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Gov’t makes full award of new 20-year T-bonds

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THE GOVERNMENT fully awarded the fresh 20-year Treasury bonds (T-bonds) it offered on Tuesday on strong demand for the papers and amid expectations of easing inflation that could support a rate cut by the central bank.

The Bureau of the Treasury (BTr) raised P30 billion as planned from the new 20-year bonds it auctioned off on Tuesday as total bids reached P91.423 billion, or more than thrice the amount on offer.

The bonds were awarded at a coupon rate of 6.25%. Accepted yields ranged from 6% to 6.328% for an average rate of 6.209%.

The coupon fetched for the tenor was 15.5 basis points (bps) lower than the 6.405% quoted for the 20-year bonds at the secondary market prior to the auction, based on PHP Bloomberg Valuation Service Reference Rates data provided by the Treasury.

The government made a full award of the new 20-year papers amid strong demand due to low supply of the tenor, a trader said by phone.

The BTr last auctioned off 20-year T-bonds in Nov. 22, 2023, with the reissued papers having a remaining life of 15 years and two months. The government made a full P20-billion award of the bonds at that auction at an average rate of 6.593%, 15.7 bps below the 6.75% coupon for the series.

Meanwhile, the coupon rate fetched for the T-bonds on Tuesday was lower than the secondary market level as the easing inflation trend could push the Bangko Sentral ng Pilipinas (BSP) to cut rates this year, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Headline inflation eased to 2.8% in January from 3.9% in December and 8.7% in the same month a year prior.

This was the slowest inflation print in more than three years or since the 2.3% seen in October 2020, during the coronavirus pandemic.

This was also the second straight month that inflation was within the BSP’s 2-4% target.

The government will report February inflation data next week. The BSP earlier said they expect the consumer price index to continue slowing this quarter due to a high base, but warned it could pick up again by the second quarter amid easing base effects and lingering upside risks to prices.

The Monetary Board raised benchmark interest rates by 450 bps from May 2022 to October 2023 to help bring down elevated inflation, bringing the policy rate to a near 17-year high of 6.5%. It has since kept borrowing costs steady.

BSP Governor Eli M. Remolona, Jr. earlier said they are unlikely to cut rates in the first semester and remain ready to hike if needed, but could consider easing their stance by the second half if inflation is firmly within their target.

Tuesday’s T-bond auction was the last for the month. The BTr raised just P60 billion via T-bonds out of the P90-billion program for February as it rejected all bids at one auction of P30 billion in bonds.

The BTr originally planned to raise P150 billion through the T-bonds but canceled two auctions to make way for its retail Treasury bond offering.

Following Tuesday’s auction, the Treasury raised a total of P121.3 billion out of its P150-billion domestic borrowing program for February.

For March, the BTr is looking to raise a total of P180 billion from the domestic market, or P60 billion from Treasury bills and P120 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 5.1% of gross domestic product this year. — AMCS

Practical solutions to the education crisis: 3 local examples

PUNLAAN SCHOOL

(Part 4)

Another outstanding private initiative to transform near-illiterate youth into high-skilled workers is called YouthWorks PH (YWPH), an eight-year (2018 to 2026) youth employability joint venture between the United States Agency for International Development (USAID) and the Philippine Business for Education (PBEd). This partnership engages government, industry, the academe and other stakeholders of the education sector, including all those who have an interest in improving the quality of human resources in the Philippines. Especially targeted are those who have limited opportunities for upskilling and gainful employment.

It aims to improve employment for marginalized, at-risk youth not in education, employment, or training (NEET) by contributing to the suitability and quality of workforce development programs. To achieve its purposes, YWPH has continuously leveraged its links to industry and its partnership with government and the academe to strengthen and expand upskilling and employment pathways for the Filipino youth NEET.

The initiative is particularly conscious of its role in addressing the problem of mismatch between the graduates that the formal educational system is producing, and the actual manpower needs of the business sector. YWPH harnesses the crucial role of the private sector in articulating the skills requirements and employment needs so that the education sector would turn out employable graduates. This is done through a process of co-development of training programs that capture the specific skills and hiring needs of industry aligned with the standards and competencies set by the partner schools and training institutions. Through this close collaboration between the academe and industry, the employability of the youth who are trained is greatly enhanced.

