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New Grammy Award rules require human input, curb artificial intelligence use

Grammy Award

“ONLY HUMAN creators are eligible” for the Grammy Awards, the Recording Academy declared on Friday, as the body that grants the world’s most recognized music awards seeks to curb the use of artificial intelligence (AI) in the industry.

AI-only work is banned, but some music created with AI help may qualify in certain categories, the academy’s updated rulebook reads. “A work that contains no human authorship is not eligible in any categories.”

Music creators must now contribute to at least 20% of an album to earn a nomination. In the past, any producer, songwriter, engineer or featured artist on an album could earn a nomination for album of the year, even if the person had a small input.

The first Grammy Awards ceremony took place in 1959, to reward music creators from 1958.

In November 2022 OpenAI launched ChatGPT, a free chatbot backed by Microsoft Corp. that can generate human-like dialogue based on simple inputs. AI apps have mushroomed, allowing users to animate still photos, create avatars in films, and write songs, essays, and articles.

People in many professions are growing fearful that AI could displace humans. For example, the Writers Guild of America (WGA) and the Screen Actors Guild (SAG-AFTRA) are wrestling with the use of AI in the creative fields of screenwriting and acting.

The WGA wants to curb the use of AI in screenwriting while SAG actors want to ensure its members can control use of their digital personas and receive proper compensation.

WGA writers went on strike in early May and have yet to agree with studios on the use of AI, among other issues.

Actors could go on strike as well if SAG-AFTRA cannot reach a deal over similar concerns. — Reuters

Go international

STOCK PHOTO | Image by Kelly Sikkema from Unsplash

In these days of the Internet 4.0, ChatGPT 2.0 and AI, the global boundaries between and among nations have been blurred. It is no longer possible to just stay as a local advocacy group, but it is easier now to embrace international groups, partners, and collaborators.

Even a Messenger group call or a Viber/WhatsApp group call is now possible, albeit at different times for everyone in various time zones. I just came home from a trip during which I was able to attend meetings via Zoom and Google Meet and Microsoft Teams, like I never left the country. Yes, it may mean a little less sleep or waking up sooner than usual, but the work gets done despite meetings being virtual. We learned that during the pandemic lockdowns!

For organizations, going international and finding foreign but like-minded co-advocates is also much easier now. There are, of course, groups that were meant to be international to begin with:

• BPW or Business and Professional Women started in 1930, way before the internet happened. This is a global organization of women in professions and business who all push for women’s empowerment, which was founded along with the UN Women Program of the United Nations. Almost anywhere you go in the world, you are bound to find a chapter or a federation of BPW. We have our local chapter of BPW-BGC, recently reorganized and soon to welcome new members among our accomplished professional and businesswomen communities.

• Women Corporate Directors International (WCDI) is the world’s largest membership organization and community of women corporate board directors, with members in 76 countries. WCD members serve in around 8,500 public and private boards. We are happy to be in the Philippine Chapter, NextGen Organization of Women Corporate Directors or NOWCD (www.nowcdphils.com), which was founded in 2021. Together, we all push for diversity in the board room to help companies become profitable and sustainable. We have peer-to-peer sessions and learn from experts from multinational companies as well as non-profits.

• The International Women’s Coffee Alliance or IWCA (www.womenincoffee.org) is present in 46 coffee-producing and consuming countries, and we work towards making women in the coffee value chain empowered to do business across the world. It matters a lot to the small-scale farmer who can get her produce sold to big companies, without the usual barriers. Coffee is traditionally a man’s world, but that is changing now because of groups that band together like IWCA.

• The ASEAN Coffee Federation or ACF (www.aseancoffee.org) was formed in 2013 after initial meetings in Pattaya, Thailand and Pakse, Laos in 2010 and 2012. Today, we are a proud member representing the Philippines as Philippine Coffee Board, Inc. (www.philcoffeeboard.com) since the association’s inception. With this group, we advocate for ASEAN coffee to be recognized and promoted as the new frontier of coffee, long dominated by Central and South America and Africa as global suppliers of coffee. Today, Vietnam and Indonesia are among the Top 5 coffee producers of the world with Vietnam as No. 1 in Robusta coffee production. The smaller producers, like the Philippines and Myanmar, are doing well in specialty coffee, like Liberica, and Fine Robusta. Even if we are small, we have access to learning and trade opportunities because of this affiliation. And the Philippines is being recognized as a coffee producer, joining the coffee tastings along with the giants. Soon, we will be able to export, too.

