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Reuters reporters’ online accounts faked to approach China activists

HONG KONG – Two Reuters journalists had their identities faked by an unknown person or people who then used sham social media accounts to engage with Chinese activists on several online platforms over several months.

The false representations of the two journalists, Shanghai bureau chief Brenda Goh and Hong Kong-based correspondent Jessie Pang, starting in late November, appeared on platforms including Instagram and the Telegram message app.

The impersonator or impersonators were seeking information about a group linked to protests the same month against China‘s strict COVID-19 controls, according to screenshots and several accounts provided to Reuters.

An Australia-based Chinese activist and dissident artist known as Badiucao first disclosed the impersonations on Saturday on Twitter.

A fake account was set up on Instagram and one on Telegram purporting to be Pang, according to screengrabs from Badiucao seen by Reuters. Another activist told Reuters he had conversed with a fake persona of Goh via Telegram for three months.

Badiucao tweeted that he had been approached on Telegram by someone purporting to be Pang, asking for information on a Chinese-language online platform called Citizens Daily that carries protest art.

“Hello everyone,” an imposter wrote in a Telegram chatroom, according to screenshots seen by Reuters that were provided by Badiucao. “I am Jessie with Reuters.” The imposter then asked two members of the group: “Do you two have any ties to Citizens Daily?”

The imposter sought to gain the group’s trust by giving details of Pang’s background and recent work, Badiucao said.

Badiucao said he became suspicious at the language and questions posed by the imposter, however, and asked to verify the person’s identity through Pang’s verified Twitter account.

The imposter said he or she had no control over the Twitter account, as it was “run by a team at Reuters“, a screenshot of the conversation provided by Badiucao showed.

The person then sent Badiucao, a political cartoonist prominent among protesters, a photo of Pang’s press ID, which had expired.

Reuters could not ascertain who was behind the fake journalist personas. After the fakes were exposed, all their known accounts and conversations were deleted. None of Goh’s or Pang’s official social media accounts appeared to have been hacked.

A Reuters spokesperson said: “We are looking into the impersonation and theft of press credentials of Reuters journalists and will take appropriate action.”

A spokesperson for Instagram owner Meta Platforms Inc META.O said the platform had taken down the imposter’s account, declining to comment further. Telegram did not respond to Reuters requests for comment on the impersonations of the journalists’ accounts on that platform.

A spokesman for Hong Kong’s Security Bureau said: “Members of the public are encouraged to report to the Police if there is any suspected crime. The Police will take appropriate actions on reports of crime accordingly.”

An administrator at Citizens Daily, responding to a request for comment, said the group suspected Chinese state involvement in the impersonations. The administrator declined to give their name, citing the risk of reprisals, and did not offer any evidence to support this assertion.

China‘s Ministry of Foreign Affairs, the Cyberspace Administration of China and the Public Security Bureau did not respond to requests for comment on Citizens Daily’s claim or on the impersonation of the journalists.

Citizens Daily had been a conduit for sharing information among protesters during the November demonstrations in multiple Chinese cities against Beijing’s zero-COVID policy, with some calling for President Xi Jinping to step down and an end to Communist Party rule.

The civil disobedience was unprecedented in mainland China since Xi assumed power a decade ago, sparking a wave of arrests and a broad security clampdown.

An activist with the Twitter handle “accelflopping” told Reuters that an imposter purporting to be Goh contacted him via Telegram. To gain his trust, the person showed a picture of Goh’s press card and provided other personal details, including Goh’s nationality.

This activist, who is based overseas, said he only learned of the subterfuge from Badiucao on Saturday after having communicated with the “fake Brenda” since late November about his group’s plans for future protests. They spoke via Telegram text message, apart from one short phone call, he said.

He declined to disclose his name, citing sensitivities.

A person with the Twitter handle “775lighting” tweeted about also having been approached several times since Feb. 4 by a “fake Jessie” Pang, who sought to “steal sensitive details” about their protest activities.

Reuters could not reach this person for comment. – Reuters

Blinken to hold talks with Central Asian nations in wake of Ukraine anniversary

US Secretary of State Antony Blinken. Official White House — CAMERON SMITH VIA FLICKR

ASTANA, Kazakhstan – US Secretary of State Antony Blinken arrived in Central Asia Tuesday where he will visit and meet with officials from all five former Soviet republics following the first anniversary of Russia’s invasion of Ukraine.

