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Becoming a manufacturing powerhouse remains a pipe dream for Philippines

A WORKER adjusts a machine at a manufacturing facility in Manila, Dec. 10, 2008. — REUTERS

By Kyle Aristophere T. Atienza, Reporter

LILY G. TERRENIO was 19 years old when she became a factory worker at Amertron, Inc. inside the Clark Freeport Zone north of the Philippine capital in 1988.

The high school graduate worked for the Taiwan-owned semiconductor company until 2000, before leaving for Dubai to work as a chambermaid.

“I would have wanted to join a different manufacturer after I left the company to broaden my experience, but options were limited,” she said in an interview.

Ms. Terrenio came back to the Philippines after two decades, when the manufacturing sector contracted by 9.8% from a year earlier amid a coronavirus pandemic.

The government must rescue the manufacturing sector from issues that have stalled growth including the lack of skilled workers, governance problems and an impending energy crisis that could paralyze the economy, analysts said.

“Philippine manufacturing has been on a retreat since the 1980s,” national scientist Raul V. Fabella, a professor emeritus at the University of the Philippines School of Economics said in an e-mail. “The share of manufacturing in Philippine gross domestic product has been losing out to services.”

He called the phenomenon “development progeria,” which happens in low-income economies when the share of industry sectors including manufacturing falls while services flourish. “The dynamics will continue into the near future because its roots are structural.”

Manufacturing activity in the Philippines continued to expand in December, albeit at a slower pace, S&P Global said on Tuesday. The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) slipped to 51.5 in December, from a nine-month high of 52.7 in November.

The Philippines had the second-highest PMI reading among Southeast Asian countries with available data, after Indonesia (52.2). Vietnam, Malaysia, Thailand and Myanmar all contracted in December.

It was a significant development for a sector that has been lagging its regional peers for decades.

In 2022, the largest share of exported commodity goods from the Philippines were electronic products, particularly semiconductors and electronic data processing products such as hard drives, making it the biggest contributor to the country’s export sales, according to Statista.

Aside from electronics, the Philippines has a large food manufacturing industry, which generated a gross value added of about P1.8 trillion ($32.5 billion) in 2022. Among the country’s leading food exports were animal or vegetable fats and oils and processed foods such as bread, cereals and dairy products.

Food manufacturers in the country also produce flour and sugar for domestic consumption and export. The Philippines also exports chemicals and chemical products such as fertilizers, petrochemicals and plastic products.

FOREIGN OWNERSHIP
Manufacturing sector growth relies on foreign direct investments (FDI), which amounted to only $9.2 billion in 2022, behind Thailand ($10 billion), Malaysia ($15.1 billion), Vietnam ($17.9 billion), Indonesia ($21.7 billion) and Singapore ($140.8 billion).

This was despite the passage of laws liberalizing the Philippine economy, including the Corporate Recovery and Tax Incentives for Enterprises Act, which cut the corporate income tax for domestic and foreign corporations to 25% from 30%.

In 2021, the Philippines passed a law that amended the country’s 85-year-old Public Service Act, allowing full foreign ownership in domestic shipping, telecommunications, shipping, railways and subways, airlines, expressways and tollways, and airports.

Global investment banker Stephen Anthony T. CuUnjieng said foreign investors “want to make money first” and changing the laws “would not necessarily make them make money.”

“If the country or the sector is unattractive or less profitable than other countries, changing the law will not change that,” he told One News channel in December, amid a renewed push to amend economic provisions of the 1987 Philippine Constitution.

“If the sector is attractive and you make foreign ownership and doing business easier, then yes, more FDIs will come in,” Mr. CuUnjieng said. “Allowing more foreign ownership will work. But if you’re not attractive to begin with, opening it up to 100% ownership and giving subsidies won’t change it if the return on investment will be lower.”

He said investors in the manufacturing sector are largely looking at labor productivity and lower electricity costs, which can be anywhere from 20% to 60% of their production costs.

“If a manufacturer in the Philippines is 20% to 40% more expensive than another in Indonesia, Thailand or Vietnam, you’re starting out already with a deficit of as much as 30% versus other countries, why would you come here for manufacturing?” he asked.

President Ferdinand R. Marcos, Jr. last year extended by another 15 years the contract for the Malampaya gas field, which supplies 20% of the Philippines’ total electricity requirements, allowing the operator to drill new wells.

Amid the declining output of the gas field, which is expected to run dry by 2027, Mr. Marcos expressed willingness to resume joint energy exploration activities in the South China Sea.

“Our power cost is the highest in ASEAN (Association of Southeast Asian Nations) for large establishments,” Mr. Fabella said, noting that the state should lower manufacturers’ electricity costs by exempting them from missionary, universal and stranded cost charges.

The possible decline in the quality of the Philippine labor force also threatens the country’s manufacturing ambitions, according to Mr. CuUnjieng.

Filipino students were still among the world’s weakest in math, reading and science, according to the 2022 Program for International Student Assessment (PISA), with the Philippines ranking 77th out of 81 countries and performing worse than the global average in all categories.

Terry L. Ridon, convenor of InfraWatch PH, said decades-long governance issues such as corruption and red tape would continue to hound the manufacturing sector.

Investors seeking to establish hubs in emerging economies would look for countries that have “very streamlined processes for permits and licenses and have low to zero perception of government corruption, he said in an e-mail.

“Our government does not live by contracts it signed and stands ready to change provisions depending on populist sentiment,” Mr. Fabella said. “Long-term investors do not invest where expropriation noise is rampant.”

The stability of politics and ease of doing business in Vietnam have been cited as key factors behind its rise as the top choice for global manufacturers diversifying away from China, which has been in a years-long trade war with the United States.

There are fewer occurrences of policy reversals in Vietnam because of its political structure, “thus increasing certainty, which is good for the investment climate,” George N. Manzano, who teaches trade at the University of Asia and the Pacific, said in an e-mail.

Vietnam has a one-stop shop for investors, Mr. CuUnjieng said. “You go to one government agency, and they take care of everything. In the Philippines, you often have one shop at every stop.”

Vietnam had FDIs worth $112 billion from 2010 to 2019, compared with $57 billion for the Philippines. Its merchandise exports in 2019 hit $300 million, compared with $70 million for the Philippines.

“The heady foreign direct investments that Vietnam attracted in the past years may have increased its attractiveness,” Mr. Manzano said. “Investments beget other investments, particularly if an investment of a sizeable manufacturing concern will attract its supplier industries to locate as well.”

He noted that as more foreign investments cluster at one hub, the production costs usually fall, leading to so-called “economies of agglomeration.”

“At the same time, there will be more flow of ideas prompting innovation,” he said. “The clustering of industries in Vietnam’s special economic zones can lead to economies of agglomeration.”

The Philippine Economic Zone Authority said it wants to benefit from the relocation of big foreign companies, especially those in the technology sector, from China.

The country anticipates increased investments in metal fabrication or skilled manufacturing, especially in the electronic vehicle (EV) sector, PEZA Director-General Tereso O. Panga said in a Viber call. He added that EV players from China, the US, Indonesia, South Korea and Japan are expected to set up production sites in the country this year.

“It’s not just multinational companies that are relocating from China, but also mainland Chinese manufacturing businesses so they can avail themselves of GSP+ privileges for their exports,” he said.

