Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 241

Lula says he won’t take orders from foreigner Trump, calls tariffs blackmail

REUTERS

SAO PAULO – Brazilian President Luiz Inacio Lula da Silva on Thursday said he would not take orders over tariffs from a foreigner, referring to U.S. President Donald Trump, and later called the United States’ threatened duty “unacceptable blackmail.”

The comments, made during two separate events, mark a continuation of a spat between the two leaders that escalated when the U.S. announced a 50% tariff on Brazil last week.

Mr. Trump attributed the tariff, set to start in August, to Brazil’s treatment of former President Jair Bolsonaro and to trade practices against U.S. companies that he said are unfair. The tariff announcement came days after Mr. Lula called Mr. Trump an “emperor” the world does not want.

Mr. Lula and members of his cabinet have rejected the reasoning behind the tariffs and insisted on Brazil’s sovereignty, while calling for trade negotiations with the United States.

“No foreigner is going to give orders to this president,” Mr. Lula said in a speech, using the slang word ‘gringo’, which in Brazil is a common term for foreigners without the pejorative sense it carries in other parts of Latin America.

He added that Brazil would go ahead with regulation and taxation of U.S. tech firms, telling a gathering of leftist student activists in the state of Goias that tech firms are conduits of violence and fake news disguised as freedom of expression.

Later on Thursday, during an evening TV and radio address to the nation, Mr. Lula said the defense of Brazil’s sovereignty extends to protecting itself against the actions of foreign digital platforms.

During the near five-minute address, Lula said Brazil has been negotiating with the U.S. over tariffs, and repeated that the Latin America country had sent a proposal in May.

“We expected a response, and what we received was unacceptable blackmail, in the form of threats to Brazilian institutions and false information about trade between Brazil and the United States,” Mr. Lula said.

Brasilia has been holding discussions with industry groups and companies that will be affected by the U.S. tariff, while also readying potential retaliatory measures if talks fall through.

Foreign Minister Mauro Vieira told CNN Brasil separately on Thursday that Mr. Lula was open to talks with Trump, who had not yet met each other.

“If the circumstances are given, they will speak,” he added.

Mr. Lula, who is in his third non-consecutive term as president of Latin America’s largest economy, saw his approval ratings start to rebound after the trade spat with Trump last week. – Reuters

Japan voters see little hope for tariff reprieve in car maker Mazda’s hometown

THE ATOMIC BOMB DOME is seen in front of the venue holding a ceremony to mark the 75th anniversary of the atomic bombing at the Hiroshima Peace Memorial Park in Hiroshima, western Japan, Aug. 6, 2020. — KYODO/VIA REUTERS

HIROSHIMA, Japan – When car maker Mazda sneezes, everyone catches a cold, say people in its hometown of Hiroshima in western Japan, but these days, auto parts maker Yuji Yamaguchi fears a deep chill is on the way.

“If Mazda builds fewer cars, our orders will drop,” said Mr. Yamaguchi, whose 110-year-old firm, Nanjo Auto Interior, has almost 1,000 employees making door panels and other parts for the automaker, which accounts for more than 90% of its sales.

“The key thing is whether we can remain profitable with lower volumes.”

The economic engine of Hiroshima, a manufacturing hub 800 km (500 miles) southwest of Tokyo, Mazda faces U.S. tariffs of 25% on automobiles, a dispiriting prospect for an electorate already battling inflation and a weak economy.

Japan votes on Sunday in an upper house election that looks set to weaken the grip on power of Prime Minister Shigeru Ishiba, who has failed to win a tariff reprieve from the United States, its closest ally and a crucial trade partner.

“I have no expectations for the Japanese government anymore,” said Yamaguchi, a great-grandson of Mazda founder Jujiro Matsuda. “I’m past frustration and have just resigned myself to things.”

As people in Hiroshima and other auto manufacturing regions, brace for the inevitable fall-out from tariffs, Yamaguchi said he had little hope the government could turn the tide.

President Donald Trump has given no sign of relenting on his tariffs, and has even hinted at raising those against Japan.

Mazda, which saw U.S. sales fall 18.6% in May on the year and by 6.5% in June, is one of the Japanese car makers most exposed to U.S. tariffs.

Imports bring in the bulk of Mazda’s American sales, but the importance of the wider industry for Japan is almost impossible to overstate.

After Japan ceded global leadership in chips and consumer electronics, its auto industry has grown to make up about 28% of the roughly $145 billion worth of goods shipped to the United States last year.

There are more than 68,000 companies in Japan’s auto supply chain, a July survey by research firm Teikoku Data Bank showed, and the JAMA industry group says they employ 5.6 million people, or about 8% of the labor force.

“A supply chain is hard to rebuild once broken,” said Hideki Tsuchikawa, research head at Teikoku Databank’s branch in Hiroshima, which his firm estimates is home to more than 2,000 auto suppliers.

“Automobiles are a core national industry. Government support is essential.”

The tariffs could cost Mazda and other smaller Japanese automakers U.S. market share lost to bigger rivals, said Julie Boote, an autos analyst at Pelham Smithers Associates in London.

Mazda, headquartered in Hiroshima, where it has assembly plants, has so far declined to give a full-year earnings outlook, citing the uncertainty of tariffs.

In a statement, Mazda told Reuters its top priority was to protect suppliers, dealers and employees as it looked to overcome the tariff impact.

It anticipated significant impact in the short term, the company said, adding it was taking all possible steps, such as asking for government countermeasures.

 

‘NO OVERTIME, NO DRINKING’

It is hard to say whether the uncertainty will further deepen voter anger over time, or how much opposition parties will be able to chip away at Mr. Ishiba’s support as they look to tap into voter discontent.

