Philippine firms tackle wage hike conundrum

May 1, 2024 | 12:32 am

Job fair-applicants — PEOPLE are seen at a job fair in Marikina City Hall, April 27, 2024. — PHILIPPINE STAR/ MIGUEL DE GUZMAN

By Kyle Aristophere T. Atienza, Reporter and Chloe Mari A. Hufana

ALEXANDER V. SUYAT, 36, trained to become a security guard in 2016 after years of working as a janitor, thinks he could earn more to support his wife and two kids.

He earns P610 ($10.59) for an eight-hour work shift — the minimum wage in the Philippine capital — and he has high hopes that the P150 legislated wage increase proposed in Congress would soon become a law.

“My salary goes to many things — food and school for my children,” he told BusinessWorld in Filipino while on a break. “Many say P150 is too small, but I’ll take it because it’s better than nothing.”

Mr. Suyat’s wife works as a saleslady in a nearby mall, and their income, which they try to increase by working overtime, is just enough for the family to get by. “Prices are so high now, it’s so hard to save even if you have a stable job.”

As the couple’s income lags, the cost of living keeps rising. Philippine inflation quickened for a second straight month in March as rice prices continued to surge. Inflation accelerated to 3.7% from 3.4% in February, according to the local statistics agency.

The economy expanded by 5.5% last year and is expected to grow by 6-7% this year, still among the fastest in the region.

Despite that strong growth, wages have remained flat, and workers are pressing the government of President Ferdinand R. Marcos, Jr. to increase wages nationwide in the face of spiraling prices.

Daily minimum wages in the Philippines, which vary per region, averaged P354.32 from 1989 until 2024, reaching an all-time high of P610 in Metro Manila last year and a record low of P89 35 years ago, according to Trading Economics, citing Labor department data.

The minimum wage in the southern Philippine region of Bangsamoro — the poorest in the country — ranged from P316 to P361.

“A P150 increase is welcome and gives some relief to workers and their families, but it doesn’t even restore wages to their level after the last legislated wage hike in 1989,” Jose Enrique “Sonny” A. Africa, executive director at think tank IBON Foundation, said in a Viber message.

“The P370-plus wage hikes since 1989 haven’t been enough to keep up with inflation and the real value of the minimum wage in all regions is worth less now than 35 years ago,” he added.

The country’s largest labor organization said the El Niño weather event and climate change “justify a wage increase, particularly in sectors most vulnerable to these changes.”

“Workers in agriculture, construction and other outdoor industries face increased health risks and disruptions to their work due to extreme weather conditions,” Federation of Free Workers Chairman Jose Sonny G. Matula said in a Viber message.

The Philippines adjusts salaries through its wage boards, but slow and meager increases against the backdrop of rising costs of living have prompted lawmakers under the Marcos administration to legislate wage increases.

At the House of Representatives, separate bills that seek to increase wages of private sector workers by P150 to P750 have been filed, as well as another that mandates a P33,000-a-month entry wage for government employees.

Senators, meanwhile, have approved a bill increasing the daily minimum wage in the private sector by P100 on second reading.

Government economic managers have warned of the consequences of legislating wage increases. National Economic and Development Authority Secretary Arsenio M. Balisacan last month said the Senate bill could cut economic output by 0.5 percentage point, stoke inflation and worsen joblessness.

The Philippine Chamber of Commerce and Industry (PCCI), the country’s largest business group, said the legislated wage hike would make it harder for companies to recover from the coronavirus pandemic and reverse business confidence.

“There were already positive signs from businesses, and confidence was gradually increasing after the pandemic,” PCCI Chairman George T. Barcelon said by telephone. He added that geopolitical tensions, persistently high inflation and the peso’s depreciation have dampened that optimism.

‘BARELY A DENT’
Mr. Barcelon said lawmakers should take into account an impending energy crisis in the whole wage hike debate as the country’s sole indigenous source of natural gas gets depleted by 2027.

“We suggest that the discussion on wage hikes be left to the Regional Tripartite Wages and Productivity Boards so that all stakeholders are represented to be able to balance the needs of workers, the capability of enterprises and varying conditions across industries and regions,” Ebb Hinchliffe, executive director of the American Chamber of Commerce of the Philippines, Inc. said in a Viber message.

British Chamber of Commerce Executive Director and Trustee Christopher James Nelson noted that while they understand workers’ predicament, in the end, inflation from wage hikes could bite them.

“We understand the concerns workers have, but inflation is a macroeconomic issue,” he said in a phone interview. “A wage hike in itself will have an inflationary impact, which will, again, impact workers.”

Mr. Nelson said persistently high inflation also keeps the Philippine central bank from cutting its benchmark interest rates, effectively increasing companies’ borrowing costs.

“Wage hikes won’t be inflationary if businesses aren’t so rigid about the profits they insist on making,” Mr. Africa said. “There are many factors causing inflation like the recent supply chain disruptions, commodity price fluctuations, currency depreciation and other external shocks. Undue alarmism about wage hikes is really just placing the burden of corporate profit-making on workers.”

A legislated wage hike would barely make a dent on corporate profits since salaries account for only as much as 11% of their expenses, Mr. Africa said, citing IBON’s study of a recent state-led annual survey of 38,000 companies of all sizes in all sectors.

“A P100 across-the-board wage hike is just 7.1% of profits on average across all firm sizes and 7.5% for micro, small and medium enterprises (MSME), while a P150 increase is just 11% across all firms and 11.3% for MSMEs,” he said.

“Even a P690 increase to raise the average wage to the current P1,207 family living wage is equivalent to just 49% of profits across all companies,” he added.