The European Parliament and European Council have agreed to extend GSP+ arrangements for four more years while they negotiate reforms to the trade deal, where the Philippines enjoys zero duties on more than 6,000 exports.

As the Philippines steps up efforts to save its export-oriented manufacturing sector, the country must also look at its volatile exchange rate, which hurts exporters and is deadly to smaller ones, Mr. Manzano said.

“We should provide a more stable exchange rate regime geared to level the playing field between nontradable and tradable goods.”

The Philippine trade deficit has been widening in the past years, as the country imports more than it exports.

Analysts said tensions with China don’t bode well for the country’s export-oriented manufacturing sector.

China remains the largest source of technologies that the Philippines needs to make its exports competitive, such as electronics and machinery, Mr. Manzano said.

“The Philippines needs electronic parts and components from China in order to export,” he said. “If the imports of parts and components are sourced from more expensive suppliers, the competitiveness of Philippine exports, particularly electronics, would be undermined.”

“The protection and development of our export-focused manufacturing is critical to propping up our dollar reserves in light of our massive import requirements in infrastructure and agriculture,” Mr. Ridon said. “This has not been enough to ensure a positive balance of trade for almost a decade.”

Banks continue to miss 10% lending quota for MSMEs

BANK LENDING to small businesses continued to fall short of the mandated quota of 10% of their total loan portfolio. — PHILIPPINE STAR/ MICHAEL VARCAS

PHILIPPINE BANKS failed to meet the mandated quota for small business loans in the first nine months of 2023, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Loans extended by the banking industry to micro-, small-, and medium-sized enterprises (MSMEs) amounted to P552.404 billion as of end-September, which made up only 4.63% of their total loan portfolio of P11.9 trillion.

This was 21.6% higher than P454.303 billion in loans extended to the MSME sector in the January-to-September period in 2022.

Under Republic Act No. 6977 or the Magna Carta for MSMEs, banks are required to allocate 10% of their total loan portfolio for small businesses to boost the sector — 8% for micro and small enterprises and 2% for medium-sized enterprises.

However, banks have long opted to incur penalties for noncompliance instead of taking on the risks associated with lending to small businesses.

BSP data showed loans for micro and small enterprises amounted to P214.748 billion as of end-September, comprising just 1.8% of their total loan portfolio and well below the 8% quota.

On the other hand, lending to medium-sized enterprises stood at P337.656 billion in the period. This is equivalent to 2.83% of the banks’ credit book and above the 2% minimum ratio required under the law.

Based on the type of bank, BSP data showed universal and commercial banks disbursed P153.105 billion in credit to micro and small enterprises as of end-September, equivalent to only 1.44% of their P11.13-trillion loan portfolio.

Big banks’ loans to medium-sized enterprises stood at P291.452 billion or 2.62% of their loan book.

At the same time, thrift banks were also unable to meet the quota as their loans to micro and small enterprises reached P29.228 billion or 3.81% of their P591.821-billion loan portfolio.

Still, thrift lenders went beyond the credit quota for medium enterprises as their loans to the sector hit P27.903 billion or 4.75% of their loan book.

Meanwhile, rural and cooperative banks extended loans worth P32.346 billion to micro and small enterprises. This is equivalent to 16.39% of their P197.401-billion credit book, and well above the minimum amount required by law. Their loans to medium enterprises hit P18.3 billion or 9.27% of their loan portfolio.

The BSP also recorded the loans granted by digital banks to the MSME sector. Digital banks disbursed P70 million in credit to micro and small enterprises in the first nine months of 2023, representing 0.4% of their P17.25-billion loan portfolio.

Digital banks did not extend loans to medium enterprises.

During the pandemic, the BSP allowed banks to count MSME loans as alternative reserve compliance with the reserve requirements to help prop up the sector. This relief measure expired on June 30, 2023.

However, the relief measure was extended to thrift banks as well as rural and cooperative banks until Dec. 31, 2025.

Based on separate central bank data, small banks allocated a total of P8-billion and P6.5-million loans to MSMEs and large enterprises, respectively, for the week ending Oct. 19.

The unwinding of the pandemic relief measure coincided with the reduction in banks’ reserve requirement ratios on June 30, 2023.

In April 2023, the central bank launched the Credit Risk Database Scoring Model, which is expected to serve as an additional tool that lenders can use to analyze the creditworthiness of MSMEs, especially those without credit history or enough collateral. — Keisha B. Ta-asan

Philippines yet to fulfill some action plans to exit from FATF ‘gray list’

President Ferdinand R. Marcos Jr. presides over a meeting discussing the status of the Philippines in the Financial Action Task Force’s (FATF) “gray list” at Malacanan Palace, Jan. 2. — YUMMIE DINGDING/PPA POOL

THE PHILIPPINES has yet to fulfill several action plans more than two years since it was placed under the “gray list” of the Financial Action Task Force (FATF), the country’s dirty money watchdog said.

But the Anti-Money Laundering Council (AMLC) is still hoping the Philippines will be able to exit the FATF’s gray list this year, and to avoid a possible inclusion in the blacklist.

At a Palace briefing, AMLC Executive Director Matthew M. David said the Philippines still has to address eight out of the 18 action plan items it had committed to comply with to be removed from the gray list.

“The most challenging action item is regarding terrorism financing prosecution. We need to file more terrorism financing cases and the one in charge of complying with this action item are the law enforcement agencies, including the AMLC,” he said.

Other remaining action plans include the effective risk-based supervision of nonfinancial businesses and professionals, mitigating risk associated with casino junkets, and streamlining access to beneficial ownership information, Mr. David said.

The Philippines has been in the global financial crime watchdog’s gray list of jurisdictions under increased monitoring for dirty money risks since June 2021.

Since the Philippines had failed to meet the FATF’s January 2023 deadline to comply with the action plans, Mr. David said the government has a self-imposed goal of exiting the gray list this month.

“The longer we are on the gray list, the bigger the possibility or the higher the risk that we will enter the blacklist,” he said.

Only three countries are currently in the FATF’s blacklist — North Korea, Iran and Myanmar.

President Ferdinand R. Marcos, Jr. on Tuesday presided over the  sectoral meeting on the status of the Philippines in FATF gray list.

“The President also directed the agencies of government to continue with their actions and to continuously sustain good coordination among themselves, between the law enforcement and other government agencies,” Mr. David said.

Enrico P. Villanueva, who teaches banking at the University of the Philippines Los Baños, said banks have done a lot of work and investments in order to manage risks related to money laundering and terrorism financing. Nonbank entities need to do more to catch up, he noted.

“For banks, improvement can still be made on drilling down customer accounts to the ultimate beneficial owners,” he said, noting that beneficial ownership information should be digitized and accessible to regulators and law enforcement agencies.

For nonbank entities, Mr. Villanueva said the regulator should impose penalties such as monetary fines or suspension of business licenses “to communicate seriousness in enforcement.”

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the Philippines needs to lift the Bank Secrecy Law to make banking regulations at par with those of its Southeast Asian neighbors.

“It will also help in facilitating the integration of the country’s capital markets into the region,” he said via Messenger chat.

Should the Philippines be blacklisted by FATF,  Mr. Ricafort said investments and other fund flows into the Philippines would be affected.

Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, called on the government to reverse its policy on offshore gambling.

“A first order of business should be the elimination of offshore gambling which is susceptible to money laundering schemes,” he said. “But of course, this should involve a whole-of-government approach which apparently this government has not done.”

In March 2020, then-senator Franklin M. Drilon flagged that millions of dollars brought into the Philippines between December 2019 and February 2020 might have been laundered through Philippine Offshore Gaming Operators (POGOs), which refer to Chinese gambling companies that offer online gambling services to markets outside the Philippines.

The Marcos administration began a crackdown on many POGOs after a spate of kidnappings that targeted their Chinese workers.

“The President has reiterated the government’s high-level political commitment and directed all government agencies concerned to swiftly address the remaining deficiencies in relation to the gray-listing of the Philippines,” Mr. David said at the Tuesday briefing.

He said investor confidence and even the country’s credit rating may be affected if the Philippines remains on the gray list.

“It may also affect foreign direct investments in the Philippines because if you don’t exit the gray list, they may think that our anti-money laundering, combating terrorism financing system is not adequate enough, or sufficient enough or strong enough,” he added.

Rommel C. Banlaoi, chairman of the Philippine Institute for Peace, Violence, and Terrorism Research, recognized the passage of The Terrorism Financing Prevention and Suppression Act of 2012, which was complemented by a 2020 law that amended the country’s Anti-Terrorism Act of 2001.

The two laws as well as the decline of terrorist threats would be enough for the Philippines to exit from the FATF’s gray list.

The country’s anti-terrorism financing measures should consider the emerging global financial landscape, Chester B. Cabalza, founder of Manila-based International Development and Security Cooperation, said via Messenger chat.

Mr. Cabalza cited the introduction of bitcoins, online transactions, and virtual wallets.

Mr. Villanueva said the action plan items needed to get out of the gray list may be challenging but not impossible.

“They just require bureaucratic or political will. For societies or governments that tolerate wrongdoings, political will may be wanting,” he said. — Kyle Aristophere T. Atienza

Jollibee boosts Tim Ho Wan capital by S$100M

FACEBOOK/TIMHOWANPH

JOLLIBEE Foods Corp. has increased its capital commitment to Titan Dining LP, the private equity fund that owns the Tim Ho Wan brand and stores, to S$414 million ($313.2 million) to fund its expansion.

In a disclosure to the Philippine Stock Exchange, the Philippine fast-food giant also said the participating interest of unit Jollibee Worldwide Pte. Ltd. in Titan would rise to 92% from 90% through the purchase of a 2% interest in another limited partner in the fund for S$7.7 million.

The fund size of Titan will increase by S$100 million to S$450 million, Jollibee said. “These amendments are necessary to support the growth expansion of Tim Ho Wan, other brands and other future food and beverages concepts that will be part of Titan’s portfolio,” it told the exchange.   

Jollibee shares rose by 1.43% or P3.60 to P255 apiece at the close of trading.

Tim Ho Wan operates 78 outlets in Asia and has stores in China, Taiwan, Hong Kong, Macau, Singapore, and the Philippines. Jollibee said it seeks to have 100 Tim Ho Wan restaurants in mainland China mid-term.

Jollibee invested S$45 million for a 45% stake in Titan, the master franchisee of Tim Ho Wan in the Asia-Pacific region, in May 2018.

The company noted at that time that by investing in the fund, it could acquire a substantial interest in Tim Ho Wan’s master franchise in the region through a purchase mechanism provided for in the investment agreement. To prepare for this, Jollibee set up a franchise operation of Tim Ho Wan in Shanghai.

In October 2019, Jollibee Worldwide’s capital commitment to Titan increased to S$120 million from S$45 million, its participating interest rose to 60% and the fund size of Titan doubled to S$200 million. Titan also expanded its assets by acquiring the Tim Ho Wan brand and trademarks. 

In October 2020, Jollibee’s participating interest in Titan increased further to 85% from 60% after its unit bought the 25% participating interest of another investor in the fund for S$36.3 million.   

In August 2021, Jollibee purchased the remaining 15% of other investors in Titan. Three months later, it entered into an amended limited partnership agreement with Titan to increase the fund size to S$250 million.

More investors also joined the fund with a 10% participating interest in Titan. Jollibee Worldwide’s commitment increased to S$225 million or 90% of the increased fund size and total commitments.   

In September 2022, the fund size of Titan increased by S$100 million to S$350 million, with Jollibee Worldwide’s fund commitment reaching S$315 million.

The listed Philippine fast-food company has two joint ventures with Titan for Tim Ho Wan in China, and for Tiong Bahru Bakery and Common Man Coffee Roasters in the Philippines. Tim Ho Wan has 19 restaurants in China, mostly in Shanghai.

Titan also owns and operates other businesses in the food and beverage segment such as the Open Farm Community, Tippling Club, Noka, Bochinche, The Butcher’s Wife, and Drunken Farmer brands. It also has a presence in the nonfood and beverage segment via its Strip, Browhaus, and Spa Esprit brands.

As of end-November, Jollibee had 6,805 stores globally across various brands, consisting of 3,487 international stores and 3,318 stores in the Philippines.   

Its largest brands by store outlets worldwide consist of Jollibee at 1,645, Coffee Bean and Tea Leaf at 1,146, Highlands Coffee at 757, Chowking at 614, and Mang Inasal at 571. — Revin Mikhael D. Ochave

Eleven-month corporate registration tops 2022 level

SEC.GOV.PH

THE number of companies that registered in the Philippines had surpassed the 2022 level as of end-November, led by domestic stock corporations, according to the Securities and Exchange Commission (SEC).

In a statement on Tuesday, the corporate regulator said electronic registration hit a record 46,455 in 11 months, exceeding 42,936 in the past year for an 8% growth.

Domestic stock corporations contributed 74% or 34,140 of newly registered corporations, while domestic nonstock corporations accounted for 21% or 9,727, the SEC said. Partnerships accounted for 5% or 2,453.   

More than a third or 16,734 of the newly registered firms were domestic stock corporations with fewer than five incorporators, while 14% were one-person corporations.   

The National Capital Region had the highest company registration at 39% or 18,342, followed by Calabarzon at 16% or 7,217, Central Luzon at 11% or 5,107, Central Visayas at 7% or 3,443, and Davao at 4% or 1,969.   

“Majority or 85% are from the service sector, with the wholesale and retail trade industry group registering 9,859 (21%) new firms, followed by other service activities at 9,756 (21%),” the SEC said.   

The regulator attributed the record number to its digital initiatives that cut the registration time, including electronic registration that started in April 2021, as well as its one-day submission and electronic registration of companies introduced five months later.   

“In the past five years, the SEC has fiercely advocated digital transformation to achieve efficiency and accessibility in the corporate sector,” SEC Chairman Emilio B. Aquino said in the statement. “The back-to-back record highs seen in 2022 and 2023 for company registration prove that we are succeeding in making doing business easier in the Philippines.”

“As we start a new year, the SEC is ready to further take advantage of automated processes in place, as well as develop new systems to ensure the smooth delivery of services to the transacting public,” he added. — Revin Mikhael D. Ochave

2024: A full theatrical calendar

THE theater, dance, and music scene last year was vibrant and jampacked, and it seems that 2024 will be no different. Here are some shows that will keep calendars full this year.

