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[B-SIDE Podcast] Beyond handshakes: In search of a diplomatic silver lining amid South China Sea tensions

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For the longest time, the Philippines has maintained a modest relationship with its Southeast Asian neighbors. Recurring tensions in the South China Sea have left the ten-member Association of Southeast Asian Nations (ASEAN) seeking clarity on how to navigate potential conflicts with China, even with the involvement of the United States.

In this B-Side episode, Herman Joseph S. Kraft, a political science professor at the University of the Philippines, discusses with BusinessWorld reporter Beatriz Marie D. Cruz the ways in which ASEAN can leverage its already strong ties to protect peace within its waters.

“Relations within the region are increasingly dominated by the rivalry between China and the US, and even if we keep emphasizing the idea of ASEAN centrality, it’s becoming more and more difficult to assert that,” he said in an interview.

The goal is to ease constraints felt by ASEAN within the ongoing rivalry between China and the US, Mr. Kraft noted.

“Ideally, ASEAN is going to be able to work in a way where it doesn’t have to actually play or at least play a role within the competition between China and the United States,” he said.

However, this is easier said than done, with ASEAN countries having their own national interests to consider.

The Philippines, Brunei, Malaysia, and Vietnam, for instance, each have territorial interests in the South China Sea, with China claiming more than 80% of the waters.

“It’s much more difficult for ASEAN to actually come up with a common appreciation of its strategic environment. Some of the members of ASEAN are actually closer to China, for instance, and some are actually closer to the US,” Mr. Kraft said.

As a long-standing treaty ally, the Philippines has allowed the US more access to military bases under the 2014 Enhanced Defense Cooperation Agreement. However, this has caused China to accuse the US of aggravating tensions in the Asia-Pacific due to its continued military expansion.

“There’s a tendency to see that or at least to look at the Philippines as going too close to the United States at the expense of our relationship with China, so our situation is seemingly a zero-sum game,” Mr. Kraft said.

He said that the Philippines should strengthen its diplomatic prowess to be recognized for its role in maintaining peaceful navigation in the disputed waters, especially within ASEAN, where the former is not seen as an “agent” of the US.

Members of ASEAN have been vocal about the need to ensure peace and stability in the region. Even Philippine President Ferdinand R. Marcos, Jr. said, without naming China, that ASEAN “must never allow the international peaceful order to be subjected to the forces of might.”

“We cannot emphasize enough that actions, not words, should be the ultimate measure of our commitment to securing peace and stability in the South China Sea,” Mr. Marcos Jr. said during the 43rd ASEAN Summit in Jakarta, Indonesia earlier this month.

Also present during the summit, Chinese Premier Li Qiang warned of a “new Cold War,” and called on affected states to “appropriately handle differences and disputes.”

“China has not necessarily been forthright about how it wants to deal with us,” Mr. Kraft said.

A security hotline between the Philippine and Chinese coast guards has been inactive since January of this year.

China and ASEAN also have yet to agree on a code of conduct in the South China Sea.

Mr. Marcos Jr. reported progress on the code of conduct at the ASEAN summit, with “milestone issues and a preliminary review of the Single Draft Negotiating Text…achieved in Manila.”

Foreign Affairs Spokesperson Teresita C. Daza recently said that the Philippines has submitted 43 diplomatic complaints against China this year. These protests are in response to China obstructing the Coast Guard’s resupply missions at the Second Thomas Shoal, also known as Ayungin, where the old World War II ship BRP Sierra Madre is stationed to assert the Philippines’ ownership in the area.

Given the region’s proximity to the South China Sea, ASEAN members should agree to a consensus on how the strategic environment should work, according to Mr. Kraft.

He cited how ASEAN made a strong stance against Vietnam’s invasion of Cambodia in the late 1970s and 1980s.

“It’s a very good example of how small countries, but acting collectively…[and] being able to sway public opinion on an issue that is central to their own regional concerns,” Mr. Kraft said.

He noted that stronger ASEAN ties would not likely be a threat to China and would similarly draw in conflict. “ASEAN has always been what some authors have said a political diplomatic community.” “Any increase in the [ASEAN’s] capability is going to be largely political-diplomatic, not hard security or military,” Mr. Kraft said.

When asked about China’s relationship with ASEAN, Mr. Kraft said: “Historically, it’s always been good.”

AFP MODERNIZATION

Alongside leveraging its diplomatic capabilities, Mr. Kraft also urged the Philippine government to be consistent with its modernization plan. He pointed out the country’s tendency to recognize the importance of enhancing its military capability when issues arise.

“Do we have to wait for a crisis to take the modernization of our instruments for asserting our sovereignty seriously?” Mr. Kraft said.

“All that China has to do is wait for us to lose interest.”

