessWorld in a Viber message.

Broken down, 80% of the borrowings will come from domestic sources while the remaining 20% will come from foreign sources.

Gross domestic borrowings were set at P2.04 trillion for 2025, 5.91% higher than the P1.92-trillion program in 2024.

On the other hand, next year’s gross external borrowings were set at P507.41 billion, 21.46% lower than P646.08 billion this year. 

“[Some] program loans, for example, and other project loans, will decrease by 2025 because many of our 2024 projects or programs already received a loan,” Mr. Basilio said.

Gross domestic borrowings will include P1.98 trillion in fixed-rate Treasury bonds and P60 billion in Treasury bills.

On the other hand, gross foreign debt will include P236.11 billion in program loans, P73.55 billion in project loans and P197.75 billion in bonds and other inflows.

The NG borrows from foreign and domestic lenders to fund its budget deficit as it spends more than its revenues.

“The outstanding NG debt level in pesos could continue to post new record highs amid continued budget deficits that would be financed by additional NG borrowings,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message. 

He noted that an offsetting factor could be the country’s gross domestic product (GDP) growth.

The government is targeting 6.5-7.5% GDP growth next year.

“Relatively faster GDP growth would help reduce the NG debt-to-GDP ratio to below the international threshold of 60% to help maintain the country’s favorable credit ratings,” he added.

The NG’s debt as a share of GDP stood at 60.2% at the end of the first quarter. The government is targeting a 60.3% debt-to-GDP ratio by yearend, slightly above the 60% threshold deemed manageable for developing economies.

Mr. Ricafort said the government should intensify tax collections, impose new or higher taxes and ensure efficient spending to narrow the budget deficit and further bring down the debt-to-GDP ratio.

Meanwhile, the government set its debt servicing program at P2.05 trillion next year, 1.19% higher P2.03 trillion this year.

Payments for domestic debt are programmed at P1.61 trillion, while foreign debt payments are at P436.78 billion.

TAX REVENUES
For 2025, the NG aims to collect P4.64 trillion in revenues, 8.77% higher than the P4.27-trillion projected collection this year.

The government expects to collect P4.33 trillion in tax revenues in 2025, 13.41% lower than its P3.82-trillion projection this year.

The Bureau of Internal Revenue is expected to collect P3.23 trillion, while the Bureau of Customs is seen to generate P1.06 trillion.

On the other hand, nontax revenues are expected to fall by 48.27% to P210.79 billion next year from P407.49 billion this year.

The target collection from privatization more than doubled to P101.02 billion in 2025 from P42.12 billion this year.

Next year’s budget also has a P13-billion contingent fund, which includes safeguards to prevent its abuse, Ms. Pangandaman said.

“The fund can only be used for specific urgent needs such as government legal obligations with final decisions from authorities, needs of newly created agencies, and the fund cannot be used for confidential and intel funds for nonsecurity agencies unless the President certifies in necessity, and buying or improving of vehicles.” — B.M.D.Cruz

POGO ban may support PHL exit from ‘gray list’ 

President Ferdinand R. Marcos, Jr. has ordered a total ban on all offshore gaming operations in the country due to its ties to illicit activities. — PHILIPPINE STAR/RYAN BALDEMOR

By Luisa Maria Jacinta C. Jocson, Reporter 

THE RECENT BAN on Philippine offshore gaming operators (POGO) would help expedite the country’s exit from a global financial watchdog’s “gray list” of jurisdictions under increased monitoring for money laundering risks, the central bank governor said.

“With the POGO ban, we do see a drop in money laundering, which should help us exit the gray list,” Bangko Sentral ng Pilipinas (BPS) Governor Eli M. Remolona, Jr. told BusinessWorld in a text message.

Last week, President Ferdinand R. Marcos, Jr. ordered a total ban on all offshore gaming operations due to their ties to illicit activities such as financial scams, money laundering, prostitution and human trafficking.

