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PSE says short selling program to start on Nov. 6

The Philippines will from Nov. 6 start allowing short-selling, a practice that seeks to profit off bets on a stock falling, two weeks behind the initial target, the bourse operator said on Friday.

The launch of the short selling program was extended to give market participants more time to prepare, the Philippine Stock Exchange (PSE) said.

“The ability to take short positions will provide investors a tool to hedge their investments, which hopefully will help attract foreign investors back to our market,” PSE president and CEO Ramon S. Monzon said in a statement.

It will also generate increased trading activity, he added. — Reuters

Philippines sees risk of missing inflation target again in 2024

PHILIPPINE STAR/ MICHAEL VARCAS

The Philippines may miss its inflation target for a third straight year in 2024 as price pressures build, according to the minutes of the central bank’s September meeting where authorities emphasized they can resume tightening if needed.

“The risks to the inflation outlook are still tilted to the upside for 2023 to 2025, and may trigger a possible breach of the inflation target in 2024,” the Bangko Sentral ng Pilipinas said in minutes of its September 21 meeting when it kept the benchmark rate unchanged for a fourth consecutive time.

The central bank is aiming for inflation at 2% to 4%, but the target was missed last year and is poised to be breached again this year. The BSP’s 2024 inflation forecast was raised last month to 3.5%, nearing the target’s top end, from a previous estimate of 3.3%

While monetary authorities opted to keep the policy rate at 6.25% last month, the BSP is focused “on resuming monetary policy tightening action” to respond to inflation risks and prevent spillover effects, according to the minutes released on Thursday. Among the major price risks are transport and power costs, it said.

The statement mirrors BSP Governor Eli M. Remolona, Jr.’s hawkish signals in the past weeks, saying that he’s open to raise the policy rate by 25 basis points on or before the November 16 meeting after price risks materialized. The key rate stands at a 16-year high after 425 basis points of rate hikes since May last year — among the region’s most aggressive policy tightening. — Bloomberg

SM Center San Pedro opens to delight South Luzon community

SM Center San Pedro, the 84th SM mall and the fourth in Laguna province, serves as a unifying force within the community of United Bayanihan in the City of San Pedro.

It is SM’s 4th mall in Laguna and the 84th in the Philippines.

Be captivated by the unconventional charm of the newest shopping and dining destination in the South. SM Center San Pedro officially opened its doors last Oct. 13. It joins SM City Santa Rosa, SM City Calamba, and SM City San Pablo as the fourth SM mall in Laguna and the 84th mall for SM Prime Holdings, Inc.

The Event Center at SM Center San Pedro is infused with natural daylight, creating a vibrant, spacious, and cozy ambiance.

Tagged as Instagram-worthy, the mall is set to bring smiles and create lasting memories for San Pedrenses with its colorful murals, immersive installations, and an aweSM activity center. Happiness starts with a big mascot installation that greets every shopper as they enter.

SM Center San Pedro, SM’s 84th mall, officially opens its doors to the Lagunenses last Oct. 13, 2023. Present during the ribbon-cutting ceremony (left to right): SM Engineering Design and Development Corp. President Hans Sy, Jr.; SM Supermalls’ President Steven Tan; Laguna Provincial Vice-Governor Atty. Karen Agapay; Bishop Leo Murphy Drona, S.D.B, D.D.; San Pedro City Mayor Art Joseph Francis Mercado and San Pedro City First Lady Mika Mercado; San Pedro City Councilor Sonny Mendoza; San Pedro City Vice-Mayor Divina Olivarez; San Pedro City Councilor Michael Casacop; SM Prime Holdings, Inc. President Jeffrey Lim; and Super Value, Inc. President Herbert Sy.

Located at the top of San Pedro, Laguna’s Upper Village, it caters to leisure and fashion aficionados, with its superb retail collection, including brands like Bench, Penshoppe, OXGN, and Regatta.

Complete your chic and fab look with Simply Shoes and Alberto. The cutest gifts, best-buy school and office supplies are waiting at Miniso and National Book Store. A haven for tech enthusiasts, SM Cyberzone offers guaranteed best brand s of gadgets, computers, consoles, and tech accessories.

Discover immersive experiences and capture Instagram-worthy moments

The fun, colorful, and Instagrammable murals adorning the mall’s stairwells quickly capture the attention of shoppers, becoming an instant hit. As a first in the province, this immersive Light-Emitting Diode (LED) wall elevates the shopping experience for San Pedrenses, adding an exciting dimension to their visits.

Happy plates for every palate

SM Center San Pedro is home to the familiar Filipino restaurants we love, as well as local food stops that are sure to satisfy your cravings. Malia’s, a home-grown café, is set to become the newest spot for family gatherings and friendly dates. If you’re looking for good coffee paired with mouth-watering cakes and pastries, After Tree is for you. Your Daily Bread has delectable bread, pasta, and hot meals. Japanese food lovers will surely flock to Botejyu. Other restaurants and food kiosks include Coco, Yogorino, Pickup Coffee, Jollibee, Chowking, Dunkin’ Donuts, Sweet Claire Patisseries, The HubStop, Zark’s Burgers, Gong Cha, and Mang Inasal.

Located on the lower ground is the SM Food Court, perfect for foodies with its choice of local and international flavors. There is Ben’s Halo-Halo, Sizzling Plate, Takoyadon, Angkol’s Pungko Pungko, Turks, Pepa Wings, Mr. Kimbob, Master Siomai, Fruitas House of Desserts, and Potato Corner.