• Then there is the ASEAN Women Entrepreneurs Network (AWEN) or the ASEAN-Business Advisory Council. Though AWEN is not yet registered even after nine years since its foundation, it is just choosing between Indonesia or Malaysia, maybe even the Philippines, to establish its legal structure. In the Philippines, the Philippine Women’s Economic Network (PhilWen) (www.philwen.org) has gladly taken the job of representing AWEN as a conduit for donor funds with much success.

Though we are familiar with advocacy and civic groups like the Rotary Club and Lions, today there are groups for every specialty product or service, and a more granular approach to civic work and advocacy is being done.

The important work to be done is proper registration of the entity, having a Secretariat and a powerful website. People just go through LinkedIn, Google, and now even ChatGPT to find out more information about their favorite cause and the groups behind the advocacies. In ACF, we find that Singapore is a good place for regional registration as it is a fast and efficient process. Malaysia is also a favorite for its more affordable cost to maintain a non-profit organization. I would also raise my hand for the Philippines as a one-stop shop for registration, maintenance, and even as a place to get your website going and to get writers to manage your social media content.

Why am I writing about international groups? Well, one has to collaborate to move the industry. There are regionally shared concerns, for example, the promotion of electric vehicles or sustainable tourism. You cannot think of one country in a silo. Rather, you find special interest groups in neighboring countries to help you navigate the policies of ASEAN and even global practices, if not legislation.

Usually, it starts with a group of like-minded people who will call themselves a regional council, with or without government blessing. Soon, they will formalize and register their group so they can be able to solicit funds and projects around the region or beyond. But collaboration is key. These regional associations are safe from changes in government administrations because they think like an international, not a local, body.

So, if you are interested in spreading your advocacy, and learning from like-minded people with expertise in the field you have chosen, be open to forming regional or international groups. Or affiliating with established non-profits. We did this with Slow Food International. We have not formed a legal entity as Slow Food Manila, but we are all members of the international body as a Slow Food community based in Manila. It works well, depending on the chosen reputable and organized international community, such as Slow Food (www.slowfood.com).

Go find your international partners to further your cause or join any of those I have already mentioned and have had experience in.

Go international!

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.

 

Chit U. Juan is the co-vice-chair of the MAP Environment Committee. She is president of the NextGen Organization of Women Corporate Directors (NOWCD), president of the Philippine Coffee Board, Inc., and founder of ECHOstore Sustainable Lifestyle. She is a member of the global Slow Food community promoting good, clean, and fair food.

map@map.org.ph

pujuan29@gmail.com

Alsons eyeing more partnerships, earmarks P6B for power projects

ALSONS Consolidated Resources, Inc. said on Monday that it is exploring various partnerships to increase the share of renewable energy in its power generation portfolio.

“We have always been open to cooperation and partnerships with potential equity investors from similar industries as well as other financial institutions and fund managers in our projects and we will continue to do so in the upcoming years,” Antonio Miguel B. Alcantara, chief investment and strategy officer of Alsons, said during the company’s annual stockholders’ meeting.

The company is allocating an estimated P6 billion for capital expenditures over the next three years, he also said.

“We shall finance our projects through a combination of project, term loans and internally generated funds,” he noted.

Mr. Alcantara also said the company will continue to invest and expand its power generation portfolio by adding more renewable energy projects.

For 2023, the company expects to start the commercial operations of its 14.5 megawatts (MW) Siguil hydropower plant, while its Siayan hydro project in Zamboanga del Norte and the Bago hydro project in Negros Occidental are poised for development.

With these developments, Mr. Alcantara said the company is continuously on the lookout for other hydropower-related opportunities.

“As we move forward in developing our renewable energy projects one after the other, we are able to continuously improve our approach and methodology leading to reductions in project-related costings, allowing us to achieve greater returns, be more competitive and embed ourselves to more communities as we move forward to power Mindanao,” he said.

The company is hoping to diversify its power generation with the addition of solar power as an immediate focus areal.

“We intend to launch our first solar project by the end of 2024,” Mr. Alcantara said.

To date, Alsons has four power facilities with a combined capacity of 468 MW. The company serves 14 cities and 11 provinces in the country.

