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Villar Land sets final property fair value at P52.74B, down from P1.33T

BW FILE PHOTO

VILLAR LAND Holdings Corp. has set the final audited fair value of its newly acquired properties at P52.74 billion, according to its 2024 annual report filed with the Securities and Exchange Commission (SEC), sharply lower than an earlier estimate of P1.33 trillion that drew regulatory scrutiny.

The valuation covers 366 hectares of prime land within Villar City, a 3,500-hectare master-planned development spanning Metro Manila and Cavite. Villar Land acquired the properties through its purchase of Althorp Land Holdings, Inc., Chalgrove Properties, Inc., and Los Valores Corp. for P5.2 billion on Sept. 30 last year.

In its filing on Thursday, the company said the properties were initially appraised using the income approach, yielding an estimated value of about P1.3 trillion. After discussions with its external auditor, Punongbayan & Araullo (P&A), Vil-lar Land adopted the market approach for its audited financial statements.

“Appraisal reports were obtained from SEC-accredited property appraisers to support the fair value measurement… The company agreed to use the valuation based on market approach,” the report said.

According to Note 28 of the audited financial statements, the fair value of investment properties was disclosed at P52.74 billion, while the properties were recorded at P8,759,321,390 cost, in compliance with Philippine Financial Reporting Standards (PFRS).

P&A identified the valuation as a key audit matter, citing “significant judgments and high estimation uncertainty” in determining fair values. The audit report noted that the market approach relies on subjective inputs such as comparable sale prices, bargaining allowances, location, topography, and amenities, making valuations highly sensitive to assumption changes.

The auditors said they performed extensive procedures, including reviewing appraisal reports, testing assumptions against market data, and engaging independent valuation specialists to validate the figures.

The adjustment follows a SEC show-cause order issued to E-Value Phils., the original appraiser, to explain its P1.33-trillion valuation. The regulator also imposed P12 million in fines on Villar Land and 11 of its officials in August for delayed submission of audited financial statements, citing violations of the Securities Regulation Code.

The company reported a net income of P1.423 billion for 2024, slightly higher than P1.416 billion for 2023, marking a 0.5% increase year on year. The improvement was driven by higher interment and chapel service revenues, which grew 23% and 43%, respectively, offsetting a 26% decline in real estate sales.

Total assets surged 28% to P35.75 billion from P27.98 billion in 2023, largely due to the Villar City land acquisition and reclassification of investment properties. Investment properties at cost jumped from P76 million to P8.76 billion, an increase of P8.68 billion or 11,462%, while fair value disclosure rose to P52.74 billion.

Equity declined slightly by 3% to P13.67 billion, while liabilities rose 59% to P22.08 billion, reflecting higher payables and related-party obligations linked to the acquisition.

EARLIER UNAUDITED DISCLOSURE

On March 31, Villar Land reported a net income of P999.72 billion for 2024, up from P1.46 billion the previous year, attributing the spike to fair value gains on investment properties that ballooned to P1.33 trillion from P59 million in 2023.

Revenue fell by 25% to P3.58 billion as real estate sales declined by 26% to P3.31 billion due to lower residential unit sales.

Villar Land, formerly Golden MV Holdings, Inc., changed its name in November 2024 following an amendment to its articles of incorporation. It is among the country’s largest developers of memorial parks under the Golden Haven brand and mass housing projects through Bria Homes.

At the local bourse on Thursday, shares of Villar Land were down by 29.97% or P688 to close at P1,608 apiece. — Beatriz Marie D. Cruz and Arjay L. Balinbin

Maynilad posts P3.9-B Q3 net income, up 16% on higher revenues

MAYNILAD

FOLLOWING its stock market debut, Maynilad Water Services, Inc. reported a 16% increase in third-quarter (Q3) net income to P3.9 billion, driven by higher revenues.

Revenues for the quarter rose 8.4% year on year to P9.30 billion, reflecting a tariff increase, according to the company’s financial report released on Thursday.

For the nine months ending September, net income rose 18% to P11.41 billion, driven by higher topline growth and a modest 2% increase in cash operating expenses, Maynilad said.

Total revenues improved 9.5% to P27.65 billion, primarily reflecting the 8% tariff adjustment implemented at the start of the year and an upward revision in the environmental charge.

“This was partly offset by a 1.1% decline in billed volume, following government restrictions on Philippine offshore gaming operators (POGO) and the transfer or closure of several large commercial accounts in the West Zone,” the company added.

As of end-September, Maynilad’s non-revenue water — water lost through leaks or illegal connections — dropped to 32.8% from 39.3% last year, due to intensified pipe replacement and leak-repair initiatives.

The utility continues to invest heavily in system upgrades and new water-treatment facilities under its 2023-2025 capital expenditure program, Maynilad said.