For the auto industry there seems to be no recourse except to return to a well-worn playbook of cost-cutting perfected during Japan’s years of stop-start economic growth.

No overtime means no extra money for drinking, said Koji Sasaki, the 54-year-old owner of a bar in the town of Fuchu close to Mazda’s headquarters, where the automaker’s employees usually form the bulk of customers.

Their numbers have dropped in recent months, with some regulars apologizing for making fewer visits, he said.

Drinking in Sasaki’s bar on a recent July evening was company veteran Toshiyuki Shimizu, 45, who said Mazda had already cut back on overtime and business travel for employees.

“We used to bring junior staff along on business trips, but now I often go alone,” said Akira Ichigi, a 32-year-old Mazda colleague, adding that the limits denied junior employees valuable experience acquired on such trips.

Mazda has set up a tariff strategy team that was meeting each week in Hiroshima, said one company insider, speaking on condition of anonymity.

But Mazda faced constraints in finding ways to tackle the tariffs from a labour shortage in the United States, that kept it from boosting capacity at its sole plant there, operated with Toyota, the source added.

Mazda said overtime cuts and a business travel review were part of its drive to cut 100 billion yen in costs. Essential travel continued, but it was evaluating whether accompanying staff were necessary, it said.

The company set up a team to monitor tariffs and was working with suppliers and dealers, it said, adding that key to increasing supply to the U.S. market were its efforts to tackle labor shortages and strengthen the supply chain.

For now, parts supplier Yamaguchi said he was not considering specific steps to counter the tariffs.

“In business, we need to have long-term vision,” Yamaguchi said, likening the moment to the COVID-19 pandemic, when his company posted a loss in 2020 but returned to profit the next year by working to boost efficiency rather than cutting costs.

“If we don’t invest in 2025, we might miss opportunities.” – Reuters

Air India cockpit recording suggests captain cut fuel to engines before crash, source says

STOCK PHOTO

WASHINGTON/SEATTLE – A cockpit recording of dialogue between the two pilots of the Air India flight that crashed last month supports the view that the captain cut the flow of fuel to the plane’s engines, said a source briefed on U.S. officials’ early assessment of evidence.

The first officer was at the controls of the Boeing 787 and asked the captain why he moved the fuel switches into a position that starved the engines of fuel and requested that he restore the fuel flow, the source told Reuters on condition of anonymity because the matter remains under investigation.

The U.S. assessment is not contained in a formal document, said the source, who emphasized the cause of the June 12 crash in Ahmedabad, India, that killed 260 people remains under investigation.

There was no cockpit video recording definitively showing which pilot flipped the switches, but the weight of evidence from the conversation points to the captain, according to the early assessment.

The Wall Street Journal first reported similar information on Wednesday about the world’s deadliest aviation accident in a decade.

India’s Aircraft Accident Investigation Bureau (AAIB), which is leading the investigation into the crash, said in a statement on Thursday that “certain sections of the international media are repeatedly attempting to draw conclusions through selective and unverified reporting.” It added the investigation was ongoing and it remained too early to draw definitive conclusions.

Most air crashes are caused by multiple factors, and under international rules, a final report is expected within a year of an accident.

A preliminary report released by the AAIB on Saturday said one pilot was heard on the cockpit voice recorder asking the other why he cut off the fuel and “the other pilot responded that he did not do so.”

Investigators did not identify which remarks were made by Captain Sumeet Sabharwal and which by First Officer Clive Kunder, who had total flying experience of 15,638 hours and 3,403 hours, respectively.

The AAIB’s preliminary report said the fuel switches had switched from “run” to “cutoff” a second apart just after takeoff, but it did not say how they were moved.

Almost immediately after the plane lifted off the ground, closed-circuit TV footage showed a backup energy source called a ram air turbine had deployed, indicating a loss of power from the engines.

The London-bound plane began to lose thrust, and after reaching a height of 650 feet, the jet started to sink.

The fuel switches for both engines were turned back to “run”, and the airplane automatically tried restarting the engines, the report said.

But the plane was too low and too slow to be able to recover, aviation safety expert John Nance told Reuters.

The plane clipped some trees and a chimney before crashing in a fireball into a building on a nearby medical college campus, the report said, killing 19 people on the ground and 241 of the 242 on board the 787.

 

NO SAFETY RECOMMENDATIONS

In an internal memo on Monday, Air India CEO Campbell Wilson said the preliminary report found no mechanical or maintenance faults and that all required maintenance had been carried out.

The AAIB’s preliminary report had no safety recommendations for Boeing or engine manufacturer GE.

After the report was released, the U.S. Federal Aviation Administration and Boeing privately issued notifications that the fuel switch locks on Boeing planes are safe, a document seen by Reuters showed and four sources with knowledge of the matter said.

The U.S. National Transportation Safety Board has been assisting with the Air India investigation and its Chair Jennifer Homendy has been fully briefed on all aspects, a board spokesperson said. That includes the cockpit voice recording and details from the flight data recorder that the NTSB team assisted the AAIB in reading out, the spokesperson added.

“The safety of international air travel depends on learning as much as we can from these rare events so that industry and regulators can improve aviation safety,” Ms. Homendy said in a statement. “And if there are no immediate safety issues discovered, we need to know that as well.”

The circumstantial evidence increasingly indicates that a crew member flipped the engine fuel switches, Nance said, given there was “no other rational explanation” that was consistent with the information released to date.

Nonetheless, investigators “still have to dig into all the factors” and rule out other possible contributing factors which would take time, he said.

