MELBOURNE — Top lithium producer Australia and major nickel suppliers Indonesia and the Philippines could team up to develop regional battery storage systems, the head of Philippine energy firm ACEN said on Monday.
“It is worth noting that there is concentration of risk for lithium battery production, with over 70% being produced in China alone,” ACEN CEO Eric Francia told delegates to an Australia-ASEAN summit in Melbourne.
“With Australia being the top lithium producer globally, and Indonesia and the Philippines being the top nickel producers,
there are potentially opportunities to establish a regional supply chain and cater to the significant demand for battery storage within our region,” he said.
Any opportunities for electric vehicle batteries would make sense to be in Thailand, while Indonesia may offer more opportunity for large scale battery production, especially as solar power is helping to green the country’s power supply, he added on the sidelines of the event. — Reuters
Panel discussion during the BusinessWorld Insights and Project KaLIKHAsan forum themed “The Shift to Green Development” last Jan. 26 at Seda Manila Bay. From L-R: Cathy Rose A. Garcia of BusinessWorld (moderator), Jolan Formalejo of Aboitiz InfraCapital Economic Estates, Gie Garcia of NEO, Alexis L. Ortiga of SM Prime’s Commercial Properties Group, and David Leechiu of Leechiu Property Consultants — Photos by Earl State R. Lagundino
Open doors, hurdles insustainable PHL real estate explored in BusinessWorld Insights forum
By Angela Kiara S. Brillantesand Mhicole A. Moral, Special Features and Content Writers
Natural disasters and sustainability issues have highlighted the vulnerability of traditional infrastructure, prompting a reevaluation of development strategies. Green and resilient real estate development is a strategy that aims to reduce the carbon footprint of buildings while also making them more resistant to natural disasters. This approach is crucial for the environment, as buildings are responsible for a significant number of carbon emissions.
Thus, since the real estate industry is a vital player in the economy, shifting towards green and resilient development can have a positive impact on both the environment and the economy. The opportunities and challenges in realizing such positive impact were explored last Jan. 26 in the BusinessWorld Insights and Project KaLIKHAsan forum themed “The Shift to Green Development” at Seda Manila Bay.
Delivering the keynote presentation, Angelo Tan, country lead for Climate Business Department (CBD) at the International Finance Corp. (IFC), discussed the complexities and opportunities to achieving sustainable real estate.
Mr. Tan emphasized the need for partnerships and the growth of the private sector as a crucial engine for growth in emerging markets like the Philippines.
“Our mandate at the Climate Business Department is to make sure that development is done that’s good for the environment. And when we work with the real estate sector, that means that we need to channel private capital toward climate smart investments,” Mr. Tan explained.
IFC is specifically mandated to collaborate with the private sector in addressing investments related to sustainability. In particular, the IFC’s goal at the Climate Business Department covers a wide range of sectors, including green buildings, renewable energy, electric mobility, waste management, and green cities.
However, Mr. Tan said that the organization does not merely invest in profitable ventures as it ensures that the projects it supports contribute to positive societal development.
“[W]e have a dual mission, ending extreme poverty and boosting shared prosperity in emerging markets. But in 2024, we launched an ambitious new vision and vision for the World Bank Group, and that’s to create a world free of poverty on a livable planet,” he said. “So anything that we now do, it has to be toward development that has a positive impact for the environment. How does that work translate to real estate? When we say sustainable real estate, this is what we mean.”
Keynote Speaker Angelo Tan, country lead for Climate Business Department at the International Finance Corp.
Mitigation and adoption
Mr. Tan emphasized the importance of adopting a green, resilient, and inclusive approach to real estate development since buildings contribute up to 40% of global carbon emissions. The construction and operation of buildings release greenhouse gases (GHG), contributing to the vicious cycle of global warming. The consequences, according to Mr. Tan, are particularly severe in regions like the Philippines, where the impact of climate change is compounded by exposure to frequent and severe disasters.
To break the cycle of environmental degradation, Mr. Tan stressed the importance of a dual approach involving both climate change mitigation and adaptation. Mitigation, he explained, focuses on reducing GHG emissions through measures such as energy-efficient building designs, passive housing, and the use of sustainable technologies like LED lighting. On the other hand, adaptation acknowledges the reality of climate change and aims to enhance resilience against its effects.
Challenges in green development
Mr. Tan identified cost as a primary barrier to the widespread adoption of green and resilient building practices. While various green measures have become more accessible and affordable, there is still an additional cost associated with building green. For developers working in lower-income segments, this added cost poses a significant challenge, as it makes selling prices higher and may deter potential buyers.
“A lot of [green] measures, they’re now much more affordable. So, there’s no excuse for anyone not to do green. But the cold, hard reality is there is an additional cost to doing green,” said Mr. Tan.
The complexity of green development, particularly in terms of certification, was another major challenge highlighted. Developers face additional costs for certifying their projects as green to avoid greenwashing. Mr. Tan emphasized the importance of third-party validation but acknowledged the financial burden it places on developers, particularly in the lower-income housing market.
He added, “There’s an additional cost to certifying as green. Why do you need to certify? Because we want to avoid greenwashing. We don’t want any developer to claim that they’re green without third-party validation. And what happens when you certify a project? You pay architects and engineers to look at your plans, visit the site, do a site audit, and make sure that the building was constructed according to how it was designed.”
In addition, the lack of green building education and expertise, especially among smaller developers outside metro areas, adds to the complexity.
The speaker also identified cultural resistance to change, described as “nakagisnan” (sticking to traditional ways), as a barrier to green development. Some CEOs and CFOs still prioritize financial benefits without fully considering the environmental and social aspects of building practices, he said.
Opportunities in sustainable buildings
Mr. Tan also highlighted key points where businesses and investors are recognizing the importance of sustainable practices.
He noted the Philippines’ leadership in net zero buildings, with the first EDGE zero carbon building in the world located in the country. The ABCs of EDGE zero carbon, which stands for advanced energy efficiency, building retrofits, carbon offsets, and renewables, are explained as the key components of achieving net zero buildings.
“We need to make our buildings more efficient and more to consume less energy. Because what’s the use of having renewable energy if the building is an energy-guzzling building? Then you’re not really making a huge difference. So, we need to make our buildings more energy efficient, and by our standard, 40% energy efficiency. And that way, that standard is now being used by other organizations, 40% improvement over base case,” Mr. Tan explained.
Mr. Tan added that working across building typologies and reaching out to the provinces to transform the industry towards a more green and resilient Philippines is important to achieve the ambitions to be raised towards a more sustainable future.
A long-term investment
The forum also brought industry leaders and experts to discuss how real estate is improving building management and operations responsibly and sustainably.
Alexis L. Ortiga, vice-president for the Commercial Properties Group at SM Prime
Alexis L. Ortiga, vice-president for the Commercial Properties Group at SM Prime, shared that adopting green buildings should be considered a long-term yet smart investment.
“We need to think of sustainability as a marathon instead of a sprint. Green buildings are smart long-term investments, from installing double-glazed windows that lessen the load of AC use, to using gray water and energy recovery technologies that boost efficiency, decrease energy usage, and lower utility bills. The benefits in the long run will far outweigh the costs of today’s investments,” Mr. Ortiga said during the panel discussion of the forum.
For Gie Garcia, co-managing director and chief sustainability officer of NEO, the shift to green buildings should start in optimizing energy-efficient resources then gradually transitioning to renewable power.
David Leechiu, chief executive officer of Leechiu Property Consultants
Leechiu Property Consultants Chief Executive Officer David Leechiu pointed out that the green office market is up and thriving as the green shift among buildings is resulting in a much higher demand for green buildings.
For instance, real estate offices like those from SM Offices have embedded sustainable practices and strategies into their buildings, such as sky garden, walk bridges, bike facilities, and bike lanes, which promote sustainability and wellness of individuals.
Moreover, most demand is coming from multinational companies that aim to deliver more sustainable and green spaces.
“[M]ultinational companies have a high preference for developments that are green because, for one, it’s also integrated into their corporate goals and targets. It’s also part of their values,” Aboitiz InfraCapital Economic Estates Vice-President for Inventory Generation Jolan Formalejo shared.
Concrete steps
The panel also noted the importance for developers to look at green certification, as this can put buildings into a stronger position, minimizing carbon footprint while catering to the needs and demands of occupants, investors, or stakeholders.
Gie Garcia, co-managing director and chief sustainability officer of NEO
According to NEO’s Ms. Garcia, green certification is important depending on the developer’s goals. Some use green certifications because it is advantageous, while others who solely aim for energy-efficient buildings, might not need green building certification but need to ensure compliance with the government’s requirement.
Retrofitting is also noted by the forum’s speakers as a means of making existing buildings more energy-efficient and sustainable.
Retrofitting is the best option for green buildings, Ms. Garcia remarked; nonetheless, embarking on this still depends on whether the building was properly maintained.
Mr. Ortiga of SM Prime, however, shared that retrofitting buildings is not always necessary because other companies are already embedding sustainable practices and strategies without them realizing it, and that’s more than enough.
Besides retrofitting, green buildings need environmental policy and management systems the most.
Jolan Formalejo, vice-president for Inventory Generation at Aboitiz InfraCapital Economic Estates
“For our developments, we have more than five certified green professionals in the company that ensures the continuous efforts are being done to continuously implement efficiency into the into the buildings that we operate.” Mr. Formalejo of Aboitiz InfraCapital said.
It was also noted that besides acquiring materials and technology fit for green buildings, developers and tenants should embrace sustainable practices such as efficient energy consumption, waste management, giving back to nature, as well as cultural reconnection with nature.
Education’s role
The forum also pointed out the significance of education as a starting point in the shift to sustainable real estate.
According to NEO’s Ms. Garcia, sustainable development starts with the younger generation and should be ingrained in their mindset for it to be effective.
IFC’s Mr. Tan mentioned in his keynote the ongoing efforts to bridge this gap through programs offered at universities.
“We’ve partnered with Polytechnic University of the Philippines and National University, so architecture and engineering students at their fourth year can study DfGE (Design for Greater Efficiency). UP has tropical architecture. But beyond that, we don’t have a lot of green architecture education,” Mr. Tan shared, adding that it takes time to get students to absorb information on sustainable development and thus to put that to action.
This forum is part of PhilSTAR Media Group’s initiative titled “Project KaLIKHAsan: Creative Solutions for a Sustainable Future,” which brings together the group’s print, digital, and on-ground platforms to raise the cause of meaningful, concrete sustainability in our industries and communities.
This BusinessWorld Insights forum was presented in partnership with SM Prime and is sponsored by Aboitiz InfraCapital, Megaworld, and RLC Residences; with the support of official venue partner Seda Manila Bay Hotel and official media partner The Philippine STAR.
SYDNEY – Australia said on Monday Indo-Pacific and Southeast Asian countries are facing serious defense threats as it set aside more funds for a maritime security pact with ASEAN countries during a summit with the Southeast Asian bloc.