Always with SM

Get your staples at SM Hypermarket, your home needs at SM Appliance Center and ACE Hardware, and toiletries and beauty supplies at Watsons. Banco de Oro (BDO) Unibank Inc. is open to make ways for San Pedrenses’ banking needs.

A friend of Mother Earth and the city

SM Center San Pedro actively supports the SM Green Movement, providing sustainable options for its shoppers. Mall goers can now charge their electric vehicles (EV) at the designated EV charging station in the mall basement parking.

SM Center San Pedro is dedicated to environmental and sustainability programs through its architectural design, highlighting natural lighting and green spaces as well as the use of Low-Emissivity (Low-E) glass for windows and skylights. It has a water treatment plant and uses Light-Emitting Diode (LED) light fixtures for more efficient water and energy consumption. The mall’s car park has an eco-friendly electric vehicle (EV) charging station to reduce carbon footprint.

San Pedro City is one of the most progressive cities in the country, achieving considerable success through sound governance and urban dynamism. SM Center San Pedro, a 23,000-sq.m. shopping mall, is proud to serve the vibrant community of San Pedro and is helping to provide job opportunities as well as be the city’s gathering place and family hub.

From its mall design to the many shopping and dining options that it houses, SM Center San Pedro aims to serve the community of San Pedro, its neighboring towns, and be another beacon of celebration for the Filipino families in the South.

 

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A success story worth celebrating

PHOTO FROM SMINVESTMENTS.COM

A classic success story has been written and carved by SM in the country’s business landscape. Starting out as a small enterprise to becoming one of the largest conglomerates in the Philippines, the SM story has been an inspiration to several budding entrepreneurs.

As a lot of Filipinos already know, whether a businessperson or not, SM’s journey to success began with the sale of shoes. Founder Henry “Tatang” Sy, Sr. established a small shoe store called ShoeMart in Carriedo, Manila in 1958. ShoeMart then expanded as a department store in the 1970s, becoming known as SM. It grew further in 1985 with the opening of its first shopping center, SM City North EDSA. Over the years until at present in its 65th year, SM maintained its name etched in the corporate scene and the minds of many Filipinos with its constant service and expansion.

While SM is mainly associated with shopping malls, the business extends to other segments of real estate and the banking industry. It also has investments in key sectors such as logistics and energy, among others.

Expansive development

SM’s chain of shopping malls has reached more than 80 establishments across the Philippines, with 24 malls in Metro Manila and 60 in the provinces. Many of these, such as SM Megamall, SM Mall of Asia (MOA), and SM Sta. Mesa (formerly SM Centerpoint), to name a few, have been at the top of mind for many when it comes to meeting with the family, friends, colleagues, or loved ones.

SM Prime Holdings, Inc., the conglomerate’s property arm, planned to open at least three malls this year, among which were SM City Bataan that opened last May and SM Center San Pedro in Laguna just this month.

SM Prime has been preparing to expand its presence in provincial areas, especially Northern Luzon, Visayas, and progressive cities in Mindanao.

“Our businesses are still operating in many highly underpenetrated sectors and we intend to serve Philippine communities in more regions nationwide,” SM Investments Corp. (SMIC) President and CEO Frederic C. DyBuncio said in a statement last January.

Beyond the Philippines, SM Prime also has seven malls in China.

Building more developments on the residential side is also aimed for by SM Prime for the current year, specifically targeting to launch 15,000 to 20,000 units. SM Development Corp. (SMDC), its residential arm, currently has 84 residential projects.

SMDC also expanded in the province with new residential developments, namely Vail Residences in Cagayan de Oro, Now Residences in Pampanga, and Zeal Residences in General Trias, Cavite. It has 18 residential properties in key provincial cities as of 2022.

In the retail business, SM Retail, Inc. is growing in various provinces as well, with over 80% of its new retail stores established in those areas. The SMIC retail arm has more than 3,300 department stores, various-sized grocery stores, and specialty retail stores. It seeks to add around 400 stores to its network this year.

SM also supports tourism further through its hotel and convention business. SM Hotels and Conventions Corp. (SMHCC) opened the new SMX Convention Center Clark in Pampanga last year, which it envisions to contribute to establishing Northern Luzon as a destination for meetings, incentives, conferences, and exhibitions (MICE). SMHCC now has eight convention centers with a total leasable space of more than 37,000 square meters, as well as nine hotel properties with a combined inventory of over 2,200 rooms.

Another development launched last year was the FourE-com Center in the SM Mall of Asia Complex, adding to the office portfolio of SM Prime.

Beyond shops and spaces

Along its journey to success in the malling scene, SM has also ventured into the banking sector through BDO Unibank, Inc. and China Banking Corp. (China Bank).

BDO offers a range of financial services, including deposit-taking, lending, investment banking and life insurance, among others. It has more than 1,600 branches across the country.

Furthermore, it also takes part in furthering financial inclusion and hence seeks to broaden the reach of its financial services. Particularly, the bank has also driven its rural bank subsidiary BDO Network Bank to reach communities that lack access to financial services.

Also providing a variety of banking services is China Bank, which has over 600 branches nationwide as of 2021. It is also doing its part in boosting financial inclusion by building up its automated teller machines (ATMs) and making account opening easier through its mobile app China Bank START.

Banking, along with property and retail, is among the core businesses of SM. But beyond these industries, SM also invested in other sectors with high growth potential.

In the logistics industry, SMIC increased its stake in AIC Group of Companies Holding Corp. (Airspeed) to 51% last year. Among the core services of Airspeed are customized logistics; freight solutions management; warehousing and distribution; and customs clearance.