The Air India crash has rekindled debate over adding flight deck cameras, known as cockpit image recorders, on airliners.

Nance said investigators likely would have benefited greatly from having video footage of the cockpit during the Air India flight. – Reuters

Trump administration tells US diplomats abroad not to opine on foreign elections

Photo By U.S. Department of State - https://www.flickr.com/photos/statephotos/54295399868/, Public Domain, https://commons.wikimedia.org/w/index.php?curid=160957686

WASHINGTON – U.S. Secretary of State Marco Rubio instructed U.S. diplomats worldwide not to comment on the fairness or integrity of elections conducted by foreign countries, according to an internal note seen by Reuters on Thursday, in a significant departure from Washington’s traditional approach of promoting free and fair elections overseas.

The order, sent to all U.S. diplomatic posts in a July 17 internal State Department cable, says the Department will no longer issue election-related statements or social media posts from Washington unless there is a “clear and compelling” foreign policy interest.

“When it is appropriate to comment on a foreign election, our message should be brief, focused on congratulating the winning candidate and, when appropriate, noting shared foreign policy interests,” said the cable, which was marked as “sensitive” but not classified.

“Messages should avoid opining on the fairness or integrity of an electoral process, its legitimacy, or the democratic values of the country in question,” it said.

It added that election-related messages should come from either the Secretary himself or the Department spokesperson and it barred U.S. diplomats from issuing such statements without explicit approval from the agency’s senior leadership.

The cable referenced President Donald Trump’s May 13 speech in Riyadh when he criticized what he called “Western interventionists” telling Middle Eastern countries how to govern their own affairs, saying that was no longer Washington’s business and it was looking to forge partnerships.

“While the United States will hold firm to its own democratic values and celebrate those values when other countries choose a similar path, the President made clear that the United States will pursue partnerships with countries wherever our strategic interests align,” the directive said.

When asked about the cable, a State Department spokesperson in emailed comments repeated some of the points in the directive and said that this approach was consistent with the administration’s emphasis on “national sovereignty.”

The United States has traditionally viewed the promotion of human rights and democracy as well as press freedom as a core foreign policy objective, although critics have repeatedly pointed out the double standard Washington has had towards its allies.

Under Mr. Trump, the administration has increasingly moved away from the promotion of democracy and human rights, largely seeing it as interference in another country’s affairs. For example, it has moved to reshape the State Department’s human rights bureau, which it said had become a platform for “left-wing activists to wage vendettas against ‘anti-woke’ leaders.”

Mr. Trump officials have repeatedly weighed in on European politics to denounce what they see as suppression of right-wing leaders, including in Romania, Germany and France, accusing European authorities of censoring views such as criticism of immigration in the name of countering disinformation. – Reuters

PHL mulls listing, tax hike on e-games

BW FILE PHOTO

By Aubrey Rose A. Inosante and Revin Mikhael D. Ochave, Reporters

THE PHILIPPINE government is considering sweeping reforms for online gambling operators, including mandatory stock exchange listings and increased taxes, in a bid to tighten oversight and reduce the social costs of gambling addiction.

Finance Secretary Ralph G. Recto said the Department of Finance is proposing new taxes and licensing fees for digital gaming firms, with support from President Ferdinand R. Marcos, Jr.

“We can force them to list so that we know who the people behind it are,” he told reporters on Wednesday. “It becomes more transparent.”

If implemented, the move will place online gaming platforms under similar public scrutiny as listed firms like Bloomberry Resorts Corp. and DigiPlus Interactive Corp., which operate ArenaPlus, BingoPlus and GameZone.

The Philippine Amusement and Gaming Corp. (PAGCOR) collects a 30% rate from e-gaming platforms, while the Bureau of Internal Revenue imposes an additional 5% franchise tax and a 3% auditing fee, bringing the total effective rate to about 38%.

“We may increase that even further,” Mr. Recto said, hinting at a broader effort to boost government revenue and disincentivize unregulated gambling.

Earlier this year, PAGCOR reduced the remittance rate on e-games to 30% from 35% and cut the rate for e-games within integrated resorts to 25%, citing operational expenses of brick-and-mortar venues. Despite these adjustments, illegal gaming remains rampant.

Mr. Recto said about 60% of the gaming market operates illegally. “The losses from uncollected revenue could be around P500 billion, because that P200 billion [in gross gaming revenue] is legal,” he said.

The gross gaming revenue (GGR) is projected to surpass P200 billion this year.

The Finance chief added that the government is also studying whether to tax individual bets placed online, though taxing GGR may be simpler to implement. “We increase [tax] by what? 10%? That’s P20 billion a year,” he said.

Analysts welcomed the proposal to require online gaming firms to go public, citing improved governance and transparency, but said it could squeeze out smaller players.

“Many small players may find it challenging to comply with the requirements and rigors of being a public company, so this could have the effect of favoring larger gaming companies,” Juan Paolo E. Colet, managing director at China Bank Capital Corp., said in a Viber message.

Foundation for Economic Freedom President Calixto V. Chikiamco noted that while transparency is desirable, it might be difficult to require all firms to go public.

“Some may want to remain private,” he said, adding that a feasible strategy could be taxing transactions through digital wallets like GCash.

Economic Planning Secretary Arsenio M. Balisacan has also expressed support for taxing online gaming and its participants, saying e-wallet transaction monitoring could aid tax collection.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said mandatory listing could also increase competition. “New entrants with strong digital platforms may attract investor interest and market share.”

Luis A. Limlingan, head of sales at Regina Capital Development Corp., said the entry of more online gaming platforms may pose challenges but could also attract institutional investment and boost legitimacy.

