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Achievements and aspirations

Incoming TMP President Masando Hashimoto steps into the limelight. — PHOTO BY KAP MACEDA AGUILA

Toyota PHL fetes outgoing Mr. Okamoto, welcomes new chapter with youngest-ever president

“HIS ARRIVAL was literally earth-shaking.”

Not a few laughs reverberated in the Grand Hyatt’s main ballroom last Tuesday when Toyota Motor Philippines Corp. (TMP) Chairman Alfred Ty recalled with a smile the beginning of Atsuhiro Okamoto’s stint as TMP president in January 2020. From an onstage podium, he narrated: “He was greeted by the eruption of Taal Volcano after over 40 years of quiet, triggering almost 600 volcanic earthquakes in just four days. Little did we know that this was only the tip of the iceberg of the challenges that Okamoto-san or AO-san would face.”

Mr. Okamoto’s presidency had progressed uneventfully for but a few weeks — and he began it with a tenor that would mark his tenure despite everything that would happen later. The man wanted to be where the people were. That meant opening his own Facebook page to make him and what he did more accessible and visible. The executive had posted, “During my first week in the Philippines, I decided to do genchi genbutsu, or to ‘go and see’ the daily struggles of Filipino commuters. I rode a bus, took a round trip of the MRT, rode the jeepney, queued for a long time to ride the UV Express, and lastly, took a tricycle ride to Tondo! For me, it’s a good learning experience. I realize that unlike Japan or Singapore, the Philippines’ current mass transport system is not enough to accommodate the huge number of daily commuters. I would like Toyota to take part in this big challenge to upgrade the quality of life for many Filipinos.”

Unfortunately, as Mr. Ty later said, COVID-19 happened. This scuttled our plans, dashed hopes, and even took away people we loved. “The economy went into a tailspin, lives and livelihood were disrupted, and there was no answer in sight. The challenges mounted and were even compounded by extraordinary weather disturbances and geo-political conflicts,” the executive rued.

Nonetheless, Mr. Okamoto, his management team, and the network of dealerships took on challenges with an unflinching resolve. At the end of it all, TMP extended its reign as perennial triple crown holder (leading the country in overall vehicle sales, passenger car sales, and commercial vehicle sales) for 22 straight years by the end of 2023.

TMP came out of the crucible of the pandemic cornering nearly half of the Philippine auto market — and remains well-positioned to realize even further growth in 2024.

“Through it all, Okamoto-san charged ahead with steadfastness and courage, showing the way for all of Team Toyota, bringing hope where there was confusion — always with a smile and a good word for everyone,” maintained Mr. Ty.

“Looking back, I could say that those four years were among the most challenging, but also the most meaningful part of my life. And I am very thankful to have experienced it with you,” declared Mr. Okamoto during his own speech.

The turnover ceremony saw “AO” formally succeeded by former TMP Senior Vice-President Masando Hashimoto — who at 46 years of age is the youngest ever to helm the company.

In a previous interview with this writer, Mr. Okamoto said his next assignment will find him back with Toyota Motor Corp. in Japan — specifically in Nagoya, where his family lives. An economics graduate of the Keio University in Tokyo, the executive has more than three decades of cumulative experience in both the Lexus and Toyota brands, having joined TMC in 1992. According to the GT Capital Holdings 2022 Integrated Report, Mr. Okamoto was tapped in 2012 as department general manager of the Lexus Planning Division. Three years later, he found himself seconded to Toyota Motor Asia Pacific (TMAP) as vice-president for marketing and sales. Immediately before his posting at TMP, he was EVP at TMAP.

Meanwhile, Mr. Hashimoto similarly paid tribute to his predecessor, who he said leaves him with big shoes to fill. “Thank you for the immense groundwork you have laid — realizing new mobility business, leading major investments, innovating the value chain, championing sustainability, and leading Toyota to emerge strong through an unprecedented era. I am pretty sure the TMP team would agree with me. You have shown a perfect example of what the Filipino value of bayanihan is.”

Mr. Hashimoto shared that he has 24 years of industry experience, “having handled global sales and business planning, as well as genba or on-ground operations.” He completed a two-year stint in New Delhi, India and another four years in Bangkok, Thailand where he was assigned as senior coordinator for Toyota Motor Thailand. Interestingly, during his posting there he worked under the leadership of former longtime TMP President Michinobu Sugata.

The new president promised to apply his “experience in distribution — covering dealer network operations, Hilux marketing, auto finance, used car auction, and connected device projects” here. Mr. Hashimoto also vowed that Toyota “will never be complacent,” even in a market such as ours where the brand is “already considered a powerhouse.”

He declared: “I believe we should foster stronger industry collaboration and harness the fullest potential of the Philippine human capital. As CKD (completely knocked down) manufacturing remains at the core of its business, Toyota can have the best of both worlds of hardware for production quality and software for (its) high-skill workforce. One of our goals is to contribute to economic balance so we will continue to enhance our very own automotive and parts manufacturing capabilities.”

The executive pointed to the “success and impact” of manual-transmission exports by Toyota Aisin Philippines since 1992, adding, “I believe that through multi-stakeholder cooperation, we can soon make our industry much more globally competitive.”

In a release, TMP said that the “turnover of leadership comes as (the company) continues to grow its business with new mobility solutions and automotive value-chain innovations.”

Significantly, Toyota is already gearing up for the local production and rollout of the IMV 0-platformed new-generation Toyota Tamaraw this year — expected to help further boost TMP’s business while enabling local enterprises grow through a reliable, affordable mobility tool.