Mr. Marcos directed the Philippine Amusement and Gaming Corp. (PAGCOR) to shutter all POGO facilities by the end of the year. 

This comes after the Financial Action Task Force (FATF) in June kept the Philippines in its gray list for a third straight year.

The global watchdog said the country still needs to address three remaining action items, one of which is “demonstrating that supervisors are using anti-money laundering and counterfinancing of terrorism (AML/CFT) controls to mitigate risks associated with casino junkets.”

Mr. Remolona earlier said the Philippines would likely exit the gray list by next year as it still needs to address the remaining deficiencies cited by the FATF.

From 2018 to 2023, the Philippines was among the top five countries in Southeast Asia with money laundering activities added over the five-year period, earlier data from Moody’s showed.

The number of money laundering events added in the Philippines jumped by 45% from 2022 to 2023, it said.

Chester B. Cabalza, founding president of Manila-based International Development and Security Cooperation, said Mr. Marcos’ order to ban POGOs would encourage more “legitimate” investments to enter into the country.

“With the expected ban, the Philippines may be relieved with the gray list tag and re-strategize for fulfilling more legal and moral entertainment investments for the inclusive growth of the country,” he said via Facebook Messenger.

Bienvenido S. Oplas, Jr., president of a research consultancy and of the Minimal Government Thinkers think tank, said the POGO ban would be a “big push” for tourism in the country.

“When POGOs are banned, then gamblers from China will be forced to travel to the Philippines and do their gambling in big casinos,” he said.

Mr. Oplas noted that the POGO ban should not be rushed due to its impact on the property market.

On the other hand, Filomeno S. Sta. Ana III, coordinator of Action for Economic Reforms, said there are still many other sources of money laundering aside from POGOs.

“(POGO) might not even be the main vehicle for money laundering in the Philippines,” he said via Facebook Messenger chat. “POGOs offer online gambling catering to a foreign country, specifically China. But what about online gambling within the Philippines? What about the proliferation of physical casinos in the Philippines? Money laundering thrives in said activities and places.”

Mr. Sta. Ana noted that there are many sectors that are vulnerable to money laundering.

“There are many ways to launder money — real estate, mineral extraction, setting up shell companies, establishing low-key businesses, purchasing artworks, jewelry, luxury automobiles, etc. A major step to get out of the gray list is to lift the strict secrecy rules on bank deposits.”

IMPACT ON BANKS
In a separate report, Fitch Ratings said the Philippine financial system is resilient enough to withstand the spillover effects of the POGO ban.

“The government’s ban on POGOs may hurt Fitch-rated banks’ asset quality and performance, but their loss-absorption buffers will be sufficient to withstand associated losses, which are likely to be limited in scale,” it said.

Banks have ample buffers to “absorb POGO-related losses without pressuring their current standalone viability ratings.”

“Moreover, banks’ record-high margins and higher loan growth — the key drivers of our ‘improving’ sector outlook for Philippine banks — are likely to compensate for higher credit costs associated with potential new impairments from the POGO ban,” it added.

The Philippine banking industry’s net income rose by 2.95% to P92.107 billion at end-March, latest data from the central bank showed.

Separate data showed that bank lending grew by 10.1% in May to P12 trillion, the fastest in 14 months.

Fitch Ratings noted that POGOs’ influence on the property market has waned due to tighter regulations. Travel restrictions also affected the sector, which is heavily dependent on workers from China, it added.

“One property consultant, Colliers, has indicated that POGOs currently occupy 3.5% of Metro Manila’s office stock, down from 10% in 2019, with most large developers’ leasing portfolios having at most a 5% exposure,” it said.

It also said real estate developers have been limiting their exposure to POGOs. The expected vacancies from the ban “may also pressure rental yields, with broader impacts on real estate firms.”

“Most of these large players have diversified real estate portfolios, so these effects could also be offset partially by better residential sales if interest rates fall as we expect in the second half of 2024 and 2025.”