At the local bourse on Monday, shares in the company closed unchanged at 72 centavos each. — Ashley Erika O. Jose

Robinsons Bank Corp. sets 2023 Annual Stockholders’ Meeting on June 29 via remote communication

 


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Seoul hosts large crowds as BTS fans celebrate 10th anniversary

WIKIMEDIA COMMONS

SEOUL — An estimated 400,000 people gathered in South Korea’s capital Seoul on Saturday as fans from around the globe commemorated the 10th anniversary of the debut of K-Pop boy band juggernaut BTS.

The band is on temporary break as a group with two of its seven members currently doing mandatory military service, but that did not stop a host of celebratory events last week catering to a loyal fanbase known as ARMY.

At the BTS 10th Anniversary FESTA at Han River Park in Seoul on Saturday, tens of thousands of fans wandered among various exhibits including a BTS history wall, stage costumes, and commemorative sculptures, many in the band’s signature purple color.

With hit songs playing in the background, fans danced under shady trees or bonded over their favorite band members.

“Through this event I think we can get experience (of) how we build up our connection with BTS and ARMY,” said Audrey Lintner, a 28-year-old master’s degree student from Sri Lanka who was attending the event.

BTS leader RM later read out fan messages, performed, and received calls from fellow members Jung Kook and V at the celebration.

“Time goes by so fast. Everything has changed, and I’ve changed a lot. I’m not sure what I’m going to be doing with what feelings on the 15th and 20th anniversaries, but my love for you won’t change,” RM told fans.

The festivities climaxed with a fireworks show on the Han River, with organizers, local police and fire authorities estimating about 400,000 people in attendance by 9 p.m., according to Yonhap news agency.

“Thank you so much for giving us great music and performances for the past 10 years,” said Kim Hye-won, a 30-year-old who has been a fan since 2018.

“I’ll continue to be an ARMY for 10, 20, 30 years, so I hope you as artists, singers, extend a lot of positive influence for a long, long time.” — Reuters

Digitizing the Department of Health will delay universal healthcare further

BW FILE PHOTO

In the June 8 episode of the TV talk show Headstart, host Karen Davila asked the newly appointed Secretary of Heath Dr. Ted Herbosa what his priority is in the short to medium term. Dr. Herbosa said, “I want healthcare access to all, quality healthcare for all people, especially those that are in the lower economic sector, those that cannot afford modern healthcare… which is embodied in the Universal Healthcare Act of 2019.” To achieve this goal, he wants to digitize and make the Department of Health (DoH) very efficient in delivering healthcare and to be able to monitor results quickly. He wants the department’s budget spent on the tools that the banking and the tourism sectors are already using as our healthcare system is still using pen and paper.

I do not know if the doctor is using the word “digitize” to mean “digitalize.” The two words are used interchangeably by many people, but they have different meanings. Digitizing means converting data into digital (bits and bytes) format. Digitalizing is transforming processes into advanced digital technology. I tend to think he means digitalizing as he makes reference to tri-party communication between doctor, pharmacy, and patient. Sec. Herbosa thinks digitizing the DoH will allow poor people in those areas to consult a doctor without having to walk two hours to see a doctor.

Whether it is digitizing or digitalizing the Department of Health, it will delay the full implementation of the universal healthcare (UHC) program by several more years than I had projected previously.

The June 9 issue of this paper had an article with the heading “Digitizing healthcare to require big IT skills push.” The article says that healthcare workers need to develop information and communications technology skills. That means training tens of thousands of healthcare workers — doctors, nurses, pharmacists, and medical technicians most of whom are still using pen and paper.

I know two doctors in Makati Medical Center with lucrative practices who are still using pen and paper. There must be hundreds of doctors of the pen-and-paper kind in government hospitals in Metro Manila and thousands more in the provinces. They need to be trained in digital technology even if only basic or primary healthcare is made accessible to all, including those in the lower economic sector and in the remote areas, as embodied in the UHC law.

Training hundreds of doctors will take time and will require a huge budget. If a huge chunk of the DoH budget is used for digitization, that would mean the deferment of the installation of the infrastructure required by UHC. If Dr. Herbosa really meant digitalization, that would require advanced training for more DoH personnel, more time, and a much bigger budget as more equipment needs to be acquired.

Dr. Herbosa forgot that unlike the user of banking services and the tourist, the poor patient in a remote area, who most likely struggles to put food on the table three times a day, has to have the gadget with which to consult a doctor. According to PhilHealth, there are 38 million enrollees who are indigents. That means about 38 million Filipinos who would still have no access to healthcare even if the DoH is digitized or digitalized because they do not have the gadget to consult a doctor with.