It also grew its investment in geothermal stream for renewable energy generation, having fully acquired the Philippine Geothermal Production Company (PGPC) in 2022.

SMIC’s Mr. DyBuncio said they are “particularly optimistic about these opportunities,” adding that it expects the contribution of its portfolio investments to its consolidated earnings to increase over time.

SMIC also has portfolio investments in integrated resorts developer Belle Corp., integrated transportation and logistics provider 2GO Group, natural resource-based company Atlas Consolidated Mining and Development Corp., co-living spaces developer Philippines Urban Living Solutions, Inc. (PULS), office towers developer NEO Subsidiaries and NEO Associates, community mall chain CityMall, and bakeshop Goldilocks.

Supporting growth

Such businesses have made up for the expansion of SM from being a small enterprise back in the 1950s. Now a large corporation, SM is supporting its partners in the micro, small, and medium-sized enterprise (MSME) sector by providing them with growth opportunities through its retail, property and banking businesses.

Numerous MSMEs have found a space to do business across SM Supermalls, and such businesses make up 68% of its tenants.

SM also offers financial support to MSMEs through BDO and China Bank. Overall, the banks accounted for more than P62 billion in outstanding loans to these enterprises last year.

Another way in which SM has supported the MSME sector is through the SM StartUp Market, which has launched its second batch of new enterprises participating in the program this year. The SM StartUp Market package includes startup-friendly rates and allows the use of kiosks or carts at no cost.

“Starting as a small enterprise ourselves, we recognize MSMEs as a driving force for innovation,” SMIC Vice-Chairperson Teresita Sy-Coson had said in a separate statement. “They are the ones who bring new ideas, new concepts, new offerings to the consumers. That’s why we remain committed to supporting the growth and empowerment of MSMEs.” — Chelsey Keith P. Ignacio

SM’s steadfast commitment to sustainability and social good

Achieving a balance between economic growth, social equity, and environmental responsibility accommodates the needs of current and future generations while successfully preserving the environment. Because of this, businesses across the Philippines have increasingly adopted sustainable development ambitions, such as the environmental, social, and governance (ESG) agenda, and corporate social responsibility (CSR) initiatives to guide their decision-making processes.

As one of the biggest conglomerates in the Philippines, SM takes pride in spearheading sustainability efforts across its diverse business ventures, such as retail, real estate, banking, and investments.

SM has divided its efforts into two initiatives, namely SM For Social Good and SM Green Movement, to enhance the sustainability of its businesses and address the climate adaptability of its cities and communities.

SM For Social Good facilitates opportunities to build a healthy and thriving community. Hence, the socioeconomic impact of SM provides access to needs that are foundational in achieving long-term community development.

According to SM Investments Corp.’s (SMIC) latest annual integrated report, the conglomerate has created 140,029 jobs, released P62.72 billion loans to micro, small and medium enterprises (MSMEs), and sponsored 11,750 academic scholars to date.

SM also helped build 342 schools, 1,110 classrooms, and 317 health centers and medical facilities.

Through proper skills and education, SM also helps families free themselves from hunger and malnutrition by providing backyard farmer training to families in vulnerable communities. With 28,550 farmers trained and 266 training sessions, the beneficiaries can now offer more nutritious yet cheaper choices for their families.

SM is also quick to respond whenever there is a need for food and essential goods in the aftermath of typhoons, earthquakes, and other calamities. It distributed 819,024 Kalinga packs and conducting 663 Operation Tulong Express across the Philippines.

SMIC also remains committed to sustainability through investments in renewable energy that serve more communities nationwide as part of the SM Green Movement. This initiative is a group-wide and multi-year campaign working together toward the improved quality of life for communities through priority initiatives of Green Planet, Green Living, and Green Culture.

Through its wholly-owned Philippine Geothermal Production Company (PGPC), SMIC is set to increase its geothermal capacity to an estimated total of 600 megawatts (MW). These new projects are in Northern Luzon (Kalinga, Daklan, and Cagayan) and in Southern Luzon (Mounts Labo and Malinao), which will form part of PGPC’s annual investment of approximately P3 billion.

SM has deeply integrated sustainable practices into its business ecosystem, focusing on energy, waste, and water management. According to the SMIC’s report, the conglomerate has recycled 42.5 million m3 of water, funded 58 renewable projects with a capacity of 2,252 MW, and ensured that at least 50% of SM Prime Holding’s energy use comes from renewable sources. For instance, SM malls and offices are designed for optimal light ventilation through the use of clerestory windows and skylights to reduce energy use and carbon emissions.

The corporation is committed to driving national growth and establishing partnerships with a 10% capital expenditure allocation for disaster resiliency and sustainability. SM has also partnered with World Wide Fund for Nature to organize the Climate Summit for Climate Alliance and has planted and maintained over 2.6 million seedlings and trees to promote environmental stewardship.

Similarly, SM has recently launched “SM Green Finds,” a collection of unique and easily accessible environmentally-conscious products. From fashionable items and personal care products to home improvement solutions and pet care, the “Green Find” badge makes it easier for customers to shop for sustainable choices that cater to their evolving needs.

They also help empower their MSME partners in their green practices by equipping them with sustainability knowledge, promoting green practices at work, and recognizing their “greenovations” through the SM Green Movement Day and Awards.

SMIC has reported that 62% of its workforce comprises women, with 57% of them holding senior leadership positions. In line with this, SMIC is one of the signatories of the United Nations Global Compact Women Empowerment Principles (WEPs) initiative, joining over 3,000 other global business leaders to promote gender equality and empower women across the workplace, marketplace, and community.