Foreign Minister Penny Wong said Australia would invest A$64 million ($41.8 million) over four years, including A$40 million in new funding, which would contribute to the security and prosperity of the region, consistent with the priorities of Southeast Asian countries.
“We face destabilizing, provocative and coercive actions including unsafe conduct at sea and in the air,” Ms. Wong said in a speech at the summit, adding free and open sea lanes in the South China Sea was critical for the region’s trade.
“What happens in the South China Sea, in the Taiwan Strait, in the Mekong subregion, across the Indo-Pacific, affects us all.”
China claims almost the entire South China Sea, a conduit for more than $3 trillion of annual ship-borne commerce, including parts claimed by the Philippines, Vietnam, Indonesia, Malaysia and Brunei. The Permanent Court of Arbitration in 2016 said China’s claims had no legal basis.
Philippines Secretary of Foreign Affairs Enrique Manalo said the South China Sea was of strategic importance that holds a promising future.
“However, such future will only be possible if nations in the region resolved to uphold cooperation, over confrontation and diplomacy over the use or the threat of use of force,” Mr. Manalo said in his speech.
The Philippines is ramping up efforts to counter what it describes as China’s “aggressive activities” in the South China Sea, which has also become a flashpoint for Chinese and U.S. tensions around naval operations.
Mr. Manalo said the arbitration is part of international law and nations in the region must stand firmly together in opposing actions that contradict or are inconsistent with it.
Australia last year said it would conduct more joint patrols with Philippines in the South China Sea.
Melbourne is hosting the summit from Monday to Wednesday to mark 50 years of Australia becoming the first external partner of ASEAN. — Reuters
A boy picks out a book at Hernando Guanlao's communal library in Makati, Metro Manila, Philippines, Feb. 7, 2024. -- REUTERS
MANILA – “A good book is easy to find” reads the sign on Hernando Guanlao’s two-storey home located on the outskirts of the Philippines’ main financial district which he has turned into a public library where anyone can borrow books for free.
Called the Reading Club 2000, Mr. Guanlao’s library showcases a wide variety of books he hopes will inspire people, especially young curious minds to read, especially at this time when reading ability among Philippine students remains low.
“The books that one can see here are those used in K-12 (elementary books), novels which students and enthusiasts can make use of,” the 72-year-old man said at his home crammed with thousands of books in stacks.
“There are also spiritual books for those who are looking for religious knowledge, hardbound and softbound books, autobiographies, and many different genre’s that one can enjoy, all for free,” he said.
What started as a 50-book display on the sidewalk fronting his home more than two decades ago, Mr. Guanlao’s collection has grown exponentially over the years, thanks to a steady supply of books from donors, some of whom opted to stay anonymous.
“They just leave boxes of books outside my house,” said Mr. Guanlao, who has also started shipping reading material to public schools in far-flung communities.
Philippine students are facing learning setbacks with math, science and reading scores among the lowest in the world, according to the Program for International Student Assessment.
“My mission is to give away used and donated books to others at no cost and to promote education through literature,” Mr. Guanlao said. — Reuters
AN AERIAL photo of Philippine-occupied Thitu Island, locally known as Pag-asa, in the contested Spratly Islands. — REUTERS
MANILA – The Philippines on Monday deployed a coastguard vessel to carry out a two-week patrol mission in waters north and east of the country to intensify its maritime presence and check on Chinese research vessels that were spotted in Benham Rise.
Benham Rise, which sits off the Philippines’ east coast, is a vast area declared by the United Nations in 2012 as part of the country’s continental shelf. Manila in 2017 renamed it “Philippine Rise.”
The Philippine Coast Guard (PCG) said in a statement its vessel will patrol the waters to conduct maritime domain awareness, intensify its presence in the northern Luzon island and monitor local fishermen.
“We will also check the reported Chinese research vessels in Benham Rise,” PCG spokesperson Armando Balilo said.
Benham Rise, said to be rich in biodiversity and fish stocks, is not in the South China Sea and Beijing has made no claim to it.
China is however involved in a territorial dispute with the Philippines over islands in the South China Sea, which Beijing claims almost entirely despite a 2016 arbitration ruling that said its claim had no legal basis under international law.
Ray Powell, director of SeaLight at the Gordian Knot Center for National Security Innovation, said on platform X on Friday that two Chinese research vessels left a port in Longxue Island in Guangzhou on Feb. 26 and were “loitering” northeast of Benham Rise, within the Philippines exclusive economic zone.
There was no immediate comment from the Chinese embassy in the Philippines. — Reuters
Inflation likely accelerated in February as prices of food and power increased. — PHILIPPINE STAR/MIGUEL DE GUZMAN
By Luisa Maria Jacinta C. Jocson, Reporter
HEADLINE INFLATION likely quickened in February amid higher prices of key commodities like food, electricity and fuel, analysts said.
A BusinessWorld poll of 16 analysts yielded a median estimate of 3% for the consumer price index (CPI) in February. This is within the 2.8-3.6% forecast of the Bangko Sentral ng Pilipinas (BSP) for the month.
If realized, February inflation would be slightly faster than the 2.8% print in January but much slower than 8.6% in the same month a year ago.
It would also mark the first time that inflation picked up on a month-on-month basis since September 2023.
February would also mark the third straight month that inflation was within the BSP’s 2-4% target range.
The Philippine Statistics Authority (PSA) is set to release February inflation data on Tuesday (March 5).
“We look for headline inflation to accelerate a touch to 3% year on year in February from 2.8% in January,” Sarah Tan, an economist from Moody’s Analytics, said in an e-mail.
“Key factors driving upward price pressures include higher prices of key agricultural goods such as rice and meat produce, an increase in electricity rates as well as higher petroleum prices,” she added.
Data from the Agriculture department showed that as of Feb. 29, the price of a kilogram of local well-milled rice ranged from P48 to P55 from P37 to P45 in the same period a year ago. Regular-milled rice rose to P50 per kilogram from P32 to P40.
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said that rice continued to be a main driver of inflation.
“High domestic rice prices and a hike in electricity rates also fanned inflationary pressures during the month. Global rice prices slightly eased by the end of February but its impact on domestic prices will likely take some time before taking effect,” HSBC economist for ASEAN Aris Dacanay said in an e-mail.
China Bank Research also noted electricity rates rose in areas serviced by Manila Electric Co. (Meralco), as well as parts of Visayas and Mindanao, during the month.
The overall rate for a typical household rose by P0.5738 to P11.9168 per kilowatt-hour (kWh) in February from P11.3430 in the previous month, Meralco said. This was due to an increase in the generation charge, which accounts for almost 80% of a consumer’s monthly electricity bill.
“Also, the Department of Energy reported an increase in crude oil prices due to supply-side constraints coming from the Organization of the Petroleum Exporting Countries output caps and lingering conflicts along the Red Sea,” Ms. Tan added.
In February alone, pump price adjustments stood at a net increase of P1.05 a liter for gasoline, P1.55 a liter for diesel and P0.35 a liter for kerosene.
Meanwhile, analysts said that fading base effects have also contributed to the potential uptick in inflation.
“Inflation for February could pick up to 3% year on year mathematically due to some easing of the high base effects,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail.
Mr. Dacanay also noted the “unfavorable” base effects due to the peak in inflation in January 2023, which stood at a 14-year high of 8.7%.
“Without any sudden change in policy or external conditions, these unfavorable base effects will likely remain in place until July of this year and can potentially push inflation to breach the central bank’s 2-4% target band sometime in the second quarter,” he added.
RISKS TO OUTLOOK In the coming months, analysts said inflation may spike in the middle of the year.
“Looking ahead, we anticipate inflation will breach the BSP’s 2-4% target again from April to July due to base effects. However, average headline inflation will likely settle within target this year,” China Bank Research said.
Philippine National Bank economist Alvin Joseph A. Arogo flagged risks to the inflation outlook, such as the El Niño weather event.
“Our baseline estimates assume that amid the wearing-off of base effects, there will be a transitory spike in prices because of the threats from El Niño, possible Middle East conflict escalation, and lagged impact of minimum wage hikes,” he said in an e-mail.
The latest bulletin from the state weather bureau showed that the El Niño will likely persist until May.
Earlier estimates by the central bank showed that the dry weather pattern could impact inflation by 0.02 percentage point.
“We expect some volatility in the inflation readings over the next few months given the El Niño weather pattern could strengthen and keep food prices elevated,” Moody’s Analytics Ms. Tan said.
“We understand that we are now experiencing El Niño, however, we note that other crops appear to have prices either falling or more behaved. If authorities can find a way to lower the cost of rice, we could see inflation well under control,” Mr. Mapa added.
Fading base effects and the El Niño could cause inflation to peak at 5% in the June-July period before easing to 3.5% in September, Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.
POLICY CUT Despite the potential uptick in inflation, analysts expect the BSP to keep rates steady until it begins policy easing in the middle of the year.
Sun Life Investment Management and Trust Corp. economist Patrick M. Ella said he expects the BSP to cut rates starting June.
“Should February’s inflation print settle within the BSP’s target range of 2% to 4%, this will give the BSP confidence to keep its policy rate steady when they next meet on April 4,” Ms. Tan said.
The BSP kept its benchmark rate steady at 6.5% at its February meeting. The central bank raised borrowing costs by 450 basis points (bps) from May 2022 to October 2023.
“Our base case at the moment is that the Monetary Board will start normalizing (cutting) rates in May, by 25 bps, with 2024 likely to see a total of 100 bps in reductions,”Pantheon Chief Emerging Asia Economist Miguel Chanco said.
ING’s Mr. Mapa also said the BSP will remain on hold as long as the US Federal Reserve keeps rates unchanged.
THE NATIONAL GOVERNMENT’S (NG) gross borrowings increased to P2.193 trillion in 2023 amid a rise in external debt, the Bureau of the Treasury (BTr) reported.
Data from the BTr showed that total borrowings went up by 1.38% last year from P2.163 trillion in 2022.
This was also slightly below the P2.207-trillion borrowing program for the year.
Gross external debt jumped by 7.49% to P559.035 billion last year from P520.091 billion in 2022. This was higher than the P553.5-billion targeted borrowings from foreign sources.
External debt was composed of P204.279 billion in program loans, P163.607 billion in global bonds, P135.858 billion in new project loans and P55.291 billion in Islamic certificates.
In January, the Philippine government raised $3 billion from a US dollar bond issuance and its second global bond offering under the Marcos administration.
It also generated $1 billion from the sale of its maiden offering of Sukuk bonds in December.
Meanwhile, gross domestic debt slipped by 0.6% to P1.634 trillion last year from P1.643 trillion in 2022. This accounted for 74.5% of borrowings during the year.
The BTr was expected to borrow P1.654 trillion from domestic sources last year.
Broken down, it raised P1.18 trillion from fixed-rate Treasury bonds (T-bonds), P252.091 billion from retail T-bonds, P119.531 billion from Treasury bills (T-bills).
It also collected P71.78 billion from retail onshore dollar bonds and P15 billion from tokenized bonds.