I have written in this space more than once that UHC is years away because the number of hospitals, doctors, nurses, and other healthcare professionals required to provide healthcare service to a population of over 100 million Filipinos is many times more than our present healthcare system has.

UHC is firmly based on the World Health Organization (WHO) constitution of 1948 declaring health a fundamental human right. Achieving UHC was one of the targets members of the United Nations set in 2015. On Sept. 25 that year, the resolution on Transforming Our World: the 2030 Agenda for Sustainable Development adopted the target of universal health coverage by 2030.

UHC is meant for people whose lives can be saved or whose good health can be maintained if they receive timely medical attention without ruining them financially. Complications of the leading diseases in the Philippines like bronchitis, influenza, chicken pox, diarrhea, and respiratory tract infections can be prevented if the patient receives preventive, curative, rehabilitative, and palliative health services.

To achieve the goal of UHC, the country must have a strong, efficient, well-run health system that meets priority health needs, provides access to essential medicines and technologies to diagnose and treat medical problems, and a large corps of trained, motivated health workers to provide the services patients need. The WHO had advised our legislators to implement universal health care fully in 2030 when the country’s health delivery system would be capable of servicing it.

Per WHO recommendation, there should be 20 hospital beds per 10,000 people. Almost all regions have insufficient beds relative to their population except for the National Capital Region, Northern Mindanao, Southern Mindanao, and the Cordillera Autonomous Region. Among the 17 regions, the Autonomous Region for Muslim Mindanao (ARMM) has the lowest bed to population ratio (0.17 beds per 1,000 people), far lower than the national average.

According to the DoH, there are 721 public hospitals, 70 of which are managed by the Health department while the others are managed by LGUs and other National Government agencies. The 70 DoH-managed hospitals account for a total of 27,019 beds. The occupancy rate is over 100%.

In observance of the WHO declaration of healthcare for everyone, many countries launched UHC programs. But some of them rushed the enactment of a law on UHC. The Philippines was one of those countries. Our legislators rushed the bill on UHC so that they could present universal healthcare in the elections of 2019 as their gift to the Filipino people. Among the authors of the law were Senators JV Ejercito, Sonny Angara, Nancy Binay, and Cynthia Villar, who were all running for re-election. Ironically, JV Ejercito, the principal author of the law, failed to be re-elected.

President Rodrigo Duterte signed into law Republic Act No. 11223, An Act Instituting Universal Health Care for All Filipinos. When implemented effectively, the law will mean all Filipinos will get the healthcare they need, when they need it, without suffering financial hardship as a result. The law enrolled all Filipino citizens in the National Health Insurance Program to be administered by the Philippine Health Insurance Corp. or PhilHealth. That is more than 100 million Filipinos spread all over the archipelago — from Batanes in the north to Jolo in the South, from Samar in the East to Palawan in the West.

As the WHO feared, the country’s health system is far from being capable of servicing UHC. If Health Secretary Ted Herbosa spends a large portion of the DoH budget on digitizing the department, full implementation of the UHC program would have to happen well beyond 2030.

 

Oscar P. Lagman, Jr. is a retired executive, management professor, and business consultant. He had extensive exposure to the healthcare field in each of those three capacities.

CTA upholds ruling to grant part of Axelum’s refund claim

CTA.JUDICIARY.GOV.PH

THE Court of Tax Appeals (CTA) has stood by its decision to grant part of Axelum Resources Corp.’s refund claim in the amount of P12.82 million representing its excess and unused input value-added tax traced to zero-rated sales for the period covering April to June 30, 2016.

In a nine-page decision dated June 13 and made public on June 16, the CTA full court said the court-approved certified public accountant’s validation of the presented documents and official receipts backed the firm’s entitlement to the reduced amount.

“Indeed, the findings and conclusions of the independent certified public accountant (ICPA) are recommendatory,”  Associate Justice Marian Ivy F. Reyes-Fajardo said in the ruling.

“However, upon validation thereof, the court may totally or partially adopt said findings and conclusions.”

Axelum initially sought a refund in the total amount of P43.71 million, which the court granted in the reduced amount of P12.82 million after the documents were evaluated.

Under the Tax Code, taxpayers that engage with foreign firms doing business outside the Philippines are entitled to zero-rated sales that do not translate to output tax.

The term “zero-rated sale” must be written in the taxpayer’s official receipts.

The firm is primarily engaged in manufacturing coconut water and other coconut-based products for the domestic and international markets.

The commissioner of internal revenue (CIR), who asked the court to overturn the refund, argued that the CTA Second Division, which previously granted the amount, should not have solely relied on the court-approved accountant’s report.

The CIR claimed Axelum was only entitled to a P2.77 million amount, which was recommended by the Bureau of Internal Revenue.

The CTA en banc disagreed saying its second division was not wrong in relying on the accountant’s report, saying it should have been disputed when ICPA was presented as a witness. — John Victor D. Ordoñez

New Black Mirror season begins by tackling actors’ anxiety about AI

SALMA HAYEK in a scene from Black Mirror. — IMDB.COM

LOS ANGELES — In the new season of Netflix, Inc.’s sci-fi show Black Mirror, an office manager finds that a streaming service is replaying her life using an avatar of Salma Hayek.

Ms. Hayek, in the episode released on Thursday, has sold her digital image to Hollywood for use in programming created with artificial intelligence (AI).

The story highlights real-world concerns of actors and writers, said Schitt’s Creek star Annie Murphy, who plays the office manager. The Writers Guild of America (WGA) went on strike in early May, partly over concerns that studios would start using generative AI, instead of humans, to write scripts.

“I hope it shines a light on what they’re fighting for and why they’re fighting for it,” Ms. Murphy said in an interview.

“It’s not just writers being whiney. It’s them saying ‘Can we not be replaced by computers?’ and that’s such a scary thing for human beings to have to ask,” she added.

Actors became concerned after realistic-looking “deepfakes” began circulating online of stars such as Tom Cruise, Keanu Reeves, and Ms. Hayek. Members of the SAG-AFTRA actors union are seeking protections on how their images are used in their negotiations with Hollywood studios.

“As much as I really want people to have a good laugh and enjoy our shockingly lighthearted episode when it comes to Black Mirror, I do hope that it sparks proper conversation, or many conversations, about the really terrible repercussions that AI can have if it goes too far off the rails,” Ms. Murphy said.

Ms. Murphy said she and Ms. Hayek discussed the issue during filming of Black Mirror.

“Her image has been used in so many terrible and disrespectful ways, so we did have conversations about that,” Ms. Murphy said. — Reuters

FDI in the Philippines and the energy mix

KENNY ELIASON-UNSPLASH

Last week, the government economic team held the 7th Philippine Economic Briefing (PEB) in the Singapore Fullerton Hotel. The first PEB in Singapore was held on Sept. 9, 2022 and led to investment pledges of $6.5 billion.

SOURCES OF FDI
Singapore is the most appropriate place to invite more foreign direct investments (FDIs) into the Philippines because it was the country’s number one source of FDIs in 2020-2022, larger than Japan, and six times larger than the US (see Table 1).

Among the declarations made at the Singapore PEB were the following. Finance Secretary Benjamin Diokno said “this is the moment”; Budget and Management Secretary Amenah Pangandaman said “the Philippines will not only be the darling but also the Sweetheart of Asia.” Secretary Arsenio Balisacan of the National Economic and Development Authority (NEDA) said the President desires to expand opportunities and partnerships for trade and bilateral relations rapidly. Central Bank Deputy Governor Francisco Dakila, Jr. added that cash remittances, BPO revenues, FDIs, and international reserves will cushion the Philippine economy against global headwinds.

DBS Group Chief Executive Officer (CEO) Piyush Gupta said that Philippines is among the top 10 nations of interest for Singapore investors. Good.

More investment means more businesses and job creation, more modernization, less poverty, and less dependence on the state for welfare by the citizens.

Notice the big jump in 2022 FDI coming from Malaysia, Russia, Germany, Kuwait, and Switzerland, while there was a big decline in FDI coming from China, the Netherlands, and the Cayman Islands.

The Philippines and the rest of Asia should focus on trade and investments, and global and regional peace via commerce, tourism, and modernization. We should not follow Europe and the US that are fixated on endless wars.

MANY ENERGY ISSUES
There have been many energy-related issues that cropped up recently. I have arranged them into sub-topics, with all stories published in BusinessWorld and mostly written by Ashley Erika Jose, my favorite objective energy reporter.

1.) Energy Regulatory Commission (ERC) and distributors: “ERC issues 33 show-cause orders against power co-ops, distributors” (May 31), “ERC orders distributors to explain higher-than-approved power charges” (June 8).