FATE
JAN. 12
The Philippine Philharmonic Orchestra (PPO) starts off the year with an evening of classical mastery. For Fate, its 5th concert in its 39th season which started last year, the PPO will perform Tchaikovsky’s Symphony No.4 Op. 36 in F minor and Brahms’ Piano Concerto No. 1 Op. 15 in D minor under the baton of Grzegorz Nowak. American pianist Jerome Rose will be the guest soloist for this symphonic journey. The concert will take place at the Samsung Performing Arts Theater in Circuit Makati.

KUMPRONTASYON
JAN. 18 – 21
PETA Plus will start the year with Kumprontasyon, a revival of one-act plays that previously ran as a thesis by director Melvin Lee in September. The three plays, which challenge the audience to confront the country’s unresolved historical past, will be shown this month at the PETA Theater Center in Quezon City.

Kumprontasyon includes Lakambini by Allan Palileo, featuring performances by Sherry Lara and Teroy Guzman, The Impossible Dream by Guelan Luarca, featuring performances by Romnick Sarmenta and Ron Capinding, and A Color for Tomorrow by Joshua Lim So, featuring performances by Missy Maramara, Adrienne Vergara, Gillian Vicencio, Eric Dela Cruz, and Carlon Matobato.

PRINSIPE BAHAGHARI
JAN. 19 – 28
Mulat Theater’s Prinsipe Bahaghari, Vladimeir Gonzales’ Filipino puppet adaptation of The Little Prince by Antoine de Saint-Exupéry, will be returning to the stage this month. Directed by Aina Ramolete, the puppet play revolves around the journey of the Rainbow Prince who is in search of a companion who would help him in caring for his flower, the Gumamela, in his home planet.

This adaptation has puppets made from rattan and uses Filipino culture and language to make the play accessible to children. The January run will be staged at the PowerMac Center Spotlight Blackbox Theater of Circuit Makati.

JOY AND DALOY
JAN. 27
The Daloy Dance Company and Joy Alpuerto Ritter are bringing Joy and Daloy to the Cultural Center of the Philippines (CCP) stage in a one-night-only show. The twin-bill production will feature the dances ItikLandia and BABAE, showcasing a mix of creative choreography, explorations of compelling themes, and fusions of traditional Filipino elements with contemporary expressions.

The show aims to help foster a deeper appreciation for contemporary dance. It will take place at the Tanghalang Ignacio Gimenez (CCP Black Box Theater) at the CCP Complex in Pasay City.

HERO Z
JANUARY TO MAY
The Philippine Stagers Foundation is currently touring a historical fiction musical with zombies nationwide. Hero Z, written and directed by the multi-awarded film and theater director Vince Tañada, features music by composer Pipo Cifra. It stars Johnrey Rivas, Vean Olmedo, Adelle Ibarrientos, Gerald Magallanes, Oj Arci, Jp Lopez, Chin Ortega, Rotsen Etolle, Bea Martin, and Fidel Redado.

The musical looks at the struggles of four friends whose lives are juxtaposed with those of heroes Bonifacio, Rizal, Kudarat, and Mabini, as they fight modern ills of a dystopic place and time. The musical will be staged in various venues across Luzon, Visayas, and Mindanao.

PIANO RAPTURE
FEB. 9
Celebrity pianist Krystian Zimerman will take center stage in the PPO’s 6th concert for its 39th season, Piano Rapture, on Feb. 9.

Grzegrz Nowak will conduct the orchestra as they perform Stanislaw Moniuszko’s The Fairy Tale Overture, Beethoven’s Piano Concerto no. 4, op. 58, G major, and Rachmaninoff’s Symphony no. 2 op. 27. The concert will take place at the Samsung Performing Arts Theater in Circuit Makati.

RAMA, HARI
FEBRUARY
Alice Reyes Dance Philippines’ ballet Rama, Hari, which ran at The Metropolitan Theater and at the Samsung Performing Arts Theater last September, will  have a rerun in February. The modern rock opera-ballet is a collaboration of five National Artists and an adaptation of the epic Sanskrit poem “Ramayana.”

The production features popular singers and incorporates traditional theater, song, and dance devices found and shared among Asian nations. Returning cast members have yet to be announced.

THE 25TH ANNUAL PUTNAM COUNTY SPELLING BEE
FEBRUARY – MARCH
The Sandbox Collective’s 10th anniversary season begins with The 25th Annual Putnam County Spelling Bee, an award-winning Broadway musical about an eclectic group of six mid-pubescents who vie for the spelling championship of a lifetime.

The musical will be under the direction of Missy Maramara, with SPIT’s Dingdong Rosales as assistant director and Rony Fortich as musical director. It will run from February to March at the PowerMac Center Spotlight Theater, Circuit Makati.

DON PASQUALE
MARCH 8
Don Pasquale, the PPO’s penultimate concert of the season, will focus on the magic of opera. It will be a semi-staged opera performance of Gaetano Donizetti’s Don Pasquale as the orchestra plays under the guidance of Grzergorz Nowak. The performance will take place at the Samsung Performing Arts Theater in Circuit Makati.

BETRAYAL
MARCH 1 – 17
An acclaimed play by British theater icon and Nobel Prize winner in Literature Harold Pinter will be making its Manila premiere this March. Repertory Philippines will be mounting the production at the Carlos P. Romulo Auditorium of RCBC Plaza in Makati.

The cast features London-based Filipino actors James Bradwell, James Cooney, and Vanessa White, with Jef Flores and Regina De Vera as covers. The production employs a reverse-chronological structure to examine the consequences of an extramarital affair on three complex individuals. The production will be directed by Manila-born and New York and London-based actor and theater director Victor Lirio.

PINGKIAN: ISANG MUSIKAL
MARCH 1 – 24
Tanghalang Pilipino’s final production of its 37th season is the debut of Pingkian: Isang Musikal, an exploration of the life of Emilio Jacinto as the Philippine revolution ends and leads up to the start of the Philippine-American war.

The musical will star Vic Robinson as Emilio Jacinto and Gab Pangilinan as his wife, Catalina de Jesus. It will be directed by Jenny Jamora, with a book by Juan Ekis and music by Ejay Yatco, who also serves as musical director.

MISS SAIGON
MARCH 23 – MAY 5
GMG Productions will bring the touring production of Miss Saigon to the Theatre at Solaire from March 23 to May 5. The new production is directed by Laurence Connor, featuring a musical staging by Bob Avian with extra choreography by Geoffrey Garratt. The musical by Claude-Michel Schönberg features lyrics by Richard Maltby Jr. and Alain Boublil. The cast has yet to be announced.

FETE FRANCAISE
APRIL 19
The PPO’s 39th season shall culminate with its eighth concert, Fete Francaise, on April 19. The orchestra will perform a commissioned Filipino work, Camille Saint-Saëns’ Introduction and Rondo capriccioso, op. 28, and Maurice Ravel’s Daphnis & Chloé, Suites 1 & 2.

Violinist Diomedes Saraza will be the guest performer and Grzegorz Nowak will conduct the orchestra. The concert will take place at the Samsung Performing Arts Theater in Circuit Makati.