In the last six years, more than 15,000 work-based training slots have been made available by the partner companies, signifying a positive appetite for industry-led skills training for employment. These work-based training partnerships have been mainly in construction, hospitality and tourism, manufacturing, retail, and some emerging sectors such as informational technology and renewable energy. Through these partnerships, over 5,800 marginalized youth have been placed in the program, with 47% of the graduates directly employed by the partner companies participating in the project. Most of the graduates were able to secure jobs within a month after training, demonstrating once again that despite the poor results in the Program for International Student Assessment (PISA) achievement tests, with the appropriate remedial help, Filipino youth do not deserve to be called “stupid” just because they suffer from learning poverty through no fault of theirs.

A tracer study has also shown that 70% of employed graduates of the program expressed satisfaction with the training they received. What is more, there is an improved perception of out-of-school youth and dropouts (the so-called near illiterates) among employers, with more companies expressing interest in opening their doors to skilled youth NEET. On the side of the youth themselves, there is a healthy change of attitude towards technical and vocational education and training (TVET) as a pathway for meaningful, high-paying and higher-level occupations within the Philippines and overseas. As I have been advocating for some time now, there is a need to cure both parents and their children of the fixation on a college diploma that often does not lead to employability. Following the European tradition (vs. the US practice), more of our youth — even those who are not suffering from learning poverty — should consider enrolling in TESDA (Technical Education and Skills Development Authority)-type schools rather than in academic colleges and universities.

Another example of a private initiative is the Punlaan Technical School, located in San Juan, Metro Manila, which upskills poor young women, most of them products of public schools providing low-quality education and who are therefore among the Filipino youth suffering from learning poverty. This TESDA-certified school was founded in the early 1970s by a group of volunteer housewives who were inspired by the teachings of St. Josemaria Escriva, Founder of Opus Dei, who famously said: “Love means deeds and not sweet words.” St. Josemaria insisted that the poor must receive effective and efficient help so that they can, in turn, help themselves and their families live and progress in accord with their dignity as progressive citizens, free from any form of social or economic discrimination.

With its inception in 1975, the Punlaan School became one of the first technical training schools which imparted varied skills in culinary, dining, and housekeeping services to young girls, housewives, and house helpers. In the same year, it was officially recognized as a technical-vocational school offering a two-year technical course in Home Arts.

By 1991, it modified the two-year Home Arts Program to Hotel Services and Food Preparation Technology, and upgraded the one-year Home Arts to the Home Skills Training Program. In 1993, it pioneered the two-year German Dual Training Program in Food and Beverage Services for hotels and restaurants in the Philippines, sponsored by the Landesinstitut for Internationale Berufsbuilding in Germany in collaboration with the Hanns Seidel Stiftung Foundation and the Hotel and Restaurant Association of the Philippines.

In 1994, President Fidel V. Ramos signed the Dual Training Law institutionalizing the Dual Training System as the preferred mode of vocational training. At that time, Punlaan was selected as a TESDA showcase for the actual implementation of the dual training program. By 2009, Punlaan had upgraded the Home Skills Training Program with the TESDA Competency Based Curriculum for the Household Services Program. In 2014, it became one of the first few schools approved as a Senior High School, administering the Senior High School Dual Training Program-Technical Vocation Track in Hospitality and Culinary Arts.

Since its inception in 1975, Punlaan has produced over 3,000 highly qualified personnel for the hospitality industry, which is one of the engines of economic growth and employment in the Philippines. One can find Punlaan alumnae in five-star hotels all over the Philippines as well as all over the world. They are highly valued by their employers because of the holistic education they have received. The formation at Punlaan goes far beyond skills training and includes general culture as well as values formation.

The education that these young women receive from Punlaan has helped improve the standard of living of their respective families and has enabled their upward social mobility. It is not uncommon to find some of these alumnae coming from the lower-income households rising to the top of their careers, such as Angela Velasco, who became Chef d’ Partie at Finestra Italian Steakhouse at Solaire; Mary Ann Garcia Agajanian, who is Jr. Sous Chef-Pastry at Discovery Primea; and Pamela Bathan, Senior F&B Associate at Seda Hotel. Ms. Bathan was recently honored at the 36th Mabuhay Awards for her exceptional performance. Her success story was cited as a testament to the transformative power of education.