Economic managers and the business community have warned that a legislated wage hike would mainly affect MSMEs, which account for more than 99% of businesses in the country.

Mr. Africa and Mr. Matula said significantly increasing workers’ wages would boost their spending power, spurring economic activity and benefiting small businesses.

“Wage hikes are an opportunity for economic growth rather than a challenge,” Mr. Matula said. “They mean enhanced purchasing power for workers, who are also consumers. This is likely to benefit businesses, especially MSMEs.”

He said a P100 wage hike, representing a 16% raise based on Metro Manila’s minimum wage now, is not only manageable but also crucial to economic growth. “The P150 wage proposal represents 24.59% of the current P610 daily minimum wage in the National Capital Region, significantly lower than the 39.1% increase seen in 1989.”

Jenet I. Dacumos, a single mom of three who works as a janitress in a mall in Manila, is pessimistic about a legislated wage increase.

“I feel our President doesn’t empathize with the poor, so I don’t expect it to happen,” she told BusinessWorld while resting during her shift. “Food prices are driving me crazy. How can they expect us to live on P610 daily? I need another racket.”

Currency depreciation may put central banks under pressure to tighten

May 1, 2024 | 12:31 am

currencies — The South Korean won, Chinese yuan and Japanese yen notes are seen with US $100 notes in this picture illustration taken in Seoul, South Korea, Dec. 15, 2015. — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

CONTINUED CURRENCY depreciation in Asia and the Pacific could add to inflationary pressures and prompt central banks to raise interest rates again, the International Monetary Fund (IMF) said.

“If exchange rates depreciate and pass through to higher inflation, then there is reason to tighten monetary policy. Otherwise, allow the exchange rate to act as a buffer against shocks. I think that could hold you in good stead,” Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, said in a webinar on Tuesday.

“Interest rate differentials will likely put pressure on currencies to depreciate. This can create a dilemma for Asian central banks, including for the Philippines,” he added.

On Tuesday, the peso closed at P57.76 against the dollar, weakening by 8.5 centavos from its P57.675 finish on Monday. This month, the peso depreciated to the P57 level for the first time since November 2022.

“It’s important to allow the exchange rates to be the buffer against shocks so that you can meet your price stability objectives, your external objectives and so on,” Mr. Srinivasan said.

“If the exchange rate movements are leading to higher pass-through, then there might be a reason to tighten interest rates. But otherwise, just look to see what’s happening to domestic inflation and tailor your policies accordingly,” he added.

The Monetary Board has hiked borrowing costs by 450 basis points from May 2022 to October 2023, bringing the policy rate to a near 17-year high of 6.5%.

Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr. has said that they “stand ready to manage any unnecessary movement and excessive volatility.”

The IMF said that central banks should focus on domestic price stability and should not be “overly dependent” on the US Federal Reserve’s own policy moves.

“I think that’s the point we’d like to make here, that don’t get yourself too tied to what the Fed does,” Mr. Srinivasan said.

Mr. Remolona had said that the peso’s recent drop was due to the strong US dollar and expectations of rate cut delays by the Fed.

Markets are now pricing in the chance of a rate cut in September from initial expectations of June. US Federal Reserve Chairman Jerome H. Powell earlier said they might have to keep “restrictive” policy rates for longer amid sticky inflation.

Mr. Srinivasan also said that most Asian countries are now better placed to cope with exchange rate movements due to “fewer financial frictions and better macro fundamentals and institutional frameworks and should continue to allow the exchange rate to act as a buffer against shocks.”

GROWTH OUTLOOK
Meanwhile, the IMF kept its growth forecast for the Philippines at 6.2% for both 2024 and 2025.

“The Philippines is one country which has done very well in terms of the growth is being resilient (and) inflation is coming down,” Mr. Srinivasan said.

This year, the government is targeting a 6-7% growth. First-quarter gross domestic product (GDP) data will be released on May 9.

In 2023, the economy grew by a weaker than expected 5.5%.

The IMF said that growth in the overall Asia-Pacific region will remain resilient.

“The region remains inherently dynamic and will contribute about 60% of global growth this year, but it will slow down, growing 4.5% in 2024 after 5% in 2023,” he said.

“Drivers of growth are as diverse as the region, ranging from resilient domestic consumption in most ASEAN countries, to strong public investment in China, and most notably in India, and to a sharp uptick in tourism in the Pacific island countries.” — Luisa Maria Jacinta C. Jocson

A book fair of consequence: Why the Philippine Book Festival matters

May 1, 2024 | 12:10 am

By Giselle P. Kasilag

BOOK FAIRS have become a staple in the calendar of most Filipino bookworms over the last 10 years. Two major ones last for a week and attract buyers from all over the country who are hoping to snag the latest bestsellers at a fraction of the cost.

But since its inception last year, the Philippine Book Festival (PBF) is emerging as the most consequential fair to date. The brainchild of the National Book Development Board (NBDB), the PBF brings together the entire spectrum of publishing under one roof for a showcase of Philippine culture driven by the written word.

Not all fairs are equal, and two things distinguish this one from the rest: It is the only national book fair in the country that features only Filipino publishers, authors, and artists; and it has become the preferred marketplace from which the Department of Education sources its Supplementary Learning Resources (SLR) or non-school books. These distinctions are by design. The fair is the book board’s direct response to the challenges that the Philippine publishing and education sectors are experiencing.