Smartphones for kids were a Faustian bargain

JACKY WATT-UNSPLASH

IT WOULD BE DIFFICULT to pinpoint the moment the smartphone took control of my life. Like Japanese knotweed, it grew surreptitiously in my mental garden, gradually throttling other forms of attention until it had insinuated itself into almost every activity. I check my screen time rarely, but I remember a sense of vague discomfort a few years ago on seeing that it had passed a daily average of six hours. Recently, it stood at more than 11.

Two decades ago, it seemed unimaginable that we might carry with us a handheld device that could be simultaneously: a phone; TV; radio; music player; shop; newspaper; book; map; wallet; bank; game console; admission ticket; calculator and translator. Among many other things, too numerous to list. I have used my phone as a tape measure, to identify plants and to prove my identity to the government. It was inevitable that access to such power and convenience would exact a price. Increasingly, it appears the most unanticipated and unacceptable has been our children’s mental health.

It took the murder of a high school student in northwest England for me to admit to myself that I have a problem. The case, which saw the teenage killers of transgender 16-year-old Brianna Ghey jailed this month, has acted as the trigger for a national debate over children’s use of technology. The victim’s addiction to social media made her a vulnerable target, while one of the fellow students who stabbed her testified to having viewed torture and murder videos on the dark web via mobile phone. Ghey’s mother is campaigning for under-16s to be barred from accessing social media apps. The UK government, responding to public pressure, issued new guidelines this week on preventing mobile-phone use in schools.

This rare and grisly event has helped draw attention to the far more commonplace and pervasive damage that smartphones, and particularly social media apps, do to the psychological and emotional well-being of young people. There is a burgeoning academic literature, and it is horrifying. Study after study has laid out evidence of an international epidemic of mental illness. Rates of anxiety, depression, attention deficit and hyperactivity disorder, anorexia and other conditions have soared since 2012, which happens to be just around the time when smartphones became ubiquitous. Girls are particularly at risk.

Correlation isn’t causation. But there is no other explanation that fits the data. The global nature of the decline in mental health stands as strong confirming evidence. American students might have other reasons for anxiety — school shootings, say — but that wouldn’t explain why the same trend might be observed in New Zealand or Brazil. Moreover, the younger a child gets a smartphone, the bigger the subsequent impact. Among women who acquired their first smartphone at age six, 74% had mental well-being scores that classed them as “distressed” or “struggling,” a global study of 27,969 people aged 18 to 24 by Washington-based nonprofit Sapien Labs reported last year. That fell to 46% for those who received their first device at 18. (The corresponding score for men was 42% at age six versus 36% at 18.)

Immersing myself in these findings has caused me to question my own habits. What kind of example am I setting? My five-year-old already shows an inordinate interest in my phone. Given the opportunity, he will snatch it and squirrel himself away in a cubby hole on the top floor of our house, where he watches YouTube videos about megalodons (having started with fish and then graduated to sharks). These still exist and live in the deepest parts of the ocean, he tells me, in the endearing way that five-year-olds have of explaining the world to adults. This illicit enthusiasm once seemed cute, if certainly to be discouraged; now it feels much more ominous.

Intuitively, it is easy to understand why smartphones have such a deleterious effect on young minds. Social behavior is complex, as the Sapien Labs study observes, and requires reading nuances in facial expression, body language, tone of voice, touch, and even smell. All this must be learned and, as in team sports, demands repeated field practice to develop mastery. Children who spend a large part of their formative years in a virtual world are missing out on face-to-face interactions that help to build strong social bonds and resilience.

This applies even more to social media, which replicates real-world interactions though removes the filters that modulate behavior in real-world interactions. Thoughtlessness or outright cruelty is easier when the recipient’s reactions aren’t immediately present to be seen and felt. Girls are more susceptible to social media and the compare-and-despair syndrome of apps such as Meta Platforms, Inc.’s Instagram; this helps to explain why they suffer disproportionate mental-health impacts. Boys tend to be drawn more to gaming.

Social media is also addictive by design, dealing out the dopamine hits of likes and engagement in a way that, it seems to me, mimics the behavior of slot machines that hand out small-value wins frequently enough to keep customers playing. Adults can also be prone to addiction, but we at least have the benefit of developed prefrontal cortexes that are able to inhibit destructive impulses.

The youngest of the first generation of children to be given smartphones are just coming of age. It has amounted to a giant uncontrolled experiment, and the evidence is accumulating that a high price has been paid. Like Faust, we accepted a gift of great knowledge and ease without fully appreciating the consequences, which haven’t been borne primarily by ourselves. There is still time to change course, though. For myself, this will mean putting my phone away when I am home, far less aimless scrolling on social media (Elon Musk’s X, formerly Twitter, has gone in the bin) and generally following the advice of Jean Twenge, one of the pioneering researchers in the field:

“Here’s the good news: You don’t have to give up your phone. Use your phone for all the great things that it can do — for an hour or two a day. And then go and live your life. Go for a run or a swim, watch a sunset, get some sleep. Go see a friend, not on Snapchat, but in person. Watch the expression on your friend’s face, hear the tone in your friend’s voice, give your friend a hug. In short, let your phone be a tool you use, not a tool that uses you.”

BLOOMBERG OPINION

Energy dep’t, BARMM to offer areas for exploration

THE GOVERNMENT is set to conduct the first bidding for the exploration of conventional fuels in the Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), the Energy department said.

The Department of Energy (DoE) and the Ministry of Environment, Natural Resources, and Energy (MENRE) of BARMM will offer four predetermined areas (PDAs) for investment, exploration, and production of the region’s indigenous resources.

“The resources identified in the BARMM area are enormous assets that we can fully develop. As we go another step forward to harnessing these assets, our aspirations for promoting economic growth, generating employment opportunities, and nurture a thriving business landscape in the region are even closer to realization,” Energy Secretary Raphael P.M. Lotilla said in a statement.

The Energy department has yet to specify the PDAs up for bidding.