The Marcos administration offered its first retail dollar bonds in late September. It also conducted its first-ever sale of tokenized Treasury bonds in November.
In December alone, gross borrowings jumped by 55% to P92.096 billion from P59.434 billion a year ago.
Domestic borrowings resulted in a net redemption of P6.186 billion versus the P32.956-billion debt in the same month in 2022.
The BTr raised P20 billion from fixed-rate T-bonds while T-bills stood at a net redemption of P26.186 billion.
On the other hand, external debt skyrocketed (271.2%) to P98.282 billion in December from P26.478 billion.
This consisted of P26.285 billion in new project loans, P16.706 billion in program loans, and the P55.291 billion raised from the Sukuk offering.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the single-digit growth in borrowings may be due to the narrower budget deficit.
The NG’s fiscal deficit narrowed by 6.32% to P1.51 trillion in 2023 from P1.61 trillion in the year earlier.
This brought the deficit-to-gross domestic product (GDP) ratio to -6.2% at the end of the year, a tad higher than the -6.1% government target but lower than the -7.3% ratio recorded at end-2022.
The budget deficit ceiling is set at P1.39 trillion this year, or 5.1% of GDP.
“Low growth in borrowings would bode well to temper the growth in the outstanding National Government debt stock and would help bring down the debt-to-GDP ratio to below the international threshold of 60%,” Mr. Ricafort added.
The debt-to-GDP ratio stood at 60.2% at the end of 2023. This was lower than 60.9% at end-2022 and the 61.2% target set by the government.
Mr. Ricafort said that possible policy easing in the middle of the year could also reduce borrowing costs.
“Possible Fed rate cuts later this year that could be matched locally could somewhat help ease debt servicing costs and overall borrowings,” he added.
The Federal Reserve raised its policy rate by 525 basis points (bps) to 5.25-5.5% from March 2022 to July 2023.
Analysts anticipate that once the Fed begins cutting rates, the Bangko Sentral ng Pilipinas (BSP) will soon follow.
From May 2022 to October 2023, the Monetary Board raised borrowing costs by 450 bps, bringing the benchmark rate to 6.5%.
The government’s borrowing program for this year is set at P2.46 trillion, with P1.85 trillion to be raised from the domestic market and P606.85 billion from foreign sources.
In February, the government raised P584.86 billion from its offering of five-year retail Treasury bonds. — Luisa Maria Jacinta C. Jocson
Philippine peso bills are pictured being received at a money remittance center in Makati City, Sept. 19, 2018. — REUTERS
THE ANTI-MONEY Laundering Council (AMLC) is optimistic that government agencies will be able to increase the number of investigations and prosecutions of cases related to dirty money, which could help the country exit the Financial Action Task Force’s (FATF) “gray list.”
In an e-mail interview with BusinessWorld, AMLC Executive Director Matthew M. David said the Philippines is continuously improving its anti-money laundering and counter-terrorism financing (AML/CFT) regime through the efforts of government agencies and the private sector.
“We are optimistic that there will be a continuous increase in ML/TF investigations and prosecutions this 2024,” he said. “There is good momentum, and all relevant government agencies have signified their strong commitment to continue implementing and improving the country’s AML/CFT framework.”
Based on the FATF’s February update, the Philippines failed anew to exit the gray list or list of jurisdictions under increased monitoring. The country has been on the gray list since June 2021.
The FATF last month urged the Philippines to implement its action plan to address strategic deficiencies as soon as possible, as all deadlines expired in January 2023.
Even though the Philippines remained on the gray list, Mr. David said the FATF recognized its high-level commitment and the steps it has taken to improve its AML/CFT framework.
“Through collective action of relevant government agencies, such as the Philippine National Police (PNP), National Bureau of Investigation (NBI), Intelligence Services of the Armed Forces of the Philippines (ISAFP), and National Intelligence Coordinating Agency, the Philippines has shown significant increase of terrorism financing identification and investigation in line with the country’s risk profile,” he said.
SEC’S EFFORTS Mr. David said the PNP, the NBI, the Philippine Drug Enforcement Agency, the Bureau of Customs, the Securities and Exchange Commission (SEC), and the Department of Justice, all helped increase investigations on money laundering.
“Through their efforts more ML investigations were conducted which led to an increase in ML prosecutions,” he said.
For its part, the SEC said it continues to support efforts for the Philippines to exit the gray list by purging delinquent corporations.
“Our assignment is immediate outcome number five pertaining to beneficial ownership. The tall order for us is to hit 65% compliance. Presently, we are 50.7% compliant,” SEC Chairperson Emilio B. Aquino told reporters on the sidelines of a signing event last week.
On Feb. 16, the SEC issued an order that suspended the corporate registration of 117,885 corporations for failing to submit their annual reports for over five years.
“At least 117,000 companies from circa 1975 to 2008, they have been there in our database, but they have not been complying with the submissions of their annual financial statements (AFS) and general information sheets (GIS) where they are supposed to lodge their beneficial ownership. They are deemed delinquent,” he added.
Mr. Aquino said the suspended corporations have 30 days from the order’s issuance to dispute or settle the matter.
“They are suspended. Not revoked yet. They have a window of opportunity for them to still go back,” he said.
About 30% of the suspended companies are nonprofit corporations while the remaining 70% are stock corporations, according to Mr. Aquino.
Aside from exiting the gray list, he said the purging of corporations is also mandated under Republic Act No. 11232 or the Revised Corporation Code of the Philippines.