“The Philippine Book Festival is shaping up to be the perfect encapsulation of what we and our partners hope to see in the landscape of Philippine publishing — one that champions Philippine authorship and readership, one that asserts that the Philippine author and reader should be at the heart of the celebration, and of a long term campaign to address access and make dedicated readers out of every Filipino,” said NBDB chairman Dante Francis Ang II at the opening ceremony.

“An all-Filipino book fair by Filipinos for Filipinos — the idea shouldn’t be as novel as it sounds. But it is. To my knowledge, before the PBF we have never held a book fair that revolves around the Philippine book, and attempts to shine new light on literature by placing it at the heart of a highly interactive fair complete with performances and a large celebration — something that people wouldn’t normally attribute to books and reading,” he continued.

BRIGHT STARS OF PINOY LIT
Indeed, every square inch of the World Trade Center where the PBF was held was marked with joy, thanks to the beautiful murals by children’s book illustrators Marc Vincent Soriano, Liza Flores, and Beth Parrocha. The space was divided into four realms with archways inspired by the elements to mark the entrances: water for Kid Lit, earth for Komiks, air for Booktopia featuring fiction and non-fiction titles, and fire for Aral Aklat featuring textbooks and educational materials.

Also on display were rare books and facsimiles of important manuscripts including Jose Rizal’s Noli Me Tangere and El Filibusterismo. The festival featured some of the brightest stars of Philippine literature including National Artists Virgilio Almario and Ricky Lee. On stage, the cast of the television series Encantadia including Faith Da Silva, Kelvin Miranda, Angel Guardian, and Bianca Umali held a read-along program. At some point, Ballet Manila performed excerpts of the ballet Tatlong Kuwento Ni Lola Basyang which is based on Anvil Publishing’s series of Christine Bellen-Ang’s retelling of the Severino Reyes’ Lola Basyang stories. And as the Festival came to a close, a cosplay event was held featuring fans portraying beloved characters from Philippine literary pieces.

But the space had an intimacy not common in events of that magnitude. There was Marivi Soliven at the Milflores booth chatting with readers while signing copies of her book, Spooky Mo. Writers Ambeth Ocampo, Butch Dalisay, and Ige Ramos were seen checking out the works of other authors after their respective book signings. Comic book artist Manix Abrera was spied grabbing a quick lunch before heading back to his booth to personally sell his books. Not too far away were his fellow komikeros, Pol Medina, Jr. and Kevin Raymudo of Pugad Baboy and Tarantadong Kalbo fame posing for pictures with fans. The Philippine Book Fair had the ambience of a family reunion rather than a marketplace.

It was the presence of hundreds of public-school principals, teachers, and procurement officers that clearly defined one of the main purposes of the festival. Multiple spaces occupying significant real estate in the venue were devoted to tables and chairs and each one was taken by buyers for the Department of Education (DepEd) who religiously pored over thick catalogues that would inform the purchases that public school students will be reading in the coming school year.

SUPLEMENTAL READING
An important aspect of the PBF and its partnership with the DepEd is the training of book evaluators and procurement officers. This year, over 750 of them from all over the country underwent training that would enable them to scope out books that would best supplement what is being taught in their schools. Thus, the festival ensures that students have access to the best books through purchases from top Filipino publishers who are then able to profit and produce more and better books.

“To redefine a national reading culture while democratizing distribution and responding to issues of access — it’s a tall order for a festival of just four days, held once or twice a year,” Mr. Ang admitted. But he remained hopeful of what this very young festival could accomplish.

“We once again emphasize that we need to continue working against lack of access and against the imbalances in our book import-to-export ratio. If nothing else, I say we have already succeeded, with the PBF being a site for an unprecedented large-scale procurement of books — we now will be able to saturate the market and our schools with relevant, accessible, and affordable Philippine-authored books.”

But lack of access is just one aspect plaguing learning. The other is context. According to DepEd Undersecretary Gina O. Gonong, the urgency to make Philippine-authored books became apparent with the observation that students learn better with materials that reflect their own language and culture. As Senator Loren Legarda said in her welcoming remarks, teaching children to add one batuan plus one batuan instead of oranges or apples simultaneously promotes Philippine culture, and places into the local context academic subjects such as mathematics.

“Beyond the mere scale of this large-scale procurement, this is precisely where the importance of these books lies — it is a step towards raising kids that have a sense of both self and of community,” Ms. Gonong said. “The PBF, then, which serves as the site for this procurement, and as a venue where educators and publishers can have conversations, is extremely valuable to Philippine education. Finally, we are all together in one space, with the singular goal of creating better learning conditions for Filipino students.”

Another season of love with Rent

May 1, 2024 | 12:09 am

By Brontë H. Lacsamana, Reporter

Theater Review
Rent
By Jonathan Larson
Directed by Robbie Guevara
Presented by 9 Works Theatrical

ON Christmas Eve, filmmaker Mark Cohen and musician Roger David once again find themselves cold and broke in the middle of the harsh Manhattan winter. The rent is due on the old apartment they live in, owned by their former roommate Benjamin “Benny” Coffin III.

Not helping matters for Mark is the fact that his ex, performance artist Maureen, has moved on — with lesbian lawyer Joanne. Meanwhile, Roger is still unable to write a great song, although he forms a connection with Mimi, a club dancer struggling with drug addiction. The same chilly night also sees their friend, professor Tom Collins, get mugged and nursed back to health by drag queen Angel.

As all of this unfolds, the cast of characters try to navigate poverty, loss, new love, and the pursuit of happiness, all in the shadow of HIV/AIDS (human immunodeficiency virus/acquired immunodeficiency syndrome).

Except it isn’t so much a shadow in this latest version by 9 Works Theatrical. At the preview night of the company’s current staging of Jonathan Larson’s Rent, it is clear that the HIV/AIDS epidemic is a major focus.