Key projects on the water-supply side include the 150-million-liter-per-day (MLD) Poblacion Water Treatment Plant in Muntinlupa and modular treatment plants in Cavite. Wastewater undertakings include the 20-MLD Tunasan and 46-MLD Cupang Water Reclamation Facilities in Muntinlupa, and the larger 205-MLD CAMANA and 180-MLD Manila North wastewater-treatment projects.

“We continue to meet our service commitments while investing in the infrastructure that will sustain long-term growth,” said Maynilad President and CEO Ramoncito S. Fernandez. “Our operational gains and disciplined execution show that our fundamentals remain sound, and that we are on track with our 2025 operational and financial objectives,” he added.

Maynilad raised P34.34 billion from its initial public offering, the second-largest in the Philippine Stock Exchange’s history, last week.

The company is an integrated primary provider of sustainable water and wastewater services for the West Zone, covering 11 cities in Metro Manila, three of which have partial coverage, as well as portions of Cavite province.

Metro Pacific Investments Corp., which holds a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.

Maynilad shares shed 2.16% to close at P14.50. — Sheldeen Joy Talavera

JG Summit Q3 core profit climbs to P4.6 billion on airline, real estate gains

https://www.jgsummit.com.ph/i

JG SUMMIT Holdings, Inc. posted a core net income of P4.6 billion for the third quarter (Q3), up from P2.1 billion a year earlier, supported by gains in its airline, real estate, and food businesses, as well as reduced losses from its idle petrochemical plant.

“We continue to exhibit a strong upward trajectory in our recurring core profits, driven by the performance of our listed strategic business units, as well as the curbed losses from our mothballed petrochemical plant,” JG Summit President and Chief Executive Officer Lance Y. Gokongwei said in a statement on Thursday.

Revenues declined by 6% year on year to P83.5 billion, due to the shutdown of its loss-making petrochemical business earlier this year, the company said. Without it, the topline would have improved by 6%.

The company has yet to release its full financial report as of press time.

For the first nine months of the year, the company’s reported core profit slipped 5% to P19.3 billion amid the absence of the P7.9-billion gain from the merger between the Bank of the Philippine Islands (BPI) and Robinsons Bank Corp. (RBC) booked last year.

JG Summit said that its total revenues ended flat at P277.5 billion.

Excluding the downward impact of the plant shutdown, revenues climbed by 10% on the back of strong demand for travel and leisure, improving residential segment, and sustained volume-driven growth of its food and beverage unit.

The real estate and hotels businesses led by RBC delivered a revenue of P124.6 billion, up 5%, driven by higher volumes and market share gains in its domestic Branded Consumer Food segment, coupled with improving scale of the URC International business.

The air transportation segment through Cebu Air, Inc. saw an improvement of 18% to P87.6 billion, propelled by higher passenger volumes, fares, and cargo volumes.

Meanwhile, after shutting down its plant, streamlining operations, and transferring debt, JG Summit Olefins Corp. (JGSOC) was able to reduce its monthly losses to P90-100 million.

JGSOC has reduced its losses to P90-100 million following its plant shutdown, organizational rationalization, and full debt transfer to the parent company.

“Presently, JGSOC continues plant preservation while pursuing opportunistic monetization of idled assets,” the parent firm said. “At the same time, there are ongoing engagements with various relevant organizations as it explores strategic options to optimize company value considering prevailing market conditions.”

JG Summit said its share in the net income of Manila Electric Co. rose by 9% to P9.5 billion, primarily driven by the expansion of its power generation business and steady contributions from its electricity distribution segment.

Equity income from Singapore Land Group Ltd. increased by 9% to P1.5 billion with higher contributions from property investments plus better occupancy and rates in its commercial properties.

PLDT Inc. paid dividends of P96 per share, down P1. BPI increased its dividend distribution by 5% to P2.08 per share.

Shares in the company declined by 1.41% to P21 each. — Sheldeen Joy Talavera

Ayala Corp. Q3 income nearly doubles to P22.91 billion

AYALALAND.COM.PH

AYALA CORP. booked a 96.16% increase in its third-quarter (Q3) attributable net income to P22.91 billion, up from P11.68 billion a year earlier.

In a statement on Thursday, the listed conglomerate said core net income went up 4% year on year to P12.8 billion, fueled by stronger contributions from Bank of the Philippine Islands (BPI) and Ayala Land, Inc. (ALI), alongside support from the company’s portfolio businesses, including AC Health, Inc., AC Logistics, Inc., Integrated Microelectronics, Inc. (IMI), and iPeople, Inc.

“While gross domestic product growth has slowed somewhat, our core businesses remain steady, and our portfolio businesses continue to improve. Our recently announced initiatives in retail, Makro and Spinneys, signify continued confidence in the long-term growth trend of the Philippine economy,” Ayala Chief Executive Officer Cezar P. Consing said.

Ayala’s core net income, excluding one-time items, remained stable year on year at P36.6 billion.