With this, Fitch said banking-asset impairments from real estate companies would be “relatively contained.”

Fitch data showed that the residential mortgage nonperforming loan (NPL) ratio improved to 7% in the first quarter of 2024 from 9.6% in the third quarter of 2021, though this was still higher than pre-pandemic levels.

It said this “reflects in part a fallout from speculative activity and more lax housing loan credit standards during the POGO boom years in 2016-2019.”

“Since then, many banks have become more averse to lending to POGO workers, given high policy risk,” it added.

Property-related losses due to closures from the ban are also not expected to be significant for banks.

“Even in the event of a greater impact than we anticipate, regulations require banks to demonstrate common equity Tier 1 (CET1) and total capital ratios of 6% and 10%, respectively, after writing off 25% of their real estate exposures. This should ensure that loss-absorption buffers are aligned with their exposure to the sector,” it added.

DBM submits P6.352-T national budget to House

BUDGET Secretary Amenah F. Pangandaman (center) and other officials of the Department of Budget and Management hold a copy of the proposed National Expenditure Program for 2025 on Monday. — PHILIPPINE STAR/RYAN BALDEMOR

By Kenneth Christiane L. Basilio

THE DEPARTMENT of Budget and Management (DBM) on Monday submitted to the House of Representatives its proposed P6.352-trillion national budget for 2025, which increases allocations for education by less than 1% and for defense by 6.4%, while more than doubling the budget for transportation.

However, the DBM slashed the proposed budgets for agriculture, health and social welfare for next year.

The proposed national budget is equivalent to 22.1% of gross domestic product, and 10.1% higher than the P5.768-trillion budget this year.

2025 National Expenditure Program“Education remains the top priority with P977.6 billion, equivalent to 15.4% of the budget, aligned with UNESCO’s (United Nations Educational, Scientific and Cultural Organization) education 2030 framework for action,” Budget Secretary Amenah F. Pangandaman said during turnover ceremonies at the House.

Next year’s proposed budget for the education sector inched up by 0.9% to P977.6 billion from P968.9 billion this year, according to a summary from the Budget department. This covers the Education department, Commission on Higher Education, Technical Education and Skills Development Authority and state universities.

However, education’s share in the 2025 budget fell to 15.4%, compared with 16.8% this year.

The allotted budget for the education sector is not on par with the 10% increase in the proposed 2025 budget and the country’s economic growth, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The P977.6 billion for education barely scratches the surface of the sector’s needs, especially considering the learning crisis exacerbated by the pandemic,” Party-list Rep. France L. Castro told BusinessWorld in a Viber message.

The government should ensure ample funding for more teaching positions to improve education quality, IBON Foundation Executive Director Jose Enrique A. Africa told BusinessWorld.

“The most glaring and most fundamental flaw is that the number of teaching positions isn’t being increased, which means that those on the frontlines of teaching will be as overtasked and overburdened as ever,” he said in a Viber Message.

The Department of Public Works and Highways (DPWH) saw its budget fall by 9% to P900 billion. Of this, P226.7 billion will go to flood management projects, while P140.9 billion will be allotted for road network development.

“The ‘Build Better More’ infrastructure program, through the Department of Public Works and Highways, will be allocated with P900 billion or 14.2% of the proposed budget to finance various public infrastructure [projects],” Ms. Pangandaman said.

In the aftermath of the massive floods caused by Super Typhoon Carina last week, Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said Congress would have to tweak the infrastructure budget, particularly for proposed flood management projects.

“Expert calls for more upland intervention such as dams might not have been reflected as yet in the current budget,” he said in a Viber message.

On the other hand, next year’s budget for the Department of Transportation (DoTr) more than doubled to P180.9 billion from this year’s P73.9 billion.

The increase is due to the need to “develop and modernize… the country’s infrastructure,” according to Ms. Pangandaman.