Mr. Recto also clarified that the government is not considering a total ban, despite President Marcos previously ordering the phaseout of Philippine offshore gaming operators.

‘BLACK MARKETS’
“I don’t think it should be banned,” the Finance chief said. “I think more regulation and higher taxes are enough. Hopefully, with that, the number of people playing will decrease.”

He said a meeting at the presidential palace was recently held to address the proliferation of online lotto platforms not affiliated with the Philippine Charity Sweepstakes Office.

Mr. Recto hinted that further details of the online gaming reform plan could be unveiled in the President’s state of the nation address on July 28.

Meanwhile, DigiPlus urged lawmakers to pursue regulation rather than an outright ban.

“The experience of other countries has shown that banning licensed platforms does not eliminate demand for online gaming, but merely shifts users to unregulated black markets,” it said in a statement on Wednesday night.

The company said a regulated market could protect players, generate billions in revenue, and support more than 40,000 jobs in tech, marketing, entertainment, customer service and compliance.

Shares of DigiPlus plunged 30% or P8.36 to close at P19.54 apiece on Thursday amid regulatory uncertainty.

Company Chairman Eusebio H. Tanco said DigiPlus supports “smart and balanced” regulation. “We believe regulation is the path to player protection. It’s the only way to safeguard players, preserve jobs, and close the door on illegal, underground platforms that operate without any oversight,” he said.

Mr. Tanco said the company is ready to work with lawmakers and regulators to make the Philippines a “model for safe, transparent online gaming in Asia.”

DigiPlus said it already uses strict know-your-customer verification, including government ID checks and age gating, as well as responsible gaming tools like deposit limits, self-exclusion and cooling-off periods.

Upcoming features include enhanced affordability checks, behavioral nudges and referral pathways to mental health professionals. In-app community support spaces and responsible gaming content will also be introduced across its platforms this month.

“These measures are not reactions to regulatory pressure, but part of a multi-year strategy to build a responsible gaming ecosystem,” DigiPlus said.

It added that it supports updated legislation that imposes stiffer penalties on illegal operators and clearer standards for advertising in the digital gaming industry.

142 firms qualify for green energy bidding

FREEPIK

THE DEPARTMENT of Energy (DoE) on Thursday said 142 bidders have qualified for the fourth round of the Green Energy Auction (GEA-4), which aims to install 10,653 megawatts (MW) of renewable energy (RE) capacity across the country.

In an advisory, the agency said more than 230 bids were submitted for evaluation by the Green Energy Auction-Bids Evaluation and Awards Committee. The participants were screened based on technical, legal and financial qualifications.

“The selected companies have demonstrated the technical, legal, and financial capabilities necessary to participate and contribute to the Philippines’ long-term clean energy targets,” the DoE said.

Notable participants include some of the country’s biggest power developers — Citicore Renewable Energy Corp., San Miguel Global Power Holdings Corp., ACEN Corp., Aboitiz Power Corp., First Gen Corp., Basic Energy Corp., Alternergy Holdings Corp., NexGen Energy Corp. and PetroEnergy Resources Corp.

Citicore submitted the most bids among all qualified entities, with 27 project proposals.

GEA-4 is offering 9,553 MW of renewable energy capacity through ground-mounted, rooftop and floating solar, as well as onshore wind projects.

An additional 1,100 MW is allocated for solar projects integrated with energy storage systems, such as battery, flywheel or pumped hydro technologies — the first time such hybrid systems are included in the auction.

The auction supports the country’s push to develop RE as a primary energy source through a competitive selection process.

Under the Green Energy Auction, developers bid to supply a specific capacity at the lowest incentivized fixed rate, with winning projects expected to begin commercial operations from 2026 to 2029. Each contract will run for 20 years from the plant’s commercial start date.

A virtual pre-bid conference for all qualified entities is set for July 28. The auction itself will be conducted on Sept. 2, with results scheduled for release on Oct. 22.

Last month, the Energy Regulatory Commission (ERC) released the Green Energy Auction Reserve prices, which will serve as the price ceilings for the bidding.

The ERC set a rate of P5.68 per kilowatt-hour (kWh) for ground-mounted solar, P4.4832/kWh for rooftop solar and P6.5258/kWh for floating solar. Onshore wind projects have a ceiling of P6.0859/kWh, while solar-plus-storage systems are capped at P5.4028/kWh.

The GEA is a flagship initiative designed to help the Philippines hit its goal of increasing the share of renewable energy in the power mix from 22% to 35% by 2030 and 50% by 2040. — Sheldeen Joy Talavera

Marcos appoints ERC chairman

FRANCIS SATURNINO C. JUAN — BW FILE PHOTO

By Sheldeen Joy Talavera and Chloe Mari A. Hufana, Reporters

PRESIDENT Ferdinand R. Marcos, Jr. on Thursday appointed Francis Saturnino C. Juan as the chairman and chief executive officer (CEO) of the Energy Regulatory Commission (ERC) effective Aug. 8.

He replaces Monalisa C. Dimalanta, who submitted her “irrevocable resignation” last week.

Palace Press Officer Clarissa A. Castro confirmed the appointment, citing Mr. Juan’s long-standing experience in energy regulation.

“He has played a key role in operationalizing the wholesale electricity spot market, advocating consumer protection and promoting renewable energy development through tariff reforms,” she added.

Created under the Electric Power Industry Reform Act of 2001, the ERC functions as an independent, quasi-judicial regulator that promotes competition, penalizes market abuse and protects consumers.