“The biggest change in this staging is that we decided to put HIV and AIDS front and center instead of having it as the musical’s backdrop,” said director Robbie Guevara in an opening speech. This is done through ensemble characters having brief scenes where they deal with AIDS symptoms.

Even the halls of the Carlos P. Romulo Auditorium have booths manned by organizations like Love Yourself, Inc., The Red Whistle, and Positive Foundation Philippines, all spreading awareness about HIV/AIDS. Theatergoers have the chance to learn about the illness and its treatments.

When the curtains rise, Mio Infante’s towering set looms over the audience. It gives the characters a vast playground to work with, as they move up and down and through the three storeys of scaffolding.

Rent relies heavily on its cast, so it pays to come see the show maybe twice to experience it with different actors and alternates. For preview night, Reb Atadero played Mark, Anthony Rosaldo played Roger, Jasmine Fitzgerald took on the role of Maureen while Fay Castro was Joanne, Thea Astley was Mimi, Garrett Bolden was Tom Collins, Lance Reblando was Angel, and Markki Stroem played Benny.

Mr. Atadero owned the stage as the filmmaker Mark, who is essentially the narrator of the whole story as he documents the cast’s ordeals on camera. His interactions are a highlight, as his energetic and passionate role has him shifting from one point of the stage to the next.

It’s a powerful, frenetic musical that traverses extreme highs and heavy lows, held together by the chemistry of the entire ensemble. Mr. Rosaldo’s Roger is the quintessential rock band frontman in both look and vocal ability, working in tandem with Ms. Astley’s moving turn as the flirtatious Mimi (most impactful in their duet “Light My Candle”).

Meanwhile, Ms. Fitzgerald and Ms. Castro as the hot-and-cold lesbian couple Maureen and Joanne were a delight to watch. The former gave an awesome rendition of the performance piece “Over the Moon,” but both really found their star power in the fiery duet “Take Me or Leave Me.”

The most unforgettable performance was Ms. Reblando’s as Angel. Angel is a transwoman in this version, and she oozed confidence and talent in both singing and dancing. Using aerial silk movements, “Contact” easily became the most breathtaking moment in the musical. Her chemistry with Mr. Bolden’s kind, soulful Tom Collins was palpable.

Though Rent first premiered off-Broadway 28 years ago, its many iterations onstage and onscreen have cemented its legacy. Back in 2011, 9 Works Theatrical staged it for the first time, and the original cast were in attendance at the preview, watching the new generation of actors take on the roles they know so well.

The power of the show has survived the years. To witness “La Vie Boheme” and “Seasons of Love” unfold before your eyes is to develop goosebumps all over your body. It’s as iconic as you’d imagine, and more.

While Rent shows the struggles and sordid sicknesses that the LGBTQ+ (lesbian, gay, bisexual, trans, queer plus) community had to face in the 1990s, it also revels in their happiest hours and most beautiful human experiences. In 2024, HIV/AIDS still exists, but so does accessible treatment. People still find it difficult to pay rent and urban poverty is as rampant as ever. But the main takeaway of this story never changes — the expansive yet intimate sense of community.

Rent runs until June 1 at the Carlos P. Romulo Auditorium, RCBC Plaza, Makati City. Tickets, ranging from P2,000 to P4,000, are available via Ticket2Me.

Bernardo Balagtas raises the banner for Angono

May 1, 2024 | 12:08 am

The former local politician catches the eye of an Italian art prize

DRAWING from the community is an important part of the creative process for Filipino artist and 2024 International Prize Phoenix for the Arts awardee Bernardo E. Balagtas.

Under the Fondazione Effetto Arte, Italian critics and curators Francesco Saverio Russo and Salvatore Russo announced their selection in March, sending out e-mailed letters to the recipients all over the world, one of whom was Mr. Balagtas.

“I had my works shown in Singapore in 2022, about four paintings of stilt houses. I guess they liked it; I’m not sure what the process [of selection] was. I was just surprised to receive the e-mail this year saying I was chosen,” he said in Filipino in a phone interview with BusinessWorld.

The recognition for his paintings depicting stilt houses in his hometown of Angono, Rizal, is also more than a personal achievement. When he goes to Venice to receive the award in person in June, he will be thinking of the people in his community.

“I always thought my main form of art would be public service,” Mr. Balagtas said. For decades, his world was the local politics of Angono — where he went from youth council chairman to barangay captain to municipal councilor, among other roles — totaling over 20 years as a public servant.

In 2003, he drafted a resolution declaring Angono as an art capital of the Philippines, being the home of two National Artists (Carlos “Botong” Francisco for visual arts and Lucio San Pedro for music) as well as around nine artist groups. “That is still the battle cry of Angono today,” he said.

These days, he has put public service in the background to focus on his art, a decision that seems to have paid off with this latest achievement.

The International Prize Phoenix for the Arts, according to the Effetto Arte foundation, is awarded to artists who have “distinguished themselves over the years for their artistic research and for the stylistic value of their works.”

The award is given to painters, sculptors, photographers, video artists, performers, and digital artists.

THE ANGONO ARTS SCENE
Born in Angono in 1972, Mr. Balagtas was exposed to art at a young age. He grew up in a family of artists, most notably his father, the late Angelito Balagtas, a founding member of the Angono Ateliers Association.

“There are many artists in Angono. It always starts within the family and the community. I won my first competition in 1977, at five years old. Parang pinapakain sa amin pintura (It’s like they feed us paint),” he said.

In his family, he and two other brothers took up Fine Arts degrees. This made him the odd one out for eventually going into public service, though he would eventually return to the arts.

“Wala akong regret sa ‘pag-iwan’ sa art world. May balik iyan kapag minahal mo, kaya binalikan ko. (I don’t have regrets over ‘leaving’ the art world. There are benefits if you love it, so I went back to it).” he added.

Mr. Balagtas’ Stilt House works — which are mixed media and stainless steel on canvas pieces — echo the cubist style of his father, who was an apprentice under Vicente Manansala.

Each house is composed of overlapping shapes, using stainless steel rods and shafts. For Mr. Balagtas, the analytical approach to cubism helps achieve a three-dimensional effect to the “painture,” meaning it is a mix of colorful painting and geometric sculpture.

“But it’s really inspired by the area in Angono that’s next to the Laguna de Bay. It’s a community that’s mostly stilt houses,” he told BusinessWorld.

Above the houses in the paintings is a round, moon-like figure. Mr. Balagtas explained that this represents abundance and harvest. “It’s a harvest moon, which is a good omen for the people,” he said.

Beyond being a record of traditional habitation, Stilt House also reflects the resourcefulness and adaptability of Filipinos amid harsh conditions.

“Isipin mo; hindi sila aabutin kapag tumaas ang tubig, pero kapag tuyo ang lupa sa baba ng bahay sila kumikilos. (Think about it; they are above the water when it floods, but when the ground is dry, they are able to use the space below their houses),” said Mr. Balagtas.

However, he credits his sensibilities as an artist to the various figures and forces that shaped his life. It started with his father, then his Fine Arts teachers Roberto Chabet and Fil Delacruz at the University of the Philippines, then, finally, his changing perspectives when he entered politics.

It is a mistake to consider him a “complete artist,” though. “Artists always evolve. Sometimes I focus on figurative work, sometimes on displacement. There’s always more to come,” he said.

Mr. Balagtas hopes that Angono continues to thrive as an artist village. As a small municipality, having two national artists, five active bands, and nine active artist groups is an admirable feat, but it doesn’t mean the development stops there.

“We have to keep showing what we’ve got, so we can proudly say that Angono is an art capital. We have to do it as a community,” he said.

The 1^st International Prize Phoenix for the Arts awarding ceremony will take place in Venice, Italy at the Scuola Grande of San Teodoro on June 12. — Brontë H. Lacsamana

DMCI sees Cemex PHL’s turnaround by next year

May 1, 2024 | 12:08 am

By Revin Mikhael D. Ochave, Reporter

CONSUNJI-LED engineering conglomerate DMCI Holdings, Inc. said it expects the financial performance of the newly acquired Cemex Holdings Philippines, Inc. (CHP) to rebound by next year, led by stronger demand and the government’s infrastructure program.

“We recognize CHP’s operational and financial issues, but we are positive that we can turn it around by 2025 because of its ongoing capacity expansion and the clear synergies it brings to our group,” DMCI Chairman and President Isidro A. Consunji said in a stock exchange disclosure on Tuesday.

“While cement demand is currently soft, we expect it to rebound as our turnaround plan progresses, supported by the ‘Build, Better, More’ program and the anticipated easing of interest rates next year,” he added.

DMCI Holdings said the acquisition of CHP is the conglomerate’s “largest investment to date and first acquisition in a decade.”

CHP, the country’s fourth largest cement manufacturer, saw a P2 billion loss in 2023, up by 100% from the P1 billion loss in 2022, mainly due to higher costs and lower sales volumes.

Last week, DMCI Holdings, Dacon Corp., and Semirara Mining and Power Corp. (SMPC) announced the acquisition of CHP for $305.6 million under a share purchase agreement. The transaction is expected to close before the end of 2024.

DMCI bought the entire shares of Cemex Asia BV in Cemex Asian South East Corp. (CASEC), the majority owner of CHP with an 89.96% equity interest.

Dacon has been appointed as the bidder for the mandatory tender offer to acquire the remaining 10.14% of the total issued and outstanding capital stock of CHP.

Under the transaction, DMCI is set to acquire a 56.75% stake in CASEC, Dacon will secure 32.12%, and SMPC will purchase the remaining 11.13%.

To increase production volume, DMCI said that CHP is in the process of building a 1.5-million ton integrated cement production line at the cement company’s solid plant in Antipolo, Rizal. It is expected to begin operations by September.

The new line will increase CHP’s capacity by 26% to 7.2 million tons from the previous 5.7 million tons, the company said.

“This expansion will effectively double the company’s cement production capacity in the Luzon region,” it noted.

DMCI also anticipates a decline in power, fuel, and other production supplies costs as a result of normalizing market prices and CHP’s transition to a more affordable energy supplier with SMPC.

Power, fuel, and other production supplies costs took up 73% or P10.01 billion out of CHP’S total costs of sales last year worth P13.74 billion.

The conglomerate added that administrative and selling expenses, which accounted for 52% of prior year operating expenses, are expected to decline due to talent and business process on-shoring initiatives following the acquisition.

SMPC expects a significant increase in its coal sales to CHP, estimating a 227% rise to 500,000 tons annually compared to 2024 levels.

The energy company could also provide CHP with 50 megawatts of electricity and fly ash.

DMCI and DMCI Homes are also projected to source around 400,000 tons of cement from CHP.

“This volume has the potential to expand further, subject to growth in DMCI’s order book and a recovery in DMCI Homes’ project launches,” it said.

Sought for comment, AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message that DMCI’s projection on CHP’s turnaround is possible.

“We think it’s possible given that CHP can be integrated vertically into DMCI Holdings’ other business units. But we really need to see costs for cement manufacturing to come down and to see some easing in competition versus imported cement,” he said.

However, Mr. Garcia remains cautious about calling the recent transaction a “good move” for DMCI Holdings.

“We’re still cautious on it, as CHP has a track record of non-profitability. We’re hoping that the change in management, and maybe infusion of additional capital, is the key to turning the business around,” he said.

“Although, given the weak profits of most cement manufacturing companies, there’s a possibility that there is an underlying fundamental weakness in the sector,” he added.

On Tuesday, DMCI Holdings shares dropped by 0.18% or two centavos to P11.08 apiece. SMPC stocks rose by 0.46% or 15 centavos to P32.95 per share. CHP shares increased by 0.73% or one centavo to P1.38 each.

Gov’t partially awards reissued Treasury bonds

May 1, 2024 | 12:07 am

THE GOVERNMENT made a partial award of the reissued Treasury bonds (T-bonds) it offered on Tuesday at an average rate higher than secondary market levels on expectations of quicker April inflation.

The Bureau of the Treasury (BTr) raised P27.476 billion via the reissued 20-year bonds it auctioned off on Tuesday, below the P30-billion program, despite total bids reaching P36.842 billion or higher than the amount on offer.

The bonds, which have a remaining life of seven years and two months, were awarded at an average rate of 7.058%, with accepted yields ranging from 6.9% to 7.18%.

The average rate of the reissued bonds jumped by 75.9 basis points (bps) from the 6.299% quoted for seven-year papers at the BTr’s April 2 auction. Still, this was 94.2 bps below the 8% coupon for the series.

The rate was likewise 11.8 bps higher than the 6.94% quoted for the seven-year bond and 5.8 bps above the 7% seen for the same bond series at the secondary market before Tuesday’s auction, based on PHP Bloomberg Valuation Service Reference Rates data provided by the Treasury.

“The higher T-bond rate offered today reflected expectations of a potential uptick in domestic headline inflation for April following the release of the BSP (Bangko Sentral ng Pilipinas) forecast inflation range,” a trader said in an e-mail on Tuesday.

The BSP on Tuesday said headline inflation could have quickened further in April and even breached its 2-4% annual target.

The central bank said that the April consumer price index (CPI) may have settled within 3.5% to 4.3% amid higher prices of rice, meat and gasoline, as well as the peso’s depreciation against the dollar.

The lower end of the BSP’s estimate would be slower than the 3.7% print in March as well as the 6.6% logged in April 2023.

However, the high end of the range would be the fastest since the 4.9% rate in October 2023. This would also mark the first time since November 2023 that the CPI exceeded the central bank’s 2-4% goal.

Headline inflation averaged 3.3% in the first quarter, within the central bank’s annual target and below its baseline forecast of 3.8% and risk-adjusted forecast of 4% for the year.

The increase in awarded rates were also in line with higher US Treasury yields recently, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

The shifting expectations on US rates have lifted Treasury yields and the dollar, dominating the currency market, Reuters reported.

On Monday, US Treasury yields pulled back from last week’s highs ahead of a Federal Reserve meeting and crucial economic data expected later in the week.

Benchmark 10-year notes last rose 13/32 in price to yield 4.6156% from 4.669% late on Friday.

The 30-year bond last rose 22/32 in price to yield 4.7357% from 4.782% late on Friday.

The Fed began a two-day policy meeting overnight.

The BTr wants to raise P210 billion from the domestic market in May, or P60 billion from Treasury bills and P150 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product for this year. — AMCS with Reuters

Bloomberry Resorts concludes settlement with GGAM

May 1, 2024 | 12:07 am

RAZON-LED Bloomberry Resorts Corp. completed its settlement agreement with casino management company Global Gaming Asset Management LLC (GGAM) after executing a P16.78-billion block sale on Tuesday.

“On April 30, Sureste Properties, Inc. (SPI) purchased 921,184,056 Bloomberry shares from GGAM at a purchase price of P18.22 per share through a special block sale through the Philippine Stock Exchange pursuant to the settlement agreement,” Bloomberry said in a regulatory filing.

“The settlement agreement is therefore completed,” it added.

In March, Bloomberry announced that its subsidiaries SPI and Bloomberry Resorts and Hotels, Inc. (BRHI) settled the decade-long dispute with GGAM. The settlement agreement required SPI to purchase shares in Bloomberry held by GGAM.

The agreement comprised of a universal agreement covering all pending cases involving the parties.

GGAM was the former partner of Bloomberry in managing Solaire Resort Entertainment City in Parañaque.

In 2013, Bloomberry ended its management deal after the Razon-led company claimed that GGAM was unable to deliver on the terms specified in the contract.

In 2019, a Singapore arbitration court mandated Bloomberry to pay $296 million to GGAM, which was disputed by the listed integrated resort operator.

Bloomberry also owns and manages Solaire Resort North in Quezon City and Jeju Sun Hotel & Casino in South Korea, alongside Solare Resort Entertainment City.

Enrique K. Razon, Jr., Bloomberry’s chairman and chief executive officer, previously said that the operations of Solaire Resort North are expected to be fully scaled up by 2026, two years after its opening on May 25.

Solaire Resort North is a $1-billion integrated resort that has 526 guest rooms and suites, 2,669 electronic gaming machines, and 163 tables across four casino levels.

The company recorded an 85% growth in its 2023 net income to P9.5 billion. Its consolidated net revenue rose by 24% to P48.4 billion.

On Tuesday, Bloomberry shares dropped by 1.88% or 20 centavos to P10.40 apiece. — Revin Mikhael D. Ochave

Metrobank net profit rises by 14.5%

May 1, 2024 | 12:06 am

METROPOLITAN Bank & Trust Co. (Metrobank) saw its net income rise by 14.45% in the first quarter as it booked higher loans, it said on Tuesday.

The lender’s attributable net income stood at P11.997 billion in the January-to-March period, up from P10.482 billion in the same period last year, its financial statement disclosed to the stock exchange showed.

This translated to a return on average equity of 13.67% and a return on average assets of 1.53%.

“The bank’s improving profitability was driven by consistent growth of its lending portfolio, better operational efficiencies, stable asset quality and continued execution of strategies to optimize the use of capital,” Metrobank said.

“As we remain focused on sustaining the bank’s profitability, our strong commitment to our customers is at the center of our growth strategy. We will consistently offer tailored financial solutions that directly address the needs and goals of those we serve to help them build a more prosperous future,” Metrobank President Fabian S. Dee said.

The bank’s net interest income grew by 15.38% year on year to P28.7 billion in the first quarter from P24.87 billion, driven by sustained growth in interest-earning assets and as its net interest margin improved to 4% from 3.9%.

“This was supported by the continued expansion of its gross loans, which rose by 12.1% year on year. Commercial loans jumped by 11.2%, partly driven by rising capital expenditures of corporates,” Metrobank said.

“The bank’s consumer loans portfolio remained robust, recording a 15.3% growth, led by a 25.5% increase in gross credit card receivables and 18.2% expansion in auto loans,” it added.

Meanwhile, other income declined by 19% to P6.58 billion from P8.13 billion due to lower net trading, securities, and foreign exchange gains, as well as fee income.

On the other hand, operating expenses grew by 6.54% to P18 billion in the first quarter from P16.9 billion a year prior.

As a result, Metrobank’s cost-to-income ratio stood at 51.3% in the period from 51.6% a year ago.

The bank set aside loan loss provisions of P562 million during the period, down by 76.51% year on year from P2.39 billion.

Despite the increase in loans, its nonperforming loan (NPL) ratio eased to 1.7% from 1.8%. NPL cover was at 174.1%.

On the funding side, total deposits rose by 4.9% year on year to P2.4 trillion at end-March, with its low-cost current and savings account or CASA deposits comprising 58.6% of the total.

Its loan-to-deposit ratio was at 67.07%.

Metrobank’s assets rose by 2.62% to P3.19 trillion as of March from P3.1 trillion at end-2023.

Meanwhile, total equity stood at P345.7 billion.

The bank’s capital adequacy ratio was at 16.8% while its common equity Tier 1 ratio stood at 15.97%, down from 17.61% and 16.77% a year prior, respectively.

Its liquidity ratio was at 48.51% at end-March.

Metrobank’s shares closed unchanged at P70 apiece on Tuesday. — A.M.C. Sy

Arts & Culture (05/01/24)

May 1, 2024 | 12:06 am

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NCCA leads National Heritage Month 2024

MAY is National Heritage Month (NHM), a period dedicated to preserving and promoting the Philippines’ rich culture. This year’s theme is “Championing Heritage: Capacity Building to Transform Communities,” and the celebration is led by the National Commission for Culture and the Arts (NCCA). There will be activities all month, kicking off with the Gotad Ad Kiyangan Festival at Kiangan, Ifugao, on May 1, and continuing with the training of cultural heritage workers at Ifugao State University on May 2. Various tours and workshops will be held throughout the Philippines for the rest of May.

Filipino entrepreneurs hold charity photo exhibition

ALUMNI of the Harvard Business School and other prominent business figures in the Philippines are set to hold a charitable photo exhibit this month. Organized by the Owner/President Management Program of Harvard Business School Philippine Chapter Alumni Association, it will showcase 41 photographs by Jose E.B. Antonio of Century Properties Group, Tony Tan Caktiong of Jollibee Food Corp., and William Chua Co Kiong of Wills International Sales Corp. The photos were all taken by these men on their travels around the world. Proceeds from the sale of the photographs will be directed towards various charitable initiatives. The exhibition will run from May 3 to June 3 at the Antonio Gallery on the 4^th level of Century City Mall in Makati City.

Montalban unveils historical markers

IN celebration of the 123^rd municipal founding anniversary of Montalban, Rizal, the National Historical Commission of the Philippines and the Municipal Government of Montalban recently unveiled two historical markers related to the town’s pivotal role in the 1896 Philippine Revolution. The first marker is for the establishment of the Gobierno Departamental Del Centro De Luzon (Departmental Government of Central Luzon) which oversaw the revolutionary organizations in Manila, Bulacan, Nueva Ecija, and Morong. The second marker is for the Battle of Mt. Puray, which marks the victory of Filipino revolutionary forces under generals Emilio Aguinaldo and Licerio Geronimo against a much-bigger Spanish force in 1897. Both landmarks are located in the upland barangay of Puray, a Dumagat tribal village 15 kilometers away from the town proper near the foot of the mountain.

Floral Artists to exhibit at Imahica Art Gallery

IMAHICA Art will be opening the group show of the Floral Artists Manila, “Floral Splendor VI,” on May 4 at 3 p.m. The exhibit aims to provide an immersive journey into the realm of floral artistry, with each artist expressing their personal journey through vibrant botanical colors, shapes, and textures. The 14 featured artists have works ranging from lush and romantic compositions to bold and avant-garde expressions, encompassing a wide spectrum of floral artistry. “Floral Splendor VI” will run from May 4 to 26 at Imahica Art Gallery, 2A Lee Gardens, Lee St., Mandaluyong City.