2.) Department of Energy (DoE) and renewables: “DoE calls for fair treatment of poor countries in transition to green-energy technology” (June 6), “Energy dep’t clarifies on-grid rollout procedures for renewables” (June 6), “DoE registers P6.8B worth of investments in energy efficiency” (June 13), “DoE may impose up to P100M in fines for RPS violations” (June 14).

3.) Decarbonization and unstable energy: “Philippine fast-track decarbonization seen costing $133 billion until 2040” (June 8), “Napocor hoping to convert off-grid unit to 100% renewable” (June 11), “New power projects to stabilize electricity supply in 2-3 years” (June 12), “Gas-fired power still critical for PHL amid green-energy transition — Fitch Solutions” (June 13).

4.) Ninoy Aquino International Airport (NAIA) blackout and Meralco: “NAIA power outage caused by MServ personnel’s lapse” (June 12), “Meralco sees easing power rates as rainy season starts” (June 12).

Last week, the Independent Electricity Market Operator of the Philippines (IEMOP) held a briefing. Since there is endless push to have more intermittent solar and wind power in the national grid, I used the IEMOP data and computed the implied capacity factor (ICF) of all energy sources — fossil fuels, conventional renewables, and intermittent renewables — to see where we can really get energy security and stability. Here are the results.

One, for the period February-May 2023, the average capacity factor — actual generation over potential generation capacity    for the Philippines overall is only 46%.

Two, geothermal has the highest ICF — it produced 67% of its potential capacity, meaning the other 33% of power plants were on maintenance shutdown or unscheduled, prolonged maintenance. Coal came in second with 64%, third was natural gas with 48.5%.

Three, hydro has a low ICF of only 24.5% because February-May is within the non-rainy season. Solar on average has an ICF of only about 15%, but those months already in the dry, generally sunny season so it reached 21%. Oil-based plants are used only as occasional peaking plants and are not running regularly.

Four, coal’s share in installed capacity is only 46% of the total but it contributed 64% in actual electricity generation. In contrast, solar and wind have a 7.5% combined share in installed capacity but contributed only 3.7% of actual electricity generation (see Table 2).

So, the intermittent sources are not dependable, are not reliable for electricity users and it will be dangerous if they dominate the grid. All those “decarbonization” efforts, which are very expensive and subsidy-dependent, will only lead to degrowth and blackout economics.

The half-hour blackout at the NAIA on June 9 was an accident. MServ, which is a wholly owned subsidiary of Meralco, was doing a comprehensive technical audit to improve NAIA Terminal 3’s electrical system following the outage that hit the terminal on May 1. It was a pro-bono effort by Meralco, at no cost to NAIA or the airport passengers. An MServ worker accidentally left grounding conductors attached to a piece of electrical equipment during a testing activity, which triggered an electrical fault that subsequently caused the power interruption of NAIA Terminal 3.

Meralco Spokesman Joe Zaldariaga quickly issued a statement explaining what happened and humbly made the public apology. I saw and read the press statement; the apology was sincere. No alibi, no blame game. They tried to help — for free — improve the airport’s electrical system, then an accident happened. Good move, Mr. Zaldariaga.

On a related note, I support the privatization of NAIA operations. Make it more professional and less political. There is no “market failure” in airport operation, even ownership. If a private airport frequently conks out, then passengers and airlines will avoid it and the private owner and operator will lose money.

 

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers

minimalgovernment@gmail.com

Gov’t partially awards T-bill offer as yields climb across the board

BW FILE PHOTO

THE GOVERNMENT made a partial award of the Treasury bills (T-bills) it offered on Monday as yields rose across the board following the US Federal Reserve’s hawkish pause.

The Bureau of the Treasury (BTr) raised just P8.8 billion via the T-bills it auctioned off on Monday versus the P15-billion program, even as total bids reached P18.605 billion.

Broken down, the Treasury borrowed just P3.258 billion via the 91-day T-bills, below the P5-billion plan, despite tenders for the tenor reaching P5.568 billion. The average rate of the three-month papers went up by 10.7 basis points (bps) to 6.029% from the 5.922% quoted for the tenor last week, with accepted rates ranging from 5.898% to 6.074%.

The government likewise made a partial P2.901-billion award of the 182-day securities versus the P5-billion program, even as bids for the tenor reached P6.536 billion. The six-month T-bill was quoted at an average rate of 6.081%, up by 10.3 bps from 5.978% the previous week, with accepted rates from 5.925% to 6.123%.