Mr. Juan served as the ERC’s executive director and general counsel and led the Independent Electricity Market Operator of the Philippines as president and chief executive officer.

Ms. Dimalanta cut short her seven-year term, originally set to end in 2029. Malacañang has not disclosed the reason behind her resignation.

Mr. Marcos also appointed lawyers Amante A. Liberato and Francis G. Real as ERC commissioners, replacing Catherine P. Maceda and Alexis M. Lumbatan, whose terms ended on July 9.

Mr. Liberato is the deputy executive secretary for finance and administration at the Office of the President and had worked with the Commission on Audit. Ms. Castro said his “strong background in fiscal management and regulatory policy will be vital in supporting institutional reforms within the ERC.”

Mr. Real brings over 20 years of legal experience and has participated in key ERC regulatory proceedings. “He is known for his focus on legal integrity and consumer protection that is expected to strengthen the commission’s quasi-judicial processes,” Ms. Castro said.

Industry leaders welcomed Mr. Juan’s return to the commission.

“We are confident that Chairman Nino Juan will continue to pave the way for energy modernization, promoting regulation that is best for all sectors to ensure energy security, reliability and efficiency,” Anne E. Montelibano, president of the Philippine Independent Power Producers Association, Inc., said in a Viber message.

Theresa Cruz-Capellan, chairperson of the Philippine Solar and Storage Energy Alliance, described Mr. Juan as “a qualified replacement who has broad knowledge and deep understanding of the job.”

“During his time in the commission, he showed resolve amidst bureaucratic challenges, displayed good judgment and compassion, and ensured consumer protection and fair return to power producers,” Ms. Cruz-Capellan said in a statement. “He is consistently optimistic by finding ways to navigate the complexities of rule-making.”

Meralco PowerGen Corp. President and CEO Emmanuel V. Rubio also commended Mr. Juan. “His deep regulatory expertise and experience are valuable assets in strengthening regulatory frameworks, ensuring market transparency and advancing consumer protection,” he said in a Viber message.

ACEN President and CEO Eric T. Francia said Mr. Juan’s leadership could help address the commission’s challenges and case backlog. “The incoming chairman’s vast relevant experience will be a huge plus.”

The Philippine Rural Electric Cooperatives Association, Inc. (PHILRECA) called on the ERC leadership to prioritize key areas for electric cooperatives, particularly the resolution of pending over- and under-recoveries.

“These approvals are fundamental for electric cooperatives to undertake critical system upgrades, secure stable and affordable power supply, expand electrification and enhance the overall reliability and efficiency of their services,” PHILRECA said in a statement.

Meanwhile, consumer group Power for People Coalition (P4P) urged Mr. Juan to protect consumer rights and ensure corporate accountability. “P4P will as usual remain vigilant in ensuring the ERC does its mandate of protecting the interest of consumers,” P4P Convenor Gerry C. Arances said in a separate statement.

Philippines may negotiate US tariffs down to 10% — BMI

PHILIPPINE STAR/EDD GUMBAN

By Luisa Maria Jacinta C. Jocson, Senior Reporter

THE PHILIPPINES has room to negotiate with the US to bring down its reciprocal tariff to as low as 10% using defense concessions as a key bargaining chip, according to Fitch Solutions’ research unit BMI.

“While [US President Donald J.] Trump has raised the rate from 17% to 20% for no explicit reason, the Philippines still faces some of the lowest tariffs in Asia,” Darren Tay, head of Asia country risk at BMI, told a webinar on Thursday.

“Overall, we still think the Philippines stands a good chance of bargaining the reciprocal rate down to the baseline 10%,” he added.

The Philippine government earlier said it is working to secure better terms with the US after Mr. Trump announced a 20% tariff on Philippine goods last week, effective Aug. 1.

“While few details have emerged from bilateral trade talks, we believe defense spending will emerge as a point of contention in the proceedings,” Mr. Tay said.

“Making concessions on defense is one good way of securing a trade deal, given that pushing allies to do more is one of Trump’s priorities,” he added.

He said increasing defense spending to 5% of economic output, similar to North Atlantic Treaty Organization benchmarks, would “impress” Mr. Trump, but noted that the Philippines is likely to propose a lower percentage.

Data from the Stockholm International Peace Research Institute  showed the Philippines’ military expenditure rose nearly 20% to $6.12 billion in 2024 from a year earlier. This brought the country’s military burden — military spending as a percentage of gross domestic product (GDP) — to 1.3%.

“But that should still be sufficient to secure a deal. Our base case, therefore, envisions reciprocal tariffs at 10%,” Mr. Tay said.

He noted that even in a worst-case scenario where tariffs rise to 20% across all sectors — including a 200% duty on pharmaceuticals — the overall impact would be limited due to the Philippines’ minimal export volume of such products to the US.

BMI maintained its economic growth outlook for the Philippines, noting that the country is less vulnerable to tariff shocks than its regional peers.

“In terms of GDP at risk, the Philippines is relatively insulated,” Mr. Tay said. “Besides the fact that export exposure to the US is slightly below average, we know that roughly half of exports to the US actually come in the form of services that are largely provided by the business process outsourcing sector — and those are untouched by tariffs.”

BMI projects Philippine GDP to grow 5.4% this year, slightly below the government’s 5.5% to 6.5% target.

INCREASED COSTS
Meanwhile, Moody’s Analytics said the US tariff could drive up costs and force businesses to rethink their supply chain strategies.

“The introduction of a 20% blanket tariff on Philippine exports to the United States adds complexity to global supply chains,” Moody’s Senior Director Choon Hong Chua said in a commentary released this week.