The DoTr budget would fund key connectivity infrastructure such as the North-South Commuter Railway System and the first phase of the Metro Manila Subway project, she added.

“Metro Manila Subway project Phase 1 is [allotted] P39.3 billion… while the North-South Commuter Railway Commuter System is [allocated] with almost P64 billion,” Ms. Pangandaman told reporters after the turnover ceremony.

Meanwhile, the Defense budget will increase by 6.4% to P256.1 billion next year amid growing tensions with China over contested waters.

The Philippine Army, Air Force, and Navy will collectively receive P204.4 billion under the proposed budget, while P50 billion will go to the Armed Forces’ modernization efforts, according to the Budget department’s summary.

The increase in defense spending due to “escalating conflicts” with China is acceptable and shows the government is consistent in supporting the country’s efforts to modernize its military, Chester B. Cabalza, founding president of Manila-based International Development and Security Cooperation, told BusinessWorld.

“The AFP (Armed Forces of the Philippines) should emphasize wiser defense expenditure and effective procurement process to accelerate the frugal budget of the government,” he said in a Facebook Messenger chat.

Rocio Salle Gatdula, a defense economist at the University of Asia and the Pacific, said the increased support for the military would help ensure it can counter China’s military capabilities.

“The Philippines needs to continue investing the modernization of its armed forces. Additionally, it is important to maintain a thorough understanding of China’s weaponry to ensure the acquisition of appropriate defense equipment,” she said via Messenger chat.

For the agriculture sector, the government is allotting P211.3 billion, 4.7% less than this year’s P221.7-billion funding. The budget will be used to fund the country’s agriculture modernization efforts and provide cash aid to farmers and fisherfolk.

Of the amount proposed for the agriculture sector, P24.6 billion will go to irrigation services, P10 billion for the rice fund under a law that liberalized the rice industry and P2.8 billion for the agricultural credit program, according to the DBM’s summary.

Next year’s funding for the Department of Social Welfare and Development (DSWD) stood at P230.1 billion, which is 7.6% lower than P248.1 billion in 2024.  It will fund the Pantawid Pamilyang Pilipino Program and social pension for indigent senior citizens, said Ms. Pangandaman.

The health sector, comprising the Health department and Philippine Health Insurance Corp., will receive P297.6 billion for next year’s proposed budget, 3.4% less than P308.3 billion this year.

Senate ratifies bicam report on 12% VAT on foreign digital service providers

SHEIN.COM

THE SENATE on Monday adopted the bicameral conference committee report on a bill imposing a 12% value-added tax (VAT) on digital service providers without a physical presence in the Philippines such as e-commerce giants Amazon, Shein and Taobao.

The reconciled version of the bill reinforces the Bureau of Internal Revenue’s (BIR) power to “impose and collect VAT on digital services and transactions,” Senator Sherwin T. Gatchalian said in a speech before the Senate adopted the report.

The joint explanation of the bicameral conference committee said both Houses of Congress agreed to use the Senate version as “the working draft.”

The committee allowed the Department of Finance (DoF) to set withholding tax rates for companies falling under the P3-million VAT threshold under the Tax Reform for Acceleration and Inclusion (TRAIN) law to protect small online businesses.

Under the measure, nonresident digital service providers and electronic marketplaces must register with the BIR for the remittance of VAT on their services. This will include online marketplaces like Amazon, Shein, Rakuten, Taobao, AliExpress and Temu.

Digital services refer to those provided over the internet or other electronic networks using information technology. These include online search engines, online marketplaces, cloud services, online media and advertising, online platforms and digital goods.

Currently, digital services provided by companies abroad are not subject to VAT, and lawmakers have said this hurts domestic rivals.

“We are committed to paving the way for a level playing field. We believe in the importance of creating an environment where our digital service providers, whether they are nonresident or local, operate under fair and square tax policies,” Mr. Gatchalian said.