Lastly, the BTr raised only P2.641 billion from the 364-day debt papers out of the P5 billion on the auction block, even as demand reached P6.501 billion. The average rate of the one-year T-bill rose by 10.4 bps to 6.166% from the 6.062% fetched last week. Accepted yields were from 6% to 6.2%.

At the secondary market before Monday’s auction, the 91-, 182- and 364-day T-bills were quoted at 5.8941%, 6.0297%, and 6.0455%, respectively, based on PHP Bloomberg Valuation Reference Rates data provided by the Treasury.

The government partially awarded its T-bill offer as yields rose on expectations of more rate hikes from the Fed, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The Fed left interest rates unchanged last week but signaled in new projections that borrowing costs may still need to rise by as much as half of a percentage point by the end of this year, as the US central bank reacted to a stronger-than-expected economy and a slower decline in inflation, Reuters reported.

In a press conference at the end of the central bank’s latest policy meeting, Fed Chair Jerome H. Powell described US growth and the job market as holding up better than expected under the weight of the aggressive monetary policy tightening of the past year — likely lengthening the Fed’s fight to lower inflation but also letting it proceed with less economic damage.

The pause was out of caution, Mr. Powell said, to allow the Fed to gather more information before determining if rates do need to rise again, with the pace of its moves now less important than finding a proper endpoint that slows price increases while minimizing any rise in unemployment.

A number of Fed officials are speaking this week, with Mr. Powell set to deliver congressional testimonies on Wednesday and Thursday.

Some officials have already sounded hawkish, and with the dot plot indicating two more hikes, markets are pricing in a 70% probability of the Fed hiking rates by a quarter point in July before holding steady for the remainder of the year.

Last week’s pause was the first time the Fed left rates untouched after hiking for 10 straight meetings by a cumulative 500 bps since March 2022 to a range between 5% and 5.25%.

Mr. Ricafort added that hints of a policy adjustment by the Bangko Sentral ng Pilipinas (BSP) next year also contributed to the increase in T-bill yields, as this would mean the key rate would stay at its 16-year high of 6.25% for the rest of the year.

The Monetary Board raised benchmark interest rates by 425 bps from May 2022 to March 2023 before pausing at its May 18 review. It will meet to discuss policy on Thursday, with investors expecting it to continue to keep rates unchanged.

BSP Governor Felipe M. Medalla earlier said the Monetary Board may keep policy rates unchanged until the third quarter.

“Yields fetched were higher today after Fed official Waller noted that the US regional bank failures did not warrant any change in Fed’s monetary tightening,” a trader added in an e-mail on Monday.

Federal Reserve Governor Christopher Waller last week said changes in US credit conditions since the failure of Silicon Valley Bank in early March were “in line” with financial tightening that was already underway due to Federal Reserve interest rate increases — comments that downplayed the idea a worse-than-anticipated contraction in credit might make further Fed rate increases less necessary, Reuters reported.

On Tuesday, the BTr will auction off P25 billion in reissued seven-year Treasury bonds (T-bonds) with a remaining life of five years and 11 months.

The Treasury wants to raise P185 billion from the domestic market this month, or P60 billion via T-bills and P125 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — AMCS with Reuters

Appreciation for life insurance is growing in PHL

BDO Life President and Chief Executive Renato A. Vergel de Dios

As more and more Filipinos recognize the value of acquiring life insurance protection, BDO Unibank expects bancassurance to remain a steady contributor to its overall business.

Bancassurance refers to selling life insurance products through the bank’s branches and other retail channels. This sales model benefits customers because it allows them to secure life insurance coverage and other financial solutions, all under one roof.

The bank’s bancassurance business is bannered by BDO Life Assurance Company (BDO Life), which, at the end of 2022, now ranks 5th in the life insurance industry, with total premiums amounting to over P19 billion, the highest-ranked local life company.

“In a way, we see ourselves as the national team, competing against the larger, longer-established foreign teams in the local life insurance scene,” BDO Life president and chief executive Renato A. Vergel de Dios pointed out.

BDO Life relies heavily on existing customer relationships with the bank when selling life insurance. BDO Life Financial Advisors work with clients to understand their needs and goals before recommending the appropriate insurance products.

“Life insurance sales in the Philippines have increased steadily over the years, clearly indicating the rising awareness of the importance of insurance protection among Filipinos,” said Vergel De Dios.