On Friday, the SEC signed data-sharing agreements with nine law enforcement agencies to address money laundering and terrorism financing. The data-sharing agreements allow the law enforcement agencies to have access to beneficial ownership information of corporations registered with the SEC.
These agencies include the NBI, Philippine Drug Enforcement Agency, Insurance Commission, Cagayan Economic Zone Authority, Department of Justice, Philippine Center on Transnational Crime, Department of Agriculture, ISAFP, and Philippine Economic Zone Authority.
At the same time, AMLC’s Mr. David said the Philippines is actively pursuing ML investigations relating to crimes with foreign and transnational elements as it continues to strengthen coordination with foreign counterparts,” he said.
In its 2022 Terrorism and Terrorism Financing Risk Assessment report published last year, the AMLC said a total of 133 terrorism financing cases have been investigated by the AMLC and law enforcement agencies from 2021 to August 2022.
The FATF did not provide specific numerical targets of investigations related to dirty money to exit the gray list, but the Philippines is continuously implementing measures to address all remaining deficiencies as soon as possible, Mr. David said.
Under Executive Order No. 33 and through the National AML/CTF Counter-Proliferation Financing Coordinating Committee (NACC), law enforcement agencies and prosecutors should have adopted policies to ensure the effectiveness of the country’s measures against dirty money.
“We wish to stress that country is doing what it can to exit the gray list, at the soonest possible time. Having said this, the date as to when the country would be considered to have accomplished all action plans and trigger exit from the list rests on the determination of the FATF,” Mr. David said.
Based on the FATF’s recent update, the country still needs to address strategic deficiencies by showing effective supervision of nonfinancial businesses and professions as well as casino junkets.
The country should also enhance and streamline the access of law enforcement agencies to beneficial ownership information.
Aside from more investigation and prosecutions, the country should also improve its implementation of cross-border declaration measures on all main international seaports and airports.
Mr. David said addressing all the remaining deficiencies requires a whole-of-nation approach. — Revin Mikhael D. Ochave with KBT
THE BOARD of Investments (BoI) has around P2 trillion worth of investment leads, mostly in renewable energy, as of January, an official said.
Ma. Corazon Halili-Dichosa, executive director of BoI’s Industry Development Services, said these investment leads comprise 331 projects, which are mostly in the renewable energy sector.
“As of January of this year, we actually have in our pipeline around P2-trillion investments that are accounted for by 331 projects,” she told reporters last week.
Ms. Halili-Dichosa said these big-ticket renewable energy projects include solar power projects and both offshore and onshore wind projects.
Some of the investment leads are in the manufacturing and data center industries, she added.
Renewable energy, information and technology, and manufacturing were among the top five performing sectors in terms of approved investments last year, accounting for over P1.1 trillion of the total approved investments.
“They are in different stages of engaging with us, but they have already expressed their interest. It is a matter really of getting final approval from their boards. But they have actually contacted us, and we have actually talked to them,” Ms. Halili-Dichosa said.
She said these investment leads are from a mix of foreign and local companies.
“For some of them, we only know the estimated project costs, which are sometimes with or without employment figures. But as to the structure of the company that will eventually apply to us, we still don’t know that,” she added.
However, Ms. Halili-Dichosa said that the investments may not register with the BoI. This is similar to how some of the projects it endorses for the green lane treatment are registered with other investment promotion agencies.
“The main objective is to get them to invest in the Philippines,” she added.
In February, the BoI announced that it had endorsed P244 billion worth of renewable energy projects for green lanes, comprising seven projects.
The endorsed projects include the 1.2-gigawatt joint wind power projects of Triconti Windkraft and Sea Wind Holdings AG worth P221.6 billion.
Executive Order No. 18, approved by Ferdinand R. Marcos, Jr. last year, established green lanes, which are meant to expedite approvals for strategic investments.
Last year, the BoI saw a 73% increase in total approved investments to P1.26 trillion, 61% of which are from foreigners. The top country sources last year were Germany (P393.28 billion), the Netherlands (P333.61 billion), and Singapore (P21.45 billion). — Justine Irish D. Tabile
By Bjorn Biel M. Beltan, Special Features and Content Assistant Editor
In a significant move towards enhancing productivity and fostering inclusivity in the Philippine banking sector, the Bangko Sentral ng Pilipinas (BSP) and the Bankers Institute of the Philippines, Inc. (BAIPHIL) recently formalized their long-standing partnership through the signing of a memorandum of understanding (MoU) on December 18, 2023 at the BSP’s head office in Manila.
“The collaboration of BSP and BAIPHIL will go a long way in reaching out to our common stakeholders by providing support to banks toward productivity enhancement through research, information exchange, and education,” BSP Governor Eli M. Remolona, Jr. said.
The collaboration aims to enhance productivity among banks through various initiatives including research, information exchange, and education. One of the key aspects of which involves joint efforts to develop capacity-building sessions for bank employees, officers, and directors, in a bid to foster continuous professional development within the banking sector.
The MoU will also facilitate the sharing of non-confidential subject matter experts and research materials, enabling both entities to leverage each other’s expertise and resources for mutual benefit.
Racquel B. Mañago, president of BAIPHIL, underscored the significance of the MoU, emphasizing that it “commits us to work together more closely toward our common goal of professional development for banking professionals, financial literacy, and financial inclusion for the underserved and unbanked.”
This commitment aligns with their overarching goal of promoting a more inclusive and resilient financial ecosystem in the Philippines, which the organization has been pursuing as part of its theme for the Fiscal Year 2023-2024, “Bridging the Digital Gap in Financial Services.”