Under the bill,  5% of the revenues from digital service VAT — or about P900 million — will be used to support the digital creative industry. — KATA

Philippines ranks 4th in Southeast Asia for IPO proceeds in first half

THE PHILIPPINE STOCK Exchange (PSE) ranked fourth in Southeast Asia for proceeds generated from initial public offerings (IPOs) in the first half of the year, according to a report by multinational professional services network Deloitte.

“Despite only having two new listings during the first half of 2024, the Philippines’ capital market had once again clinched the fourth spot in the region, with both new entrants securing positions in the Top 10 IPOs of 2024 H1,” Deloitte said in its Southeast Asia Mid-Year IPO Snapshot 2024 report.

“The energy and resources industry remains a strong sector for the country’s capital market,” it added.

During the first half, the PSE saw the public listings of OceanaGold Philippines, Inc., a gold and copper mining company, and Citicore Renewable Energy Corp., a renewable energy company. These IPOs were the second and fifth largest in the region, respectively.

The Philippines accounted for 14% or $194 million of the total IPO proceeds raised by Southeast Asian countries, higher than Vietnam’s 3% or $37 million and Singapore’s 1% or $20 million.

However, the Philippines trailed countries such as Malaysia, which accounted for 33% or $450 million of all IPO proceeds raised, as well as Thailand with 31% or $427 million, and Indonesia with 18% or $248 million.

For the first half, Deloitte noted that the Southeast Asia IPO market had 67 IPOs, down by 21% from the 85 IPOs last year.

The region also saw a 59% drop in IPO proceeds to $1.4 billion, and a 71% decline in IPO market capitalization to $5.8 billion.

“Despite a positive growth outlook and increasing foreign direct investment in Southeast Asia, the prolonged geopolitical instability and high interest rates environment have significantly impacted market conditions and investor sentiment in Southeast Asia, leading to a lukewarm record of IPOs in 2024 H1,” Deloitte Southeast Asia Accounting & Reporting Assurance Leader Tay Hwee Ling said.

“The ongoing inflation concerns and efforts to stabilize the global economy suggest that the high interest rate environment could persist into 2024,” she added.

Meanwhile, Ms. Hwee Ling is cautiously optimistic that Southeast Asia’s IPO market will improve beyond 2024, despite being subdued so far.

“As investors and IPO candidates adapt to the new norm of higher interest rates and reduced liquidity, they are becoming more adept at navigating the complexities of geopolitical tensions and the global economic landscape. Looking further ahead, the potential for interest rates to decrease could spur the return of real estate investment trust listings in the region,” she said.

“Additionally, many artificial intelligence (AI) and AI-associated businesses are still in the early seeding stages within the private domain. We anticipate a significant wave of AI IPOs tapping into the IPO capital markets in the coming years, bringing innovation and new opportunities to the market,” she added.

The PSE also saw the public listing of NexGen Energy Corp. in July, nearing the market operator’s target of six IPOs this year. — Revin Mikhael D. Ochave

Meralco Q2 profits up 29% with higher plant availability

MERALCO.COM.PH

MANILA Electric Co. (Meralco) on Monday reported a 29% increase in its second-quarter (Q2) consolidated core net income, reaching P13.12 billion, up from P10.16 billion the previous year.

This growth was driven by higher sales volumes in the distribution business and increased plant availability in power generation, the electric power distribution company said in a statement.

“With the steady growth trajectory of the economy, we are satisfied that Meralco will sustain its robust performance throughout the year,” Chairman and Chief Executive Officer Manuel V. Pangilinan said.

“Beyond the core distribution business, we continue to invest in more generation capacity which will help address, if not eliminate, instances of supply insufficiency in the country’s power grid, and support the growing demand for power,” he added.

Core earnings before interest, taxes, depreciation, and amortization increased by 24% to P21.96 billion.

For the six months ending in June, the power distributor recorded a consolidated core net income of P23.2 billion, up by 21% from P19.2 billion last year. Of this total, the distribution business contributed P12.8 billion, power generation accounted for P6.2 billion, and retail electricity supply and non-electricity businesses generated a combined P4.2 billion.