In July last year, the DoE and the BARMM’s MENRE signed the Intergovernmental Energy Board (IEB) circular on the joint award of petroleum service contracts and coal operating contracts.

Specifically, the IEB circular “jointly grant rights, privileges, and concessions for the exploration, development, and utilization of uranium and fossil fuels such as petroleum, natural gas, and coal within the territorial jurisdiction of the Bangsamoro.”

The DoE is also inviting oil and gas companies to participate in its competitive bidding for the right to explore and develop specific acreage within the country.

Under the “2024 Philippine Bid Round,” the DoE  said it will offer two PDAs for the development and production of petroleum with “confirmed resources” in northwest Palawan and southern Cebu basins and two PDAs for native hydrogen exploration in Central Luzon.

The bidding seeks to facilitate efficient oil and gas exploration and ensure responsible resource management.

Both biddings will be launched on Monday, Feb. 26.

“The Philippines holds immense potential for energy exploration that could contribute to the country’s energy security and unlock opportunities for economic growth in the area where these resources are located,” the DoE said.

“Given this, the DOE continues to pursue more gas exploration, including the exploration, development, and production of native hydrogen, which can serve as a transition fuel,” it added. — Sheldeen Joy Talavera

What makes a design Filipino?

Ongoing exhibit celebrates 50 years of the Design Center

 THE “50 Years of Philippine Design and Beyond” exhibit tried to examine and summarize the movements of the design industry in the Philippines, with a focus on the contributions of the Design Center of the Philippines.

The exhibit, with over 300 images and objects, is on display at the National Museum of Fine Arts, the former Legislative Building. While the exhibit has been up since December last year, as part of the celebrations marking the Design Center’s 50th anniversary after it was founded in 1973, it was formally launched on Feb. 23, with additional items and exhibits. The country’s president, Ferdinand Marcos, Jr. and his wife, Liza Araneta Marcos, toured the exhibit.

“I would like to thank you for the opportunity to come back here in the National Museum, here in the old Session Hall of the Senate,” said Mr. Marcos in a speech. “As a matter of fact, I spent many hours here in this place, waiting for my father to finish his work while he was senator, and then Senate President. I sat there,” he said, motioning to the back of the room. “It’s so nice to be back here. It holds very great memories for me, because these were some of the best times I spent with my father.” During the rule of his father, dictator Ferdinand Marcos, Sr., the senate building was padlocked in 1973 after the abolition of congress, a result of his father’s declaration of Martial Law in 1972.

“This event is extra-special to me, as it was my mother, Imelda Romualdez Marcos, who envisioned a future where design would shine brightly, guiding the path of our nation. In 1973, her vision came to fruition with the establishment of the Design Center, laying the groundwork for Filipino creativity to dazzle the global stage,” he said. The Design Center was established through Presidential Decree No. 279 (“Creating the Design Center of the Philippines to Develop, Promote, and Enhance the Product Design of All Philippine Products and Handicraft”).

SIGNS OF THE TIMES
Many of the objects in the exhibit came from this period, including furniture, clothing, movie posters, and even toys. The exhibit is divided into three parts, with the first showing items from 1973 to 2000, then from 2001 to 2023, and “The Future Today.” “The Future Today” section shows projects by the Design Center including Pinyapel, a specialty paper sourced from pineapples that can be made into other objects, and a collection of chairs by contemporary artists innovating on an original 1982 chair by National Artist Arturo Luz.

Unfortunately, it seems that many of the clothes from the 1970s had not survived intact. During the tour, we were shown sketches and plates by boutique Azabache, as they couldn’t find intact clothes from the store, which was then one of Manila’s most famous. Another casualty of time were barongs designed by Jean Paul Gaultier during a stint in Manila as an apprentice of Pierre Cardin, who had a boutique in Manila during that period. All that survives are photographs of the said barongs, displayed in the exhibit.

Still, there are many treasures: there are wooden toys by Francisco Mañosa, National Artist for Architecture, first designed for his children and then later mass-produced, as a response to many imported toys coming into the market (these were even given Filipino names, such as a toy grasshopper called Tipaklong). There were chairs by Designs Ligna, as well as chairs by Betty Chen Cobonpue, mother of Kenneth Cobonpue.

Comics and movie posters for controversial movies like Sister Stella L. and Itim were also on display, with curator Marian Pastor Roces discussing how politics and economics influenced these particular posters (there was the expense of colored posters; the poster for Sister Stella L. was made with woodblock printing, a favored method of Leftist movements here and abroad).

The 2001-2023 collections show magazine shoots, comics like Pugad Baboy and works from the artist Garapata, as well as furniture by Ito Kish, Mr. Cobonpue, and designs by Albert Andrada (such as the blue dress worn by former Miss Universe Pia Wurtzbach at her coronation); among others.

“It’s really about inflection points,” said Maria Rita O. Matute, Executive Director of the Design Center in an interview with BusinessWorld, when discussing how the items were chosen for inclusion in the exhibit. “Did this item, regardless of how beautiful it is — did it signal a change?”

TRANSLUCENCE
Ms. Matute attempts to make a summary of Philippine design through the items in the exhibition. Asked how one could tell whether a design was Filipino if the viewer were devoid of context, she of course talked about the material, but also, she said, “There’s a certain translucency.” One may look at the dress by Salvacion “Slim” Lim-Higgins, a National Artist for Fashion Design, or else the capiz lamps by the Design Center, but she elaborated, “It doesn’t have to be translucency literally, but there is a sort of crosscurrent — it’s a little bit woven… it’s not solid.”

“There’s an indoor-outdoor feel to it. It’s not solid, visually… there are negative spaces in between,” she said.

Since design is reflective of a people’s culture, she pointed out, “Our private and public spaces — there’s no real demarcation in traditional Philippine architecture. It’s pinapakiramdaman (a concept in Filipino hard to translate, but perhaps “tact” is appropriate) where it becomes private, and where it’s public.

“There are weak signals, but they are signals to show a relationship, or a change in relation, because we’re not confrontational as a people. Everything, you have to feel your way.”

The exhibit is on view until April 21. — Joseph L. Garcia

IPOPHL lauds young Filipino inventors designated as WIPO Youth Ambassadors

The Intellectual Property Office of the Philippines (IPOPHL) commended the pool of young Filipinos whom the World Intellectual Property Organization (WIPO) declared as this year’s WIPO Youth Ambassadors.

Director-General Rowel S. Barba said the ambassadorship of Yzhae Marrione Capuno Villaruel of the Manila Science High School, and Josefino Nino Ligan, Chesyne Danielle Galura Pepito and David Elijah Corsini Atup, formerly of the Philippine Science High School in Central Visayas, “shows the youth’s ingenuity and dedication to make an impact.”

“They are role models for their generation. They are an inspiration for more inventors, both young and old, to pursue goals that could create positive change,” Mr. Barba said.

All ambassadors have registered patents.

Ms. Villaruel, at 15, patented her “Multi-S.A.V.E.R (Multifunctional Safety Aid for the Visually Impaired and Elderly in Roadside) Cane” which took inspiration from her mother’s eyesight and hearing issues.

What started as a school project turned into a patented award-winning invention with the help of IPOPHL’s Inventor Assistance Program and her school’s IP Club.

For Mr. Ligan, Ms. Pepito and Mr. Atup, their invention journey started when they were 16. Driven to address plastic pollution, they came up with a project titled “Image processing device for Micro-plastics Assessment and High-quality Evaluation of water,” which can count microplastics in water.

With the Philippine Science High School System dedicated to cultivating an IP-conscious community, the trio was able to get all the support they needed to patent their invention.

Mr. Barba said the ambassadorship of the young inventors make a case for the critical role of schools in fostering innovation.

“Schools can play a huge role not only by educating young Filipinos of the transformative power of IP but also empowering them to fully utilize their IP rights,” he said.

The IPOPHL director-general urged the youth to take advantage of the Youth IP Incentive (YIPI) Program, which waives certain fees and provides comprehensive IP application assistance to young aspiring inventors, entrepreneurs and artists.

“Our YIPI Program is committed to ensuring the youth is at the forefront of the growing IP landscape, where they can flourish by producing relevant and practical solutions to the challenges faced by Filipino society,” Mr. Barba added.

Rice processing facility due to rise in Cotabato province

COTABATO PROVINCE

THE GOVERNMENT of Cotabato province broke ground on Friday on a rice processing facility designed to improve the quality of milled rice while reducing weight, thereby allowing farmers to earn more from their crop.

The P50-million Rice Processing Center 3, which was funded by the Department of Agriculture in Region 12, features a warehouse, a multi-pass rice mill with capacity of 3 tons, a truck for hauling product, a forklift, three drying stations and recirculating dryer.

The project beneficiary is the Budasan Farmers Irrigators Multipurpose Cooperative of barangay Bulakanon in Makilala municipality.

Governor Emmylou J. Taliño-Mendoza said the project will boost food security in the province.

The province’s Rice Technical Working Group has been pursuing projects to improve rice production efficiency.

Ms. Mendoza cited joint efforts with the Philippine Center for Post-harvest Development and Mechanization, using mechanization funds from the Rice Competitiveness Enhancement Fund.

In 2022, Cotabato province was the top producer in Region 12, third in Mindanao, and 10th nationally in rice production. — Maya M. Padillo

Volkswagen Tharu: Return to form

Powered by a turbocharged 1.5-liter mill, the VW Tharu comes in two variants, priced from P1.808 million. — PHOTO BY DYLAN AFUANG

Like a true Volkswagen, the Tharu is comfortable and classy

By Dylan Afuang

A GROUP of young boys — about five or six years of age and living in the Chosen Children Village — giddily flocked to our Volkswagen Tharu SEL press cars, and exclaimed oohs and aahs upon seeing the cars’ shiny paint and fancy cabins.

Following the fairly recent local introduction of the Tharu, the press sampled the model through a day trip from Manila to Cavite. We rode and drove the capable and comfortable Tharu along highways and byways. We also visited and donated goods to the aforementioned small community that cares for orphaned boys and girls with special needs.

Based on initial favorable impressions from us and the children, things are looking good for Volkswagen’s global crossover model. The vehicle finely justifies its price premium over its Japanese and Chinese contemporaries in the local compact crossover sector. It also quite proves that global VWs possess excellent quality, like any other offering from the brand.

Volkswagen Philippines, operated by the Ayala-led AC Motors, sources the local-market Tharu units from China — where the model was developed and is being currently retailed as well. Alongside the T-Cross, the company sells the Tharu in 300 TSI DSG SE (P1.808 million) and 300 TSI DSG SEL (P1.945 million) variants.

The compact Tharu slots above the subcompact T-Cross and alongside the Tiguan in the German car maker’s global portfolio. Like the former, Volkswagen retails the Tharu outside European markets. Aside from China, the Tharu is also made in Brazil and is sold in North and South America, and Russia where it bears the Taos name.

The Tharu’s European connection and premium quality is most apparent in how it rides and drives.

The ride remains unperturbed even when the car is driven spiritedly or over road imperfections. Outside and engine noise barely permeates into the cabin. Like many German vehicles, this car’s ride and handling dynamics feel buttoned-down and the cabin gives an impression of solidity.

Both the SE and SEL are powered by a turbocharged 1.5-liter, four-cylinder engine dishing out 160ps and 250Nm. This is paired to a seven-speed DSG, dual-clutch transmission that drives the front wheels. Similar to a few products from the VW Group, the engine performs strongly and effortlessly and the transmission seamlessly swaps one gear for another.

The vehicle has more attractive attributes. With crisp body lines and a wide grille that blends into the IQ Light LED headlamps, the crossover’s exterior is certainly reminiscent of the much-admired, European-centric Volkswagen models sold here in the past.

The car also sports 18-inch alloy wheels with a split-spoke design, and at the rear, an illuminated VW badge and LED tail light assembly that spans the vehicle’s width — design details that are influenced by Volkswagen’s ID battery electric vehicles.

As VW Philippines Chief Operating Officer Joshua Altarejos explained before, the Tharu’s styling previews the brand’s BEVs that the company could introduce here in the near future.

Moving inside, shutting the doors is accompanied by a solid thunk, a sound we recall hearing in past VWs. The quality and feel of the materials on the leather seats, dashboard, and door panels are also comparable to those found in more German premium marques. A moonroof adds to the premium ambience.

Steering wheel and climate controls are of the touch-sensitive type, and most of the vehicle’s wealth of tech is accessed through the 12-inch center screen. Physical buttons may trump these for user-friendliness, but at least there’s generous space for the crossover’s five passengers. Cargo space is expansive, too, measuring from 455 to 1,543 liters.

Truly, the Tharu is capable, classy, and lives up to its badge. But would local consumers, who have a strong affinity for seven-seat vehicles, choose the five-seat Tharu over three-rowed alternatives of similar price? That remains to be seen.

Yields on gov’t debt track US Treasuries

YIELDS on government securities (GS) rose across the board last week amid higher US rates due to expectations of delayed policy easing by the US Federal Reserve.

GS yields, which move opposite to prices, went up by an average of 4.06 basis points (bps) week on week at the secondary market, based on the PHP Bloomberg Valuation Service Reference Rates as of Feb. 23 published on the Philippine Dealing System’s website.

At the short end, yields on the 91-, 182-, and 164-day Treasury bills (T-bills) went up by 5.22 bps (to 5.6226%), 4.48 bps (5.9045%), and 5.32 bps (6.1323%), respectively.

At the belly, the rates of the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) increased by 7.29 bps (to 6.1316%), 4.6 bps (6.1638%), 2.8 bps (6.1946%), 2.51 bps (6.2228%), and 3.77 bps (6.2614%), respectively.

At the long end, the 10-, 20-, and 25-year papers climbed by 0.55 bp, 4.24 bps, and 3.86 bps to yield 6.2634%, 6.3995%, and 6.3994%, respectively.

GS volume traded stood at P17.97 billion on Friday, up from P4.24 billion on Feb. 16.

Local GS rates rose to track the increase in US Treasury yields, Nicholas Antonio T. Mapa, senior economist at ING Bank N.V. Manila, said in an e-mail.

“Local bond markets continue to take their cue from developments in the US Treasury market. With the Fed signaling it won’t be cutting rates soon, accompanied by some robust US economic data, local bonds have tracked their move,” Mr. Mapa said.

“Movement was mainly influenced by mostly elevated global yields following the reaction to higher price data from the US,” a bond trader likewise said in a Viber message.

The benchmark 10-year Treasury yield, which moves inversely to bond prices, hit 4.35% earlier last week, its highest level since late November, Reuters reported.

While optimism on earnings and the economy has helped stocks shrug off the climb in yields, this could change if inflation data keeps coming in stickier than expected, forcing the Fed to further delay rate cuts.

An inflation test arrives Thursday, with the release of January’s personal consumption expenditures (PCE) price index, which the Fed tracks for its inflation targets. On a monthly basis, the PCE index is expected to increase 0.3%, according to a Reuters poll of economists, up from a 0.2% rise the prior month.

The combination of strong growth and inflation not yet slowing to the Fed’s 2% target has led Fed officials to push back on rate cut expectations.

Fed funds futures show a 52.3% chance of a cut in June, with a 34.7% probability of no cut, a sharp reversal from bets on Feb. 1 of a 62% chance of a cut in March, according to CME Group’s FedWatch Tool.

The Bangko Sentral ng Pilipinas (BSP) is also unlikely to cut before the Fed does, which also affected local yield movements, Mr. Mapa said.

“They will likely mirror what the Fed will do and keep an outlook of elevated interest rates for the moment to maintain the interest rate differential and prevent the peso from depreciating,” the bond trader said.

GS yields rose due to the government’s retail Treasury bond (RTB) offering, Mr. Mapa added.

“Demand for other bonds may have also been impacted by the RTB issuance… Expect demand for the RTB to soak up market liquidity until settlement,” he said.

The government raised P584.86 billion from its offer of five-year retail bonds that ended on Friday, the Bureau of the Treasury (BTr) said in a statement over the weekend.

Of the total, P212.72 billion was awarded at the rate-setting auction for the RTBs held on Feb. 13.

An additional P372.14 billion was raised during the nine-day public offer period, with P128.69 billion of this being new money and P243.45 billion coming from the bond exchange component of the offering.

The BTr will issue the bonds on Feb. 28, Wednesday. The papers carry a coupon rate of 6.25%.

For this week, GS yields may continue to move sideways as the market waits for leads, the bond trader said.

“Traders will remain defensive for the moment and rallies will be short-lived as the market waits for a clear shift in the BSP’s outlook,” the trader said. — BTMG with Reuters

Seizing growth opportunities amidst challenges

Photo from rawpixel.com on Freepik

By Mhicole A. Moral, Special Features and Content Writer

The Philippine real estate market has been grappling with several challenges for the past years, especially due to the lingering impact of the COVID-19 pandemic. Property developers have been particularly affected by the slowdown in the market, which has resulted in a decrease in demand and sales.

Unfortunately, the uncertainties brought about by the health crisis have led to cautious consumer behavior, affecting their purchasing decisions. According to Colliers International Philippines, the prices for many residential properties, especially condominiums, were lower by nearly 4% in 2022 when adjusted for inflation.

Despite the challenges faced by the real estate market in the Philippines, experts predict that it will recover in the coming years. Colliers International Philippines has forecast that the market will experience a stronger pace of recovery in 2024. The growth will be driven by sustained macroeconomic growth and the implementation of sound economic policies.

Executives from some of the country’s leading developers also share similar outlooks.

“The pandemic has heavily changed consumer needs and preferences. However, we are also seeing that consumer needs and preferences are again changing because we are all going back to our normal lives. This also becomes an opportunity for developers to adapt quickly and be the first mover in the market,” Stephanie Anne Go, assistant vice-president and head of Business Development and Design at RLC Residences, said in an e-mail to BusinessWorld.

Rafael Fernandez de Mesa, head of Aboitiz InfraCapital Economic Estates, president of LIMA Land Inc., and president of Cebu Industrial Park Developers, Inc., has emphasized the growth in the industrial real estate landscape, driven by the government’s initiatives to attract foreign direct investments, including tax incentives and streamlined regulations. This has led to a surge in interest, particularly from the region from places such as Japan, China, South Korea, and Taiwan.

“The demand for premium industrial spaces offers a lucrative opportunity for forward-thinking developers. At Aboitiz InfraCapital Economic Estates, we are strategically positioned to seize this growing demand,” Mr. Fernandez de Mesa added.

The latest data and analyses from KMC Savills’ Research and Consultancy have revealed that lease rates for Metro Manila offices have stabilized post-pandemic. The average lease rate is now P858 per square meter (sq.m.), which is 6.7% lower than pre-pandemic rates.

According to the data, the upcoming office completions this year are expected to stimulate leasing activities. While demand is projected to remain strong in 2024, an increase in vacancy rates is anticipated due to multiple office building completions throughout the year.

Furthermore, Bonifacio Global City (BGC) remains the top choice for prime buildings in Metro Manila, with over 2 million sq.m. of office space available. Noteworthy transactions during the last quarter of 2023, particularly in Makati, have maintained high occupancy rates, demonstrating the competitiveness of the office landscape.

Therefore, despite economic uncertainties and global disruptions, the industry has continued to evolve, demonstrating its ability to adapt to changing landscapes and contribute significantly to the country’s economic growth.

Digitized, sustainable industry

Furthermore, digital transformation has influenced Philippine real estate as developers are leveraging technology to streamline processes, enhance customer experiences, and enhance security more effectively. Virtual tours, online transactions, and the like have become integral components of the industry, enabling stakeholders to adapt to the changing demands of the market.

Mr. Fernandez de Mesa explained, “We recognize the substantial potential of proptech and digitization in boosting transparency and efficiency. Online platforms and automated processes contribute to smoother and faster transactions, offering benefits to both investors and locators. Moreover, this technological integration enhances operational excellence by leveraging data-driven insights to optimize resource allocation, improve maintenance practices, and ensure the overall well-being of our estates. Additionally, proptech fosters a more connected and responsive community, allowing residents and locators to access information, request services, and interact seamlessly with us through digital channels.”

“In our forward-looking approach, we are steadfast in our commitment to pushing boundaries by seamlessly integrating cutting-edge technologies such as artificial intelligence and the Internet of Things (IoT) into our estates. Our overarching vision is to craft world-class smart communities that not only address the needs of businesses but also elevate the overall quality of life for every individual residing, working, and engaging within these dynamic environments,” he added.

The country’s real estate sector has also shifted towards sustainable and eco-friendly practices, with developers incorporating green building technologies, energy-efficient designs, and eco-conscious urban planning to reduce environmental impact.

For RLC Residences, developers in the country are now recognizing the demand for environmentally friendly and energy-efficient living spaces. One noteworthy initiative by developers to assure homebuyers of the sustainability of their projects is the adoption of EDGE (Excellence in Design for Greater Efficiencies) certification.

“To ensure our future homeowners that they are buying and living in a sustainable building, we are applying for EDGE certification across all our new projects. However, it is the responsibility of the developers to create sustainable projects that are practical and functional and not just some concept on paper,” Ms. Go explained.

Furthermore, Mr. Fernandez de Mesa underscored Aboitiz InfraCapital’s unwavering commitment to sustainability. A notable achievement in this regard is the 5-Star BERDE District Certification bestowed upon LIMA Estate in Batangas by the Philippine Green Building Council. This distinctive accolade positions LIMA Estate as the first and sole industrial development in the country to receive the distinction.

Aboitiz InfraCapital recognizes the shared commitment to sustainability among its esteemed locators. Emphasizing the significance of Environmental, Social, and Governance (ESG) criteria, the company applauds the vigilance of its partners in monitoring their ESG scorecards.

“We acknowledge that sustainability is not merely a passing trend but a fundamental responsibility. By embodying these values, we not only meet the expectations of our locators but also attract businesses that share our commitment to sustainability and responsible operations,” stated Mr. Fernandez de Mesa.

Investment prospects

Regarding investing in real estate, investors are advised to exercise caution and stay vigilant regarding potential risks associated with economic fluctuations and regulatory changes. Economic conditions can also impact property values, demand, and overall investment viability. According to KMC Savills, investors should keep an eye on the market segments that are showing security, such as the office market, retail, and the hospitality sector.

However, the consulting firm warns of a potential saturation of the mid-end residential market, which could decrease demand and prices. Additionally, a mismatch between demand and supply in the industrial market could lead to oversupply and a decrease in prices.