The Philippines, like many other countries, faces significant digital gaps that hinder financial inclusivity and access to digital services for underserved communities. The digital divide in the Philippines is characterized by disparities in internet access, digital literacy, and the adoption of digital financial services among different segments of the population.
“Though it’s true that the pandemic accelerated the digital transformation of the country, the pandemic made it more pronounced, more obvious, this big gap. For many students, they may not be able to complete assignments because they do not have computers or access to the internet. For employees, they may not be able to work remotely due to connectivity issues; they may not have access to information on job opportunities. For many seniors, they cannot access online medical consultations because of this digital divide reinforcing socioeconomic inequality,” Ms. Mañago had said in an interview with BusinessWorld.
“The goal is to close that gap, or at least minimize the gap or divide. The ultimate goal is for digital financial inclusion, which is possible when we bring technology and digital know-how to everyone so that no one is left behind.”
At the beginning of this fiscal year, BAIPHIL embarked on a project to close the digital gap where it raised funds for a computer and printer bundled with 6-months free Wi-Fi for deserving schools nationwide. BAIPHIL extends its gratitude to six (6) banks who responded generously to our appeal; namely: AUB, BDO, RCBC, Robinsons Bank, SBTC and Uno Digital Bank. Equicom Savings Bank likewise donated cash to supplement this project. To date, computer bundle sets have have been turned-over to the following beneficiaries: Labney Integrated School in Mayantoc, Tarlac, Lasala Integrated School in Siargao Island, Barangay Caub in del Carmen, Surigao, Makabata School Foundation Pasig, Mapita Integrated School in Aguilar, Pangasinan, Suit Island School in Dagupan, Pangasinan and Pulung Bulu Integrated School, San Fernando, Pampanga. BAIPHIL hopes to donate computer bundle sets to more schools.
The partnership between BSP and BAIPHIL will serve to push this initiative beyond internal capacity-building to encompass the advocacies for digital finance, financial literacy, financial inclusion, sustainable finance, legislative initiatives, and other reforms that are already in place.
BAIPHIL has launched various financial literacy programs in partnership with the BSP in the past to educate parents of elementary school children and their teachers about financial literacy. BAIPHIL has also partnered with organizations like Rags2Riches, Inc. to train artisans who are mostly women from Payatas and promote financial inclusion all over the country.
Members of local government units and senior citizens are also welcome to participate in BAIPHIL’s financial literacy programs. In addition to traditional financial education, the organization intends to provide digital financial literacy programs to help the Filipino people better understand and make use of various digital tools and resources.
Ms. Mañago said that the MoU will bring both organizations together in close talks to discuss ways to align their goals in such initiatives, while continuing to promote excellence in the banking industry moving forward.
One such event focused on the continuous professional development of the banking sector was the recently-concluded “Live2Lead: BAIPHIL” leadership event, which aimed to equip potential leaders or young professionals currently performing leadership roles in the industry with new perspectives, practical tools, and key takeaways that will allow them grow and learn as leaders.
The event involved a mix of a public replay of leadership talks from world-renowned leadership experts and fireside chats with three local leaders respected in the banking industry such as former BSP Governor Felipe M. Medalla, former BSP Deputy Governor Diwa C. Guinigundo, and BSP Deputy Governor Chuchi G. Fonacier.
Ms. Mañago emphasized that BAIPHIL is very conscious of the participation and engagement metrics of training and events, as they use them to quantify and monitor progress and completion of business plans.
“We’re very conscious about the metrics and because this will tell us, ‘Are we achieving our targets, or do we need to re-strategize?’” she said.
As of March 1, 2024, BAIPHIL has offered a total of 73 training programs participated in by almost 3,000 trainees and 8 events with 3,439 participants.
“I’m really grateful that we have signed the MoU with BSP. I think that’s good leverage to take in more members. In partnership with the BSP, I feel like we can do so much more to support the digital initiative. One year is not enough, unfortunately, but hopefully we will keep going.”
Ms. Mañago hopes that through BAIPHIL’s efforts it will maintain its momentum of growth in terms of reach, to be able to engage with as many people, build partnerships and reach as many bankers, schools, and communities as they can.
She said that BAIPHIL recognizes that collaboration is essential in bridging the digital gap and including more Filipinos to enjoy the benefits of economic development. The organization actively engages with various stakeholders, including government agencies, financial institutions, and technology providers, to foster a collaborative environment.
“It’s an ongoing process. And with the help of everybody, I think we can achieve so, so much more,” Ms. Mañago said.
Established in 1941 as a non-stock, non-profit corporation, the Bankers Institute of the Philippines, Inc. (BAIPHIL) primarily aims to improve and standardize banking accounting, auditing, and operations nationwide.
From its humble beginnings as an association of mostly auditors and accountants, the Institute has blossomed into a prominent and esteemed organization for bankers. A total of 70 financial institutions and related groups have since joined the organization, representing a wide range of banking practices and services.
At present, it counts over 250 distinguished bankers and other professionals including well-known CEOs among its associates, all of whom make significant contributions to the organization’s various projects.
In its eight decades of operation, the institute has never wavered from its mission to aid financial institutions in raising productivity via research, knowledge sharing, and educational initiatives.
This article is in the special edition of BusinessWorld In-Depth digital magazine on BAIPHIL Training and Development Week and 83rd Anniversary. Get the full issue for FREE via BWorldX. Visit www.bworld-x.com.
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PANGILINAN-LED MERALCO PowerGen Corp. (MGen), Aboitiz Power Corp. (AboitizPower), and Ang-led San Miguel Global Power Holdings Corp. (SMGP) have forged a deal worth $3.3 billion, or around P168 billion, to establish an integrated liquefied natural gas (LNG) facility in Batangas.