Consolidated reported net income rose by 26% to P22.4 billion from P17.9 billion last year. Consolidated revenues increased by 6% to P237.5 billion.

For the first half of the year, energy sales volume grew to 26,954 gigawatt-hours (GWh) from 24,792 GWh. The volumes of Meralco and Clark Electric Distribution Corp. increased by 9% and 7%, respectively.

“The six-month sales volumes got a boost from second-quarter sales which hit a new record—with monthly volumes breaching the 5,000 GWh level in May, largely driven by double-digit growth in residential and commercial segments,” the power distributor said.

Residential sales volume rose by 13% to 9,715 GWh from 8,629 GWh last year, driven by warmer temperatures and increased time spent at home by consumers.

Commercial sales volume climbed by 10% to 10,068 GWh from 9,162 GWh, supported by steady consumer demand and expansions in real estate, retail, restaurants, and hotels.

Industrial sales increased by 2% to 7,097 GWh from 6,928 GWh, reflecting the continued recovery of plastics and cement industries, as well as sustained performance in food and beverage and semiconductor sectors.

Singapore-based Pacific-Light Power Pte. Ltd., a subsidiary of Meralco PowerGen Corp. (MGen), saw a 29% decrease in its core net income to PHP 6.4 billion.

San Buenaventura Power Ltd. Co.’s core net income declined by 3% to PHP 1.7 billion, while Global Business Power Corp. reported a 78% increase to PHP 1.5 billion.

MGen’s renewable energy arm, MGen Renewable Energy, Inc., recorded a core net income of PHP 131 million, up by 68%.

Meralco’s majority owner, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

Jollibee drops P8-B preferred shares plan, lowers 2024 capex

JOLLIBEE Foods Corp. (JFC) said it is withdrawing its plan to issue up to P8 billion in preferred shares due to strong growth in its domestic business and a decision to reduce its 2024 capital expenditure (capex) budget.

“Following careful consideration of all relevant factors and in the interest of achieving the best value for our shareholders, we have made the decision to withdraw our previously announced public offering of Series C Preferred Shares,” JFC Chief Financial Officer Richard Chong Woo Shin said in a statement to the stock exchange on Monday.

“We will explore other capital-raising opportunities, focused on shareholder value and optimization of our capital structure,” he added.

In March, JFC’s board approved an issuance consisting of five million preferred shares with an oversubscription option of up to three million preferred shares at P1,000 apiece, with a value size of up to P8 billion.

The proceeds were supposed to be used for the refinancing of the company’s Series A preferred shares and other general business purposes.

According to JFC, the additional funding from the planned issuance is no longer needed for the refinancing of the Series A preferred shares due to the “strong profit performance and cash flow generation of its Philippine business.”

The company added that the decision to withdraw the preferred shares offering is in support of the plan to reduce its P23 billion capex budget for 2024 by at least 20%.

JFC previously announced that it had earmarked P20-23 billion in capex funding to bankroll the plan of opening 700 to 750 new stores this year.

The company said the preferred shares plan was also dropped due to expected rate cuts later in the year, which would help secure “more beneficial bank loans at floating interest rates.”

The recent acquisition of South Korean value coffee brand Compose Coffee also influenced the decision to withdraw the preferred shares offer, citing the “profit-accretive contribution” from its consolidation with the fast-food giant.

In early July, JFC announced the acquisition of Compose Coffee for $340 million to strengthen its coffee and tea business. The acquisition is projected to be completed by the first half of August.

“JFC expects these factors and considerations will improve its flexibility in funding and in increasing its leverage position. As a result of the withdrawal, no Series C preferred shares will be offered or sold by JFC,” the company said.

On Monday, JFC shares fell by 0.18% or 40 centavos to P227.60 per share. — Revin Mikhael D. Ochave