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S&P slashes PHL growth forecast

THE OUTLOOK for the Philippine economy remains cloudy due to elevated inflation and high interest rates. — PHILIPPINE STAR/WALTER BOLLOZOS

By Keisha B. Ta-asan, Reporter

THE PHILIPPINE ECONOMY will likely expand by just 5.2% this year as high inflation and the lagged impact of the central bank’s aggressive monetary tightening dampen growth, S&P Global Ratings said.   

The debt watcher’s latest Philippine gross domestic product (GDP) growth estimate for this year is lower than its 5.9% forecast given in June.

This is also below the government’s growth target of 6-7% for 2023, and much slower than the 7.6% GDP expansion in 2022.

“Growth this year will be weaker than in 2022, but our outlook remains broadly favorable,” S&P said in a report. “We lowered (our forecasts) for Hong Kong, the Philippines, Singapore, Thailand and, notably, Vietnam.”

S&P’s lower forecast comes after Philippine GDP grew by a weaker-than-expected 4.3% in the second quarter. In the first half, GDP expanded by 5.3%.

For 2024, S&P raised its GDP projection to 6.1% from 5.9% previously. However, it lowered its growth forecast for 2025 to 6.2% from 6.6%.

Meanwhile, the credit rater expects inflation to average 5.8% this year, in line with the Bangko Sentral ng Pilipinas’ (BSP) revised full-year forecast.   

It also sees inflation easing to 3.2% in 2024, slightly below the BSP’s 3.5% forecast.

According to S&P, core inflation has eased in Asia-Pacific economies, including the Philippines. But recent spikes in international prices of oil and food, especially rice, were reflected in the higher headline inflation in August.

“A fuller picture of the effect will emerge in coming months, depending on the evolution of global prices and government policies (an export ban on rice in India, the world’s largest rice exporter, contributed significantly to the increase in rice prices in Asia),” it said.

The debt watcher also noted that the El Niño weather pattern may likely persist until 2024, which will lead to weaker agricultural activity in the region and potentially higher food prices.

Headline inflation quickened for the first time in seven months in August to 5.3% from 4.7% in July. Meanwhile, core inflation further eased to 6.1% year on year in August from 6.7% in July.

“The recent rise in oil and food prices hasn’t yet led to a renewed worsening of external deficit trends in the Asian economies that ran current account deficits in 2022: India, New Zealand, the Philippines, and Thailand. Earlier declines in oil and commodity prices helped to reduce those deficits,” S&P said.

In the first semester, the country’s current account deficit stood at $8.2 billion (-4% of GDP), 32.2% lower than the $12.1-billion deficit (-6.1% of GDP) in the same period last year.

The BSP projects the current account deficit to reach $11.1 billion (-2.5% of GDP) for this year, before narrowing to $10.3 billion (-2.1% of GDP) in 2024.

“In New Zealand, the Philippines, and Thailand, rising tourism revenues are also making a difference. However, the new rise in oil and food prices will put pressure on the external deficit data in coming months,” the credit rater said.

Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said the Philippines cannot rule out the debt watcher’s lower growth outlook for this year.

“We are a bit more optimistic than S&P though: while we think that making up for public sector underspending in the second quarter will be an uphill climb, we are likely to see improvements in government spending in the second half of 2023 to bring growth to the 5.5% to 6% range,” Mr. Neri said in a Viber message.

Aside from higher interest rates, he noted that growth has also been dampened by persistent inflation, government underspending and possible erosion of investor confidence due to geopolitical issues.

George N. Manzano, an economist at the University of Asia and the Pacific, said it will not be easy for the Philippines to achieve its 6-7% GDP growth target this year.

“The economy has to grow by 6.6-6.7% in the second half to hit the lower bound 6% government target,” he said.

“At the rate that inflation is increasing, with the food and energy prices, it may hamper demand and investment, especially if the BSP will hike interest rates further in the year. Thus, the burden will be on government spending to spur growth,” he added.

Last week, the BSP kept its key interest rate for a fourth straight meeting at 6.25%. From May 2022 to March 2023, the Monetary Board raised borrowing costs by 425 basis points (bps).

In the report, S&P expects the BSP’s policy rate to reach 6.5% this year. This assumes that the Monetary Board may still hike by 25 bps in the fourth quarter.

By end-2024, S&P expects the Monetary Board to cut its key rate to 5.75%.

The credit watcher also noted that they do not see any policy easing in the near term due to challenges in inflation and uncertainties from the US Federal Reserve.

“Most Asia-Pacific central banks consider the recent currency weakening as manageable but given renewed increases in global energy and food prices, they would be reluctant to see large currency depreciation stoke so-called imported inflation,” it said.

BSP Governor Eli M. Remolona, Jr. earlier said that the Monetary Board may raise policy rates again at its next meetings on Nov. 16 and Dec. 14 if inflationary pressures persist.

Retail dollar bond offer to start on Wednesday

REUTERS

THE GOVERNMENT is set to launch on Wednesday the first dollar-denominated bond offering targeting retail investors under the Marcos administration.