The example of Punlaan, that just inaugurated a brand new six-story building in its original site in San Juan, Metro Manila, should reassure the pessimists that much can still be expected from the Filipino youth despite the poor results of the PISA tests.

In the healthcare sector, an outstanding practical solution to the shortage of nurses is being implemented with the certification of the Joint Commission of Higher Education (CHED)-Department of Health Administrative Order 2023-0001, upon the advice of the Private Sector Advisory Council’s healthcare group led by Ayala Healthcare Holdings.

The program involves upskilling nursing students or graduates who have not passed the nursing board exam, to prepare them to become “clinical care associates” in hospitals. Upon finishing the upskilling course, they can work as clinical care associates and perform non-core nursing functions.

According to Paolo Borromeo, President of Ayala Health Care Holdings, if 1,000 clinical care associates can qualify among the 7,000 to 10,000 graduates of nursing schools, that would be a significant addition to the number of health workers in the country and would partly compensate for the inevitable outflow of Filipino nurses to the developed countries that are suffering from an acute shortage of health workers because of the ongoing demographic and ageing crisis that has hit countries like Japan, South Korea, Singapore and practically all countries in Europe.

This very creative solution — thanks to the decision of President Ferdinand Marcos, Jr. to turn for advice to the most successful businesspeople — can be replicated in other sectors such as IT, education, and hospitality which will also suffer from manpower shortages because of competition from the developed countries.

Once more, we have demonstrated that despite the “learning poverty” that our youth are suffering from, there can be quick solutions to the present manpower shortage problem in some of our critical industries.

(To be continued.)

 

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

bernardo.villegas@uap.asia

PSE OK’s Ayala Land plan to issue more shares after merger with Cebu Holdings

AYALALAND.COM.PH

LISTED property developer Ayala Land, Inc. (ALI) said on Tuesday that it secured the approval of the Philippine Stock Exchange (PSE) for the company’s plan to issue more shares following its merger with Cebu Holdings, Inc. (CHI).

In a regulatory filing, ALI said the PSE approved the additional listing on Feb. 22.

The issues will be issued to CHI stockholders following the merger, which was approved by the Securities and Exchange Commission on Dec. 16, 2021. ALI will be the surviving entity following the merger.

The merger between ALI and CHI was approved by CHI and ALI in their annual stockholders’ meeting held on April 14, 2021, and April 21, 2021, respectively.

“Any resulting fractional share shall be paid in cash at the rate of P23.78 per one full share and shall be released together with the new ALI stock certificates following the same procedure set forth in the guidelines,” the property developer said.

On Feb. 26, the PSE announced the listing of the shares in relation to the ALI and CHI merger.

The local market operator added that CHI shares will be delisted from the official registry of the exchange on March 1.

Following the approval of the merger of CHI with ALI, the separate juridical personality of CHI has ceased to exist by operation of law.

In 2023, ALI recorded a 32% increase in its full-year net income to P24.5 billion carried by strong property demand and consumer activity. The company’s consolidated revenue jumped by 18% to P148.9 billion,

ALI shares fell by 1.4% or 50 centavos to P35.10 apiece on Tuesday. — Revin Mikhael D. Ochave

Tiffany landmark to host first art exhibit with works by Basquiat, Hirst

The interior of the Tiffany & Co. Landmark building in New York’s 5th Ave. — PRESS.TIFFANY.COM

THE TOP three floors of the Tiffany & Co. Landmark building at the corner of Fifth Avenue and 57th Street sit in an airy glass box with views of Central Park and the New York City skyline. This addition to the historic building was part of a sweeping renovation completed in April 2023. So far, its sun-filled environs have largely been reserved for VIP appointments and private showcases.

But that will soon change with the opening of Culture of Creativity. The exhibition showcases 70 contemporary pieces by 26 artists, shown in partnership with the architect Peter Marino, who oversaw the building’s renovation. From March 4 to May 20 the public will be invited to stroll through the aerie and admire works by Jean-Michel Basquiat, Francesco Clemente, Urs Fischer, Damien Hirst, Jenny Holzer and Rashid Johnson.