Mr. Blinken‘s visit to the capitals of Kazakhstan and Uzbekistan is his first to the region as the Biden administration’s top diplomat.

The trip comes just days after the Feb. 24 anniversary of the invasion of Ukraine, which has tested Moscow’s influence in a region that also includes Kyrgyzstan, Tajikistan and Turkmenistan.

Leaders in the region have been emboldened to stand up to Russia by their new-found leverage as Moscow looks to their markets and trade routes in a bid to circumvent Western sanctions.

In Astana, Mr. Blinken will with meet with the five nations‘ foreign ministers individually and as a group, in what officials say is an effort to set out the benefits of US cooperation to a region facing economic fallout from the conflict to the west.

“Our main goal is to show that the United States is a reliable partner, and we see the difficulties that these economies are facing – high food prices, high fuel prices, high unemployment, difficulty in exporting their goods, slow post-COVID recovery, and a large influx of migrants from Russia,” Donald Lu, the State Department’s top official for South and Central Asia, told reporters ahead of the trip.

Mr. Blinken will also meet Kazakhstan’s President Kassym-Jomart Tokayev, who was re-elected in a landslide in November and has pushed back publicly against territorial claims made by Russian President Vladimir Putin in Ukraine.

Russia and Kazakhstan share the world’s longest continuous land border, prompting concern among some Kazakhs about the security of a country with the second-biggest ethnic Russian population among ex-Soviet republics after Ukraine.

Mr. Blinken will travel to Uzbekistan later on Tuesday to meet with President Shavkat Mirziyoyev. – Reuters

North Korea’s Kim orders ‘fundamental transformation’ of agriculture amid reports of food shortages

KCNA VIA REUTERS

SEOUL – North Korean leader Kim Jong Un urged government officials to engineer a “fundamental transformation” in agricultural production, state media reported on Tuesday, amid fears that the country’s food shortage is worsening.

Mr. Kim said hitting grain production targets this year was a top priority and emphasized the importance of stable agriculture production during the second day of the seventh enlarged plenary meeting of the 8th Central Committee of the Workers’ Party of Korea on Monday, according to state news agency KCNA.

The report did not elaborate on what measures North Korea would take, but Mr. Kim said the changes need to happen in the next few years.

Collective farms account for the vast majority of North Korea’s agriculture, according to researchers. Such farms typically host multiple small farmers who produce crops with joint labor.

Mr. Kim‘s remark comes amid reports of growing food shortages in the country, though North Korea has denied suggestions that it cannot provide for its citizens.

Earlier this month, South Korea’s Unification Ministry said the food situation in the North “seemed to have deteriorated”.

The ministry said at the time that it was rare for North Korea to announce a special meeting on agriculture strategy which was slated for late February.

In his address at Monday’s meeting, KCNA said Mr. Kim mentioned the “importance of the growth of the agricultural productive forces” in ensuring socialist construction.

North Korea is under strict international sanctions over its nuclear weapons and ballistic missile programs, and its economy has been further strained by strict self-imposed border lockdowns aimed at stopping COVID-19 outbreaks.

The full extent of the food shortages in North Korea is unclear, but in a January report, the US-based 38 North project said that food insecurity was at its worst since famines that devastated the country in the 1990s.

“Food availability has likely fallen below the bare minimum with regard to human needs,” the report said.

North Korea’s pursuit of self-sufficiency means almost all its grain is produced domestically, but that has left the country vulnerable, 38 North found.

“Achieving adequate agricultural output in North Korea’s unfavorable soils has, ironically, generated a heavy reliance on imported goods and left the country exposed to global shocks, diplomatic conflicts, and adverse weather,” the report said.

The long-term solution to the problems lies partly in resolving the standoff over nuclear weapons and sanctions, but also requires economic reforms.

The initiation of domestic economic reforms would unshackle North Korea’s productive capacity and allow it to export industrial products and tradable services, earn foreign exchange and import bulk grains on a commercially sustainable basis, 38 North said. – Reuters

US awards nearly $1 billion to airports in infrastructure grants

L FILIPE C SOUSA-UNSPLASH

WASHINGTON – The Federal Aviation Administration said Monday it is awarding nearly $1 billion to 99 US airport terminal projects under a 2021 $1 trillion infrastructure law.