In a notice on its website, the Bureau of the Treasury (BTr) said it will hold a price-setting auction for the five-and-a-half-year onshore retail dollar bonds (RDB) on Sept. 27.

The bonds will also be offered to the public starting Sept. 27 until Oct. 6.

The issue date is set for Oct. 11. The bonds will mature on April 11, 2029.

The BTr set the minimum issue size at $200 million, although Finance Secretary Benjamin E. Diokno earlier said the government will try to raise $1 billion from the RDB offering.

“I think initially (the size is) $1 billion, but the demand for the offering is too big. Maybe we can upsize,” Mr. Diokno said on Friday.

This would be the Philippines’ second RDB issuance but the first one under President Ferdinand R. Marcos, Jr. The first offering raised $1.6 billion in 2021, under the Duterte administration.

“The RDBs shall be issued in scripless form and will be sold during the public offer period in minimum denominations of $200 (around P11,400) and multiples of $100 (P5,700) after,” the BTr said.

To encourage more investors, the RDBs will be exempted from taxes, such as the final withholding tax on coupon payment and documentary stamp tax on original issue.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the yields for RDBs could range from 5.2% to 5.4%, similar to previously issued offshore dollar bonds in the secondary market.

“The relatively higher interest rates/yields for the RDBs could be attractive for retail investors and could lead to strong demand given the low minimum amount to enjoy the higher interest rates, especially if the investors hold the bonds until maturity to prevent market risk and enjoy the relatively higher coupon/interest rate income,” he said in a Viber message.

China Banking Corp. Chief Economist Domini S. Velasquez said she expects decent demand for the RBDs as “its rate will be higher than what we have seen in recent years.”

“The relatively small amount to enter the RDB market will prompt retail investors to take advantage of the issuance,” she said in a Viber message.

Security Bank Corp. Chief Economist Robert Dan J. Roces said the timing of the RDBs aligns with market conditions.

“The flexible tenor options, lower minimum denomination, and plans for Sukuk bonds should make these offerings more attractive to a broad range of investors,” Mr. Roces said in a Viber message.

Investors can order and purchase the new subscriptions to the RDBs through the BTr Online Ordering Facility on its website and settle through electronic payment facilities of China Banking Corp., Land Bank of the Philippines. (LANDBANK), and Metrobank via First Metro Securities Brokerage Corp.

Other online channels for the RDBs include Bonds.ph, and the mobile banking apps of Overseas Filipino Bank and LANDBANK.

The BTr is also targeting to launch Sukuk bonds within the fourth quarter this year. Mr. Diokno said that the Sukuk bonds will likely have an offer size of $1 billion. This would also mark the Philippine government’s first issuance in the Islamic bond market.

This year, the government’s borrowing plan is set at $2.207 trillion, consisting of P1.654 trillion from domestic sources and P553.5 billion from foreign sources. — A.M.C.Sy

Finance dep’t ready to privatize PAGCOR’s gaming operations

A casino dealer collects chips at a roulette table in Pasay City, Metro Manila. — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

THE DEPARTMENT of Finance (DoF) is ready to privatize the Philippine Amusement and Gaming Corp.’s (PAGCOR) gaming operations once the agency finalizes its shift to become a purely regulatory body.

“We are waiting for PAGCOR’s cue. Chairman (Alejandro H. Tengco) asked for time to organize the transition and increase cash flows to the casinos for higher value sales,” Finance Undersecretary Catherine L. Fong told BusinessWorld in a text message.

“Once PAGCOR is ready, we can acquire independent appraisals to set a base price for auction,” she added.

Ms. Fong noted that the timetable for divesting PAGCOR’s assets by 2025 is “very feasible.”

Last week, PAGCOR announced its plan to let go of its operator role to fully become a regulatory body. It is beginning preparations for the transition, which will likely be completed by 2025.

Mr. Tengco earlier said that the move will “level the playing field and ensure future growth and viability for all gaming industry players.”

The DoF as well as some lawmakers have been pushing to relieve PAGCOR of its role as a casino operator and commit to being a regulator.

Antonio A. Ligon, a law and business professor at De La Salle University, said that this decision is a “welcome development.”

“Drawing of lines as to the responsibilities will be relevant and necessary to avoid conflict of interest,” he said in a Viber message.

Ateneo de Manila University economics professor Leonardo A. Lanzona said that PAGCOR’s dual role as operator and regulator had “created conditions more favorable to their operations at the expense of the other firms.”

“As a result, PAGCOR ends up mainly as a monopoly, thus raising the prices for the patrons of these services and resulting in lower revenues for the government,” he said in an e-mail.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message that PAGCOR’s commitment to being a regulator will help create a “better and more accessible gaming landscape for everyone.”

PAGCOR regulates and issues licenses to all gaming operations within the Philippines. This includes land-based casinos, bingo, electronic bingo, e-Casino games, sports betting, specialty games and e-Billiards.