Despite potential risks, Mr. Fernandez de Mesa highlighted that the country stands as one of the top-performing economies in the region, boasting robust economic performance.

“This is coupled with ongoing infrastructure development projects and government initiatives focused on enhancing the ease of doing business, collectively creating an exceptionally favorable investment environment,” remarked Mr. Fernandez de Mesa.

Furthermore, KMC Savills has predicted that two emerging markets are poised for significant growth this year. These markets are renewable energy and data centers, both of which are currently in their early stages.

“At Aboitiz InfraCapital, we proactively align ourselves with these trends,” emphasized Mr. Fernandez de Mesa. “We seamlessly integrate sustainability and smart city technology into our Economic Estates, addressing present requirements while anticipating future industry demands. Through our strategically developed estates, we provide businesses with an environment that is not only attractive but also future-proof, further solidifying the Philippines’ position as a leading and resilient investment hub in the region.”

“Property buyers are more discerning and more critical of their investments now. This means developers will be challenged to be more creative in their concepts and designs. But more importantly, it is critical for developers to not just deliver quality homes but also delightful experiences to homeowners,” Ms. Go said.

The Dirty Ashtray Award

ALEXAS FOTOS-UNSPLASH

The “Dirty Ashtray Award,” as described by a caption in a photo release (Feb. 21, 2024) from the Senate of the Philippines, is “notorious,” and it is “a well-known publicly recognized award to call out those influenced by lobbying from the tobacco industry.” This notorious award is given by the Global Alliance for Tobacco Control to a government whose “public officials succumb to” the lobbying of the tobacco industry, “or when the government accepts, supports, or endorses policies or legislation in collaboration with the tobacco industry.”

The giving of the “Dirty Ashtray Award” happens during the Conference of Parties (COP) of the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC). In the recent 10th COP held in Panama in the first half of February, the Philippine government became a recipient of the Dirty Ashtray award.

The Philippine government wanted to avoid receiving this award. Senior Deputy Executive Secretary Hubert Guevara, the head of the Philippine delegation to the COP10, “expressed shock at receiving the ‘Dirty Ashtray’ Award.” (From an Inquirer story, Feb. 23, 2024.)

The problem, however, was that the Philippine government set itself up to become a recipient of the Dirty Ashtray Award. Even before the COP10 commenced, the tobacco industry propaganda machine had been at work to discredit the Dirty Ashtray Award. A columnist called the Dirty Ashtray Award an “absurdity at its worst.”

In the same vein, this columnist argues that her and the tobacco industry’s concept of harm reduction through the shift from manufactured tobacco products to electronic cigarettes is being dismissed by the WHO-FCTC. It is her argument that is absurd and disingenuous. How can novel products like electronic cigarettes be a harm reduction tool when they are being sold and promoted to the youth, when they are being targeted to initiate non-smokers into smoking these new products?

And to avert a backlash from the Philippine government’s becoming a recipient of the Dirty Ashtray Award, the Philippine delegation framed its strategy as a “balanced approach,” meant to balance health and tobacco interests. Again, this is absurd, for tobacco kills, and therefore cannot be compatible with health interests.

Being an organization that has championed tobacco tax reforms and has supported previous administrations in securing a series of significant tobacco laws, Action for Economic Reforms (AER) is most disturbed over the Philippines’ receiving a “Dirty Ashtray Award” during the 10th COP of the WHO FCTC.

It is supremely ironic that the Philippines, which the international community has admired for being a global model in advancing tobacco taxation (a pillar of the FCTC’s strategy), has been treated as a party favoring tobacco interests and obstructing measures to further strengthen the Framework Convention. It is an irony that the Philippines, which has dramatically reduced smoking prevalence thanks to higher tobacco taxes, would be shamed in an international conference on tobacco control because of the contradictory actions and statements taken by some officials of the Philippine delegation.

Rather than championing public health and capitalizing on the gains that we have made on tobacco control which the international community has recognized and appreciated, some voices from the Philippine delegation acted as spokesmen for the tobacco industry. Note that the Philippine delegation attended a WHO conference on tobacco control, not an activity about tobacco promotion.

The actuations of the Philippine delegation also did harm to the current effort of the administration to burnish the Philippines’ international image to attract more investments. Receiving the Dirty Ashtray tarnishes our reputation. It is not just the civil society attendees, but, more importantly the senior representatives of governments all over the world, that witnessed the embarrassing, if not shameful, behavior of leading members of the Philippine delegation.

It is in this light that we value the privilege speech delivered by Senator Pia Cayetano, expressing her concern over the Philippines once again being the recipient of the Dirty Ashtray. In the same vein, we welcome and appreciate the Senate public hearing to conduct an inquiry into this matter.

We wish to make the following recommendations to avoid a repeat of the embarrassment that the Philippines suffered.

First, the Philippine government must always consider that the overriding concern and framework for our participation in the FCTC, in other WHO activities, and similar multilateral international hearings is public health. Tobacco control is essentially about public health. It is a great disservice for the Philippine delegation to compromise the public health framework and objectives by accommodating the interests of the tobacco industry.

A “balanced approach,” that the Philippine delegation promoted during the COP10 was but to cover or candy coat tobacco industry interests. Our government delegates to FCTC and similar conventions or summits must be made accountable to advancing and defending public health. The FCTC is not the place for the government delegation to attempt to balance health and competing commercial or (for-profit) interests.

Second, given that the FCTC is about health promotion, the Philippine delegation must be led by the Secretary of Health. Other members of the delegation must take their cues from the Department of Health on FCTC issues.

We note the unambiguous manifestation of the DoH delivered during the Senate public hearing to inquire into the issues revolving around the Dirty Ashtray Award:

“It is undisputed that tobacco kills. As the national technical authority on health, the DoH serves as the key executive government agency for promoting tobacco control in the country. The DoH hopes to lead country delegations to the COP of WHO FCTC and be granted the privilege of formulating a healthy national position on COP agenda items.”