He added that the tariff could increase operational uncertainty for Philippine exporters accessing the US market.

“Philippine exporters may face increased costs and heightened uncertainty in accessing the US market, which could lead to reduced demand and intensified competitive pressures — particularly if higher costs are passed on to consumers,” Mr. Chua said.

Mr. Trump announced the tariff, which takes effect on Aug. 1, last week. The 20% rate is higher than the 17% initially announced in April and brings the Philippines in line with tariffs imposed on Vietnam, which recently secured a trade deal with the US, and now also faces a 40% duty on transshipped goods.

Other Southeast Asian nations also hit with increased tariffs include Laos and Myanmar (40%), Cambodia and Thailand (36%), Indonesia (32%), and Malaysia and Brunei (25%).

Moody’s noted that the Philippines could be affected since the US is the top destination for Philippine-made goods. More than 15% of the country’s exports in May were bound for the US, according to the Philippine Statistics Authority.

Mr. Chua advised companies with exposure to Philippine-based sourcing to reconsider their supplier strategies amid rising geopolitical and tariff-related risks.

“For companies with exposure to Philippine sourcing, it may be prudent to reassess supplier strategies in light of evolving geopolitical and tariff-related risks,” he said.

While firms may look to shift their sourcing to other Southeast Asian markets, Mr. Chua warned that such a move could involve short-term operational challenges.

“While some organizations may consider alternative sourcing options within Southeast Asia, any transition could involve short-term operational adjustments,” he said.

Despite these potential disruptions, Mr. Chua cited the importance of keeping a flexible and well-monitored supply chain to weather trade uncertainties.

“Maintaining supply chain visibility and agility remains essential for resilience,” he said. “Businesses that proactively adapt to shifting trade conditions and mitigate emerging risks will be better positioned to navigate ongoing uncertainty.”

Moody’s commentary underscores growing global concerns about how escalating trade measures could reverberate through supply chains, particularly in export-dependent economies like the Philippines.

8990 Holdings seeks delisting, tenders P10.42 per share

8990HOLDINGS.COM

By Revin Mikhael D. Ochave, Reporter

MASS HOUSING developer 8990 Holdings, Inc. is planning to voluntarily delist from the Philippine Stock Exchange (PSE), with its subsidiary launching a tender offer at P10.42 per share as part of the exit process.

“Upon extensive deliberations by the board of directors of the company, the board has approved the voluntary delisting of the company from the PSE,” 8990 Holdings said in a regulatory filing on Thursday.

“The board noted that the voluntary delisting of the company would unlock the intrinsic value of the company’s business and assets, which does not seem to be fully appreciated by the market, based on the historical trading price of the company’s shares on the PSE,” it added.

The tender offer will exclude common shares owned by majority shareholders Iholdings, Inc., Kwantlen Development Corp., Mariano D. Martinez, Luis N. Yu, Jr., and the qualifying common shares of the directors.

The offer price represents a 10% premium over the one-year volume-weighted average price of the company’s common shares from July 16, 2024, to July 16, and falls at the upper end of the range in an independent valuation report.

The tender offer price is also a 13.3% premium over the share price of P9.20 apiece on July 16.

8990 Holdings said the voluntary delisting is up for stockholders’ approval during the annual stockholders’ meeting on Aug. 26.

For a company to voluntarily delist from the PSE, the tender offer should constitute at least 95% of the total issued and outstanding common capital stock of the company.

8990 Holdings is the third company to delist this year, joining Kepwealth Philippines Holdings, Inc. and Philab Holdings Corp.

Trading of 8990 Holdings’ shares was suspended on Thursday and will resume on Friday following the announcement.

DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin said in a Viber message that the tender offer price offers a “reasonable exit” for minority shareholders.

“The decision to go private is understandable. Remaining listed entails significant regulatory and reportorial requirements, which may no longer be aligned with 8990 Holdings’ current strategic direction. For a company with limited trading activity, the benefits of staying public may no longer justify the costs,” he said.

“Given 8990 Holdings’ prolonged illiquidity and lack of investor interest, the stock has suffered from poor price discovery. With limited market activity, it has been difficult for the public to realize the company’s intrinsic value,” he added.

Mr. Tin said the increasing number of companies opting to delist this year reflects the challenges faced by the local capital markets.

“The growing number of exits underscores persistent issues in the local capital markets — chief among them, low liquidity and limited investor participation,” he said.

“That said, the PSE’s move to streamline its roster by delisting dormant or thinly traded companies may help consolidate trading volume and improve liquidity in remaining names,” he added.

8990 Holdings has business interests in the affordable housing business. Its portfolio includes low-cost mass housing units and subdivision lots, medium-rise, and high-rise building housing units. The company also has interests in hotel operations.

The company’s real estate brands include Deca Homes, Deca Towers, and Urban Deca Towers.

SEC cuts filing fees for MSMEs by up to 50%

A woman arranges bottles of vinegar at a food exhibition. — PHILIPPINE STAR/JOHN RYAN BALDEMOR

THE Securities and Exchange Commission (SEC) is slashing rates on certain filing fees for micro, small, and medium enterprises (MSMEs) to support their growth.

The corporate regulator issued Memorandum Circular (MC) No. 8 on July 16, which provides for lower rates on certain transactions involving MSMEs, with discounts ranging from 20% to 50%.

“MSMEs are the backbone of our business sector, accounting for more than 99% of all businesses in the country and generating millions of jobs for our fellow Filipinos,” SEC Chairperson Francisco Ed. Lim said in an e-mail statement on Thursday.