It currently operates 42 Casino Filipino branches and satellite operation groups nationwide.

Mr. Tengco earlier noted that PAGCOR’s estimated sales from gaming venues could yield between P60 billion and P80 billion.

To ensure a successful transition, Mr. Ligon said that PAGCOR must focus on delineating functions.

“Crucial in the transition will be the personnel and the necessary system operations. It will be a good opportunity to come up with streamlined operation structures, together with a corrupt-free mechanism,” he said.

He also noted that the DoF should be transparent in setting guidelines and procedures in screening private operators.

Mr. Lanzona said this shift will also be an opportunity to revisit the country’s gaming laws.

“(The government) also needs to highlight the taxes and other services that new gambling facilities will need to pay society. Limitations on certain socially unacceptable side products of these firms should also be set. Otherwise, social damages or unethical activities may prosper as the market becomes more competitive,” he added.

Senator Ana Theresia “Risa” N. Hontiveros-Baraquel also said that PAGCOR must work on strengthening its regulatory powers.

“PAGCOR needs a plan on how it will help tax the operators, ensure compliance with laws against money laundering, conduct due diligence, and exercise vigilance to avoid working with and giving licenses to bad elements,” she said in a Viber message.

“It’s harder to do this when the government loses access to the goings-on inside gaming establishments. PAGCOR needs to identify the new legal, personnel, and technological capabilities it needs to have,” she added.

Mr. Limlingan said that PAGCOR should also be vocal on the changes happening in the gaming environment.

“Concerning privatization strategy, it is always recommended to be mindful of all shareholders and ensure that there will be a smooth transition in the privatization process,” he added.

PHL financial resources further rise at end-July

Bangko Sentral ng Pilipinas main office in Manila. — BW FILE PHOTO

THE TOTAL RESOURCES of the Philippines’ financial system further rose at end-July, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Resources of banks and nonbank financial institutions increased by 6.7% to P28.796 trillion in the first seven months of the year, from P27 trillion in the same period in 2022.

However, the growth in total resources is slower than the 7.7% recorded a month ago.

These financial resources are held by banks and nonbank financial institutions. These include funds and assets such as deposits, capital, as well as bonds or debt securities.

“The growth in the total assets/resources in the financial system and of banks is similar to the growth in loans; but still faster/better than the economic growth as consistently seen in recent years,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Earlier BSP data showed outstanding loans of big banks grew by 7.7% to P11 trillion in July from P10.21 trillion a year ago. This was slower than the 7.8% seen in June.

“The sustained growth in bank loans may also be attributed and consistent with the continued growth in deposits, as supported by the economic reopening narrative,” Mr. Ricafort said.

He said the sustained growth in the net income of banks has contributed to the increase in the financial system’s total resources. 

The Philippine banking system’s combined net profit climbed by 27.7% to P182.764 billion in the first half of the year, from P143.122 billion in the same period in 2022, separate BSP data showed.

“However, the slower growth in the total assets/resources of banks and nonbanks could be partly attributed to higher prices/inflation and higher interest rates,” he said.

To tame inflation, the Monetary Board hiked borrowing costs by 425 basis points from May 2022 to March 2023.

Based on data from the BSP, banking resources rose by 7.5% to P23.763 trillion at end-July from P22.095 trillion a year prior. Banks include universal and commercial banks, thrift banks, as well as rural and cooperative banks.

Broken down, the total banking resources held by universal and commercial banks stood at P22.338 trillion as of end-July, up by 7.5% from P20.775 trillion a year ago.

Thrift banks held P1.018 trillion of total resources, increasing by 7.7% from P945 billion a year ago.

The total resources of rural and cooperative banks climbed by 8.8% to P408 billion as of end-July from just P375 billion in the same period in 2022.

Meanwhile, the resources of nonbanking financial institutions inched up by 2.6% to P5.033 trillion from P4.906 trillion as of end-July 2022.

Nonbank financial institutions include investment houses, finance companies, security dealers, pawnshops and lending companies. 

Institutions such as nonstock savings and loan associations, credit card companies, private insurance firms, the Social Security System and the Government Service Insurance System are also considered nonbanks.

The financial system’s total resources stood at P28.806 trillion in 2022, up by 9.3% from a year prior. — Keisha B. Ta-asan

DMCI Mining expects record nickel ore shipments

DMCI Mining Corp. is on track to surpass last year’s nickel ore shipments, its president said, as the company recorded robust production in 2023 while also targeting to start operating a new mine site by December.

“We’re very pleased that we will have a historical year in terms of shipments this year and that will help offset the lower prices because [we’ve recorded] volume gain,” DMCI Mining President Tulsi Das C. Reyes said in a media briefing on Friday.

His optimism comes as the mining firm’s subsidiary, Zambales Diversified Metals Corp. (ZDMC), produced more than one million tons of nickel ore in the first six months.