Most of the art is from the Peter Marino Art Foundation, based in Southampton, New York. A group of Tiffany sterling silver plates, serving dishes, and other objets from the 1880s is on loan from Marino’s private collection — as is the Basquiat, a taupe-toned mixed-media piece from 1981. Many of the artists in the show, including Fischer and Hirst, are also represented throughout the Landmark, where their work is permanently installed amid displays of jewelry and home goods.

“We are incredibly honored to have the opportunity to re-engage with Peter Marino in a creative partnership for the Landmark’s first major exhibition,” Anthony Ledru, Tiffany’s chief executive officer, said in a statement. “Peter reimagined the Landmark as a world of wonder and a cultural hub. There is no better place to show his collection.”

Tickets can be reserved on Tiffany.com starting March 1. — Bloomberg

China Bank posts record net earnings of P22 billion

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CHINA BANKING Corp. (China Bank) saw its net income rise to a record high in 2023 amid higher revenues from its core businesses, it said on Tuesday.

The Sy-led bank’s net profit grew by 15% year on year to P22 billion last year, the lender said in a disclosure to the stock exchange.

This translated to a return on equity of 15.5% and a return on assets of 1.6%.

Its financial statement was unavailable as of press time.

“Our strong growth in 2023 solidifies our position as one of the top four banks in the country. We remain focused on executing our business strategies while leveraging our investments in digitalization to deliver better services to our customers,” China Bank President and Chief Executive Officer Romeo D. Uyan, Jr. said.

“Our continuous drive for operational efficiency and the strong client demand for our services underpin our solid financial performance in 2023. We will continue to strengthen our business fundamentals and capabilities to sustain our growth momentum in the coming years,” China Bank Chief Finance Officer Patrick D. Cheng said.

The bank’s net interest income increased by 17% year on year to P53.5 billion amid strong loan and investment growth and despite higher interest expenses, it said.

“Net interest margin was maintained at 4.2%,” China Bank said.

Meanwhile, the lender’s operating expenses went up by 11% to P27 billion amid bigger volume-related taxes and increased investments in manpower and information technology (IT).

“Simultaneously, substantial overhauls are underway within China Bank’s IT architecture as an integral component of its ongoing digital transformation endeavors,” it said.

China Bank’s cost-to-income ratio was at 50%.

Meanwhile, the bank’s gross loans grew by 10% year on year to P791 billion in 2023. Consumer loans made up 23% of the bank’s portfolio, it said.

China Bank set aside loan loss provisions of P1.2 billion.

Its nonperforming loan (NPL) ratio was at 2.5% last year, while its NPL coverage ratio was at 104%.

“On the funding side, total deposits rose by 11% to P1.2 trillion, with the current account-savings account ratio at 48%,” China Bank said.

The bank’s assets increased by 11% to P1.5 trillion last year.

Total equity likewise grew by 12% to P150 billion.

The bank’s common equity Tier 1 ratio was at 15.3%, while its capital adequacy ratio stood at 16.1%.

China Bank has 648 branches and 1,070 automated teller machines (ATMs) to date, including the 168 branches and 202 ATMs of China Bank Savings.

Its shares climbed by 25 centavos or 0.73% to end at P34.35 apiece on Tuesday. — A.M.C. Sy

Keeping logistical variables and vulnerabilities at a minimum

FREEPIK

The World Economic Forum’s Global Risks Report 2024 characterized the world we live in as marked by rapidly accelerating technological change and economic uncertainty. Underlying geopolitical tensions threaten to combine with burning hostilities in multiple regions.

Moreover, there are two new entrants to the Top 10 risk ranking this year: inflation and economic downturn. The cost-of-living crisis remains a major concern. This stems from supply-side pressures ranging from El Niño conditions to the potential escalation of live conflicts.

As a result, it is likely that a new set of winners and losers across both advanced and developing economies would emerge.

As a middle-income economy, for instance, the Philippines has some room to grow. Data from the Philippine Statistics Authority showed that in the fourth quarter of 2023, gross domestic product (GDP) expanded by 5.6%, bringing the full-year GDP growth to 5.6% — well below the 2023 target of the Development Budget Coordination Committee, which was between 6% to 7%.

It is clear that there is an opportunity for the economy to grow and do better. The question is how.

We at Stratbase have always advocated a shift from a consumer-driven economy to investment-led growth, and a serious, single-minded pursuit of investments in the manufacturing sector. Through this, the Philippines can better stimulate economic activity, create employment opportunities, and attract yet more investments, all ultimately driving sustainable economic growth.

The geopolitical situation in the Indo-Pacific region, food security and supply chains, digitalization and infrastructure development for tourism growth, and energy security were among the themes explored during the 10th edition of the Philippines-Spain Forum, organized by the Philippine Chamber of Commerce through its Philippines-Spain Business Council, and Casa Asia earlier this month. The event celebrated the enduring relationship between Spain and the Philippines and highlighted opportunities for trade and investment.

Indeed, there is a need for a comprehensive approach to maritime security, considering both the immediate environment and the bigger picture. What emerged from the forum was that the maritime challenges in the Indo-Pacific region, where the Philippines sits, has global implications. These maritime issues do not just affect our political and territorial rights as a nation. Our reliance on maritime transportation is linked to national security, economic development, international relations, and the broader challenges and opportunities in the Indo-Pacific region.

One of the highlights of the forum was a talk by Pablo Corralo of Bluefocus Infrastructure Advisors. Mr. Corralo said that the Philippines heavily relies on maritime transportation for goods, including food. Thus, if the costs of marine transportation — fuel expenses, port fees, and maintenance expenses of vehicles —increase, the price of food also increases. The overall logistics costs in the Philippines are actually higher, which directly affects the transportation of goods, including food products.

Is there a way, then, to keep the variables and external vulnerabilities to a minimum so that the price of food and other goods would be more stable and predictable for the average Filipino?

According to Mr. Corralo, ongoing developments in technology and practices can play a significant role in achieving sustainability goals in the food supply chain. This includes innovations such as blockchain for traceability, precision agriculture for efficient resource use, and advancements in packaging to reduce waste. Embracing these developments can contribute to a more resilient and sustainable food system, addressing both environmental concerns and long-term food security.

Keeping up with developments in logistics and technology entails establishing and strengthening ties with economic partners, Mr. Corralo said. This is meant to enhance the Philippines’ position in the global supply chain. This is also particularly relevant to addressing vulnerabilities in maritime transportation, as strategic partnerships can contribute to infrastructure development and technology sharing.

One of the consequences of globalization is that nations become interdependent upon one another in various aspects of their economic life. This facilitates trade and commerce and improves everybody’s access to goods and services no matter where they are from. On the other hand, it also highlights some vulnerabilities especially when unforeseen circumstances — conflict, for instance, or disasters, or pandemic-induced mobility restrictions — disrupt the usual flow of trade.

The sea lanes, particularly, are a major component in the supply chain. Maritime issues such as contention and power plays over a given territory could be tricky. Imagine one country attempting to infringe into a territory, asserting itself in places it has no authority to do so, and driving away legitimate vessels and fishermen. But the sea is also where a fair amount of trade passes, and any instability in the sea lanes poses a threat to the stability and reliability of the transport of goods.

It is thus imperative that we address our maritime challenges, for the sake of our sovereignty, and also for the sake of the stability of our supply chains. If we can minimize the variables and vulnerabilities in moving goods, including food, from one place to another, then we can attract more investments as intended and keep prices stable, benefiting not only individuals and families, but also the Philippine economy as a whole.

 

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

AsiaLink secures P4-B investment from Malaysian equity firm Creador

ASIALINK Finance Corp. said on Tuesday that it received a P4-billion investment from Malaysian private equity firm Creador to fund its expansion plans.

“With Creador, Asialink is primed for further growth to help the largely the unbanked part of the business community. This partnership is envisioned to strengthen the small and medium enterprises and make them a major contributor to economic growth just like in other developed economies,” AsiaLink Chief Executive Robert B. Jordan, Jr. said in a statement.

The partnership highlights the commitment of both parties to drive AsiaLink towards sustained growth and market leadership, Mr. Jordan added.

The Malaysian equity firm is set to acquire an 18% stake in AsiaLink.

Creador will also share its expertise in business innovation and automation to improve AsiaLink’s operational efficiency, the company said.

Paulton & Company acted as AsiaLink’s financial advisor for this transaction. — Aubrey Rose A. Inosante

Coca-Cola eyeing to invest additional $1 billion in PHL

ASERUSAINHUU-UNSPLASH

THE COCA-COLA Co. (TCCC) will invest $1 billion, or around P56 billion, in the Philippines over a five-year period to sustain its domestic expansion, a company official said on Tuesday.

 “In the next five years, we’re planning for $1 billion investment, and in fact, we’ve even doing a new plant, which we are building in Tarlac,” Coca-Cola Europacific Partners Plc (CCEP) Chairperson Sol Daurella Comadrán said in a statement.

“We generate 100,000 plus (employees) throughout the distribution, through our supplies… And we’re very enthusiastic and we see, we need to invest in the Philippines, invest to grow the business,” she added.

The country’s domestic market is “full of opportunities for the company,” she said.

TCCC made the commitment following the completion of the $1.8-billion joint acquisition of Coca-Cola Beverages Philippines, Inc. (CCBPI) by Aboitiz Equity Ventures, Inc. (AEV) and CCEP on Feb. 23.

CCBPI is the bottling arm of TCCC in the Philippines. Under the joint acquisition, CCEP has a 60% stake in CCBPI while the remaining 40% is held by AEV.

“This significant investment from TCCC highlights our shared commitment to the Philippines’ growth and development. We are confident that this partnership will create lasting value for our stakeholders and contribute positively to the Philippine economy,” Aboitiz Group President and Chief Executive Officer Sabin M. Aboitiz said. 

On Tuesday, AEV shares rose by 0.31% or 15 centavos to P49.20 each. — Revin Mikhael D. Ochave

RCBC books higher net profit in 2023

RIZAL COMMERCIAL Banking Corp.’s (RCBC) net profit hit record high in 2023 amid higher loans and deposits, it said on Tuesday.

The Yuchengco-led bank’s net income stood at P12.22 billion last year, the lender said in a disclosure to the stock exchange.

“It hit a record high profit as customer loans soared by 15% year on year, faster than industry average. CASA (current and savings account) deposits increased by 19%, likewise outpacing the industry’s 3% growth,” RCBC said.

Its financial statement was unavailable as of press time.

“RCBC saw another breakthrough year in our financial performance, complemented with more recognitions in digital banking and customer service. We will intensify the use of AI (artificial intelligence) and data science across the bank to guide our product innovation and exceptional service delivery,” RCBC President and Chief Executive Officer Eugene S. Acevedo said.

The bank’s loans grew by 15% to P622 billion, with consumer loans rising by 29%, driven mainly by credit cards and housing loans.

RCBC said its credit card balances and billings also grew by 48% and 45%, respectively, amid its data-driven acquisition campaigns. Meanwhile, housing loans rose by 22% in 2023 amid record bookings.

Despite the increase in loans, the bank’s gross nonperforming loan ratio improved to 3.34% in 2023 from 3.75% in 2022.

On the funding side, total deposits reached P957 billion in 2023, driven by the 19% growth in CASA deposits.

“The bank’s cash management and payroll solutions, alongside extensive business relationships, provided the double-digit uplift in low-cost CASA deposits,” RCBC said.

The bank’s assets stood at P1.2 trillion at end-2023.

Total capital grew by 31% last year following Sumitomo Mitsui Banking Corp.’s capital infusion in July.

Its capital adequacy ratio and common equity Tier 1 ratio stood at 16.37% and 14.69%, respectively.

As of Dec. 31, the bank had a consolidated network of 458 branches, 1,460 automated teller machines (ATMs), and 5,779 ATM Go terminals nationwide.

RCBC’s shares dropped by 10 centavos or 0.41% to end at P24 apiece on Tuesday. — A.M.C. Sy

To solve the plastics crisis, we need to calm down about plastics

ISHAN-SEEFROMTHESKY-UNSPLASH

HOW TO DEAL with the waste generated by the half-billion metric tons of plastic manufactured each year? One approach is to consume fewer polymers, recycle them more, and stop the rest from getting into the natural environment. Another is to declare the whole process a scam, and hope the problem will somehow go away of its own accord.

Faced with a seemingly intractable dilemma, the latter approach is tempting. Fixing things is hard; assigning blame far easier. Such a strategy is unlikely to change much, however.

The Center for Climate Integrity, a US nonprofit, issued a report this month alleging oil and chemicals companies “perpetuated a decades-long campaign of fraud and deception about the recyclability of plastics,” combing through public and private statements to build a case for legal action against the companies and their lobby groups. The report tells a powerful story about the difficulty of making recycling work, and the incessant efforts of the plastics industry to pretend it was more successful than it really is.

And yet the problem with our plastics addiction is far more fundamental than an issue of mere greenwashing.

Consider the progress that’s been made against other pollutants. Per-capita carbon emissions and crude oil consumption have fallen about 15% in rich countries over the past few decades, as efficiency improvements, renewable power and electrification squeezed fossil fuels out of the economy.* Plastics have gone in the opposite direction: In 2019, we were using about 29% more per person than we were at the turn of the millennium.

That’s not because plastics producers have carried out a more successful lobbying operation than the rest of the fossil fuel industry. It’s because their products are more indispensably useful to our lives, and harder to substitute with alternatives.

The progress that we’ve made on the road to net zero comes from three main sources: efficiency, substitution, and lifestyle changes. To tackle our plastics problem, we need to consider which combination of those levers to pull.

To make our usage of plastics more efficient, we’d need to recycle more and shift our consumption toward lightweight, thinner containers. Such moves can show real benefits in reducing emissions. Members of the Organization for Economic Cooperation and Development, the club for rich democracies, are consuming less gasoline now than at any point since the 1980s. That’s largely caused not by the recent rise of electric cars, but by fuel-economy regulations that have been slowly tightening for decades.

Efficiency gains can be agonizingly slow, however. In the US, those fuel economy regulations mean that emissions from gasoline usage have fallen about 9.3% since 2000, slipping to 1.7% if you add in the diesel used in trucks. Substitution — replacing one technology with another — is far more effective. By switching away from coal-fired power and toward wind and solar (as well as less-polluting natural gas), emissions from America’s grid fell by a third over the same period.

Substitution might not work well for plastics, though. It’s dependent on the availability of viable alternative technologies. Wind and solar power and electric batteries are cheap, scalable, and superior to fossil fuels. Biodegradable and reusable plastics that we might want to use instead of conventional ones offer few improvements, while alternatives such as glass and aluminum are often worse in climate and environmental terms.

That leaves lifestyle changes, but these are famously difficult to engineer. Every time you buy a clamshell of strawberries, a bottle of water, or a gallon of milk, you’re making a decision to use more plastic, rather than less. If we’re adjusting our behavior at all, it’s to use more and more polymers, both in rich countries and in emerging ones.

As long as consumers and producers continue to favor plastic, our consumption will tend to rise. That tendency is so strong that even widespread public aversion (Americans consider plastic waste a bigger problem than climate change as well as air and water pollution, for instance) doesn’t appear strong enough to rein it in.

It’s hardly surprising that this situation inspires a sense of futility. That’s particularly the case because, as the Center for Climate Integrity’s report points out, the industry’s approach has been riven with cynicism for decades.

Meeting that with further cynicism, however, won’t solve the problem. Efficiency gains from recycling and light-weighting may be the best hope we have to turn around the juggernaut of our society’s plastics habit. In places, such as Norway and Japan, there’s even evidence that they’re producing real results, particularly when manufacturers are forced to shoulder the cost of disposal.

That’s an argument for tough regulations that will be resisted tooth and nail by the industry, to build a recycling system strong enough to command public support and discourage households from landfilling their polymers. Encouraging the nihilistic sense that all attempts to improve our usage of plastics are fraudulent will only make that work harder.

*It’s not that rich countries have “exported emissions” by offshoring manufacturing to developing countries. Accounting for such shifts only takes away about 42 million metric tons from the 1.2 billion ton reduction in emissions from rich countries over that period, according to data from the Global Carbon Project.

BLOOMBERG OPINION

Miley Cyrus hit ‘Flowers’ named best-selling single of 2023 in IFPI chart

Miley Cyrus in Miley Cyrus: Flowers (2023) — IMDB

LONDON — Miley Cyrus’s hit “Flowers” was named the world’s best-selling single in 2023 on Monday, the first time the US singer-songwriter has topped the chart run by industry body the IFPI.

The emotional disco-tinged breakup anthem — in which the singer reminds herself she can buy her own flowers after the end of a relationship — got the coveted IFPI Global Single Award for 2023 just weeks after picking up two Grammys.

The single had the equivalent of 2.7 billion streams on paid subscription services according to the London-based body which uses data from physical sales and digital delivery methods to come up with a representative figure.

“Topping the charts in so many countries simultaneously, the song — along with its message of empowerment — resonated across the world and is the definition of a truly global hit,” Lewis Morrison, the IFPI’s director of global charts and certifications, said.

Artists from Nigeria and Mexico entered the top 10 for the first time: Rema’s “Calm Down” with Selena Gomez ranked at No.2 while “La Bebe” by Yng Lvcas and Peso Pluma was at No.6, highlighting the rise in popularity of Afrobeats and regional Mexican genres. US star Taylor Swift, who was last week named global recording artist of the year for the fourth time by the IFPI took the No.7 and No.9 spots on the singles rundown with “Cruel Summer” and “Anti-Hero” respectively.

The IFPI — the International Federation of the Phonographic Industry — represents the global recorded music industry. — Reuters

Gov’t told to help automate Philippine leather goods sector

PAIRS OF HIGH-QUALITY SHOES made in Marikina City are shown to members of the media during a tour of C Point Manufacturing’s shoe factory in Barangay Concepcion Uno on Aug. 7, 2019. — PHILIPPINE STAR / BOY SANTOS

THE GOVERNMENT of President Ferdinand R. Marcos, Jr. should help the leather goods industry mechanize processes so local manufacturers can compete in the global market, an industry player said.

“We need programs that promote genuine leather and the businesses that use this to create quality goods,” William Lu, who owns Tony Tony Leather Crafting, said in an e-mail.

“The program can appeal to sustainability,” said Mr. Lu, whose company that is based in Marikina City supplies raw materials for leather goods. “A high-quality leather product, if taken care of, can withstand decades of use and can be passed down to multiple generations.”

Durability remains an issue with most synthetics, he pointed out.

Mr. Lu said the Trade department should help local businesses automate their manufacturing processes to keep up with international competition.

It can do so through loan grants or by creating facilities that “can speed up production and keep up with demand,” he added.

Most leather goods manufacturers are considered micro, small and medium enterprises, according to the Board of Investments (BoI).

The Philippine leather goods industry increased its gross value added (GVA) to P11.8 billion in 2022 from P7.1 billion in 2014, according to BoI data.

GVA, which measures the contribution of a company or sector to the economy, provides a dollar value for goods and services produced in a country, minus the cost of inputs and raw materials.

The US was the Philippines’ top export market for leather goods last year, accounting for 66.3%, followed by Japan at 8.5% and China at 4.6%.

Leather goods are among Philippine products that enjoy zero tariffs under the European Union’s Generalized System of Preference Plus.

A House of Representatives special committee on the creative industry in October 2022 formed a technical working group that would firm up measures to revive the Marikina shoe industry.

“It is a challenge to keep on top of trends and maintain an inventory of popular items,” Mr. Lu said, noting how the demand for leather supplies is affected by fashion trends.

Tony Tony Leather Crafting, which started as a manufacturer of metal heels in the 1960s, has since evolved into a supplier of leather and other related accessories for manufacturers and crafters.

“Leather crafting was among the many hobbies people picked up in quarantine during the coronavirus pandemic,” Mr. Lu said. “Most were interested in replacing their worn down leather goods… or customizing new ones to fit their needs.”

He said hobbyists usually turn into entrepreneurs when friends and family offer to buy their leather projects. They end up catering to orders of bespoke leather goods.

Local leather businesses face stiff competition from imported mass-produced products, Mr. Lu said. “If government programs can be made to support local businesses, I’m optimistic that they can catch up,” he added. — Patricia B. Mirasol