The conglomerate has been recognized as a top-rated sustainability company in the industry and Asia by international ratings firm Morningstar Sustainalytics. According to Morningstar’s 2023 report, SMIC received an ESG Risk Rating of 13.3 and was identified to be at “Low Risk” of experiencing material financial impacts from ESG factors.

All these show that SM continues to create a positive socioeconomic impact in the community by facilitating responsible urbanization and development, and advocating for national growth and environmental stewardship. — Mhicole A. Moral

The enduring legacy of Henry Sy, Sr.

PHOTO FROM SMINVESTMENTS.COM

Henry Sy, Sr. is an undisputed icon in Philippine business history, even being dubbed as the “Father of Philippine Retail,” with the SM Group of Companies as his crowning achievement.

More than that, however, he is fondly remembered by the moniker “Tatang” by his employees, managers and the entrepreneurs who have worked with him and who over the years have shared countless stories of his warmth, humility and compassion for his fellow Filipinos.

Before his death on Jan. 19, 2019 at the age of 94, Mr. Sy was the wealthiest person in the Philippines, according to Forbes, with a net worth of US$19 billion (about P1 trillion). In his wake, he left behind a legacy that goes beyond his vast wealth.

For instance, while working with her mother-in-law, National Book Store Founder Socorro Ramos, Precy Ramos recounted how Tatang personally supervised the construction of SM North Edsa, the first SM Supermall, which opened in 1985.

Over the course of many years, Tatang went above and beyond to make sure that SM malls had adequate space for National Book Stores.

This successful alliance was a result of the deep friendship and business relationship maintained between Tatang and Nanay Coring, who had watched Mr. Sy’s business grow from its earliest days in the Avenida business district.

“During Tatang’s 80th birthday celebration, for example, he sent somebody over to get Nanay. She sat beside him [during the party], they were beside each other the whole time,” Ms. Ramos said. “They really had a lot of respect for each other.”

Bernie Liu, chairman and CEO of the Penshoppe Group — the Filipino-owned fashion conglomerate behind the Penshoppe, OXGN, Regatta, Forme, Memo, and Bocu brands — was also impressed by Tatang’s meticulous attention to detail.

Tatang is still clear in Mr. Liu’s mind as he described how Mr. Sy would go throughout the department store with a team behind him, making notes and jotting down orders.

“He was very particular about the display. I remember when we opened our display module in SM Makati, there was a portion that he thought was too dark. He said that should be changed,” Mr. Liu said, adding that Tatang was “really hands-on and very down to earth.”

After all, it was easy to assume that someone with Tatang’s level of accomplishment and status would use his privileged position to control his expanding business from an ivory tower. But that was not how Tatang did things. Instead, he liked to scout for new expansion chances while walking the floor and keeping his ears to the ground.

But perhaps most striking of such stories is that of Lydia de Roca, founder of the 58-year-old Lydia’s Lechon.

Ms. De Roca said that in 1989, her first business in Baclaran had a regular customer, a Chinese man, who would come in on Sundays and eat his own 1/4 kilo of lechon with rice in peace and quiet.

He was dressed simply in a shirt, shorts and slippers, and he carried an empty bayong. He would fill his bayong with seafood from the neighboring stalls after finishing his plate of Lydia’s lechon.

It was only after a while before Ms. De Roca found out who the man was. The following Sunday, she approached him and introduced herself, sharing how she owned the branch but that she started with a small stall outside the Our Lady of Sorrows Church in Pasay City.

To her surprise, Tatang asked her if she wanted to also have a stall in the SM Food Court. Ms. De Roca took him up on his offer and opened in 1990 the first Lydia’s in the food court of SM Sta. Mesa, then known as SM Centerpoint.

“Since then, I’ve always kept him in my prayers. I asked the Lord to always keep watch over him and his family,” Ms. De Roca said.

Mr. Sy was born in Fujian, China, but he and his family emigrated to the Philippines when he was 12 years old.

Showing an inherent drive for diligence and entrepreneurship, he helped his father sell rice, sardines and other merchandise at the shop their family had set up. When the shop was destroyed in World War II, Mr. Sy’s family decided to return to China, leaving him behind as he pursued a business degree at Far Eastern University. He launched ShoeMart in 1958.

ShoeMart, now known as SM, began as a modest shoe store in Manila and has since expanded, with more than 60 department stores, 50 supermarkets, and 200 grocery stores spread throughout 49 malls in the Philippines and China.

With such humble beginnings, Mr. Sy’s SM Investments Corp. (SMIC) is today the largest conglomerate in the Philippines, with holdings in retail, real estate, and banking. SM Prime Holdings, Inc., China Banking Corp. and SM Retail Group are just a few of SMIC’s other notable holdings.

BDO, the country’s second-largest bank, and SMDC, a real estate conglomerate, are both owned by the SM Group.

Together with his wife Felicidad Tan-Sy, Mr. Sy also founded the SM Foundation, Inc., a nonprofit organization that works to promote social inclusion by providing resources and support to underprivileged neighborhoods in areas where SM operates. — Bjorn Biel M. Beltran

BoP deficit narrows in Sept.

TIMIS ALEXANDRA-UNSPLASH

THE PHILIPPINES’ overall balance of payments (BoP) position narrowed significantly to $414 million in September from the $2.34-billion gap in the same month a year ago, the central bank said.

Data released by the Bangko Sentral ng Pilipinas (BSP) on Thursday showed the country’s BoP position remained in deficit for a sixth straight month in September. It was also the widest deficit since the $606-billion gap in June. 

Month on month, the BoP deficit widened from the $57-million deficit in August.

Philippines: Balance of Payments Position“The BoP deficit in September 2023 reflected net outflows arising mainly from the National Government’s (NG) payments of its foreign currency debt obligations,” the central bank said in a statement.

The BoP measures the country’s transactions with the rest of the world at a given time. A deficit means more funds fled the economy than what went in, while a surplus shows that more money entered the Philippines.

For the nine-month period, the Philippines’ BoP position swung to a surplus of $1.74 billion from the $7.83-billion deficit in the same period in 2022.

“This development reflected mainly the improvement in the balance of trade and the higher net inflows from personal remittances, trade in services, and foreign borrowings by the NG,” the BSP said.

Latest data from the local statistics agency showed the country’s trade deficit stood at $4.13 billion in August, narrower than the $4.2-billion gap a month prior and the $6.03-billion deficit a year earlier.

Year to date, the trade deficit shrank to $36.31 billion from the $41.86-billion gap during the same period in 2022.

“Given that the current account is likely in deficit due to the sizable trade deficit, financial account inflows, most likely tied to government issuances of bonds, likely pushed the BoP into a surplus (in the January-to-September period),” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.    

The government raised $1.26 billion from the retail dollar bond offering in late September.

“The retail dollar bond issuance during the month helped bring the deficit to $414 million, offsetting the trade deficit,” Mr. Mapa added.

At its end-September position, the BoP reflected a final gross international reserve level of $98.1 billion, 1.5% lower than $99.6 billion as of end-August.

The dollar reserves were enough to cover 5.7 times the country’s short-term external debt based on original maturity and 3.6 times based on residual maturity.

It is also equivalent to 7.3 months’ worth of imports of goods and payments of services and primary income.

An ample level of foreign exchange buffers safeguards an economy from market volatility and is an assurance of the country’s capability to pay debts in the event of an economic downturn.

“The BoP may remain in deficit for the rest of the year given our expectation for the current account to stay in the red,” Mr. Mapa said.

In the second quarter, the current account deficit reached $3.6 billion, or equivalent to -3.4% of gross domestic product (GDP), which was lower than the $8-billion shortfall a year ago.

This brought the current account deficit in the first semester to $8.2 billion (-4% of GDP), a 32.2% reduction from the $12.1-billion deficit (-6.1% of GDP) recorded in the same period last year.

“There is a planned Sukuk issuance but we’ve yet to hear more details on the timing,” Mr. Mapa said.

The government is planning to launch Sukuk bonds by end-November. It is targeting to raise around $1 billion from the Islamic bonds, which will have a minimum denomination of at least $200,000.

The BSP expects the country’s BoP position to end the year at a $127-million deficit (0% of GDP). — Keisha B. Ta-asan

Marcos says Maharlika fund will start operating by yearend

PRESIDENT FERDINAND R. MARCOS, JR. — PHILIPPINE STAR/KRIZ JOHN ROSALES/ PPA POOL

By Kyle Aristophere T. Atienza, Reporter

THE PHILIPPINES’ first sovereign wealth fund will start operating by yearend, President Ferdinand R. Marcos, Jr. said on Thursday after suspending it supposedly to improve its organizational structure.

“The organization of the Maharlika fund proceeds apace,” he said before leaving for Saudi Arabia, where he is expected to promote the fund. 

“We have found more improvements we can make, specifically to the organizational structure of the Maharlika fund,” he added, amid criticisms that the wealth fund threatens the financial stability of two state banks.

Mr. Marcos said the concept of the Maharlika Investment Fund (MIF) “remains a good one” and therefore, “we are still committed to having it operational before the end of the year.”

The Oct. 12 memorandum ordering the suspension of the MIF law’s implementing rules and regulations (IRR) was addressed to the Bureau of the Treasury as well as the heads of the Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP).

The President insisted that the suspension must not be seen as “a judgment of the rightness or wrongness of the Maharlika fund.”

“On the contrary, we are just finding ways to make it as close to perfect and ideal as possible, and that is what we have done,” Mr. Marcos said, adding that he consulted economic managers and other people who would be involved in the fund’s operations.

“Their inputs had been very important and that is why we are now going to utilize them to make it a better organization.”

In a statement, Budget Secretary Amenah F. Pangandaman said the economic team will work closely with the President “to prudently review all provisions line by line and make sure that all things are in order.”

“We will also take this opportunity to engage in more multi-stakeholder groundwork in preparation for the launch of the MIF.”

DAMAGE TO CREDIBILITY?
If the issue is just a matter of improving the organizational structure of the investment fund, “why suspend the whole of Maharlika,” Action for Economic Reforms coordinator Filomeno S. Sta. Ana III said in a Facebook Messenger chat.

“This shows an utter failure of communication. Or it shows the confusion in Malacañang,” he said. “This further damages the leadership’s credibility.”

Mr. Sta. Ana noted that the Philippine government’s credibility matters most for investors.

Enrico P. Villanueva, a senior lecturer at the University of the Philippines Los Baños, expressed doubt if the MIF could start operations before yearend when there’s only just two and a half months to go.

“Making a new fund operational in that limited time period is implausible. The IRR revision may take at least two weeks or even more than two months depending on how serious the administration is in making the rules better,” he said via Messenger chat.

Earlier, observers said the suspension of the IRR may be aimed at allowing the President to have greater say on the choice of the Maharlika Investment Corp.’s top executives.

“Whether the President and the MIF proponents like it or not, the directive — to suspend the implementation of the IRR is an admission that something is wrong or amiss with the MIF — certainly in the IRR, and likely even in the law itself,” Mr. Villanueva said.

For GlobalSource Partners Country Analyst Diwa C. Guinigundo, the problem is not the fund’s organizational structure “but the whole concept of putting up a sovereign investment fund when we have chronic fiscal deficit and rising public debt.”

“It’s a missed opportunity for the President to rectify this piece of bad legislation,” he said in a Viber message. “With this very tentative mode of formulating and executing public policy, it would be difficult to inspire investment confidence and market support.”

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch, said the IRR suspension should pave the way for the government to assess the performance of the LANDBANK and DBP which have remitted their contributions to the MIF.

“If the banks’ performance flounders in the next few months to at most a year, the government should reassess whether it should dive quickly into MIF investment or focus on strengthening the performance of government banks instead,” he said via Messenger chat. 

The suspension of the Maharlika fund’s implementation came amid concerns on the financial stability of LANDBANK and DBP, which were required to contribute P50 billion and P25 billion, respectively, to the fund’s startup money.

After remitting their contributions, the two banks sought regulatory relief from the central bank’s capitalization requirements.

Earlier this month, Foreign Affairs Assistant Secretary Daniel R. Espiritu said Mr. Marcos is expected to promote the Maharlika fund during his meetings with investors on the sidelines of his participation in the first-ever summit between Southeast Asian and Gulf leaders today (Oct. 20).

Mr. Marcos, in his pre-departure speech, said his government was “encouraged by the reaction of our friends in the Middle East and for that matter around the world to the fund.”

“We’re very encouraged that we are going down the right path.”

Bayan Muna Chairman Neri J. Colmenares said that following the suspension of the MIF law’s IRR, the High Court should “see that the chief executive himself is now hesitant of his pet project and that there is indeed no need for its certification of urgency.”

“The Office of the President’s reason for stopping the MIF’s implementation is to “further study the plan” — meaning it was rushed and half-baked,” he said in a Thursday statement. “We urge the Supreme Court to decide on our petition against the constitutionality of the railroaded passage of the Maharlika law and forever prohibit this presidential abuse of the power to railroad legislative proceedings.”

Gary Ador Dionisio, dean of the De La Salle – College of Saint Benilde School of Diplomacy and Governance, said the government has failed to prove that it is capable of protecting public money. 

“MIF is unnecessary and untenable to protect taxpayers’ money,” he said via Messenger chat. “A weak institution like the Philippines will always be prone to oligarchic interest.”

Economists hike inflation projection for this year

Shoppers browse through the aisles of a supermarket in Mandaluyong City, Aug. 10, 2023. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

PRIVATE SECTOR economists raised their inflation outlook for this year through 2025 due to recent supply-side shocks, although they still expect inflation to return to the 2-4% target range in 2024 and 2025, the Bangko Sentral ng Pilipinas (BSP) said.

Based on the results of the BSP’s survey of external forecasters in September, the average inflation forecast of analysts for 2023 went up to 5.9% from just 5.5% in the August survey.

Economists’ mean inflation forecast for 2024 and 2025 also climbed to 3.7% (from 3.5% previously) and 3.5% (from 3.4%), respectively.

The analysts’ forecasts are slightly above the central bank’s projections. The BSP sees average inflation at 5.8% this year, before easing to 3.5% in 2024 and 3.4% in 2025.

“Analysts expect inflation to accelerate anew due to recent supply-side shocks domestically and overseas,” the BSP said in the highlights of the Sept. 21 Monetary Board meeting.

“They also anticipate further upside risks to the inflation outlook, due mainly to supply disruptions, particularly from the adverse impact of weather disturbances and trade restrictions,” it added.

At its Sept. 21 meeting, the Monetary Board kept the key interest rate unchanged at a near 16-year high of 6.25%. This was after hiking borrowing costs by 425 basis points from May 2022 to March 2023.

“The Monetary Board deemed it appropriate to maintain prevailing monetary policy settings while emphasizing the BSP’s focus on resuming monetary policy tightening action to respond to emerging upside risks to the inflation outlook and potential second-round effects that could dislodge inflation expectations,” the BSP said. 

The central bank’s policy-making body also called for more non-monetary interventions such as the temporary reduction of import tariffs and timely arrival of imported commodities.

“The BSP also continues to prioritize the restoration of inflation towards a target-consistent path over the medium term, in line with its primary mandate to ensure price stability,” it said.

However, the risks to the inflation outlook are on the upside, which could cause inflation to breach the 2-4% target next year, the central bank said.

“The potential impact of higher transport charges is among the major risks to the inflation outlook given the fare increase petitions filed by transport groups in August 2023 due to elevated oil prices,” the BSP said. 

The Land Transportation Franchising and Regulatory Board had approved the P1 provisional jeepney fare increases nationwide, raising the minimum fare to P13 starting Oct. 8. For modern jeepneys, the new minimum fare would be P15.

“Other key upside risks to the inflation outlook are the impact of El Niño weather conditions on food prices and utility rates, higher-than-expected minimum wage adjustments, and higher domestic prices of key food items facing ongoing supply constraints,” the BSP said.

BSP Governor Eli M. Remolona, Jr. earlier said that the Monetary Board may resume its monetary tightening at its next policy-setting meeting on Nov. 16 if risks to the inflation outlook persist.

Mr. Remolona also hinted at an off-cycle rate hike, but he said the BSP still needs to review the latest data before coming up with a decision. — Keisha B. Ta-asan

PHL unlikely to hit 2024 growth goal

PHILIPPINE ECONOMIC managers are targeting 6.5-8% gross domestic product growth in 2024. — PHILIPPINE STAR/WALTER BOLLOZOS

By Keisha B. Ta-asan, Reporter

THE PHILIPPINES is unlikely to hit its 6.5-8% gross domestic product (GDP) growth target in 2024, due to high borrowing costs and increasingly gloomy trade outlook.