The awards include $10.8 million to Des Moines International Airport in Iowa to replace the 1948 terminal that is operating above capacity and $29 million to Salt Lake City International Airport in Utah for a terminal and concourse redevelopment program. This is the second phase of funding – the FAA awarded nearly $1 billion for airport terminal projects announced for 85 airports last year.

The FAA said the grants will help “meet the growing demand for air travel and invest in key areas to help get travelers in and out of airports more quickly and improve the passenger experience by investing in new baggage systems, larger security checkpoints and improved ground transportation.”

The United States is spending tens of billions to refurbish and expand aging airports that were often mocked. Then Vice President Joe Biden in 2014 compared New York’s LaGuardia airport to “some third-world country.”

Last year, New York celebrated the six-year $8 billion reconstruction of LaGuardia airport.

In November the FAA granted final environmental approval for construction of a new $4.2 billion terminal at New York City’s John F. Kennedy International Airport and for an $8.5 billion project at Chicago’s O’Hare International Airport that includes a new Terminal 2.

On Monday, O’Hare was awarded $50 million to help rehabilitate and expand passenger access for the 60-year-old Terminal 3.

The Department of Transportation also said Sarasota Bradenton in Florida would get $10 million to help fund new passenger security screening checkpoint lanes and gates, while Savannah/Hilton Head in Georgia won $6.5 million for a 23,000-square foot security screening checkpoint expansion project to help reduce wait times.

The 2021 infrastructure law dedicates $25 billion for airport projects over five years. – Reuters

Japan, Australia may conduct South China Sea patrols with US, Philippines – ambassador

US NAVY/HANDOUT VIA REUTERS/FILE PHOTO

MANILA – The Philippines is in talks to possibly include Australia and Japan in planned joint South China Sea patrols with the United States, a senior diplomat said on Monday, in another sign of concern over Beijing’s activities in the strategic waters.

“Meetings have already been set and probably we may have the Japanese and the Australians join in,” Philippine Ambassador to the United States Jose Manuel Romualdez told Reuters.

“They would like to join in for joint patrols to make sure that there’s the code of conduct and there’s freedom of navigation,” adding it was still “an idea under discussion”.

If the plan materialises, it will be the first time the Philippines has joined multilateral maritime patrols in the South China Sea, a move that would likely anger Beijing, which claims most of the sea as its territory.

The foreign ministries of Australia and Japan and the embassies of the United States and China in Manila did not immediately respond to separate requests for comment.

The patrol talks and renewed engagement with the United States underscore how much Philippine President Ferdinand Marcos Jr. has realigned his country with its historic ally, moving away from predecessor Rodrigo Duterte’s hostile approach to Washington while still pursuing close economic engagement with regional powerhouse China.

Australia and the United States have separately been discussing joint patrols with the Philippines, amid concerns about China’s assertiveness in the South China Sea, through which about $3.4 trillion of commerce passes each year.

The United States, Japan and Australia have been conducting trilateral naval exercises, and joint patrols with those countries would be “good for the Philippines and for the entire area”, Romualdez said, adding: “We want to have freedom of navigation.”

‘THESE ARE OUR ALLIES’

The patrols “could be initially country-to-country” and expanded eventually “because these are our allies, like-minded countries”, he said.

The prospect of a four-country bloc patrolling together in the waters would send a unified message to China, which maintains a constant presence of hundreds of vessels across the South China Sea to assert its claims.

China is accused by some Southeast Asian neighbours of deploying its coast guard and a maritime militia to bully their fishermen and disrupt resupply missions and energy exploration. China maintains it is protecting its historic territory.

“For the Philippines, it allows us an alternative partner to counter China aside from U.S.,” Rommel Jude Ong, former vice commander of the Philippine navy, said of the prospect of patrols.

“Whether we like it or not, we need to calibrate our activities with the U.S. also to make sure we do not get drawn to issues that solely reside between the U.S. and China.”

Australian Defense Minister Richard Marles last week said Australia wanted to expand its bilateral defence relationship with the Philippines and joint patrols were “the next step”.

Japan, Australia and the United States are among dozens of countries that recognise a landmark arbitration case in 2016 won by the Philippines that invalidated China’s expansive territorial claim.

Beijing does not recognize the ruling. It says it respects freedom of navigation but opposes actions that undermine what it considers its sovereignty.