“Kung mataas ’yung volume mo, bababa ’yung cost per ton mo (If your volume is high, your cost per ton will go down),” he added.

Company data show its nickel ore production stood at 1.12 million wet metric tons (WMT) in the January-to-June period, nearly double the 567,000 million WMT a year earlier.

First-half output is also higher than the 1.03 million WMT produced during the full-year 2022.

Meanwhile, shipments reached 1.06 million WMT, equivalent to 73% of the total sales volume of 1.45 million WMT.

“We attribute our strong performance to improved operational efficiency and permit timing,” Mr. Reyes said.

“Shortly after [ZDMC] was granted an ECC (environmental compliance certificate) amendment, we worked on securing the auxiliary permits, local manpower and heavy equipment needed to boost our production capacity,” he said.

In January, ZDMC was granted an amended ECC that allowed it to produce two million WMT of nickel ore from the previously permitted one million WMT.

DMCI Mining has said that it is eyeing to ship out 1.5 WMT of nickel ore this year.

Meanwhile, Mr. Reyes said that the company is looking to open a mine in Zambales which is targeted to be operational by December this year, and another mine by the second quarter of next year.

DMCI Mining is currently securing a tree-cutting permit for an area inside ZDMC that is likely to produce 20 million tons of nickel ore, he said.

“I strongly believe that we have a very good chance to get this permit before year-end,” he said. “Once we get the tree-cutting permit, we can already mine.” 

The new mine site will be operated by another subsidiary, Zambales Chromite Metals Corp. It was not operating in 2019 due to the lack of permits to commence.

Mr. Reyes did not disclose the location of the other mine prospect.

He said he was bullish about ending the year with good results amid the projected higher selling prices with the closures of some mining operations in Surigao.

“With Surigao shutting down or closing for the season in October, we feel that prices will go high because the supply is naturally decreased,” he said.

“So I’m very positive for the outlook for the last quarter of this year and the first quarter of next year, for me, personally, because our mine sites normally operate when Surigao closes,” he added.

DMCI Mining is the mining subsidiary of Consunji-led listed holding firm DMCI Holdings, Inc. — Sheldeen Joy Talavera

San Miguel says its power unit is still ‘viable’

SMCGLOBALPOWER.COM.PH

LISTED CONGLOMERATE San Miguel Corp. (SMC) said that the businesses of its power unit, San Miguel Global Power Holdings Corp. (SMGP), and its subsidiaries are still “viable” and are able to meet financial obligations.

“SMGP remained profitable in 2022, as it has been since it started operations in 2011, in spite of the rise of coal and other fuel prices to unprecedented levels,” SMC told the local bourse on Monday.

The company said the unit’s consolidated revenues of P221.4 billion and earnings before interests, taxes, depreciation, and amortization (EBITDA) of P42.32 billion are “both at par with results in prior years.”

It said that this is due to the implementation of “various power plant operating cost optimization strategies combined with viable commercial arrangements with its existing bilateral customers.”

SMC said that certain loan maturities this year have been refinanced and SMGP is currently closing a project financing arrangement for its battery energy storage systems, which is expected to contribute to its revenues.

“SMGP remains confident of its ability to tap the local market as proven by its successful issuance of the P40 [billion] peso retail bonds,” the company said.

Meanwhile, SMC said the unit is still on track with the development of solar-based power generation projects while remaining “fully compliant” with existing local and international requirements, laws, and regulations.

“To date, the Company and its subsidiaries, including SMGP, are fully compliant with and continue to comply with their financial obligations,” it said.

As of June, it said SMGP had a combined installed capacity of about 19% of the national grid, 25% of the Luzon grid, and 7% of the Mindanao grid, with power supply agreements with distributors and other end users.

On Monday, SMC shares rose by 30 centavos or 0.29% to close at P104.80 apiece. — Sheldeen Joy Talavera

SEC advises against investing in unlicensed Eatcited, Amelia Mall 

THE Securities and Exchange Commission (SEC) warned the public against investing in Eatcited Pasalubong Center and Amelia Mall Online as these are not authorized to solicit investments. 

In two separate advisories posted on its website, the corporate regulator said that Eatcited and Amelia Mall are operating without the necessary license to solicit, accept, or take investments from the public. 

According to the SEC, Eatcited and its representatives are enticing the public to invest in its wholesale and retail food product services. The entity allegedly promises a guaranteed 5% earnings per month for a minimum investment of P20,000 and a guaranteed 10% earnings per month for a maximum investment of P500,000. 

Eatcited, located in Tayabas, Quezon province, is registered with the Department of Trade and Industry as a sole proprietorship.

“As appearing in its social media posts, Eatcited Pasalubong Center claims that it is looking for partners/silent investors for a short- or long-term contract with the possibility of earning money up to 120% for a period of 12 months,” the SEC said. 