In 2022, BDO Life exhibited strong business recovery, exceeding its pre-pandemic sales. The Company moved up to the 4th spot in new sales, measured in terms of New Business Annual Premium Equivalent (NBAPE). NBAPE is a weighted measure of premiums received on all first-year policies.

Raising appreciation for life insurance

The pandemic has undoubtedly raised Filipinos’ awareness of the risks of premature death.

“While we all have little control over our mortality risk, mitigating the associated financial risks is within our control. With life insurance, financial protection is possible for Filipinos and their families in unexpected circumstances such as disability, critical illness, or death,” the BDO Life executive added.

Yet, despite its benefits, the country’s penetration rate of life insurance remains relatively low.

Industry experts cited several reasons why Filipinos may not be buying life insurance as much as they should. For one, there still needs to be more awareness and understanding about the importance of life insurance. There is also the tendency of breadwinners to underrate the financial consequences of such unexpected events on the family. Many may still need to fully appreciate how life insurance benefits provide much-needed financial protection for their loved ones who depend financially on them.

While cost or affordability has been a factor, as many Filipinos have limited disposable income to purchase life insurance coverage, insurance in sachet sizes enables more people to acquire some form of coverage, albeit in limited quantities.

To help Filipinos better understand and appreciate what life insurance can do, BDO Life launched its “Plan B” campaign. If Plan A consists of one’s financial plan anchored on savings and investments, Plan B serves as Plan A’s protection foundation in the form of life insurance.

“When premature death strikes and disrupts Plan A, Plan B springs to action to inject needed cash into Plan A to help empower our loved ones to move on. Life insurance is your Plan B, the safety net that will help your family recover from the grief after you pass. More importantly, Plan B helps them avoid the burden of immediate financial worries. In those crucial moments, BDO Life’s Plan B helps your family keep their financial dignity intact.” said Vergel De Dios.

For policy-related inquiries and concerns, please call BDO Life Customer Care Hotline at (+632) 8885-4110 or 1800-1888-6603 (PLDT Toll-free).

 


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NEXIF RATCH Energy starts construction of Calabanga solar project 

NEXIF RATCH Energy Investments Pte. Ltd. (NEXIF RATCH Energy) has started the construction of its solar photovoltaic (PV) farm in Calabanga, Camarines Sur, after it secured the needed funding for the project, the Singapore-based energy company said on Monday.

“The start of construction of the Calabanga solar project is an important milestone in our plans to add much needed renewable energy to the Philippines,” Surender Singh, chairman of NEXIF RATCH Energy, said in a media release.

It said funding for the project will be provided by Security Bank Corp., serving as the project’s single lender with SB Capital Investment Corp. as the lead arranger to fund 70% of the project cost on a limited recourse basis.

NEXIF RATCH Energy, through its subsidiary Calabanga Renewable Energy, Inc., will implement the 74 megawatt-peak (MWp) ground-mounted project which is expected to be completed by the second quarter of 2024.

The energy company said it intends to sell about 85% of the generated energy output of the solar project to subsidiaries of AboitizPower Corp., AP Renewables, Inc., and Adventenergy, Inc., under a power supply agreement.

It added that the remaining 15% will be sold to the Wholesale Electricity Spot Market or through direct short-term contracts with commercial or contestable customers. “With this project now moving to construction, it builds on our under construction/operating portfolio, which already comprises a hydropower project in Vietnam, one stage of which is operating and the other stage that is under construction,” said Sakarin Tangkavachiranon, director of NEXIF RATCH Energy.

NEXIF RATCH Energy said the construction of the project will be conducted by a consortium of PowerChina Huadong Engineering Co. Ltd. and PowerChina Philippines Corp. through a lump-sum turnkey engineering, procurement, and construction contract.

PowerChina Philippines will also handle the operations and maintenance activities of the project for the first two years from the start of the project’s commercial operations. 

Mr. Singh said the company is now working to secure funding for its 150-MWp NPSI PV solar project in Negros within this year.

He said that NEXIF RATCH Energy is also “rapidly advancing” the development of its offshore wind pipeline projects in Luzon, with a combined potential capacity of 2,000 MW.

NEXIF RATCH Energy is a joint venture company of Nexif Energy of Singapore and RATCH Group of Thailand. It manages and owns an energy portfolio with a combined capacity of 4 gigawatts spread across Southeast Asia and Australia. — Ashley Erika O. Jose