The collaboration is expected to augment the country’s power supply with over 2,500 megawatts (MW) of generation capacity once fully operational, SMGP said in a statement on Sunday.
“For the first time, three leading power companies are working together to secure our country’s energy needs while transitioning towards cleaner power sources,” SMGP Chairman and President Ramon S. Ang said.
SMGP is the power arm of the conglomerate San Miguel Group, while MGen is the power generation arm of the electricity distribution utility Manila Electric Co. (Meralco).
Under the deal, MGen and AboitizPower will jointly invest in two of SMGP’s gas-fired power plants: the 1,278-MW Ilijan power plant and a new 1,320-MW combined cycle power facility.
The Ilijan power plant resumed its operations last year, while the new power facility under Excellent Energy Resources, Inc. is expected to start operations by the end of 2024.
The three entities will also invest in “almost 100%” of the LNG import and re-gasification terminal owned by Linseed Field Corp., a unit of Atlantic Gulf & Pacific Co.
“This will be used to receive, store and process LNG fuel for the two power plants, thus fully integrating the local energy sector into the global natural gas supply chain,” the company said.
UBS AG served as the financial adviser to MGen and AboitizPower on the transaction, according to Meralco.
MGen Chairman Manuel V. Pangilinan described the deal as a “pathbreaking venture.”
“Apart from transforming the energy landscape of the Philippines, this symbolizes a milestone alliance among major players in the energy industry towards a more sustainable future. We are thrilled to have such reliable partners as we lay the foundation for a brighter, greener future,” he said.
SMGP said that the “combined expertise and resources” will “guarantee the delivery of dependable and competitively priced energy while helping to boost economic growth and environmental preservation.”
“Both LNG and renewables are needed to achieve a balanced energy mix and well-planned energy transition… economic development is impossible without energy security, and this investment is a definitive step forward in that direction,” AboitizPower Chairman Sabin M. Aboitiz said.
Under the Philippine Energy Plan, the Department of Energy aims to increase the share of LNG in the country’s power mix to 26% by 2040, which is seen as “a suitable transition fuel.”
Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera
Style- and tech-rich MG One heats up crossover competition
By Dylan Afuang
HERE’S THE ONE — perhaps named after MG’s centennial this year — the brand’s latest compact crossover that local distributor SAIC Motor Philippines boasted as delivering advanced technologies and a sharp look.
Previewed locally late last year alongside the battery electric Cyberster, the One was recently launched — packing turbocharged internal combustion power and taking its place above MG’s best-selling subcompact crossover, the ZS.
The model comes in Std (P1,298,888) and Lux (P1,458,888) variants. For a limited time, SAIC offers the model at discounted prices of P1,223,888 for the Std and P1,390,888 for the Lux.
“This stylish vehicle boasts a wide range of features that suits the needs of young, on-the-go first-time car buyers or maybe second-car owners,” SAIC Motor Philippines Marketing Director Dax Avenido stated during the One’s public launch at the Glorietta mall in Makati City. Weeks ago, the company staged marketing activities for the One and the model’s stablemates here.
Its size makes it one of the larger crossovers in its class, with a 4,581-mm length, 1,871-mm width, 1,617-mm height, and wheelbase of 2,670mm.
The One adopts the new Dual Front Face style first seen in the GT sedan. Complementing this are a tall, sloping hood, a sinewy-patterned big grille known as the Energized Alpha Grille, and angular LED headlights that are paired with three-bar LED daytime running lights.
Contrasting black roofs distinguish the Lux variant. The car rides on 18- or 19-inch alloy wheels, and LED Delta Glow taillights. A Twin Aero rear spoiler and bumper with an integrated diffuser make the rear end look sharp.
A 30-inch wraparound screen faces the driver inside the One Lux. This sizable screen consists of what MG describes as a 5.4-inch “touch switch screen” and 12.3-inch Driver Information Center, and a 12.3-inch touchscreen infotainment system with Apple CarPlay and Android Auto compatibility.
The wealth of tech continues to the electronic shift lever, smart key system, push-button start/stop, fabric or “leather-style seats” with power adjustment, wireless device charger, electric seats, dual zone climate control, and a panoramic sunroof. For safety, the One is fitted with tire pressure monitors, an electronic stability program with hill hold control, ABS with EBD, four SRS air bags on the One Std (six on the Lux), rear cross traffic alert, and a 360-degree camera.
Active safety features are exclusive to the Lux, such as Blind Spot Detection, Lane Departure Warning, Front Collision Warning, and Automatic High Beam.
Supporting all of these is the SAIC Motor Intelligent Global Architecture or SIGMA platform, which features independent suspension on all four corners.
“It’s a concept where space-saving construction is applied,” SAIC Motor Philippines Product and Logistics Manager Glenn Tacardon detailed the SIGMA platform to “Velocity” on the sidelines of the One’s launch. He added, “It’s also forward-thinking for new vehicles that MG is adapting; to have them globally applicable.”
Moving the One is a turbocharged 1.5-liter, four-cylinder engine that’s mated to a CVT and drives the front wheels. Engine output is rated at 170hp and 275Nm of torque, and these result in the vehicle’s zero-to-100kph time of 8.8 seconds.
Color options for the stylish crossover include Moon White, Iron Oxide, Meteorite Black, Extreme Speed Red, Fizzy Orange, and Brighton Blue, with the Lux matching these with the aforementioned black roof.
The One comes standard with a five-year or 100,000-kilometer warranty and 24/7 emergency roadside assistance.