“The scheme employed by Eatcited Pasalubong Center has the characteristics of a Ponzi scheme where money from new investors are used in paying fake profits to prior investors and is designed mainly to favor its top recruiters and prior risk takers and is detrimental to subsequent members in case of scarcity of new investors,” it added. 

Meanwhile, the SEC said Amelia Mall Online/AriaMall/Amelia-Mall Philippines, Inc. allegedly offers a part-time job by placing orders online with a promise of receiving a commission, which could only be withdrawn upon payment of a tax charge. 

The corporate regulator added that the certificate of registration being shown by Amelia Mall to the public is bogus, as the commission’s records showed that the entity is not registered as a corporation, partnership, or one-person corporation. 

“Reports revealed that the entity is engaged in a scheme known as tasking and recharging where the public is invited on purported online jobs by performing certain tasks for a promise of receiving monetary rewards or what they call commission and once the tasks are completed, the investor will be given another task to perform for the same promise of receiving commissions which can only be withdrawn upon payment of what they call a tax charge,” the SEC said. — Revin Mikhael D. Ochave

AbaCore to invest in 15-hectare Batangas property

ABACORE CAPITAL Holdings, Inc. is investing in a 15-hectare property at Simlong, Batangas as the listed firm aims to increase its investment properties. 

In a stock exchange disclosure on Monday, AbaCore said the location of the property is contiguous to the company’s current properties in Simlong. The investment was approved by its board on Sept. 22.

According to the company, the target investment property is “at a discount of around P225 million to the most recent appraised value.” 

“The investment will result in the increase in investment properties of the corporation and a replenishment of the inventory of its assets, in line with the previously adopted principle of the board to replace assets sold with new assets even in other areas,” the company said. 

In a separate statement, AbaCore said it would repurchase up to P45 million of its common stock upon the board’s approval to finalize details of the company’s buyback program.

The buyback program will run from October this year until September 2025. Guild Securities, Inc. will serve as the broker for the program.

To repurchase shares, AbaCore will spend the remaining funds after allocating for operational expenditures, capital expenditures, a 10% annual dividend, taxes, and payment of advances from related parties.

“We are pursuing this program as we believe our stock has strong fundamentals. We look forward to providing value to our shareholders and instilling confidence in our company’s future,” AbaCore President, Chairman, and Chief Executive Officer Raul B. de Mesa said. 

Meanwhile, AbaCore’s board also approved a business development incentive program that seeks to diversify the company’s operations and generate “regular” cash flows from its investment properties.

“The business development incentive program aims to ensure that AbaCore will continue to adapt to various evolving trends within the markets it operates in,” Mr. De Mesa said.

“While investing in properties will remain a core part of our operations, we acknowledge there is untapped potential coming from business ventures we could enter in the future with local and foreign partners,” he added. 

AbaCore is a listed holding company that has interests in sectors such as tourism, real estate, financial services, and energy. It recorded P384.6 million in net income as of August, a reversal of the P15.5 million net loss in the first half of last year. 

On Monday, shares of AbaCore at the local bourse rose two centavos or 1.8% to finish at P1.13 each. — Revin Mikhael D. Ochave

EDC plans to drill more wells for geothermal sources

LOPEZ-LED Energy Development Corp. (EDC) is looking into drilling more wells in the next three years to sustain its operations via geothermal energy sources.

“The main focus of EDC over the next three years is to make sure that we can continue to deliver the amount of renewable source of geothermal for our customers,” EDC Vice-Chairman and Chief Executive Officer Francis Giles B. Puno said during a conference organized by Net Zero Carbon Alliance (NZCA) on Monday.

“Part of that is a need to drill close to 40 wells over the next three years. It means an investment of roughly in excess of half a billion dollars just to make sure that we can continue to extract sustainable steam from the ground,” he added.

EDC, the renewable energy arm of listed First Gen Corp., will drill the new wells mostly in Leyte province.

On its website, the company said that it has an installed capacity of 1,480.19 megawatts (MW) of renewable energy, of which 1,185.40 MW comes from geothermal sources.

NZCA, in partnership with media and business intelligence organization Eco-Business, organized the conference to gather international and local experts on climate and sustainability and discuss the challenges, opportunities, and solutions to expedite the private sector’s net-zero journey.

“As always, climate action is a matter of urgency as we continue to experience the ever-increasing impacts of our warming planet around the world, most especially in the Philippines,” said Allan V. Barcena, executive director of NZCA and assistant vice-president and head of corporate relations and communications of EDC.

“NZCA aims to contribute practical measures toward decarbonization that Philippine businesses can take, starting with interventions such as renewable energy,” he added. — Sheldeen Joy Talavera

DFNN clears sale of offshore gaming subsidiary

THE board of listed gaming technology company DFNN, Inc. has approved the sale of an offshore gaming subsidiary to Vanguard Investments to streamline its operations. 