Virgin Labfest calls for writing fellowship applications

THE Cultural Center of the Philippines (CCP) is now accepting applications for the Virgin Labfest (VLF) 19 Writing Fellowship Program. Applications will be accepted until May 15. The two-week mentorship program will select eight writing fellows who will take part in lectures, discussions, and workshops on playwriting, script critiquing, and other aspects of theater production. This year, the program will run from June 18 to 30, both online via Zoom and onsite at the CCP Complex in Pasay City. The fellowship will culminate in a staged reading of their works. Interested applicants must be college students or young professionals, aged 29 years old or below, who have not had a play produced by a professional theater company or published in a literary journal. For more details, visit the CCP/VLF website and social media pages.

National Museum holds heritage conservation talks

THE Museum Foundation, in partnership with the National Museum of the Philippines, is presenting a series of talks this month titled “Heritage Conservation: Preserving Our Past for the Future.” The talks will be held at the National Museum Auditorium every Saturday (May 4, 11, 18, and 25). They aim to provide a platform for everyone to engage in insightful discussions about heritage identification, preservation, and protection of cultural, historical, and national heritage sites. On May 4, the topic is “Sacred Spaces: Repaint, Overpaint or Restore” led by Tats Manahan. On May 11, Dr. Gerard Lico will discuss “Conserving Modern Heritage.” On May 18, heritage planning around rivers will be tackled by Paulo Alcazaren in “A Tale of Two Rivers.” Finally, May 25 will have “Law and the Setting for Heritage,” with Mark Evidente as the speaker. Admission to all talks is free.

Rep stages I Love You, You’re Perfect, Now Change

THIS coming June, Repertory Philippines (Rep) will be giving Filipinos a wild ride through the phases of modern relationships in the form of the musical comedy I Love You, You’re Perfect, Now Change. With book and lyrics by Joe DiPietro, music by composer Jimmy Brooks, and direction by Menchu Lauchengco-Yulo, Rep’s latest production presents a series of hilarious yet familiar vignettes on connection and intimacy, commitment and loneliness. It will feature a cast of four — Gian Magdangal, Gabby Padilla, Krystal Kane, and Marvin Ong — playing 40 different characters. The show will run from June 14 to July 6 at the Carlos P. Romulo Auditorium in RCBC Plaza, Makati City.

PNOC, Land Bank subsidiary to explore solar project for 21-ha ecozone

May 1, 2024 | 12:06 am

State-run Philippine National Oil Co. (PNOC) and the subsidiary of the Land Bank of the Philippines (LANDBANK) entered into a memorandum of understanding (MoU) to study the installation of rooftop solar systems in the latter’s 21-hectare economic zone (ecozone).

PNOC President and Chief Executive Officer (CEO) Oliver B. Butalid said during the MoU signing with LBP Resources and Development Corp. (LBRDC) on Tuesday that the company is aiming to position itself as a service agency to government entities.

“We would like to step into that role and make the government entities benefit from all of these technologies in renewables,” Mr. Butalid said.

“And so that is our contribution not only to government agencies [in] reducing their electricity cost, their recurring expense, but of course achieving societal goals of ensuring that we use energy more efficiently,” he added.

PNOC said that the partnership will involve sharing of technical expertise and pooling of resources to develop sustainable solar initiatives.

The two entities are seeing a three-month timeline for conducting further studies on suitable installation sites and structural assessments before formalizing a memorandum of agreement (MoA).

Upon completion of the MoA, procurement and installation activities will commence, the company said.

“On our side, we are also really very excited. It’s not just because we want to save money on electricity, but it’s because of the multiplier effect of what this partnership can achieve,” LBRDC President and CEO Ricardo C. Juliano said.

LBRDC said that the economic zone has an energy requirement of 300,000 kilowatt-hours a month.

“Lowering the energy costs within the economic zone could have the potential effect of making it more attractive to investors by reducing overall operating expenses,” Mr. Juliano said.

LBRDC is engaged in construction, project management, brokering services and real estate management and development. — Sheldeen Joy Talavera

Bank of Commerce looks to raise P5B from bonds

May 1, 2024 | 12:05 am

BANK of Commerce (BankCom) is looking to raise at least P5 billion through series B notes due 2025, which will mark the second tranche of its peso bond program.

“Proceeds from the bonds will be used to refinance maturing debt obligations,” the listed bank said in a disclosure to the stock exchange on Tuesday.

The public offer period for the one-and-a-half year notes began on Tuesday and is set to run until to May 9, unless closed early by the bank.

The bonds will be issued and listed on the Philippine Dealing & Exchange Corp. on May 16.

BankCom has priced the notes at 6.5635% per annum, payable quarterly.

The notes will be sold for a minimum amount of P100,000 and in multiples of P50,000 thereafter.

“BankCom appointed ING Bank N.V., Manila Branch and Philippine Commercial Capital, Inc. (PCCI Capital) as joint lead arrangers and joint bookrunners for this issuance. BankCom is also acting as a selling agent for the offering, together with ING and PCCI Capital,” it said.

The notes will be issued under its P20-billion bond program.

The first issuance under the program was made in July 2022, with the lender raising P7.5 billion from two-year series A bonds, more than double the original issue size of P3 billion.

The bonds carry a rate of 5.0263% per annum.

BankCom saw its net income rise by 55.67% year on year to P2.802 billion in 2023 amid higher revenues.

Its shares went up by 18 centavos or 2.90% to end at P6.39 apiece on Tuesday. — A.M.C. Sy