ONE MORE CHANCE THE MUSICAL
APRIL
PETA has announced that it will be staging One More Chance the Musical, featuring the music of Ben&Ben, this April at the PETA Theater Center in Quezon City. The story, based on a 2007 Star Cinema film of the same name, follows two college sweethearts who face the challenges of adult life and their tumultuous romantic journey, including struggles, conflicts, and an eventual breakup.

The announcement was made by Ben&Ben at the closing night curtain call of PETA’s production of Walang Aray in October. The stage adaptation of the film will serve as the theater company’s season ender.

KUNG PAANO NANALO SA KARERA SI ROSANG TABA
APRIL
Dulaang UP’s Kung Paano Nanalo sa Karera si Rosang Taba, based on a short story by Dean Francis Alfar, is returning this April.

Adapted by Rody Vera and Maynard Manansala, directed by Jose Estrella, and starring Kiki Baento in the titular role, the play was initially staged at the University Theater Main Stage of UP Diliman in March and April of 2023. More details on the rerun have yet to be announced.

I LOVE YOU, YOU’RE PERFECT, NOW CHANGE
JUNE 7 TO 30
Repertory Philippines will be bringing another Off-Broadway musical to RCBC Plaza’s Carlos P. Romulo Auditorium this year. Written by Joe Di Pietro (book and lyrics) and Jimmy Roberts (music), I Love You, You’re Perfect, Now Change is a series of vignettes on love and relationships involving a wide cast of characters, ranging from big-city singles and awkward wallflowers to suburban settlers and sassy seniors. They will all be played by a cast of four.

The show will be directed by Menchu Lauchengco-Yulo, with Cara Barredo as assistant director. Also in the creative team are Ejay Yatco (musical direction) and Joey Mendoza (set design).

PATINTERO SA AYALA AVENUE
JUNE
Written and directed by Rafael Jimenez, a new original Filipino play entitled Patintero sa Ayala Avenue will be staged by CAST PH — best known for their staged readings — in June at a venue that has yet to be announced.

The story centers on a 16-year-old boy who is kicked out of school and has a night on the town in Makati’s Poblacion to find out what happens to the lights on Ayala Avenue after Christmas. The show will star Zoë de Ocampo.

VIRGIN LABFEST
JUNE
CCP’s annual theater festival Virgin Labfest (VLF), which is usually held around June, selected 12 one-act plays for its 19th edition this year. The 12 untried, untested, and unstaged plays were selected from 145 submissions received early last year.

The selection committee was composed of festival directors Tess Jamias and Marco Viaña, together with VLF founders Writers Bloc Inc.’s Rody Vera and director-playwright Herbie Go.

LITTLE SHOP OF HORRORS
JULY – AUGUST
The Sandbox Collective will be staging the sci-fi musical Little Shop of Horrors, which is one of the longest-running Off-Broadway shows. The tongue-in-cheek comedy has been produced worldwide and will make its return to the Philippine stage under the direction of the theater group’s Managing Artistic Director, Toff De Venecia, with musical direction by pianist and musical director Ejay Yatco.

It will run from July to August at the Globe Auditorium, Maybank Performing Arts Theater, Bonifacio Global City, Taguig.

OTHELLO
OCTOBER
The second play in CAST PH’s season is Shakespeare’s Othello, which will be directed by the company’s artistic director Nelsito Gomez. The production will star Tarek El Tayech as Othello, Gab Pangilinan as Desdemona, Maronne Cruz as Emilia, and Reb Atadero as Iago.

One of William Shakespeare’s renowned tragedies, believed to have been written around 1603, the play is set in Venice and the island of Cyprus, and revolves around themes of jealousy, manipulation, and racism. Further details on this particular staging like the full cast, venue, and ticketing details have yet to be announced.

TINY BEAUTIFUL THINGS
NOVEMBER
The Sandbox Collective will conclude its 2024 season with the Manila premiere of Tiny Beautiful Things, based on the bestselling book by Cheryl Strayed and adapted for the stage by Nia Vardalos. Recently released as a limited TV series starring Kathryn Hahn, Tiny Beautiful Things is a play about reaching when you’re stuck, healing when you’re broken, and finding the courage to take on the questions that have no answers.

The show is set to be directed by Jenny Jamora. It will have a three-week limited engagement in November at the Zobel De Ayala Recital Hall, Maybank Performing Arts Theater, BGC, Taguig.

GOING HOME TO CHRISTMAS
NOVEMBER – DECEMBER
Repertory Philippines will cap the season with Going Home to Christmas, an original jukebox musical featuring the music of Jose Mari Chan, whose name has become synonymous with Christmas. It will be directed by Leo Rialp, and written by Robbie Guevara, Luna Griño-Inocian, and Joel Trinidad, with additional scenes by Cathy Azanza-Dy.

Though the story is still being written, Ms. Griño-Inocian teased that it centers on four relationships between father and son, husband and wife, boyfriend and girlfriend. “It is set in an airport because everyone is going home to Christmas,” she said. “It’s sort of like Love Actually except it’s very Pinoy in sentiment and a lot of the stories will sound familiar.”

SHOWS WITH DATES TO BE ANNOUNCED
Jonathan Larson’s beloved musical Rent will be restaged this year by 9 Works Theatrical, following the company’s staging of Larsen’s other work tick, tick… BOOM! in 2023. Auditions for Rent were held last September, so casting announcements will be coming soon. The musical was last staged in the Philippines in 2010 and 2011.

Another original jukebox musical is coming to the Newport World Resorts stage this year. Buruguduystunstugudunstuy: Ang Parokya ni Edgar Musical will be performed at the Newport Performing Arts Theater, with a cast led by Felicity Kyle Napuli, Marynor Madamesila, Tex Ordoñez-De Leon, and Natasha Cabrera. It is directed by Dexter M. Santos, with a book by Rody Vera and musical direction and arrangement by Ejay Yatco.

Finally, there is Repertory Theater for Young Audiences’ (RTYA) offering this year: Jepoy and the Magic Circle. An adaptation of a children’s story by Gilda Cordero Fernando, the light-hearted musical centers on Jepoy and his dog, Galis, as they enter the whimsical balete world to attend a tikbalang wedding. The adaptation will be directed by RTYA creative director Joy Virata and written by Rody Vera, with music and lyrics by Ejay Yatco. — Brontë H. Lacsamana

Philippine builders may benefit from state’s renewed infra dev’t plan

A construction site is seen in Cubao, Quezon City. — PHILIPPINE STAR/ MICHAEL VARCAS

By Ashley Erika O. Jose, Reporter

LISTED construction companies are expected to post better results this year amid a growing state focus on infrastructure development and with the Philippine central bank widely expected to start cutting interest rates, analysts said.

“There will be faster growth this year as government public-private partnership projects pick up and easing inflation lowers construction and funding costs,” Cristina S. Ulang, research head at First Metro Investment Corp., said in a Viber message on Tuesday.

Infrastructure spending increased by 66% to P122.1 billion in August from a year earlier as the government fast-tracked projects, the Budget department said in October.

“If the government maintains or increases its focus on infrastructure development, as indicated by ongoing projects and future plans, listed construction companies may experience positive growth,” Globalinks Securities and Stocks, Inc. head of sales trading Toby Allan C. Arce said in a Viber message.