“This policy represents our strong resolve to help bring down barriers to entry for small businesses to ensure they can grow, thrive, and continuously contribute to economic growth,” he added.

Under the MC, the SEC announced a 50% discount on the registration of securities for MSMEs that will tap the capital market. This will be effective until June 30 next year.

The move is consistent with the commission’s commitment to further reduce friction costs for companies looking to go public, the SEC said.

Effective until Dec. 31 this year, the MC also provides that MSMEs planning to register as a corporation will be given a 20% discount on registration fees, while those looking to increase their capital stock by amending their articles of incorporation will receive a 25% discount on filing fees.

MSMEs are classified based on asset size, as provided under Republic Act No. 9501 or the Magna Carta for MSMEs.

Under the law, micro-sized businesses have assets of up to P3 million; small businesses, up to P15 million; and medium-sized enterprises, up to P100 million.

For capital stock increases and securities registration filings, the president or treasurer of the applicant company must issue a signed certification of qualification stating that the company’s total assets exclude the land on which the business entity’s office, plant, and equipment are located.

“The commission is committed to implementing strategic interventions tailored to MSMEs to encourage economic growth, create employment, and strengthen the Philippines’ self-sufficient industrial foundation,” the SEC said.

The reduced rates for MSMEs follow the SEC’s announcement earlier this month to cut the rates for corporate data requests by 50%.

The corporate regulator has also previously committed to strict timelines for processing applications for permits, licenses, registrations, certificates, clearances, and other authorizations, in order to eliminate delays and remove backlogs. — Revin Mikhael D. Ochave

SSS acquires 740-M Century Properties shares

CENTURY-PROPERTIES.COM

LISTED real estate developer Century Properties Group, Inc. (CPG) has sold P500 million worth of shares to the state-led Social Security System (SSS) through a block sale transaction.

SSS acquired 740.74 million CPG shares at P0.675 per share, the company said in a regulatory filing on Thursday.

CPG is primarily engaged in the development, marketing, and sale of mid- and high-rise condominiums and single-detached homes, in the leasing of retail and office space, and in property management.

The company, through its subsidiary PHirst Park Homes, Inc., is planning to launch around 10 projects over the next two years, including its first development in Mindanao, set for the third quarter of this year.

“The next five years will see continued growth and sustained launches from PHirst, highlighting our vision of becoming a leading enabler of first-time home buyers in the country,” Century Properties President and Chief Executive Officer Jose Marco Antonio said during the company’s annual stockholders’ meeting last month.

PHirst President Ricky M. Celis said the segment is on track to open six to eight new projects across different brands in 2025, covering about 100 hectares.

The upcoming developments will consist of more than 10,000 units, with a projected sales value of P25 billion.

For the first three months, CPG saw its net income rise by 16% year on year to P473 million, while consolidated revenue grew by 4% to P3.72 billion. PHirst accounted for 60%, or P2.24 billion, of total revenue.

On Thursday, CPG shares closed unchanged at P0.71 each. — Sheldeen Joy Talavera

Lucien Dy Tioco @ 60: Leading through liminal space

Lucien C. Dy Tioco, executive vice-president of the PhilSTAR Media Group

By Bjorn Biel M. Beltran, Special Features and Content Assistant Editor

In the past two decades, few media executives have had to make harder choices than those leading legacy newspapers into the digital age. Faced with an unknown frontier, many were at a loss.

Some titles doubled down on nostalgia, hoping the loyalty of aging print readers would carry them through. Many others treated digital as an afterthought, walling off online operations from their editorial cores, republishing print content wholesale without adapting them to the digital medium, or outsourcing innovation to agencies with no stake in the paper’s identity.

As part of that era of leaders, Lucien C. Dy Tioco, executive vice-president of the PhilSTAR Media Group (PMG), the multimedia outfit that houses esteemed titles like The Philippine STAR and BusinessWorld, had to brave that transition.

In doing so, he has not only succeeded in adapting the journalistic legacy of Philippine print media to the digital age, helping his organization become the leading print media organization in the country with six titles comprising broadsheets and tabloids circulated nationwide; but he also transformed the brand into a creative platform for advertisers navigating the new media landscape, securing the partnerships and collaborations that ensured the company’s continued success.

Upholding past legacy

After earning a degree in Journalism from the University of Santo Tomas in 1985, Mr. Dy Tioco took a detour into music, working at PolyEast Records (then called OctoArts International) in Artist and Repertoire, where he managed local releases of global labels like Virgin, Chrysalis, and RCA.

It had been his dream. Mr. Dy Tioco had a passion for music, and during his application for that first job, his knowledge of the industry impressed the executives at OctoArts International so much that they created a job opening exclusively for him. But after two years, print called him back.

His family already had ties to the industry. His sister had been an account executive at Business Day, the precursor to BusinessWorld. Meanwhile, his father was an advertising executive at the company now known as McCann and Saatchi.

Mr. Dy Tioco joined The Philippine STAR in 1987 as a branch coordinator for classified ads, cutting his teeth in marketing research, and quickly becoming one of the paper’s standout account managers.

One of his most successful projects was a lockout for Sharp in 1990, a term for when all the advertisement in a particular newspaper issue is from a single advertiser. It was not only the newspaper’s first lockout project; it was considered the first of its kind in the industry. It was so successful that it ran annually for 10 years.

In 2000, Mr. Dy Tioco was named advertising director. A dozen years after that, he was elevated to Senior Vice-President for Sales and Marketing.

When BusinessWorld became part of the PMG portfolio in 2015, Mr. Dy Tioco was given expanded oversight. He worked to modernize the brand’s image while preserving its editorial gravitas introducing online video conferences, digital subscription models, and a more dynamic social media presence that helped the outlet reach a younger generation of professionals without diluting its authority.