For the first nine months, Ayala’s reported attributable net income rose by 36.22% to P46.27 billion, mainly due to one-time gains from revaluing AC Ventures, which holds Ayala’s direct stake in Mynt. A remeasurement gain was recorded, according to the company, due to Mitsubishi’s acquisition of a 50% stake in AC Ventures, which resulted in indirect ownership of Mynt.

ALI, BPI, Globe Telecom, Inc., and AC Energy (ACEN) reported mixed results in the January-to-September period, with BPI and ALI posting net income growth, while Globe and ACEN saw declines due to lower revenues and higher expenses.

BPI’s net income increased by 5% to P50.5 billion, driven by solid loan growth and an expanding net interest margin (NIM). Return on equity stood at 15%.

Ayala Land’s net income also rose 1% to P21.4 billion, supported by stable property development revenues and steady performance in its leasing and hospitality operations.

Meanwhile, Globe’s core net income fell 12% to P15.5 billion due to lower gross service revenues and higher expenses, while ACEN’s core net income dropped 18% to P4.3 billion because of wind farm damage, weaker market prices, and new depreciation costs.

ACEIC, ACEN’s parent, saw a 59% net income decline to P4.2 billion, pressured by lower contributions from ACEN and thermal plants along with reduced net interest income at the parent level.

AC Health narrowed its net loss from P417 million to P9 million, driven by strong provider business performance, a P103-million gain from selling KMD shares, no KMD losses, and an earnings before interest, taxes, depreciation, and amortization increase from P460 million to P1.02 billion.

ACMobility posted a net income of P18 million, reversing a P176 million loss last year, due to higher volume that cut losses in distribution and dealerships.

IMI posted a net income of $14.8 million, reversing a $9.2-million loss last year, due to improved operational efficiency from restructuring and higher facility utilization rates.

Ayala Corp. shares fell by 0.05% or 20 centavos to P420.80 apiece on Thursday. — Alexandria Grace C. Magno

Now a senior bagets: Raymond Lauchengco stages 60th birth-day concert

TO celebrate turning 60, Raymond Lauchengco is showing his gratitude to all those who have supported him throughout the years with a grand birthday concert, a heartfelt new song, and a book featuring his stories and art-works.

As a 1980s matinee idol best known for the coming-of-age film Bagets who was also an acclaimed singer with hits like “I Need You Back,” “Farewell,” and “So It’s You,” he has never rested on his laurels. In the years since, he has cultivated a creative journey in music and art.

For Mr. Lauchengco, this milestone marks the perfect time to look back at a lifetime of beloved hits and meaningful memories. His concert, Everybody Loves Raymond, which takes its name from his favorite 1990s sitcom (the lead of which he happened to share a name with), takes place on Nov. 28 at The Theatre at Solaire in Parañaque.

“Last year, for my 40th anniversary in show business, I went back to the ’80s. This year, the scope will be wider because it starts even before that, from the time I was a choir boy at 11 years old up to now,” Mr. Lauchengco told BusinessWorld in an interview.

“The repertoire is going to cover more genres, from the choir to Broadway, because I started out acting on stage,” he added. (He had made his stage debut at the age of 12 in Repertory Philippines’ staging of The King and I.) “Af-ter that, I dreamt of becoming a balladeer like Barry Manilow.”

Sharing the Solaire stage with him are three performers he deeply admires: Sharon Cuneta, Ice Seguerra, and Mitch Valdes, among other surprise guests. With them, he hopes to showcase the wide variety of music that has shaped his life and career over decades.

“Without Sharon Cuneta, there would be no Raymond Lauchengco,” he said. “She was supposed to be at my show last year, but couldn’t make it, so it means the world to me that her schedule aligned this year!”

His sister, acclaimed theater actress Menchu Lauchengco-Yulo, will be directing her brother for the first time ever for the concert. She said that he knows exactly what he wants. “I’m really just putting it together and making sure it happens. He’s a director as well, so it’s his concept, and since he’s my brother, it’s not as intimidating,” she explained.

She added that her role has simply been to implement his vision, with the help of musical director Marvin Querido and producer Girlie Rodis. Meanwhile, for Mr. Lauchengco, there is “no better person to direct than my sister.”

A SINGLE AND A BOOK
Aside from the concert, his 60th birthday is also marked by the release of a new single, titled “My Favorite Story,” dedicated to family, friends, and fans who have supported him.

“You know how our life is made up of thousands, millions of little stories? You put that all together, you have a life. So this song is my way of saying ‘thank you’ to everybody who has become a part of that,” he explained. Mr. Lauchengco’s first book, Dance With the Wind, has also been released, available online via raymondlauchengco.com. It is a collection of essays and artworks that reflect his personal transformation over the years, many of which were created during the COVID-19 pandemic. A long-time photographer whose oeuvre covers art photos to portraits, he took up the Japanese art of kintsugi, in which broken objects are repaired with lacquer and gold, and sculpture during the pandemic

The title of the book takes its name from one of his short stories, referring to a tree that has remained standing amid strong winds because of its ability to bend and sway with it — a representation of his own resilience and lon-gevity.