We could have spared the Philippine delegation from controversy and shame if the Health Secretary or his designated representative had taken the lead to assert the health mandate. We could have spared the delegation head, Senior Deputy Executive Secretary Guevara, from embarrassment. To quote him: “I deeply apologize if this has brought embarrassment to you and to other countrymen who felt the same way.”

It is likewise disconcerting that the Philippine delegation to FCTC COP10 had several co-heads. Too many cooks spoil the broth. To repeat for emphasis, the Secretary of Health must be in command for the FCTC and similar functions.

The public must likewise know how members of the delegation are selected. As a case in point, we ask: How come a member of the House of Representatives (HOR) associated with the tobacco industry was selected to be a co-head of the delegation? Worse, this Congressman and other members of the delegation contradicted the DoH’s position on key issues.

Third, the Senate should inquire into tobacco industry interference, which the FCTC is empathically against. Some members of the Philippine delegation merely echoed the tobacco industry position (for example, a distorted concept of harm reduction).

A pattern can likewise be established that there is a globally coordinated effort to undermine FCTC objectives, using the Philippine delegation as a pawn. Several news articles were published before, during, and after the COP10 that propagated the tobacco industry line. Worse, there are instances that these stories quote statements from government officials when such statements do not reflect the position of the Philippine delegation.

And as mentioned earlier, the tobacco industry and its apologists had anticipated that the Philippines would receive the Dirty Ashtray Award. This would suggest that they knew beforehand that the Philippine position would contradict the positions and expectations of the global tobacco-control community. Thus, their propaganda tactics included disparaging and ridiculing the Dirty Ashtray Award.

To quote Senator Pia Cayetano, “If any of you here are in bed with the tobacco industry, that is a crime. And this committee will not stand for it. By not acting on your job, you are committing a crime. So, work with me, so we can protect the children of this country.”

Fourth, the Philippine government must insist on the correct definition and practice of harm reduction, an issue that dominated the COP10. The industry is branding or packaging the selling of electronic nicotine and non-nicotine devices (ENNDS) as harm reduction. It is far from being a harm reduction strategy, for such devices are being marketed to non-smokers, especially the youth.

We wish we did not receive the Dirty Ashtray Award. It should not have happened, and we should have been the toast of the world for our dramatic gains in tobacco taxation and reduction of tobacco smoking. Sadly, members of the Philippine delegation became the villains, dragging down with them the country’s reputation.

 

Filomeno S. Sta. Ana III is the executive director of Action for Economic Reforms (AER). Jessica Reyes Cantos is the AER president.

Aboitiz InfraCapital, Cebu Pacific team up to develop route network

ABOITIZ InfraCapital GMR Megawide Cebu Airport Corp. (Aboitiz InfraCapital GMCAC), which manages the Mactan-Cebu International Airport,  has partnered with budget carrier Cebu Pacific to develop a route network, the company announced on Sunday.

“The thrust of Aboitiz InfraCapital, through our airport business, is to improve the country’s gateways and provide a world-class travel experience to boost tourism further,” Rafael M. Aboitiz, vice-president and head of Airport Business at Aboitiz InfraCapital, said in a media release.

Priorities include improving connectivity at the airport’s domestic and international terminals and the utilization of electric vehicles to help reduce carbon emissions, the company said.

Aboitiz InfraCapital holds a 33% stake in Mactan-Cebu International Airport, which serves about 11 million passengers.

MCIA is operated and managed by a private group, which includes Aboitiz InfraCapital, Megawide Corp. and GMR Group under a 25-year public-private partnership.

The collaboration also aims to improve passenger experience while also enhancing the operational capacity at the MCIA, Aboitiz InfraCapital said.

“Cebu Pacific is proud to operate its largest base outside Manila in one of the best airports in Asia. Partnering with Aboitiz InfraCapital GMCAC will help us reaffirm our commitment to provide safe, accessible, and affordable air transport and elevate the travel experience of our passengers,” said Alexander G. Lao, president and chief commercial officer of Cebu Pacific. — Ashley Erika O. Jose

LVMH launches entertainment venture led by Arnault heir and US boss

PARIS — Luxury goods giant LVMH is launching an entertainment venture to boost the marketing of its labels, overseen by a committee of executives led by LVMH heir Antoine Arnault and Anish Melwani, chief executive officer (CEO) of the group’s North America operations.

The new venture, called 22 Montaigne Entertainment — a reference to LVMH group headquarters in Paris on Avenue Montaigne, is a partnership with Superconnector Studios and that company’s co-founders Jae Goodman and John Kaplan, LVMH said.

The move comes as the fashion industry becomes increasingly linked to the entertainment industry, with the presence of stars like Beyoncé, Zendaya, and Rihanna adding buzz to fashion shows and LVMH label Louis Vuitton bringing in Pharrell Williams to head menswear designs.

French luxury goods billionaire Francois-Henri Pinault, chairman and CEO of Gucci-owner Kering, last year bought a majority stake in Creative Artists Agency (CAA), a Los Angeles-based agency that represents thousands of actors, directors and music artists including Beyoncé and Mr. Pinault’s wife, actress Salma Hayek.

LVMH said the aim was to collaborate with leading entertainment creators, producers, and distributors to co-develop, co-produce and co-finance entertainment focused on premium film, TV, and audio formats.

Antoine Arnault is one of LVMH Chairman and CEO Bernard Arnault’s five children and heirs, who is in charge of image and environment at LVMH and credited with negotiating a high-profile deal for the company to sponsor next summer’s Paris Olympic Games. He stepped back from the day-to-day management of upscale menswear label Berluti in January. — Reuters

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