In terms of leading the marketing team, he described his management style as more of a coach than an instructor.

“I consider myself a coach with a pride of athletes, and I train them to be tough and No. 1 in the field. I build them like a champion team,” he had previously said of his management style.

“More than meeting targets and group goals, all the qualities and skills to become an effective leader boils down to one thing: It’s all about finding one’s motivation and working on that motivation to achieve success in life,” he added. “The success of the common goal comes easily because everyone is motivated. That to me is the core of leadership. Motivating the human spirit to defy all odds.”

A year later, he was named Executive Vice-President for Sales and Marketing for both titles.

Under Mr. Dy Tioco’s leadership, PMG remade itself into one of the country’s top digital platforms. What began as a post-EDSA broadsheet grew into a multimedia operation spanning mobile, web, live events, television, and outdoor. He applied the same digital-first sensibility to business daily BusinessWorld, Filipino tabloid Pilipino Star Ngayon, Cebu broadsheet The Freeman, and a new slate of digital-native brands.

“It was still early days when The Philippine STAR debuted its newspaper app in 2013. The app, I recall, integrated an early augmented reality feature to the delight of our followers,” he recalled, writing for the STAR in 2022.

“Our foray into apps, digital editions and augmented reality — despite lagging connectivity issues then — emboldened us to produce more multimedia formats, from video documentary series to the creation of TV shows under the brand Philstar TV, which showcased TV shows inspired by our sections. We were the first and only newspaper to produce a miniseries that led to a movie through which we boldly partnered with the country’s leading network.”

It was during those early days that he saw the value in developing in-house creative and production teams that were capable of producing videos and creating events. The choice to create television-styled content was a strategic one. By bringing STAR sections to screens, they created touchpoints for audiences who might never pick up a broadsheet, positioning the brand as a content engine, not just a publisher.

Mr. Dy Tioco also realized then that the key to the digital transition is not the discarding of old conventions in favor of what is new, but the evolution of what made the printed legacy so influential in the first place.

“Our journey to a more digitized world has made us hone our expertise and expand our influence. We are able to do all of this because of a very important strategy: keeping the printed format healthy and sustainable,” Mr. Dy Tioco noted.

Unlike the fragmented attention of scrolling through feeds, print demands and rewards deeper engagement. Mr. Dy Tioco cited analytics from July 2022 that show readers of The Philippine STAR and its sister publications spend an average of over 41 minutes per issue, far exceeding the one to five minutes people spend on most news websites.

Even during the most restrictive months of the pandemic, readers sought out their newspapers, underscoring a level of loyalty and routine digital alone could not replicate. Mr. Dy Tioco saw this as the validation of a hybrid model: one where print and digital complement one another, rather than cannibalizing each other’s growth. The print readership of PMG titles, he pointed out, includes decision-makers and loyal readers who still read from cover to cover.

“Shrinking print ad budgets notwithstanding, The STAR’s share of the market continues to grow, thanks to the trust of our readers and advertisers,” he said.

“We brace ourselves for newer waves of digital transformation that will further shape our world, but we will continue fighting for our place as a credible and trusted source of news and information. For this reason, we at The Philippine STAR look forward to unveil our next pages while keeping our core — truth and nothing but — strong,” he added.

Transitioning into an unknown future

The journey of PMG into the digital frontier was neither seamless nor without risk. Since the advent of the internet, there has been no small number of well-established publications that saw their final issues printed.

Advertising, the lifeblood of newspapers everywhere, was migrating online; and journalism had to function not just as storytelling but as a digital product. Newsrooms had to become competitive advertising platforms, capable of monetizing attention in a digital economy governed by clicks, algorithms, and engagement metrics.

Even today, the Reuters Institute finds that online and social media, mostly Facebook and YouTube, remain the most popular sources of news in the Philippines for the urban population. TV and radio news, while still important for those who are not online, are seeing continued decline over the last five years. Only 18% of Filipinos pay for online news.

Yet, the company pulled it off, and Mr. Dy Tioco came away with quite a few accolades that acknowledge his efforts.

Recognized for his outstanding leadership and dedication to his job, he was named Asia’s Top Outstanding Netizen Marketeer of the Year at the 2023 AMF Asia Youth, Women Netizen Marketing Excellence Awards.

“Every award validates everything that we have been doing as right. This award is really special because of its international recognition,” he had said on receiving the award.

He had also received honors and acclaim from agencies and award-giving bodies like the 37th Agora Awards, where he was named the recipient of the Outstanding Achievement in Marketing Communications award. His alma mater, the University of Santo Tomas, awarded him with the Outstanding Thomasian Alumni (TOTAL) award for his work in the media industry. He was also listed as one of the recipients of the 2016 CEO Excel Award from the International Association of Business Communicators (IABC). In 2020, he led the Philippine Marketing Association as its president.

“More than the Filipino as a world-class marketer, I am proud of how the Asian community has recognized our efforts to make The STAR thrive amidst the challenges of the print industry and the pandemic,” he said.

Technology continues to evolve, however, and trailblazers like Mr. Dy Tioco are seldom awarded time to rest. Artificial intelligence is revolutionizing the landscape once again, and is raising all-new questions regarding the future of journalism and media.

“I have my sights set on how The STAR Group will be by 2030. With a new generation of tech coming in, all I can say there’s a whole lot of exciting possibilities and opportunities poised for The STAR,” Mr. Dy Tioco said.

1...240241242...13,203Page 241 of 13,203
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube