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Gov’t makes full award of T-bills as yields drop on strong demand

THE GOVERNMENT fully awarded the Treasury bills (T-bills) it auctioned off on Tuesday as yields fell across the board amid easing inflationary worries here and abroad.

The Bureau of the Treasury (BTr) raised P10 billion as planned via the T-bills it offered on Tuesday as total bids reached P72.215 billion, more than seven times the amount on the auction block.

Broken down, the Treasury made a full P3-billion award of the 91-day T-bills, with tenders for the tenor reaching P25.615 billion. The three-month paper was quoted at an average rate of 4.753%, 137 basis points (bps) below the 6.123% seen for the P5-billion award made for the tenor on Nov. 13. Accepted rates ranged from 4.72% to 4.78%.

The government likewise borrowed the programmed P3 billion through the 182-day securities, as bids for the paper reached P22.38 billion. The average rate for the six-month T-bill stood at 5.181%, down by 133.2 bps from the 6.513% quoted for the previous awarding worth P5 billion, with accepted yields ranging from 5.11% to 5.27%.

Lastly, the BTr raised P4 billion as planned via the 364-day debt papers, with bids reaching P24.22 billion. The average rate of the one-year T-bill went down by 83.3 bps to 5.727% from the 6.56% fetched for the P5 billion borrowed two weeks ago. Accepted yields were from 5.59% to 5.75%.

The government did not auction off T-bills last week to make way for its maiden offering of one-year tokenized bonds, from which it raised P15 billion at a coupon rate of 6.5%.

At the secondary market on Tuesday, the 91-, 182-, and 364-day T-bills were quoted at 5.7399, 5.9376%, and 6.2694%, respectively, based on PHP BVAL Reference Rates data published on the Philippine Dealing System’s website.

“The lower rates tendered today reflected easing inflationary concerns locally and globally,” a trader said in an e-mail on Tuesday.

Philippine headline inflation eased to 4.9% in October from 6.1% in September. This brought the 10-month average to 6.4%, still above the Bangko Sentral ng Pilipinas’ 2-4% target and 6% forecast for the year.

Meanwhile, the US consumer price index (CPI) was unchanged in October for the first time in more than a year and followed a 0.4% rise in September. Year on year, the CPI rose by 3.2%, slower than 3.7% the prior month.

T-bill yields were significantly lower than secondary market levels after global oil prices declined to four-month lows recently, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

On Tuesday, US crude eased 0.13% to $74.76 per barrel and Brent was back below $80, with oil prices swaying between gains and losses ahead of Organization of the Petroleum Exporting Countries’ meeting later this week, Reuters reported.

Slower US inflation fanned dovish expectations for the US Federal Reserve, which caused global yields, including local rates, to go down, Mr. Ricafort added.

Traders hunkered down on bets that the Federal Reserve could start cutting interest rates in the first half of next year, Reuters reported.

Traders are now eyeing US core personal consumption expenditures price index — the Fed’s preferred measure of inflation — this week for more confirmation that inflation in the world’s largest economy is slowing.

The US central bank kept its target rate steady at the 5.25%-5.5% range for a second straight time during its Oct. 31-Nov. 1 meeting.

It has hiked borrowing costs by a cumulative 525 bps since it began its tightening cycle in March last year.

The Federal Open market Committee will next meet on Dec. 12-13 to review their policy stance.

On Wednesday, the BTr will offer P20 billion in reissued seven-year Treasury bonds with a remaining life of five years and 10 months.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — AMCS

Eastern Telecommunications says its services now reach Pangasinan

TELECOMMUNICATIONS company Eastern Communications is expanding its footprint by extending its services to Pangasinan as part of its commitment to help boost digitalization growth.

“Expanding to Pangasinan provides us an immense opportunity to finally be able to bridge our services in Northern and Central Luzon. We have long been eyeing Pangasinan as a key expansion area for its advantages in the agro-industrial sectors and its increasing economic activities,” Michael Castaneda, vice-president and head of sales, said in a statement on Tuesday.

The company has expressed its interest in supporting Pangasinan’s economic opportunities where the telecommunications company said it aims to bridge other economic zones and provinces through tools and platforms to enhance digitalization within the province.

“Eastern Communications stands ready to support Pangasinan’s vision to boost its MSME sector. With its business-grade connectivity services and ICT solutions, enterprises of all sizes can avail of necessary tools to guarantee expansion and success,” the company said.

Eastern Communications equips businesses with cloud and data services to allow them to accommodate large-scale applications and secure storage. The company also said it tailor-fits internet solutions to cater to their business needs and operations. — A.E.O. Jose

Late Show host Stephen Colbert recovering from ruptured appendix

STEPHEN COLBERT —IMDB.COM

LOS ANGELES — Production of The Late Show with Stephen Colbert was canceled this week as the top-rated US late-night television host recovers from surgery for a ruptured appendix, the CBS program announced on Monday.

The news came in a brief statement posted on the show’s official feed on the social media platform Threads, presented as a message from Mr. Colbert himself in his signature tongue-in-cheek style, jokingly hinting at Thanksgiving over-indulgence.

“Sorry to say that I have to cancel our shows this week. I’m sure you’re thinking, ‘Turkey overdose, Steve? Gravy boat capsize?’ Actually, I’m recovering from surgery for a ruptured appendix,” he wrote.

Mr. Colbert, 59, goes on to express gratitude to his doctors for their care and to his wife, Evie, and their children “for putting up with me,” adding, “Going forward, all e-mails to my appendix will be handled by my pancreas.”

No details were offered about when he fell ill and underwent surgery, how long he was hospitalized, or whether he has yet been discharged. His representatives did not immediately respond to Reuters’ requests for further details.

Cancellation of this week’s shows marked the second disruption of Mr. Colbert’s production schedule since his show, taped before a live audience in the Ed Sullivan Theater in Manhattan, returned to the airwaves in early October following settlement of a prolonged strike by the Writers Guild of America.

Mr. Colbert, the most watched host on US late-night television for several years, hosted one episode from his home last month after testing positive for COVID-19 before the rest of that week’s installments were canceled, according to Hollywood trade paper Variety.

Among the guest celebrities and performers who had been due to appear on the show this week were actress Jennifer Garner, director Baz Luhrmann, former Late Show band leader Jon Batiste, actor Patrick Stewart, singer-actress Barbra Streisand and actor Kelsey Grammer, Variety reported. — Reuters

An intellectual giant on Philippine agribusiness: Diversifying crops

JAKE GARD-UNSPLASH

(Part 3)

The late Dr. Rolando “Rolly” Dy always started with a macro view of the entire agricultural sector as he related it to comprehensive economic development and poverty eradication. He, however, was at his best in descending to the micro level of agribusiness which he always viewed as a whole value chain from farming to post-harvest to logistics, manufacturing and processing, retailing and all the way to the final consumers of food and beverage products. That is why he was a favorite consultant of some of the largest Philippine agribusiness firms like San Miguel Corp., Del Monte, Monde Nissin, Nestlé, Century Pacific, etc.

He would usually start with some strategic directions at the macro level, such as: “For agriculture to be able to contribute to inclusive growth, three pillars or job creation streams must be pursued: farm productivity, farm diversification, and agri-manufacturing. An overall requirement is that of market-driven competitiveness of the entire sector. The private sector must take the lead and the public sector must be there only to give the necessary support of the physical and legal infrastructure.”

His insistence on the three pillars remind me of what former Secretary of Agriculture William Dar presented to President Ferdinand Marcos, Jr. as his Transition Report in which the former Secretary, who always consulted with Rolly, specifically referred to the three strategic directions of land consolidation (to reach economies of scale for productivity increase), product diversification (veering away from the obsession with rice), and industrialization (value adding through processing raw materials instead of just exporting them). The only strategy that was added in the Transition Report was “Digitalization” which only recently has become an imperative in any attempt to improve the productivity of any sector, whether agriculture, industry, or services.

After specifying the strategic directions at the macro level, Rolly immediately plunged into the microeconomics (or industry level) of agribusiness. In his Magisterial Lecture, he made a very useful comparison of the productivity levels in very specific crops among the ASEAN countries. He presented data demonstrating that the Philippines lags in farm productivity metrics in the major crops common to ASEAN economies: in rice, corn, coconut, coffee, and rubber. The Philippines only excelled in banana and pineapple, two plantation crops that accounted for less than 1.5% of the total farmland of about 10 million hectares. The crop with the largest area, coconut, accounted for 3.5 million hectares with productivity levels of only 25% of the potential, considering the other coconut producers in Asia such as Indonesia and India. According to the Philippine Coconut Authority (PCA), barely one million hectares have some form of intercropping. The crop mainstay, because of poor clones, senility, and limited fertilization, generates less than one ton of oil per hectare as compared to oil palm at four times that level.

Rolly enumerated the causes of low productivity in Philippine farms. They can be categorized as follows:

• Inputs: limited access to land, inadequate supply of quality seeds and seedlings; high costs of inputs, limited access to credit;

• Production: poor farm management, lack of access to advanced technology, no economies of scale because of farm fragmentation;

• Market: poor access to market, lack of price and market information, lack of information on returns on alternative crops;

• Infrastructure: inadequate and poor quality of farm-to-market roads, high cost of power;

• Pests and Diseases;

• Natural calamities;

• Lack of long-term capital; and,

• Misguided policies of Government, both at the national and local levels.

In contrast with what was happening in the Philippines, in which agriculture suffered from both benign neglect and erroneous policies, the rapid productivity gains in many parts of Asia were fueled by a veritable Green Revolution. This Revolution led to increased producers’ incomes, higher laborers’ wages, and lowered prices of food.

In addition, new livelihood opportunities were generated when success in agriculture provided the basis for economic diversification. Links between agriculture and poverty reduction are forged through four transmission mechanisms: a.) direct and relatively immediate impact of improved agricultural performance on rural incomes; b.) impact of cheaper food for both the urban and rural poor; c.) agriculture’s contribution to growth and the generation of economic opportunity in the non-farm sector; and, d.) agriculture’s fundamental role in stimulating and sustaining economic transition, as countries (and poor people’s livelihoods) shift away from being primarily agricultural towards a broader base of manufacturing and services.

Increasing agricultural productivity remains the single most important determinant of economic growth and poverty reduction in countries with the necessary land endowments such as Indonesia, Thailand, Vietnam, Malaysia, and the Philippines. In fact, the success stories of Thailand and Vietnam in transitioning from low to high-middle income economies in the last 20 years mirrors the process described above.

In advocating for product diversification, Rolly presented clear evidence of lack of diversification as one source of the underdevelopment of the Philippine agricultural sector. Some 80% of all the farmlands are planted to just three crops: coconut, rice, and corn. Most are producing below potential. At the same time, there are other commodities such as tree crops (e.g., coffee, rubber, cacao, and palm oil) and fruits which can be intercropped in coconut areas. Some of them can be planted as mono crops such as oil palm and rubber. There can also be mono tree crops that can be planted in large corporate farms like mangoes, avocado, and durian, following the very successful experiences in banana and pineapple plantations in Mindanao.

The dismal record in product diversification is reflected in the low agricultural exports as compared to its ASEAN peers. The Philippines was the only one with a negative trade balance in agri-food trade. In 2010, total agri-food exports of the Philippines were $4 billion compared to the $13 billion to $33 billion of Vietnam, Malaysia, Thailand, and Indonesia. All its neighboring ASEAN countries had positive trade balances in agricultural trade while the Philippines posted a negative trade balance of -$2.7 billion.

Rolly did not spare details in lamenting the failure of the Philippines in diversifying its food exports. He cited the fact that the country’s agri-food export intensity, as measured by value per physical area of land, was very low. It was less than half of Indonesia’s, one-sixth of Thailand’s, and one-tenth of Malaysia’s. The Philippines had only three agricultural exports with earnings of more than $250 million a year as compared to Malaysia and Vietnam that had nine each, Indonesia’s 11, and Thailand’s 19. For billion-dollar exports, the Philippines had only one (coconut oil) as compared to Malaysia’s four; Vietnam’s five; and Thailand’s seven. These comparative figures have changed very little up to this day.

It is to be hoped that the new Secretary of Agriculture will assign the highest priority to the diversification of crops in the Philippines. This diversification is very closely tied up with the indispensable step of farm consolidation to attain economies scale in the growing of such crops as cacao, coffee, palm oil, mangoes, avocado, durian, and other products which our ASEAN neighbors have succeeded in developing for exports.

(To be continued.)

Read Parts 1 and 2 here: An intellectual giant on Philippine agribusiness (https://tinyurl.com/ynvauzqn) and An intellectual giant on Philippine agribusiness: Reducing poverty (https://tinyurl.com/yp2mfv3)

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

UnionBank to infuse P1.8B in capital into digital bank

PHILIPPINE STAR/KRIZ JOHN ROSALES

UNION BANK of the Philippines, Inc. (UnionBank) will infuse P1.8 billion in fresh capital into its online lending arm UnionDigital Bank, Inc.

The infusion was approved by UnionBank’s board of directors at a meeting on Friday, the listed lender said in a disclosure to the local bourse on Tuesday.

The fresh funds will be used “to support UnionDigital’s ongoing business operations and allow it to deliver sustainable growth,” UnionBank said.

UnionBank last month said it made an equity investment of P900 million into UnionDigital to support its subsidiary’s growth and boost its capital position.

UnionDigital is planning to introduce ​​high-frequency lending in the second quarter or second half of 2024, targeted towards individuals that live “day-to-day.”

The first version of the loan will have a tenor of 30 days with no repayment penalty. UnionDigital is looking to introduce shorter tenors in descending order, starting with two weeks, then weekly, and then daily.

The loans will be priced slightly above credit card rates, it said.

As of November, the digital bank’s outstanding loan balance stood at P12 billion.

UnionDigital is one of the six Bangko Sentral ng Pilipinas-licensed digital banks in the country. It secured its online banking license in July 2021 and began operations in July 2022.

UnionDigital’s parent UnionBank saw its net income drop by 58.99% year on year to P1.65 billion in the third quarter as it set aside more loan loss provisions in the period versus the prior year.

As of Dec. 31, 2022, UnionBank had 385 branches, and 585 automated teller machines nationwide.

UnionBank’s shares dropped by 20 centavos or 0.34% to end at P58.80 apiece on Tuesday. — A.M.C. Sy

Energy transition seen backed by wind, solar resources

FREEPIK

WIND and solar energy resources are seen to drive the country’s transition into cleaner energy, according to top energy players, who highlighted the need to boost the transmission infrastructure.

“We don’t think that geothermal potential in the Philippines would close that gap of 5,000 megawatts (MW) of renewables. We believe that a lot of that will be driven by solar and wind, which have low output or low capacity factor,” said ACEN Corp. President and Chief Executive Officer Eric T. Francia during the BusinessWorld Economic Forum last week.

Mr. Francia said that the Philippines needs to build 18,000 MW of renewables to adjust to the low capacity factor of solar and wind resources.

“When we now look forward, by 2030 and beyond, the country is growing at 5-6% per year and that translates to about 1,000 megawatts of new capacities that we need to build every year,” Mr. Francia said.

Looking at the next seven years and beyond, he said that the country will need to build around almost 6,000 MW of “clean” capacity, which is to be driven by solar and wind sources.

ACEN is building solar and wind power projects with a total capacity of 1,100 MW, of which 700 MW is expected to be operational in the next three to six months, Mr. Francia said.

Currently, ACEN has approximately 4,430 MW of attributable capacity spanning the Philippines, Vietnam, Indonesia, India, and Australia.

Meanwhile, Abotiz Power Corp. (AboitizPower) President and Chief Executive Emmanuel V.  Rubio said that there is a need to balance “variable” renewable energy (RE) sources to ensure grid preparedness for its buildout.

“What’s not being discussed is that energy needed to balance the variability of solar and wind,” he said, adding that the power grid can manage only up to a certain level of renewable energy capacity.

AboitizPower has set a target net attributable capacity of 9,200 MW and a 50:50 balance between its RE and thermal portfolios by the end of the decade.

Mr. Rubio said that the country’s energy transition needs to consider a lot of things.

As of end-2022, renewables accounted for about 22% of the Philippines’ power generation mix. The government wants to increase the share to 35% by 2030 and 50% by 2040.

“It’s easy to actually discuss and simplify things but it’s not simple. The transition has to be well-managed and well-planned and every time there’s a discussion on transition to cleaner energy, I think what has to be put into the table is also about climate justice and energy equity,” he said. — Sheldeen Joy Talavera

Jon Batiste says documentary became a ‘symphony of life’

LONDON — He planned to make a film about composing his first symphony but in late 2021, award-winning musician Jon Batiste was nominated for 11 Grammy awards and his partner’s long-dormant cancer returned, so the movie became more a “symphony of life.”

“Imagine you’re on stage at the Grammys and you’re thinking about what’s going on back home,” Mr. Batiste said of the night in 2022 when he won five trophies including best album.

“We just won the biggest award in music. But everything is put in proper perspective when life is giving you this sort of moment,” he said.

Mr. Batiste and his wife, journalist and author Suleika Jaouad, teamed up with filmmaker Matthew Heineman to make American Symphony, which was initially going to just capture Mr. Batiste’s creative process leading up to a performance at New York’s prestigious Carnegie Hall.

It did just that, and it also showed Ms. Jaouad going through a second bone marrow transplant while Mr. Batiste was winning awards.

“I think it felt really important to show what it’s really like to go through an illness like this… with the hope that it might offer some companionship and comfort to people who are similarly in the trenches of treatment,” she said.

“I owe so much to them for having the bravery to open up their lives at such an unbelievably sensitive and critical juncture,” said Mr. Heineman who shot scenes in Ms. Jaouad’s hospital room as well as Batiste’s bedroom.

“I didn’t want to tell the story from the outside. I want it to be an experiential film with them through all the twists and turns,” he said.

Sitting alongside her husband in London, Ms. Jaouad said she was “doing really well” and despite being told that she would be in treatment indefinitely, she was focused on the present.

“My practice has become to try to live every day as if it’s my first, to wake up as a newborn, with a sense of curiosity and awe and wonder.”

Mr. Batiste has recently been nominated for another five Grammy Awards, and this time around the couple expect to attend the event in 2024 together.

As for the film, which is available on streaming platform Netflix from Nov. 29, Mr. Heineman hopes “it not only brings joy, but also provides a roadmap on how to confront difficult moments.” — Reuters

The economic nature of security and the importance of international collaboration

RAWPIXEL.CFOM-FREEPIK

There have been many security challenges to the Philippines, both within its borders and in the context of the Indo-Pacific region. In recent years and months, we saw an aggressive and antagonistic state’s repeated incursions into what had been established by international law as belonging to our country. Numerous incidents in the West Philippine Sea showed the brazenness and desperation of that country, resorting to tactics that ranged from pointing military-grade lasers at members of our Coast Guard, using water cannons against our vessels, installing floating barriers in our own territory, and dangerous maneuvers against Philippine vessels. Such activities have also damaged our coral reefs, endangering not only Filipinos but marine life within our bounds, and compromising the future of the next generation.

In facing these challenges, we have looked to our international partners which have given us support in many forms. They have articulated their support for our victory at the Permanent Court of Arbitration and have provided much-needed opportunities to upgrade our military defense capabilities through joint exercises, shared technology, and shared best practices.

Similarly, in our pursuit of security in cyberspace, where individual, group, or state-sponsored bad actors proliferate to commit crimes for material gain, disruption, or to advance their own agenda, we can learn much from our international partners. These tech-based attackers are unseen enemies that are difficult to keep track of, much less catch and prosecute. The very nature of the internet provides the perfect opportunities for cybercrime.

We recognize, however, that robust military defense mechanisms and sophisticated cybersecurity techniques are but one aspect of security.

A more common, visible, and fundamental kind of security is economic in nature. There is economic security when individuals in a nation enjoy a stable source of income and are consistently able to meet their basic needs. No less than the President said that economic security is national security.

This is not pure rhetoric, either. When people know where their next meal is coming from, and when they can plan how they spend their own resources and enjoy the agency to set their own economic goals, that is security. When they are confident that their children can attend school and contemplate a prosperous future, that is security as well. When they go to sleep at night knowing that they have some savings put away in times of emergency or for their old age, that is security.

But how exactly do we work toward that kind of security, not only for a small segment of the Filipino population but for the majority of the people?

This was the central theme of the 2023 Pilipinas Conference of the Stratbase ADR Institute, titled “The Path Towards Economic Security: Turning Global Risks into Opportunities.” This is the eighth year the Institute has held such a conference, and last week’s event was attended, as always, by top leaders in government and the private sector as well as members of the diplomatic community.

Our panel with the ambassadors reminded us that the Philippines can only achieve prosperity through the support and cooperation of the international community. Shared prosperity results from shared responsibilities in being a true and beneficial partner to each other. It validated the results of a Stratbase-commissioned September 2023 survey by Pulse Asia that said Filipinos are keen for the Marcos Jr. administration to work with like-minded states in strengthening economic security. Indeed, with robust trade relations, the Philippines continues to elevate its ties with these countries and initiatives are expanding.

During the forum, Australian Ambassador Hae Kyong (HK) Yu PSM recognized the Philippines as a long-standing partner and highlighted the importance of sustainable long-term economic growth. She expressed optimism on the Philippine economy, stating that the country’s sound fiscal and monetary policies, good regulatory framework, and active private sector create an enabling investment environment.

British Ambassador Laure Beaufils emphasized that maintaining economic security is dependent on cooperation and partnerships, which translates to working together to protect the international rules-based economic order.

Delegation of the European Union Ambassador Luc Véron underscored the significance of simultaneously maximizing the benefits of economic partnerships and minimizing the risks from economic dependencies. The EU’s strategy, he said, is composed of three Ps: promoting competitiveness, protecting economic security, and partnering with reliable partners to address shared security concerns.

For Canadian Ambassador David Hartman, collective prosperity relies on a fair, predictable, and open international trading system. Building economic security relies on trade diversification, developing new commercial partnerships, investing in supply chain infrastructure, supporting a rules-based international trade system that is stable and inclusive, developing a robust national security review system, protecting critical infrastructure, and investing in cyber security, protecting intellectual property, technologies, and data. Collective prosperity relies on a fair, predictable and open international trading system, he said.

United States Chargé d’affaires Y. Robert Ewing, who represented Ambassador MaryKay Carlson, emphasized that economic and political stability are critical for the Indo-Pacific region to flourish. The region must be equipped to mitigate and respond to shocks ranging from territorial disputes, climate change, and energy to ensure a positive trajectory of economic growth. He reaffirmed the commitment of the United States to principles, norms, and standards of the international community to ensure a stable and prosperous region.

These assurances from our international partners were helpful as we anticipate both the risks and opportunities of 2024 and the coming years, and as we continue to pursue an investment-led growth anchored on the core democratic values of transparency and accountability, responsive public service, and the rule of law. After all, global investors will only come — and stay — if they feel that the government is keen on true governance.

Together let us work to create and maintain a sound economic environment, for sustainable growth and development, and for the shared prosperity and security of all Filipinos.

 

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.

Debt watchers assign ratings to PHL Sukuk issue

REUTERS

FITCH RATINGS, Moody’s Investors Service and S&P Global Ratings and have given investment-grade ratings to the Philippines’ proposed maiden issue of Sukuk bonds.

Moody’s has assigned the proposed bond issue a “Baa2” rating, Fitch rated the notes “BBB,” and S&P Global gave a preliminary “BBB+” score, all at par with their current ratings for the Philippines’ sovereign debt.

The government on Monday launched its first-ever offering of Sukuk bonds as it mandated banks for the sale of benchmark-sized 5.5-year papers. Benchmark-sized issues are worth at least $500 million.

On Tuesday, Finance Secretary Benjamin E. Diokno said at a Palace briefing that the Sukuk issue is targeted to be settled by mid-December.

“According to the transaction documents available to Moody’s, the Sukuk will constitute direct, unconditional and unsubordinated obligations of the Government of the Philippines (the issuer). It will be issued by a special purpose vehicle (ROP Sukuk Trust) and rank pari passu with all of the issuer’s current and future senior unsecured external debt obligations,”Moody’s said in a statement on Monday.

“The ratings mirror the Government of the Philippines’ issuer rating of ‘Baa2’. Moody’s notes that its Sukuk ratings do not express an opinion on the structures’ compliance with Shari’ah law,” it added.

Moody’s rating for the Philippines as an issuer is supported by the country’s high potential growth and moderate government debt, it said.

The country has also improved its fiscal position and has enough foreign exchange buffers against external risks, Moody’s added.

“Even as it emerges from the pandemic with a degree of economic scarring, Moody’s expects the recovery in real GDP (gross domestic product) growth to persist amid the deterioration in global credit conditions in the near term, and converge towards potential rates of around 6% per annum,” it said.

“At the same time, the Philippines has sustained strong access to domestic and international funding markets, a stable banking system and ample foreign-currency reserves to weather global capital flow volatility,” it added.

The Philippine economy will likely continue to expand amid favorable demographics and better investment conditions, Moody’s said, unless there is a significant weakening in its growth drivers. Other risks to the outlook include elevated inflation and climate shocks.

For its part, S&P Global likewise said its preliminary “BBB+” grade for the Sukuk bonds “reflects the sovereign credit rating on the Philippines, the obligor.”

“ROP Sukuk Trust will use at least 55% of the proceeds of the Sukuk issuance to purchase real estate assets from the sponsor, the Philippines, and the remaining portion to purchase Shari’ah-compliant commodities,” it said.

S&P said its preliminary rating is based on details in draft documents as of Oct. 23 provided to them and could change if there are significant modifications in the final legal documents for the issue.

Lastly, Fitch said its rating on the Sukuk issue “is driven solely by the Philippines’ Issuer Default Rating (IDR), which we affirmed at ‘BBB’ with a ‘stable’ outlook in November 2023.”

“We have not considered any underlying assets or collateral provided when assigning the rating, as we believe the issuer’s ability to satisfy payments due on the proposed Sukuk will ultimately depend on the government satisfying its unsecured payment obligations to the issuer under the transaction documents, as described in the offering memorandum and other supplementary documents,” it said.

“We also believe the government would be required to ensure full and timely repayment of ROP Sukuk Trust’s obligations due to the government’s various roles and obligations under the Sukuk structure and documentation,” Fitch added.

The debt watcher’s rating on the Sukuk issue will be affected by any changes to the Philippines’ long-term foreign currency IDR, it said.

Global list of best employers includes San Miguel at 43rd

ANG-LED San Miguel Corp. (SMC) climbed by 131 spots to 43rd place on the annual World’s Best Employers list this year issued by Forbes Magazine and research company Statista in October. 

In a statement on Tuesday, SMC said its 2023 ranking improved from 174th in last year’s list to make it the only Philippine company to be included in the top 50. 

Other Philippine companies included in the 2023 version of the rankings were Security Bank Corp. (54th), Metropolitan Bank and Trust Co. (162nd), Ayala Corp. (186th), Alliance Global Group, Inc. (283rd), Land Bank of the Philippines (304th), LT Group, Inc. (361st), and SM Investments Corp. (420th).

“It’s a great honor to make it to this list of the world’s 700 best employers, along with some of the most recognized and most successful Philippine firms. This just goes to show that Filipinos can compete and run proudly with the very best in the world,” SMC President and Chief Executive Officer Ramon S. Ang said.

“It also shows that given the right training, motivation, support, and a sense of a higher purpose, the Filipino workforce is highly motivated, effective, dedicated, and therefore fulfilled in their work,” he added.

According to Forbes, the rankings were determined via a survey done by Statista that covered over 170,000 employees working for various companies across 50 countries.

The companies were ranked based on criteria such as talent development, remote working options, parental leave benefits, diversity, work-life balance, and pride in the offered products or services. Respondents were also asked if they would recommend their company to family and friends as well as rate companies within their own industries and countries.