“If someone had told me years ago that I would have my own book by 60, I would have stared at them in disbelief. Yet here it is,” he said.

ON TODAY’S BAGETS
Mr. Lauchengco confirmed that the concert will contain many of his hits, especially from his time as part of the iconic 1984 film Bagets. The topic shifted to the musical adaptation of the film which will be coming out early next year. “At that time, we were just horsing around, we were just playing,” he said of his co-stars — William Martinez, JC Bonnin, Herbert Bautista, and Aga Muhlach — when they were making the film. “We had no idea that what we were doing was going to turn into some sort of a classic, representative of an entire generation,” he told BusinessWorld.

With the advent of digital technology, the bagets of today have an entirely different culture, which he thinks will make the new adaptation “interesting.”

“It’s a totally different world. Back then, there were no such things as gadgets. We relied on people. We connected with people. We would go to each other’s houses, go outside with our barkadas. It’s different [today],” he said.

His character in the film, the rich kid Arnel, will be played by young stars Ethan David and KD Estrada in the upcoming musical. “I’m not going to presume to give them any kind of advice except to enjoy it and be yourselves, be-cause that’s what we did,” said Mr. Lauchengco.

“The reason it clicked so well is because we honestly liked each other. We really became friends — JC, myself, Herbert, William, Aga,” he added. “That’s one of the secrets why the film worked, because our caring for each other was so real.”

Despite the key differences that today’s version of Bagets will surely exhibit, he expressed confidence in the universal themes present in the material.

“You’re a teenager, you’re trying to discover yourself, you’re trying to navigate the world,” he said. “Those things are universal. The only difference is the world has changed. The environment has changed.”

With that said, Mr. Lauchengco maintained that, like how he’s been able to “dance with the wind” as per his book, Bagets will live on in its own way.

Everybody Loves Raymond takes place on Nov. 28, a day before his 60th birthday. Those who pre-order the book or concert merchandise bundles will receive a free meet-and-greet pass after the show. Details can be found on https://raymondlauchengco.com. Tickets are available online at ticketworld.com.ph. — Brontë H. Lacsamana

MPTC secures approval for P15-B bond offering

PANGILINAN-LED Metro Pacific Tollways Corp. (MPTC) has secured approval from the Securities and Exchange Commission (SEC) for its P15-billion fixed-rate bond offering.

In a media release on Thursday, the tollways arm of Metro Pacific Investments Corp. (MPIC) said it had received pre-effective approval from the corporate regulator for its P15-billion fixed-rate bond offering, with an oversubscription option of up to P5 billion.

“This maiden bond offering strengthens MPTC’s liquidity and diversifies its sources of capital… The proceeds will fund our ongoing investments and expansion projects, consistent with our mission to build essential infrastructure that supports nation-building and economic progress,” MPTC President and Chief Executive Officer Gilbert F. Santa Maria said.

The offer period is targeted to run from Nov. 17 to 21, while the bonds are expected to be issued and listed on the Philippine Dealing and Exchange Corp. (PDEx) on Dec. 2.

MPTC said the offer is still subject to the satisfaction of all required and applicable regulatory requirements and the receipt from the SEC of a permit to sell the bonds.

The company intends to allocate net proceeds from the offer to partially finance its continued investments in the construction and maintenance of the Manila-Cavite Expressway, Cavite-Laguna Expressway (CALAX), and Lapu-Lapu Expressway (LLEX), as well as the refinancing of its bridge facilities and other corporate purposes.

“The proceeds will fund our ongoing investments and expansion projects, consistent with our mission to build essential infrastructure that supports nation-building and economic progress,” Mr. Santa Maria said.

BPI Capital Corp. and First Metro Investment Corp. are the joint issue managers for the offer, while BDO Capital & Investment Corp., China Bank Capital Corp., PNB Capital and Investment Corp., and Security Bank Capital Investment Corp. are joint lead underwriters and joint bookrunners.

The bonds have been assigned a credit rating of PRS Aaa with a stable outlook by Philippine Rating Services Corp. (PhilRatings), the highest rating assigned by the credit watcher.

PhilRatings said the rating reflects MPTC’s growing regional footprint and project pipeline, as well as its sustained growth and increasing earnings.

MPTC is the tollways unit of MPIC, one of the three key Philippine subsidiaries of Hong Kong-based First Pacific Co. Ltd., along with Philex Mining Corp. and PLDT Inc.

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

Philippine banks to see ‘robust’ credit growth as rates go down

PHILSTAR FILE PHOTO

PHILIPPINE BANKS may see strong demand for loans until next year as the economy remains strong and as borrowing costs continue to go down amid manageable inflation, S&P Global Ratings said.

“Credit growth should stay robust,” S&P Global Primary Credit Analyst Nikita Anand said in a report released on Nov. 12. “Strong economic growth and lower inflation and interest rates will support credit demand.”

The banking sector’s loans are likely to expand by 11%-13% this year and next, mainly driven by the retail sector.

Outstanding loans of universal and commercial banks grew by 10.5% year on year to P13.704 trillion at end-September, the slowest expansion seen since the 10.4% in July 2024.

However, as banks ramp up their lending to the consumer sector, asset quality could take a hit, which would also drive up credit costs, S&P Global said.

“A rising share of higher-risk (and higher-yielding) unsecured consumer loans and global uncertainties could lead to a manageable deterioration in the nonperforming loan ratio and keep credit costs elevated,” it said. “Large corporates, which form the bulk of the sector’s loan portfolio, should remain resilient.”

“We expect the sector’s credit costs to stay elevated at 0.7%-0.8% of gross loans over the next two years. This level, while lower than peers, is slightly higher than the five-year pre-pandemic average of 0.5%.”

Philippine banks’ gross nonperforming ratio was at 3.31% in September, the lowest level seen in six months or since the 3.3% in March. It likewise eased from 3.5% in August and 3.47% in September 2024.

S&P Global also flagged risks stemming from the property market.

“Philippine banks have sizable exposure to the real estate sector at about 20% — one-third of this is housing loans and the remaining two-thirds is to the commercial real estate sector. Any significant deterioration in the sector will affect banks’ asset quality,” it said.

“We see some pockets of risk; there is an oversupply in the condominium market and office space in Metro Manila, for example. However, spillover to the broader sector will likely be limited. We believe the decline in interest rates will help borrowers and contain any spike in nonperforming loans.”

Still, lenders have enough buffers against risks, the debt watcher said.

“Philippine banks are well positioned for growth with a sound capital position (15.7% Tier 1 ratio). They also maintain adequate provisioning. These provide a buffer against indirect tariff effects such as lower global economic growth, uncertainty, and hits to confidence,” S&P Global said.

This would help boost their profits, although it expects the sector’s return on average assets to fall to 1.4% this year and in 2026 from about 1.5% last year.

“Banks’ profitability could edge down as margin expansion dissipates… A higher share of unsecured loans and cuts to operating expenses may offset the impact of potential rate cuts,” it added.

S&P Global expects the Bangko Sentral ng Pilipinas (BSP) to cut rates further to 4% until next year from 4.75% currently as inflation stays moderate.

“This should also help contain asset-quality risks emanating from rising household leverage,” it said.

The central bank has cut interest rates by 175 basis points (bps) since it began its easing cycle in August 2024.

The market widely expects a fifth straight 25-bp cut at the Monetary Board’s Dec. 11 policy meeting and more reductions next year.

BSP Governor Eli M. Remolona, Jr. has said they see the need for more policy accommodation to support the Philippine economy amid weakening consumer and investor confidence due to a corruption scandal involving government infrastructure projects.

The scandal, which caused slower government spending, was the main reason behind the weak gross domestic product (GDP) growth logged last quarter. Expansion slowed to an over four-year low of 4% in the period from 5.5% in the second quarter and 5.2% in the third quarter of 2024.

For the first nine months, GDP expansion averaged 5%, putting the government’s 5.5%-6.5% full-year growth target further out of reach.

S&P Global kept its growth forecast at 5.6% for this year and 5.8% for next year.

“Domestic consumption drives the Philippine economy,” it said. “It is less exposed to cross-border trade and, thus, to geopolitical strains that could weaken trade prospects.” — Katherine K. Chan

BPI looks to sustain 12-13% loan growth

BW FILE PHOTO

BANK of the Philippine Islands (BPI) is looking to sustain its loan growth at the mid-teens range next year as it continues to expand its consumer lending business.

“We’re hoping that next year, we’ll grow probably 12-13%. Depends on the economy. Outstanding loan volumes will continue to grow. There is sufficient liquidity in the market,” BPI President and Chief Executive Officer Teodoro K. Limcaoco told reporters late on Wednesday.

The bank wants to continue expanding its consumer lending segment for margin growth, especially with interest rates likely to go down further, he said.

“Our strategy has always been to focus on the consumer sector because, first of all, the institutional sector, the top corporates, that’s a very competitive market, and there’s a lot of banks competing in that, and the margins are small. So, as rates come down, you’ll get more compression there. Whereas if you focus on consumer loans, because the market is very wide, you have very sticky pricing. So, even when the rates come down, the margins don’t compress as much,” Mr. Limcaoco said.

He added that banks with sufficient data, reach, and technology can take advantage of the consumer sector as it remains largely untapped.

“Plus, it’s a very untapped market because the infrastructure for consumer loans is still quite nascent.”

Consumer loans currently make up 30% of BPI’s loan book, he said.

The bank is also looking to grow its middle-market segment or lending to small and medium enterprises (SMEs), which also contributes to its consumer book.

“It’s still small. Our SME loan book is probably half the size of our auto book,” Mr. Limcaoco said.