“We are expecting Philippine economic growth to accelerate from 5.3% in 2023 to 6.2% in 2024. That is still less optimistic than the government’s projections of 6.5-8%,” BMI Asia Country Risk Analyst Shi Cheng Low said in an e-mail.

He noted the dimmer trade outlook and elevated interest rates to tame rising inflation are two major headwinds to the economy’s expansion next year.

“We think that the trade cycle downturn has further to run. Growth in both the US and Mainland China, the Philippines’ two largest partners, is set to slow next year, which will limit any recovery in exports,” Mr. Low said.

Mr. Low said in a webinar on Tuesday that the US economy may enter a shallow recession in the second and third quarter of 2024, while China’s economic growth may slow to 4.7% in 2024 from 5.2% this year.

The Development Budget Coordination Committee projects goods exports and imports to grow by 1% and 2%, respectively, this year. Exports growth is expected to stabilize at 6% in 2024 to 2028, while imports are expected to grow by 8% annually during the same period.

Mr. Low said the Bangko Sentral ng Pilipinas (BSP) will also likely maintain its hawkish stance during the first half of 2024, as inflation remains elevated.

“Increasing price pressures will prompt the central bank to resume its tightening cycle. We now think that a hike of 25 basis points (bps) is possible in the November meeting,” he said.

BSP Governor Eli M. Remolona, Jr. earlier said the Monetary Board is considering another 25-bp rate hike on Nov. 16, and even hinted at an off-cycle rate hike if price pressures persist.

“Still, we think the tightening cycle will have not much further to run beyond that,” Mr. Low said.

The BSP has kept the key interest rate at a near 16-year high of 6.25% for the last four meetings. To curb inflation, it has hiked borrowing costs by 425 bps from May 2022 to March 2023.

BMI expects Philippine inflation to average around 3.6% next year, well within the 2-4% target band of the BSP, but a tad higher than the central bank’s 3.5% forecast for 2024.

“But we note that risks are skewed to the upside due to the El Niño phenomenon and the Hamas-Israel conflict being potential sources of upside price volatility,” Mr. Low said.

Meanwhile, Security Bank Corp. Chief Economist Robert Dan J. Roces said while another rate hike can be effective in stabilizing prices and support the local currency against the dollar, it may slow down economic growth and burden borrowers with higher debt costs. 

“Balancing inflation control and economic growth is a complex task that calls for a multi-faceted approach. In addition to rate hikes, government authorities could consider supply-side policies, fiscal stimulus, and foreign exchange interventions among other measures,” he said in a Viber message.

Mr. Roces said a cautious approach that avoids further monetary tightening could be “more prudent” in dealing with inflation, given the risks to economic growth. 

“The BSP will be very wary of over tightening especially as investment weakness has been very apparent in the latest growth data,” BMI’s Mr. Low said.

The Philippine economy grew by an annual 4.3% in the second quarter, the slowest in over two years. It was weaker than the 6.4% growth in the first quarter.

For the first semester, GDP growth averaged 5.3%.

Gross capital formation dipped by 0.04% in the second quarter, a reversal of the 12.6% growth in the first quarter and 17.2% in the second quarter of 2022.

Third-quarter GDP data will be released on Nov. 9.

“As for rate cuts, we expect it to materialize in the second half of 2024, similar to our projections for the Fed. This means that interest rates will be kept at multi-year highs for a prolonged time,” Mr. Low said.

At its meeting last month, the US Federal Reserve kept its own policy rates unchanged at 5.25-5.5%.

Netflix raises prices and adds subscribers, despite Hollywood strikes

LOS ANGELES — Netflix increased subscription prices for some streaming plans in the United States, Britain, and France on Wednesday as it shattered expectations for new customers, sending its shares surging 13%.

Almost 9 million subscribers joined Netflix around the globe in the third quarter, surpassing Wall Street analysts’ forecast for 6 million, according to LSEG. Netflix said it expected a similar number of additions in the current quarter.

The strong performance showed Netflix was thriving despite Hollywood labor tensions that shut down a large swath of US production. Netflix makes many of its shows and movies overseas, which accounted for the bulk of its new sign-ups.

Netflix pointed to the global success of One Piece, a live-action adaptation of the venerable Japanese manga series and an example of its hefty investment in stories with local resonance that travel the world. The streaming giant also attracted new audiences to long-running television shows, such as the legal drama Suits, which it licensed from Comcast, and HBO’s World War II series Band of Brothers.

“These are the times I’m glad we have such a rich and deep and broad programming selection,” Netflix co-CEO Ted Sarandos said after the release of the quarterly results. “The same was true during COVID, when we were able to manage the slate through a prolonged and pretty unpredictable production interruption.”

Hollywood’s film and television writers ratified a new contract this month, but actors remain on strike. Mr. Sarandos said Netflix was “totally committed to ending this strike.”

The company’s third-quarter customer gains represented its strongest quarterly uptick since the second quarter of 2020, when lockdowns early in the global pandemic led to an unprecedented surge in streaming subscriptions.

Netflix increased the US price of its premium ad-free plan by $3 per month to $22.99. The cost for premium rose by £2 to £17.99 in Britain, and by €2 to €19.99 in France.

Investors welcomed the news, sending Netflix shares climbing to $390.80 in extended trading from a close of $346.19.