In a stock exchange disclosure on Monday, DFNN said its board authorized on Sept. 22 the sale of its wholly owned unit Nico Bayan, Inc. to Vanguard Investments for P2 million. The listed firm said it has no relationship with Vanguard Investments.

Nico Bayan is in the business of developing software solutions.

“[This sale is] to streamline its current technology operations reporting thus focusing on revenue generation and optimizing wholly owned resources and improving overall profitability under the main listed company,” DFNN said.

“The manner of the acquisition shall be through a contractual arrangement,” it added.

In 2019, DFNN incorporated Nico Bayan to expand the company’s offshore gaming operations.

“The incorporation of Nico Bayan is intended to be used as a vehicle for the expansion of its offshore gaming operations,” DFNN said in a previous disclosure. 

Last week, the Senate Committee on Ways and Means recommended the gradual phase-out and the eventual termination of Philippine offshore gaming operators or POGOs from the country due to the negative social impact in communities where their operations are located.

In a separate disclosure, DFNN said that it added Nicholas Te to its board of directors.

“This strategic move is not only aimed at expanding revenue streams but also at aligning the company’s organizational structure with the burgeoning opportunities in the technology sector,” DFNN said.

“Mr. Te brings a wealth of expertise in cutting-edge technology solutions. And with the majority of our business pipeline deeply entrenched in pioneering technology, this strategic appointment underscores our commitment to staying at the forefront of technological advancements,” the company added.

According to DFNN, Mr. Te has a Bachelor’s Degree in Materials Science and Engineering from the University of California in Berkeley. He is an engineer at Tesla, Inc., which is owned by American billionaire Elon Musk.

In the first six months, DFNN recorded P41.8 million in net income, down 71.2% from P144.9 million a year ago as its consolidated cost and expenses rose 30.6% to P606.6 million.

The company attributed the higher cost and expenses to a surge in variable costs and other costs associated with the continued development of its interactive technology platforms.

Shares of DFNN at the local bourse were last traded on Sept. 22, when it closed unchanged at P3.08 apiece. — Revin Mikhael D. Ochave

When the scene calls for more than a kiss: Filipino intimacy coordinators enter the scene

MARLON BRANDO and Maria Schneider in the 1972 film Last Tango in Paris.

By Brontë H. Lacsamana Reporter

THOUGH AN actor’s job entails sometimes being in intimate situations to truthfully play a role, sometimes things can go too far, or a director wants too much.

Take as an example, the Last Tango in Paris. The erotic Bernardo Bertolucci film famously features a rape scene between Marlon Brando and Maria Schneider. Ms. Schneider said, during a 2006 interview with The Sydney Morning Herald, that the scene was not in the script. “When they told me, I had a burst of anger. Woo! I threw everything. And nobody can force someone to do something not in the script. But I did not know that. I was too young.” Ms. Schneider, when the film was made in 1972, was only 19. “Marlon said to me; ‘Maria, don’t worry, it’s just a movie.’ But during the scene, even though what Marlon was doing wasn’t real, I was crying real tears. I felt humiliated and to be honest, I felt a little raped, both by Marlon and by Bertolucci,” she said in an interview with the Washington Post in 2007.

Today, such a situation is less likely to happen. A cultural shift in the entertainment industry over the last decade has led to the professionalizing of intimacy work, even in the Philippines.

WHAT CHANGED?
In 2017, the #MeToo movement arose from sexual harassment accusations against American producer Harvey Weinstein, among many other powerful Hollywood abusers.

Things took off after that, with the first intimacy coordinator role created at HBO in 2018, and the first intimacy director for Broadway hired in 2019.

Intimacy coordination for film, or intimacy direction for stage, is about fostering consent and care-based collaboration between actors and the rest of the directorial team — especially when intimate scenes get uncomfortable.

Missy Maramara, a Filipino theater actress and director who is also a certified intimacy coordinator, has been advocating for this line of work to be more commonplace in local film and theater. All this while she herself is working on completing intimacy work certifications from international acting groups.

“The #MeToo movement started in the entertainment industry in the United States, but that doesn’t mean it’s only then and there that abuses due to power dynamics started happening,” said Ms. Maramara, in a conversation with BusinessWorld.

What changed is the younger generations, who now finally have the agency and the courage to speak up when boundaries are “challenged or even broken, whether on purpose or not,” she said via Zoom.

OF COMBAT CHOREOGRAPHERS AND INTIMACY COORDINATORS
Ms. Maramara explained that the goal is for actors not to get injured, much like a fight choreographer’s job.

“If there’s violence and combat, there should be a fight choreographer. On the other hand, if there’s intimate physical contact and emotional vulnerability, there should be an intimacy coordinator,” she said.

This view references the 2006 study of intimacy work by Tonia Sina (co-founder of Intimacy Directors International, or IDI), which connects the parallels of fight choreography with intimacy choreography.

As per this thesis, the safety principles used for fight scenes — choreographing safe, repeatable movements — have to also apply to intimate scenes, especially given the power dynamics between directors and actors.