The Philippines’ growth is still expected to be faster the global economy’s expansion, which would be supportive of consumer loan demand, he added.

Philippine gross domestic product (GDP) grew 4% in the three months to September, the slowest in over four years. This was down from the 5.5% expansion in the second quarter and the 5.2% clip from a year earlier.

For the first nine months, growth averaged 5%, well below the government’s 5.5%-6.5% full-year target.

“While people might be disappointed with 4% growth, let’s remember the rest of the world is growing at 2%. So, the Philippine economy is still growing. It’s not growing as fast as it used to, but it is still growing,” Mr. Limcaoco said.

BPI’s net income rose by 5.2% year on year to P50.5 billion in the first nine months of the year as revenue growth outpaced the rise in its expenses.

Its shares closed unchanged at P102.50 each on Thursday. — Aaron Michael C. Sy

Disney eyes ESPN expansion in Asia to boost streaming content

WALT DISNEY CO. is seeking to bring its ESPN sports brand to Asia, stepping up efforts to expand in one of the world’s fastest-growing streaming markets.

The company aims to add more live sports to Disney+ and gradually roll out ESPN across Asia, Luke Kang, president of Disney Asia Pacific (APAC), said in an interview. Launch timing will vary by market, he said, as sports rights and fan bases differ by country. Disney introduced ESPN on Disney+ in Australia and New Zealand earlier this year, the sports streaming brand’s first presence on the platform in the region.

“Our long-term goal is to integrate ESPN into the platform as we do in other parts of the world and eventually become a premier destination for sports,” Mr. Kang said on the sidelines of the Disney APAC Content Showcase in Hong Kong. “We’re constantly looking at all of the sports rights to see what timing is appropriate to launch ESPN.”

Sports streaming has become a key battleground for US media companies vying for global growth. Rivals are also striking deals in Asia, where domestic platforms dominate live sports coverage. Amazon.com, Inc.’s Prime Video secured rights to stream Major League Baseball games in Japan through a partnership with South Korean broadcaster SPOTV, while Netflix, Inc. plans to stream the 2026 World Baseball Classic exclusively in the country. Disney is now weighing new licensing deals and sports events in Japan and Southeast Asia, Mr. Kang said.

Since rolling out Disney+ in major Asian countries four years ago, Disney has shifted its streaming strategy from local content investment in various Asian markets to a more selective focus on quality and cross-border hits. The company has scaled back production in Southeast Asia and merged its India business with Reliance Industries Ltd.’s entertainment business entity to create joint venture JioStar.

Disney+’s regional focus now centers on Korean dramas and Japanese animé, which have proven appeal across Asia and in Western markets. As part of that strategy, Disney recently integrated CJ ENM Co.’s platform Tving into its app in Japan, a move Mr. Kang said reflects the company’s openness to potential partnerships.

Disney+ is currently the third-largest streaming platform in Asia and is projected to end 2025 with 19 million subscribers and $1.4 billion in revenue across the region excluding India and China, according to Media Partners Asia.

“Disney+ is entering its second phase of streaming growth in Asia-Pacific,” said Vivek Couto, executive director at Media Partners Asia. “Engagement remains anchored by US franchises and children’s content, but local produc-tions — notably Korean dramas, thrillers, and Japanese animé — are driving consumption and brand affinity.” — Bloomberg

PAL to boost Manila-Los Angeles flights to 18 weekly from June 2026

PHILIPPINEAIRLINES.COM

FLAG CARRIER Philippine Airlines (PAL) is further expanding its US routes as the airline is set to increase its flagship flights between Manila and Los Angeles by next year.

“By increasing our capacity on this key route, we are opening doors for travelers to experience the world-class service and heartfelt hospitality unique to Philippine Airlines, while also supporting the dynamic economic relationship that drives opportunities between the Philippines and the US,” PAL President Richard Nuttall said in a media release on Thursday.

Starting June 1, 2026, PAL will offer nonstop Manila-Los Angeles service 18 times weekly, up from the current 14.

At present, PAL offers Manila to Los Angeles twice daily, utilizing its Boeing 777 aircraft, it said, adding that by next year it will expand its frequency to three times a day, operating every Monday, Wednesday, Friday, and Saturday.

Mr. Nuttall said this expansion will provide seamless access to PAL’s extensive domestic and regional network, further complementing its route to the US.

The airline also operates daily flights to San Francisco and Guam, thrice-weekly service to New York, and five-times-weekly flights to Honolulu.

PAL Holdings, Inc., the operator of PAL, said its attributable net income climbed 33.58% to P9.03 billion from P6.76 billion a year ago, supported by higher passenger revenues of P116.56 billion, up from P115.66 billion.

Cargo and ancillary revenues contributed P6.71 billion and P12.67 billion, respectively.

Total revenues for the nine-month period increased 2.68% to P136.01 billion from P132.45 billion, while gross expenses rose 3.96% to P124.85 billion from P120.09 billion.

At the local bourse, shares in PAL closed unchanged at P3.80 each. — Ashley Erika O. Jose

Are you listening to bots? Survey shows AI music is virtually undetectable

AI BAND The Velvet Sundown attracted one million Spotify listeners monthly before its synthetic origins were exposed. — INSTAGRAM.COM/THEVELVETSUNDOWNBAND

A STAGGERING 97% of listeners cannot distinguish between artificial intelligence (AI)-generated and human-composed songs, a Deezer-Ipsos survey showed on Wednesday, underscoring growing concerns that AI could upend how music is created, consumed and monetized.

The findings of the survey, for which Ipsos polled 9,000 participants across eight countries, including the US, Britain, and France, highlight rising ethical concerns in the music industry as AI tools capable of generating songs raise copyright concerns and threaten the livelihoods of artists.

It also showed that most listeners want clear labelling on AI-generated music, music streaming platform Deezer said.

The study found that 73% of respondents supported disclosure when AI-generated tracks are recommended, 45% sought filtering options, and 40% said they would skip AI-generated songs entirely. Around 71% expressed sur-prise at their inability to distinguish between human-made and synthetic tracks.

Deezer, which has 9.7 million subscribers, has seen daily AI music submissions rise to more than 50,000 — about a third of total uploads, up sharply from 18% in April. It has introduced tagging and excluded AI-produced tracks from editorial playlists and algorithmic recommendations to promote transparency.

“We believe strongly that creativity is generated by human beings, and they should be protected,” Deezer Chief Executive Officer Alexis Lanternier told Reuters, urging transparency.

Mr. Lanternier noted the complexity of implementing differential payout structures for AI music, stating a “massive change” in remuneration policies remains challenging. Deezer has also started excluding fake streams from royalty payments.

The issue gained attention earlier this year when AI band The Velvet Sundown attracted one million Spotify listeners monthly before its synthetic origins were exposed. Universal Music Group recently settled a copyright case with AI music company Udio. While financial terms were undisclosed, the parties plan to launch an AI-powered music creation platform in 2026, using licensed music to train the tool. On Tuesday, a Munich court ruled that OpenAI’s ChatGPT violated German copyright laws by reproducing song lyrics, a decision the company said it might appeal.

Consumer attitudes toward AI in media remain mixed. A May survey by Luminate found the majority of US audiences were indifferent or accepting of AI use in cinema tasks like visual effects, but skeptical of AI-written scripts or synthetic actors. — Reuters

What today’s Daniel would see on the wall

STOCK PHOTO | Image from FREEPIK

The Philippine Statistics Authority (PSA) has confirmed what many had feared all along: the Philippine economy is losing steam. Real gross domestic product (GDP) growth slowed sharply to 4% in the third quarter of 2025, down from 5.5% in the previous quarter and 5.2% in the same period last year. With this performance, the economy’s year-to-date average is only 5%, well below the government’s already downgraded target of 5.5-6.5%.

If a modern-day Daniel were standing in the king’s court, he would read this as the first of the writing on the wall — a warning that the country’s growth trajectory is faltering, not because of fate, but because of choices.

1ST: FADING GROWTH PROSPECTS
Department of Economy, Planning, and Development (DEPDev) Secretary Arsi Balisacan now concedes that even the lower end of the target range may be a tall order. To reach 5.5%, the economy would need to grow by 6.9% in the last quarter, a heroic and unrealistic feat given the weak macroeconomic environment. While the Philippines struggles to maintain momentum, regional neighbors such as Taiwan, South Korea, and Vietnam have posted stronger rebounds, driven by robust exports, revitalized investment, and more decisive policy execution.

The contrast is telling. These economies are immune neither to global headwinds nor to climate change, but they have built resilience through coherent planning, predictable governance, and sustained confidence from both domestic and foreign investors. The Philippines, by comparison, continues to grapple with policy uncertainty, under-execution of public programs, and a trust deficit that dampens business sentiment. This divergence in performance is not inevitable — it is the product of governance.

2ND: THE WEAKNESS  OF PUBLIC SPENDING
The second message on the wall is the failure of public expenditure to deliver growth. Government spending, especially on capital outlays, has lost vigor. Infrastructure investment, long heralded as the backbone of the country’s development agenda, has slowed to a crawl amid corruption probes and procedural paralysis.

The ongoing investigations into flood control project anomalies have had a chilling effect across multiple layers of government. Local and national agencies alike are reluctant to initiate new projects for fear of being caught in the dragnet of scrutiny. While accountability is vital, the unintended consequence has been a virtual freeze in implementation. As a result, construction output barely grew by 0.5% in the third quarter, dragging down the entire industrial sector.

Meanwhile, fiscal capacity is eroding. The Bureau of Internal Revenue (BIR) is poised to miss its P3.219-trillion collection target, widening the fiscal deficit, which already reached P1.117 trillion, or nearly 72% of the full-year ceiling of P1.56 trillion, by the third quarter. With such shortfalls, the government will have little choice but to borrow more, further swelling the national debt, which stood at P17.46 trillion, equivalent to 63.1% of GDP, as of September 2025.

Debt servicing alone absorbed P1.787 trillion in the first three quarters, P1.121 trillion in principal and P666 billion in interest payments. Every peso used to pay old debts is a peso diverted from classrooms, hospitals, and roads. This is not just a fiscal issue; it is a moral one. The inability to spend effectively, and the tendency to spend wastefully, erodes both economic capacity and public trust.

3RD: THE SOFTENING OF PRIVATE DEMAND
The third warning comes from private consumption which drives over 70% of the nation’s output. Household spending decelerated to 4.1% in the third quarter, down from 5.3% in the previous quarter and 5.2% a year earlier. Real wages have barely kept up with inflation, and cash remittances, a traditional lifeline for domestic consumption, have expanded only marginally.

Consumer sentiment has weakened under tighter financial conditions, high household debt, and uncertainty about job prospects. Business investment, too, remains cautious amid the perception of a difficult regulatory environment and a politicized bureaucracy.

Even the apparent stability in prices is fragile. The state of national calamity declared by President Ferdinand Marcos, Jr. has temporarily frozen the prices of basic commodities for 60 days starting Nov. 6, a short-term reprieve that masks deeper structural pressures on food and energy supply chains. The moderation in household consumption, the country’s primary growth engine, constitutes the third writing on the wall.

4TH: A SHRINKING PRODUCTIVE BASE
On the supply side, the story is equally sobering. The services sector continues to anchor expansion, growing at 5.5%, but agriculture remains stagnant at under 3%. The industrial sector, however, has become the real drag, eking out a meager 0.7% growth. Manufacturing barely rose 1.2%, and construction inched forward 0.5%, while mining and quarrying showed more life at 4.4%.

The share of industry in GDP declined from 26.7% to 25.9%, signaling structural weakness and waning competitiveness. Business and consumer confidence indices from the Bangko Sentral ng Pilipinas (BSP) point consistently downward. The Purchasing Managers’ Index dipped below 50, indicating a contraction in manufacturing activity. Meanwhile, the stock market continues to underperform compared with its regional counterparts, reflecting investor hesitation and, yes, fatigue.

Without renewed confidence, the Philippines risks being trapped in a low-growth equilibrium where weak demand discourages investment, low investment suppresses productivity, and low productivity ensures continued weakness in demand.

5TH: A VULNERABLE FINANCIAL SECTOR
The only sector seemingly unscathed is banking and finance, which still enjoys solid capital buffers, ample liquidity, and strong deposit growth. Non-performing loans (NPLs) remain contained, with coverage ratios near 95%. However, this stability is not immune to macroeconomic decay. If growth remains sluggish and fiscal management continues to wobble, the accumulation of bad loans could rise, undermining balance sheets and financial confidence.

History reminds us that financial resilience can erode swiftly once the real economy weakens. A sustained slowdown could expose vulnerabilities in asset quality, especially in real estate and construction lending, amplifying the distress already visible in the productive sectors.

THE FINAL MESSAGE: GOVERNANCE, CORRUPTION, AND THE PATH TO REFORM
The true roots of these problems lie not merely in statistics but in governance. Economic growth falters when institutions fail, when public funds leak through corruption, and when policy credibility collapses under the weight of corruption and political expediency.

Ghost projects, overpriced procurements, and unaccountable spending continue to haunt the national budget. They represent not isolated incidents but a systemic failure that robs the nation of its future. The cost is not just financial; it is human — measured in overcrowded hospitals, under-resourced schools, and communities vulnerable to floods that should have been prevented by honest infrastructure spending.

The country’s economic challenge, therefore, is inseparable from its governance crisis. And while floods and earthquakes and climate change could be challenging, by no means should those in authority blame them for failed leadership and failure to deliver. To reverse the decline, the Philippines needs more than stimulus packages or policy slogans. It needs meaningful reforms anchored on transparency, accountability, and efficiency.

To be sure, such reforms are not new. They have been written in countless annual reports and promised in countless speeches. What is new is the urgency, the urgency to produce results, the urgency to show integrity in public service. Without them, the economy will continue to drift, growing below potential, lagging behind neighbors, and burdened by an ever-heavier debt load.

READING THE WRITING BEFORE IT FADES
The Philippines is not doomed to simply wither away. It still has a dynamic workforce, entrepreneurial energy, and a young demographic profile that, if supported by sound and serious policies, could propel it toward inclusive prosperity. But optimism without reform is denial.

The writing on the wall is clear: slowing growth, weak spending, waning confidence, and rising debt. To ignore them is to invite the fate of kingdoms like Nebuchadnezzar’s ancient Babylon that once refused to listen until it was too late.

Economic growth is not an illusion; it is an outcome of good governance. The choice, as always, lies not in fate but in intentional leadership.

 

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

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