PP Foresight analyst Paolo Pescatore said the third-quarter growth at Netflix was a testament to its recent crackdown on password sharing and the opportunities for growth as it moves into advertising.

“It is firing on all cylinders, with recent efforts all heading in the right direction,” he said.

GLOBAL GAINS
The price hikes were announced in an earnings report that showed the company’s global subscriber base reached 247 million at the end of September.

Substantial subscriber gains came in Europe, the Middle East and Africa, where Netflix added nearly 4 million subscribers. More than 70% of its members now reside outside the United States.

During the quarter, Suits became the most-watched title across film, original TV, and acquired TV on streaming in the US for 12 straight weeks after it hit Netflix. The series, starring Prince Harry’s wife, Meghan Markle, originally aired on the USA cable network from 2011 to 2019.

“As the competitive environment evolves, we may have increased opportunities to license more hit titles,” Netflix said in its quarterly letter to shareholders.

The company posted revenue of $8.54 billion, in line with analyst forecasts. Earnings came in at $3.73 per share, ahead of Wall Street’s expectation of $3.49.

Netflix’s forecast for fourth-quarter revenue of $8.69 billion was slightly below analysts’ estimates of $8.77 billion.

The writer and actor strikes prompted Netflix to revise its projections on content spending to $13 billion in 2023, assuming the studios reach a settlement with striking actors “in the near future.”

That was down from the $17 billion it expected to spend.

Netflix said it continued to dominate viewership. Netflix programming accounted for 8% of television screen time, second only to YouTube, the company said, citing Nielsen data. — Reuters

The horrors of false hope and misplaced faith

Movie Review
In My Mother’s Skin
Directed by Kenneth Dagatan
Amazon Prime Video

By Brontë H. Lacsamana, Reporter

FOR Filipinos seeking out unique depictions of their nation’s wartime gloom and doom (and subsequent navigation of it all), there is a notable pantheon of works.

There’s Oro, Plata Mata (Gold, Silver, Death) from 1982, written by Jose Javier Reyes and directed by Peque Gallaga, set in World War II in the island of Negros, where haciendero families descend into misfortune and violence.

There’s Tatlong Taong Walang Diyos (Three Years Without God) from 1976, written and directed by Mario O’Hara, also set in WWII but in Laguna, where a teacher and a soldier’s romance is shattered by the arrival of the Japanese.

In My Mother’s Skin, directed by Kenneth Dagatan, premiered earlier this year at the Sundance Film Festival in the US, and it continues the age-old sentiments of the two, established films before it.

The same time period, a similar provincial setting, with more harrowing insights about the consequences of colonial suffering on the Filipino identity — but what sets it apart is that it basks in wartime dread as an atmospheric folk horror, experienced by a child who must learn to protect herself against false hope.

Dagatan’s film follows Tala (Felicity Kyle Napuli), a young teen desperate to cure her dying mother, Ligaya (Beauty Gonzalez), while her father has had to leave to escape accusations of stealing Japanese gold. Between her frail mother and her naive younger brother, Tala takes it upon herself to find food and medicines as the war keeps them starving, helpless, and isolated in their provincial estate.

In her journey into the jungle, she encounters a mysterious diwata or Philippine “fairy” (Jasmine Curtis-Smith) who offers her assistance. The understandable decision to trust this being, when no other alternatives exist at the moment, quickly becomes the downfall of her family.

Based on this summary, one would expect something akin to Guillermo del Toro’s 2006 fantasy Pan’s Labyrinth, which also sets a young girl on the dark side of folklore during a historically pivotal war.

However, this fairy tale is far more cruel and bloody.

Gonzalez as Ligaya is equal parts heartbreaking and terrifying as she is first weakened by a fatal illness and later possessed, gradually contorted by a parasitic, flesh-eating force. Curtis-Smith inhabits her breathtaking Santo Niño-inspired diwata garb with an eerie calm, appearing and sounding both inviting yet menacing.

Napuli as Tala is the revelation of this film, this being her first movie role coming from theater. She delivers an impressive characterization of a teenager becoming brave enough to fend for herself and her family — albeit in the worst of times, where humans both, Filipino and foreign, and creatures, seek to take advantage of their desperation. As the film goes on its blood-soaked path, she embodies the role of one so young and confused by all the terrors that beat her down, again and again.

Elevating the slow-burn frights presented by Dagatan (known for his 2015 horror short Sanctissima and his 2019 supernatural horror feature Ma) are the fascinating visuals and sound design.

Originally from Cebu and mindful of the quality of regional perspectives, it’s no surprise that his films are all drenched in the lush untamed atmosphere only found in a rural Philippine setting. Eddie Huang and Yi Ling Chen’s fantastic sound design permeates in this regard, making use of the sound of cicadas and the rustling through leaves in admirably frightening ways and conveys the heightened feeling of being trapped in a tropical environment.

The fascinating visuals are filled with religious iconography: the Catholic statues that the family pray to every day, and the diwata’s beautiful costume patterned after the iconic Santo Niño’s. Benjamin Padero’s production design provides us these images as haunting reminders of the tragic Filipino tendency towards false hope and misplaced faith, being an aggressively religious country, in keeping with how Tala falls for the diwata’s schemes.

As an atmospheric horror, In My Mother’s Skin delivers scares that are subtle yet effective, with steady narrative pacing and sometimes lacking pay-offs that only serve the dread of it all.

Coming from Sundance to a streaming platform like Amazon Prime Video (globally, might I add!) may be an unusual journey for such a singular type of film, but hopefully it finds an audience that it can both horrify yet inspire.

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