“Continued government support often translates to a steady flow of projects, contributing to the construction sector’s overall performance. Conversely, economic challenges or uncertainties may impact the willingness of both public and private sectors to invest in construction projects,” he added. 

Construction industry growth could improve this year amid faster economic growth, easing inflation and possible Fed rate cuts, Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., separately said via Viber.

Inflation likely eased to 4% in December, according to a median estimate of 13 analysts in a BusinessWorld poll last week, amid lower prices of fruits and vegetables, electricity and fuel.

The Monetary Board in December kept its benchmark rate at a 16-year high of 6.5% for a second straight meeting. From May 2022 to October this year, it raised borrowing costs by 450 basis points to tame inflation. 

“The government’s budget on infrastructure continues to be significant, while a potential drop in interest rates that would result from a sustained decline in inflation could encourage the private sector to boost capital expenditures,” April Lynn Lee-Tan, chief equity strategist at COL Financial Group, Inc. said in a Viber message. 

Listed construction companies had mixed earnings results in the third quarter. Megawide Construction Corp.’s net loss narrowed to P29.85 million from P319.58 million a year ago on higher revenue.

Megawide’s attributable net income in the nine months to September hit P333.31 million, a turnaround from the P445.25-million net loss a year earlier. 

EEI Corp. reported an attributable net income of P406 million for the third quarter, higher than P33.08 a year earlier, while revenue rose by 5.3% to P4.35 billion. But it posted an attributable net loss of P294.97 million in nine months from a P149.68-million profit a year ago.

During the quarter, Phinma Corp.’s attributable net income rose by 40.5% year on year to P582.77 million on higher revenue. Its attributable net income fell by 3.7% to P791.53 million in nine months.

The growth of construction companies would also be driven by renewable energy projects, Mr. Arce said. “If the government’s commitment to increasing the share of renewable energy in the power generation mix continues, construction companies involved in renewable energy projects may see increased opportunities.”

Gov’t upsizes award of T-bills as bids soar amid pent-up demand

STOCK PHOTO | Image by RJ Joquico from Unsplash

THE GOVERNMENT upsized the volume of Treasury bills (T-bills) it awarded on Tuesday, even as rates rose across all tenors, amid pent-up demand for debt following the holiday break and with interest rates expected to remain elevated in the near term.

The Bureau of the Treasury (BTr) raised P17 billion via the T-bills it offered on Tuesday, above the initial P15-billion program, as total bids reached P39.945 billion or more than twice the amount on the auction block.

Broken down, the Treasury made a full P5-billion award of the 91-day T-bills as tenders for the tenor reached P13.36 billion. The three-month paper was quoted at an average rate of 5.14%, 14.4 basis points (bps) above the 4.996% seen at the last T-bill auction on Dec. 4. Accepted rates ranged from 5.4% to 5.88%.

The BTr likewise borrowed P5 billion as planned via the 364-day debt papers as bids for the tenor reached P12.225 billion. The average rate of the one-year T-bill went up by 9.7 bps to 5.829% from 5.732% previously. Accepted rates were from 5.498% to 6.7%.

Meanwhile, the government raised P7 billion through the 182-day securities, above the original P5-billion program, as bids for the paper reached P14.36 billion. The average rate for the six-month T-bill stood at 5.578%, jumping by 31.1 bps from the 5.267% quoted the previous auction, and with accepted yields ranging from 5.328% to 5.85%.

At the secondary market on Tuesday, the 91-, 182-, and 364-day T-bills were quoted at 5.244%, 5.518%, and 5.867%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data provided by the Treasury.

“The Auction Committee fully awarded bids for Treasury bills at today’s auction… The auction was 2.7 times oversubscribed, attracting P39.9 billion in total tenders, prompting the committee to double the accepted volume of non-competitive bids for the 182-day T-bills. With its decision, the Committee raised P17 billion compared to the P15-billion initial program,” the BTr said in a statement on Tuesday.

“The substantial amount of awarded volume today represented some catch-up placements by investors after the prolonged pause in weekly issuances last December,” a trader said in an e-mail on Tuesday.

The Treasury did not hold auctions of government securities after the first week of December after completing its domestic borrowing plan.

T-bill rates rose due to hawkish signals from the Bangko Sentral ng Pilipinas (BSP) chief, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“T-bill rates moved up from last auction due to lingering expectations of elevated BSP policy rates for the earlier part of the year, which affect local short-term yields,” the trader likewise said.

BSP Governor Eli M. Remolona, Jr. last month said the central bank is unlikely to cut rates in the coming months and is leaning towards keeping borrowing costs higher for longer until inflation is comfortably within their 2-4% annual target.

The central bank raised benchmark interest rates by a cumulative 450 bps from May 2022 to October 2023, bringing the policy rate to a 16-year high of 6.5%.

In the first 11 months of 2023, headline inflation averaged 6.2%, still above the BSP’s 6% forecast and 2-4% goal for the year.

A BusinessWorld poll last week yielded a median estimate of 4% for December headline inflation, within the BSP’s 3.6-4.4% forecast for the month. This is slightly slower than the 4.1% in November but significantly below the 8.1% in December 2022.

If realized, December could mark the first time that inflation met the central bank’s 2-4% target after 20 straight months. It would also be the slowest since the 3% print in February 2022.

This would bring the 2023 inflation average to 6%, matching the BSP’s baseline forecast.

The Philippine Statistics Authority will release December consumer price index data on Friday.

On Wednesday, the BTr will auction off P30 billion in fresh three-year Treasury bonds (T-bonds).

The Treasury wants to raise P195 billion from the domestic market this month, or P75 billion via T-bills and P120 billion through T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 5.1% of gross domestic product this year. — A.M.C. Sy

Steady hearts, steady hands as Vatican experts restore masterpieces

DAVID at its current location in the Galleria dell’Accademia. — MARCUSOBAL/EN.WIKIPEDIA.ORG

VATICAN CITY — Whenever Alessandra Zarelli, a restorer at the Vatican Museums, works on a masterpiece by an artist such as Michelangelo, she steadies her heart so her mind can concentrate on the task at hand.

The standing order for Ms. Zarelli and her colleagues is to work with just chemistry, physics, and history and leave any excitement and awe at the door.

“The emotion of working on something like a Michelangelo is truly indescribable,” said Ms. Zarelli, 56, who helped restore a fresco by the Renaissance master in the Pauline Chapel.

“But I try to remain detached while I am working. I have to concentrate on the material and the work that I have to do, otherwise the emotion would paralyze me,” she said while working on a painting from 1550 called Enthroned Madonna and Child with Saints by Italian artist Moretto da Brescia.

“At the end of the day I keep some moments for myself to contemplate and enjoy the emotion of being so close to marvelous masterpieces,” she said

She is one of about 36 members of an elite team at the Vatican Museums’ restoration lab for paintings and wood.

The team is responsible for looking after thousands of square meters of wall paintings, including the Sistine Chapel frescoes, as well as some 5,300 framed oil paintings and dozens of wooden statues.

A CENTURY OF RESTORATION
The restoration of the Moretto painting included a new internal frame, smoothing out deformations caused by humidity, removal of oxidized varnishes and retouches on both the painting as well as the gilded external frame.