“Specific to us in SMC, I believe that our strong emphasis on business for nation-building, our core value of malasakit (concern for others), coupled with our decisive and impactful actions related to greater sustainability, has really resonated with our employees,” Mr. Ang said.

“We have also always strived to provide our employees an environment where they can learn, realize their potential, build good relationships with colleagues, and feel they are part of not just a great heritage, but also of something bigger. We believe this has greatly contributed to whatever successes we’ve had over the years,” he added. 

SMC recorded a 141% increase in its nine-month net income to P31.2 billion despite the conglomerate’s consolidated revenues falling 5% to P1.1 trillion. 

Shares of SMC at the local stock market dropped 90 centavos or 0.84% to P106 apiece on Tuesday. — Revin Mikhael D. Ochave

Construction of C5 link segment set in early 2024

PHOTO FROM CIC

METRO Pacific Tollways Corp. (MPTC) unit MPT South Corp. expects to begin the construction of its C5 link segment 3-B by the first quarter of next year.

“We are taking an aggressive position. There is a commitment that they will partly fund the remaining right of way, we are hoping that we will be able to attain at least 80%,” Raul L. Ignacio, president and general manager of MPT South, told reporters.

Once right-of-way acquisition reaches about 80%, construction is expected to begin by January, Mr. Ignacio said.

The C5 Southlink project’s segments 2 and 3 include a 7.70 kilometers six-lane toll road project divided into 2×3 expressways and stretches from the R-1 expressway to the southern section of the C5 road.

The project is valued at P1.5 billion and is expected to reduce travel time by 30 to 45 minutes from Cavite Expressway to Makati and Taguig.

Segment 3B of the project is expected to be completed by March 2025 and has only acquired 68% of its right of way.

For the next two years, MPT South has said that it is allocating about P11.95 billion for its capital expenditure, which will mainly fund the ongoing construction of its existing projects.

MPTC is the tollways unit of Metro Pacific Investments Corp., which is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

Ancient artefacts returned to Ukraine after long dispute with Russia

ANCIENT Scythian artefacts from museums in Russian-occupied Crimea have been returned to Ukraine after a legal dispute over ownership rights during which they spent almost a decade in the Netherlands, a Ukrainian museum said on Monday.

More than a thousand artefacts, including a solid gold Scythian helmet and golden neck ornament, were on loan to Amsterdam’s Allard Pierson Museum when Russian troops seized and annexed the peninsula in 2014.

Both Ukraine and the museums located on the Moscow-controlled territory claimed ownership rights to the pieces when the exhibition ended. The items date from when the Scythian people lived in the area between the 7th and 3rd centuries BC.

“After almost 10 years of court hearings, artefacts from four Crimean museums that were presented at the exhibition Crimea: gold and secrets of the Black Sea in Amsterdam have returned to Ukraine,” the National Museum of History of Ukraine said.

It said the Allard Pierson Museum had returned 565 items including ancient sculptures, Scythian and Sarmatian jewelry, and Chinese lacquer boxes.

It said the collection would be stored in the museum until the de-occupation of Crimea.

The Allard Pierson Museum said the artefacts had been returned to Kyiv on Sunday.

“This was a special case, in which cultural heritage became a victim of geopolitical developments,” said Els van der Plas, director of the Allard Pierson. “We are pleased that clarity has emerged and that they have now been returned.” In June, the Dutch Supreme Court ruled the items should be returned to Ukraine. Kyiv sees the artefacts as part of its national heritage, while the Moscow-controlled museums said they had to return to the peninsula due to loan terms.

On Monday, Kremlin spokesman Dmitry Peskov was quoted by TASS state news agency as saying the artefacts “belong to Crimea and should be there.”

The Moscow-installed governor of the peninsula, in comments on Telegram, suggested they should be returned by “achieving the goals of the special military operation,” Russia’s official title for its war in Ukraine.

Ukrainian customs services reported on Monday that a truck carrying “2,694 kg of cultural property” entered the 980-year-old Kyiv-Pechersk Lavra monastery complex, where a further identification process would take place. — Reuters

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