THE IMPORTANCE OF COMMUNICATION
Intimacy coordination for film, or intimacy direction for stage, is about fostering consent and care-based collaboration between actors and the rest of the directorial team — especially when intimate scenes get uncomfortable.

“Over the course of my career, there were times I wish I knew nudity and lots of kissing were required before I was cast in a role,” Ms. Maramara said, to explain her personal realizations once the trend took off.

“I wish I could have spoken to someone about those instances, not just the director, whom I fully respect but wouldn’t talk to for fear of career repercussions,” she added.

Speaking as a director, it would also help to have someone mediate, even if the actor were a friend, since they could just feel pressured to comply so as not to be seen as “difficult.”

Jaime Wilson, a theater actor and director, told BusinessWorld in an FB message that, though he hasn’t worked with an intimacy professional yet, there were times where “another person watching out for the actors involved might have been useful.”

Mr. Wilson mentioned a particular scene on stage where his head was to be in between a co-actor’s legs. “At rehearsals I went a little too far in, and the discussion of parameters only happened after the fact. Knowing what I know now, it’s important to discuss it beforehand!”

“Discussing parameters and limits with actors is always a must. I’ve done that with my co-actors a few times, but there were a few instances where that discussion didn’t take place and we just winged it and went for it,” he said.

PREPPING FOR SAFETY
Regina De Vera, an acting coach and intimacy coordinator for film, worked in Ryan Machado’s film Huling Palabas, an entry in the 2023 Cinemalaya Independent Film Festival.

This involved intimacy prep calls with the directorial team to discuss the scope of nudity and intimate physical contact required in their storytelling vision. After that, she relayed all that information via one-on-one intimacy prep calls with the actors, to check how that worked for their personal boundaries.

“We begin this back and forth until we reach a collaborative agreement between all parties,” she told BusinessWorld in an e-mail interview.

Agreements can include preferences for costume and modesty garments (clothes placed strategically on actors’ bodies in scenes where they need to appear nude on-camera).

Afterwards, everything is written down and signed by the actors and the line producer at least a week before shooting begins. This allows everyone involved to “come into the set with clear expectations on what is required of each department, with as little to no last-minute changes.

“On set, I assist the directorial team and the actors in the choreography of the intimate scenes in a consent-forward manner,” said Ms. De Vera.

Ms. De Vera became an intimacy coordinator after returning to the Philippines after completing a Master’s in Acting at Juilliard, inspired to do so after she learned of what had happened in the Philippine High School for the Arts — students and alumni came out in November 2021 to expose the abuse that they had experienced from members of their faculty.

“I knew that if I was this angry about something, it’s a sign that I had to do something about it,” she said. “We are overdue in updating the paradigms we’ve inherited that believe abuse and force builds ‘character.’”

According to Ms. Maramara, while there are only a handful of intimacy professionals working in the Philippines, the awareness is beginning to spread.

“I’ve been sharing what I’ve learned with universities, the Theater Actors Guild, and the Guild of Assistant Directors and Script Continuity, because I really want the industries to understand that it’s absolutely necessary to have intimacy professionals in the country,” she said.

SEEKING CERTIFICATION
Ms. Maramara is currently working towards an intimacy certification for theater with the Intimacy Directors and Coordinators (IDC) and for film with the Intimacy Professionals Association (IPA).

She is the first coordinator from the Philippines to reach level three of the IPA process.

Aside from beefing up her credentials as a professor at the Ateneo de Manila University, it will also help her get hired for upcoming projects under Amazon Prime Video, which is expanding to Southeast Asia.

“Since I’m with IDC, an American SAG (Screen Actors Guild) member who’s coming to the Philippines (to film) might require me as a domestic coordinator. They won’t have to fly someone in from the US because I’m already here,” she said.

However, the certification process is an expensive one.

For example, to achieve certification with IDC, one must first complete the Level 1 Foundations of Intimacy online course that costs $399 and then the Level 2 Foundations of Intimacy Course that costs $549.

“The challenge in the Philippines is really resource allocation. People would rather not develop skill sets that aren’t funded,” Ms. Maramara said.

She explained that, although being certified shouldn’t be a hard requirement for a set to be safe, it would definitely open up a lot of opportunities for the professional and his/her country.

Meanwhile, for Ms. De Vera, being certified means that one is giving power to an institution to document your training, which legitimizes your practice, which is not necessarily bad.

“I find it problematic that, in a field that promotes care-based and consent-based practices, there is a certification ecosystem that is overpriced and accessible mainly to people with financial and geographical access,” she said.

This is why Ms. De Vera instead trained via online intimacy courses at Theatrical Intimacy Education (TIE), which does not certify but offers scholarships.

Though both intimacy professionals took different paths, they share the same goal — that hopefully, the Philippines develops its own robust ecosystem of intimacy work that provides support and advocates for Filipino actors.