The painting and wood restoration lab, one of eight specialized units in the museums, allowed a few news organizations rare access in December to mark its 100th anniversary.

Restoration techniques are constantly changing and today’s restorers often have to repair or remove mistakes of their predecessors who worked decades or even centuries ago with rudimentary techniques.

Another problem, usually from the distant past, is that restorers were not technicians but artists in their own right, some of whom thought they could “improve” the original by adding highlights or contrasts, according to the lab’s director, Francesca Persegati.

“It’s important to be humble in this job, to respect the work but also to have a scientific background to understand the materials,” she said.

Before a painting even reaches the lab, it already has undergone tests using ultra-violet, infra-red and other non-invasive methods to detect paint added later, pigmentation and any underlying sketches.

In another part of the lab, Caterina Manisco was restoring an 1895 painting called Madonna and Child Between St. Theresa and St. Francis, by Emma Richards. The Italian-born artist worked in the court of Queen Victoria and Prince Albert, a rarity for a woman at the time.

“Because she was a woman, I somehow feel very close to her,” said Manisco, 40, an external restorer at the lab.

To mark the 100th anniversary of the paintings and wood lab, the museums have placed QR codes near 37 works of art, allowing visitors to see beyond the surface and experience the many layers in the life of a restoration. — Reuters

Global Ferronickel renews supply deal with Baosteel

GLOBAL Ferronickel Holdings, Inc. on Tuesday said it plans to sell 1.5 million wet metric tons (WMT) of nickel ore to Baosteel Resources International Co. Ltd.

In a disclosure to the Philippine Stock Exchange, the company said units Platinum Group Metals Corp. and Ipilan Nickel Corp. have renewed the purchase deal with the China-based company.

Global Ferronickel said the ore would come from the company’s operating mines in Surigao del Norte and Palawan. The price of the ore would be determined monthly based on the prevailing market price.

“This agreement and our long history together demonstrate our customer’s confidence in our business and provide further recognition of our efforts in maintaining a reliable supply chain to meet the demands for Baosteel products throughout the Asia-Pacific region and internationally,” Global Ferronickel President Dante R. Bravos said in the statement.

Global Ferronickel’s share price rose by 0.49% or a centavo to close at P2.07 apiece.

The Philippine miner said two-thirds of its ore to be sold this year is expected to be low-grade with 0.90% nickel content and 48% iron content,

It said a third of the shipment would be composed of low-grade nickel ore with 0.9% nickel and 49% iron. The remainder will be medium grade with more than 1.4% nickel content and an iron content of 12% to 23%.

Meanwhile, Global Ferronickel said it shipped 4.76 million WMT of nickel ore last year — 3.297 million WMT from PGMC and 1.466 million WMT from Ipilan. It sold 0.38 million WMT to Baosteel last year.

Baosteel, a unit of China Baowu Steel Group, has interests in mineral resource investment, trading, and logistics services.

Global Ferronickel is a holding company engaged in nickel ore mining, logistics, cement and steel production and port operations. — Adrian H. Halili

No reason to be complacent: Helping the illiterate

BW FILE PHOTO

(Part 3)

In his Message for the 2023 World Day of the Poor celebrated on Nov. 19, 2023, Pope Francis recalled the 60th anniversary of the encyclical Pacem in Terris of Pope Saint John XXIII by quoting the following from the encyclical: “Every human being enjoys the right to life, to bodily integrity and to the means necessary for the proper development of life, including food, clothing, shelter, medical care, rest, and, finally the necessary social services. In consequence, every individual has the right to be looked after in the event of ill health; disability stemming from work; widowhood and forced unemployment; as well as in other cases when, through no fault of his own, he or she is deprived of the means of livelihood.”

From these words of Pope Francis, we should be careful not to pooh-pooh “dole-outs” citing the well-known phrase “it is better to teach someone to fish than to give him fish.” Even Our Lord had to perform a miracle to give instant relief to thousands of hungry people by providing them some fish (and bread) to eat. There are many situations in which immediate relief is needed. In many of the cases, it should be the Government (through the Department of Social Welfare and Development or DSWD) who should decide who are the ones entitled to instant relief such as in the cases of cash gifts through the 4Ps (Pantawid Pamilyang Pilipino Program) itinerant program. This is the reason why the DSWD recently admonished private individuals to refrain from giving street beggars the usual cash gifts because such direct help may just encourage dependency even among those who are healthy enough to do some productive work. Let the DSWD decide who are the really deserving poor. For the others, the most effective help is to provide them with the necessary knowledge and skills to be productively employed.

It is heartening to see many business organizations like the SM group, the Metrobank group, the Madrigals, the Aboitizes, the Ayalas, and the Lucio Tan group and many others organizing educational foundations supporting the school-related expenses of numerous deserving but poor young people so that they can acquire quality education in some of the leading private educational institutions. These scholarship programs go a long way to uplift the lives of many poor households. Also very commendable are individuals or organizations that help establish skills training institutions like the Don Bosco Technical Schools, the Dualtech School, the MIF Institute of Technology (formerly the Meralco Foundation), the Center for Industrial Technology and Enterprise (CITE) in Cebu, and other Technical Educational and Skills Development Authority (TESDA)-certified technical training institutes that produce technically qualified people that are in great demand in the business sector.

In fact, Senator Sherwin Gatchalian recently called out TESDA for supposedly pushing training programs that do not align with today’s most-in-demand jobs. In his statement, the Senator lamented that TESDA’s programs with the highest enrollment do not align with the most in-demand jobs until 2025. It seems that none of the top five most popular courses offered by TESDA are aligned with industries that will grow in the next three to five years. It is important then for the big private donors supporting scholars to make sure that their beneficiaries are actually enrolled in the right courses. The right technical or vocational schools turning out people with skills needed by industry are even more needed than the run-of-the mill colleges or universities that often turn out college graduates who have no skills that are marketable. Often, there is a big mismatch between what is demanded by industry and the products of college degree programs. We have to re-examine the K-to-10 as well as the K-to-12 programs so that, as President Ferdinand Marcos, Jr. announced in his second state of the nation address, we can encourage more of our high school students to follow the tech-voc track and acquire more relevant technical skills (e.g., in the construction and hospitality sectors) instead of aspiring for a college degree that leads to nowhere.

But what do we do with the numerous poor who are illiterate and cannot qualify for formal education, whether college-oriented or tech-voc? The most recent data reveal that there are 363,683 illiterate youth in the Philippines and 2.8 million illiterate adults. Nine out of 10 Filipino children struggle with reading at the age of 10. The first solution is obviously to address the problem of Filipino children who have difficulties reading. This is where the Department of Education, i.e., the Government, has the primary responsibility of addressing this serious problem.

Let us quote Pope Francis again: “How much still needs to be done for this to become a reality, not least through a serious and effective commitment on the part of political leaders and legislators! For all the limitations and at times the failures of politics in discerning and serving the common good, may the spirit of solidarity and subsidiarity continue to grow among citizens who believe in the value of voluntary commitment to serving the poor. Certainly there is need to urge and even pressure public institutions to perform their duties properly, yet it is of no use to wait passively to receive everything ‘from on high.’ Those living in poverty must also be involved and accompanied in a process of change and responsibility.”

There are numerous individuals, both young and old, who can lend a hand to the efforts of the Department of Education to improve the reading ability of the youth. Vice-President Sara Duterte has launched a “reading along” program for children who will be grouped according to their reading ability. Private individuals can volunteer to help the public-school teachers in this initiative in very much the same way that for generations (including my own), students from Catholic schools and colleges volunteered a great deal of time to teach the Catechism of the Catholic Church to pupils and public elementary and high schools. I hope this practice continues unabated. The generosity of young people can be fostered by having them help in the improvement of the reading ability of public-school pupils, especially among the disadvantaged. Needless to say, even more important is the spiritual welfare of these children who need doctrinal formation in their faith. There are also many commendable efforts of NGOs to address the reading deficiency of Filipino children. One example is the Read Along program of the Metrobank Foundation in cooperation with the Philippine Daily Inquirer. This is one example of private individuals not just waiting for the solutions to the reading problem to come from “on high.”

Since the solution to the problem of illiteracy will take time to implement, there must be short-term ways of helping the illiterate to still become productive members of society. Here, the example of an award-winning “Hero of the illiterate” in India, named Sanjit “Bunker” Roy, is worthy of emulation. Roy firmly believes that illiteracy is not a barrier to achievement. His motto: “Illiterate people may not be able to read or write but they are not stupid.” How true. On many occasions, I would rather depend on an illiterate person to replace a bulb, fix a faucet, or change a tire than on a Ph.D. in mechanical or electrical engineering, much less on a Ph.D. in economics. Under the guidance of Roy, for 50 years, illiterate and near-illiterate people from the poorest of India’s rural poor have achieved marvels, built houses (using recycled plastic), repaired machinery, given reign to their artistry, and trained to become barefoot doctors, along similar lines to the model used in China. Most importantly, these illiterate people now know their worth and human dignity.

At first it was called SWRC — Social Work and Research Centre — but soon everyone around knew it as Barefoot College. It has been thriving since 1972, offering a cornucopia of good things, from clean water (collected and filtered from rain, not pumped from environmentally damaging wells) to basic education. Traditional skills and knowledge are blended with modern solutions — as long as those solutions are simple and kind to the environment, and work. Showing belief in people, giving encouragement and drawing out their best so that they could earn a living wage. I know that in the rural areas in the Philippines, there are already many initiatives of private individuals that are replicating the example of Bunker Roy. Let’s stop the futile lamentations about our illiterate Filipinos. Let us do something about it as Bunker Roy has been doing for more than 50 years among the rural poor in India.

(To be continued.)

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

An economically secure 2024

JANOON0028-FREEPIK

It is not uncommon to say “have a Prosperous New Year” when we greet friends and acquaintances at the start of the year. But what exactly do we mean by “prosperous”? Do we mean that we want the recipients of our greetings to be awash with cash (or its equivalent), more than they know how to spend?

More likely, we only mean that they should not want for anything, that they would be able to consistently meet their daily necessities — and perhaps have something extra for their reasonable wants with a little amount put away for emergencies. We could mean that they should not worry about whether they would continue to have an income in the foreseeable future, and that they are able to live the kind of life they envision for themselves.

This is the very definition of economic security.

It seems so basic, written down and spelled out, but unfortunately, this is an aspiration — not the actual situation — of millions of Filipinos. In the most recent Pulse Asia survey in December 2023, as commissioned by the Stratbase ADR Institute, economic issues remain the top-of-mind concern of Filipinos. Controlling inflation, cited by 72% of respondents, was at the top of the list. Other concerns include increasing the pay of workers (40%), creating more jobs (28%), reducing the poverty of many Filipinos (25%), and fighting graft and corruption in the government (19%).

That Filipinos should be concerned with the rising prices of goods is well-founded. To be sure, macroeconomic numbers are seeing marginal improvement. For example, headline inflation slowed to 4.1% versus 4.9% in October, driven by the lower year-on-year growth of the heavily weighted food and non-alcoholic beverages at 5.7%, followed by transport at 0.8%. This brings the national average inflation from January to November 2023 to 6.2%, making the 6% full-year target set by the Development Budget Coordination Committee (DBCC) likely. And then, data from the Philippine Statistics Authority (PSA) show that in October 2023, the unemployment rate eased to 4.2% from the 4.5% recorded in October 2022 and the 4.8% in July 2023.

Still, these are results from short-term, month-to-month data. The fact is that the cost of living remains a big concern in the long run, and 2.09 million persons remain unemployed. It is no surprise that consumer outlook in the Philippines for the fourth quarter of 2023 worsened and significantly became more negative at -19% from -9.6% in the third quarter, according to the Bangko Sentral ng Pilipinas (BSP).

This weaker confidence among consumers stemmed from their concerns about the following: 1.) faster increase in the prices of goods; 2.) lower income; 3.) fewer available jobs; and, 4.) the effectiveness of government policies and programs on inflation management, public transportation, and financial assistance to low-income households.

What must be done to improve the confidence of consumers and the general sentiment of Filipinos that things will be better for them in the future? Economic security, after all — and economic security alongside defense is an essential part of national security — goes beyond month-to-month improvements. Security, rather, is a long-term concern that affects the direction of the lives of families, and enables parents, for instance, to assure their children that their needs would be taken care of, and that they can actually contemplate a secure future ahead of them.

Going beyond individuals and families, the economic security of a nation hinges on structural reforms that make a difference years down the line. Achieving economic security means that our nation will be resilient and self-sustaining despite disruptions and other challenges that may arise from geopolitical and geoeconomic developments around the world, and will be able to achieve sustained, inclusive growth that would be felt by as many people in society as possible.

We know the challenges all too well, being a consumer-driven economy with a greater volume of imports than exports, resulting in a trade deficit. During the pandemic, when mobility restrictions disrupted the global supply chain, our economy suffered heavily with prices of goods increasing. Today we remain on edge as we anticipate further challenges in flashpoints and other areas, specifically China’s continued aggression and adventurism in the West Philippine Sea, and the conflict in Ukraine and in Gaza. We are also at the mercy of other developments like climate change and more erratic weather patterns, resulting in constant threats to our agricultural output.

A logical, strategic step, as Stratbase has been espousing and supporting for quite a time now, is to shift from consumer-driven to investment-led growth. Investments, in their essence, are all about the long term. They bring in infrastructure, jobs, income — all of which will be realized not today, not next month, but in the years and generations to come. Specifically, investments in the manufacturing sector will do much to make our economy resilient and less vulnerable to the complications of geopolitics. Imagine the jobs that such investments would generate, communities that would be empowered, and prosperity that would be attained.

Of course, a lot is demanded of our government to be able to effect this shift to investments, even though its initiatives thus far have been commendable. Investments come to countries where the regulatory environment is encouraging and conducive, where policies are fair, consistent, and evenly applied, where transactions and costs are transparent, and where officials are accountable.

We can take heart in the business sentiment as reported by the BSP: it remained upbeat in Q4 2023 as the overall CI stood at 35.9%, slightly higher than the 35.8% in Q3 2023. If the private sector can remain this optimistic about their prospects, then they must be given additional reasons for being upbeat about the Philippine economy.

With this, I wish our country and our people an economically secure new year and beyond.

 

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.

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