‘EXTREMELY PLEASED’

With some overlapping maritime claims, the Philippines has been ramping up rhetoric to challenge what it calls illegal Chinese activities in its exclusive economic zone.

It has made 77 complaints to China since Marcos took office in June last year. This month, he summoned the Chinese ambassador, concerned about “aggressive” Chinese maritime actions.

“Washington is extremely pleased that the Philippines is taking a stronger stand in its territorial rights,” added ambassador Romualdez, who is relative of Marcos.

The move is a stark departure from predecessor Duterte’s open disdain for the United States and efforts to appease China. Duterte was widely criticized for being reluctant to press China to abide by the arbitration ruling, concerned it could hurt investment.

Marcos on Monday described the South China Sea issue as “the most complicated geopolitical situation in the world”.

“There was a time where we did not have to worry about these threats and the intensification of the competition between the superpowers,” he said in a speech to soldiers.

Early this month, Marcos granted the United States greater access to Philippine military bases by adding four more sites, on top of five existing locations, under the 2014 Enhanced Defense Cooperation Agreement, or EDCA, an agreement predecessor Duterte had threatened to scrap.

EDCA allows U.S. access to Philippine bases for joint training, pre-positioning of equipment and building of facilities such as runways, fuel storage and military housing, but not a permanent presence.

Romualdez, who was also ambassador under Duterte, said recent developments showed “the relationship between the United States and the Philippines today is definitely at its best”. — Reuters

BSP targets to reduce RRR to 10%

STOCK PHOTO | Image by David Dvořáček from Unsplash

THE BANGKO SENTRAL ng Pilipinas (BSP) will likely cut banks’ reserve requirement ratio (RRR) to 10% to encourage them to cut transaction fees on small-value digital payments, its governor said on Monday.

“We hope, in return, the banks will waive all fees on small transactions when people make bank-to-bank payments. We’re literally bribing the banks to subsidize the small transactions,” BSP Governor Felipe M. Medalla told an economic briefing on Monday.

He said small-value transactions could include digital transfers of as much as P500. He earlier noted that a P15 fee for a P200 transaction “is quite large relative to the amount being sent.”

“What I’m telling (the banks) is, we’ll be more eager to cut the reserve requirements if they help us in this area. Our target is (to cut the RRR to) 10% and we can make it lower than 10%,” he said.

Mr. Medalla expressed confidence banks would support the move to reduce digital transaction fees.

“I’m confident that it will happen soon. I’m sure the BAP (Bankers Association of the Philippines) will work out a proposal that we can all agree on, a fair way of handling it,” he said.    

In a statement, BAP President Antonio C. Moncupa, Jr. said banks support the BSP’s goal to reduce transfer fees to boost financial inclusion.    

“While transfer fees are determined by each bank, and the need to cover cost of technology, infrastructure, cybersecurity, consumer education and charges by the switch operator are imperative, the BAP maintains close collaboration with the BSP and stakeholders to ensure that the ultimate goal of financial inclusion is attained in a way that is efficient and sustainable,” Mr. Moncupa said.

The BSP wants 70% of Filipino adults to have a formal financial account by this year. It also wants digital payments to make up 50% of all transactions both in volume and value.   

Based on the latest central bank data, banked adults made up 56% of the total population in 2021 from just 29% in 2019.   

The share of digital payments in the total volume of retail transactions in the country rose to 30.3% in 2021 from 20.1% a year earlier. The value of payments done online represented 44.1% of total retail transactions, higher than the 26.8% share in 2020.   

SMALL CUTS
Meanwhile, Mr. Medalla said the central bank could deliver small increments of reductions in the RRR until it reaches the single-digit level.

“(But) the cut in the reserve requirements will happen (if) everybody believes that inflation is clearly moving towards our target. Our problem is if we cut the reserve requirement, but we’re still raising interest rates, the market might get confused,” he said in mixed English and Filipino.

The RRR for big banks is 12%, one of the highest in the region. Reserve requirements for thrift and rural lenders are at 3% and 2%, respectively.   

In March 2020, the central bank cut the RRR, or the percentage of deposits and deposit substitutes banks must keep with the BSP, by 200 bps to 12% to cushion the impact of the coronavirus pandemic.

Mr. Medalla said the BSP is confident headline inflation would return to the 2-4% target by the fourth quarter or early 2024.   

Inflation quickened to the fastest in 14 years to 8.7% in January from 8.1% in December, marking the 10th consecutive month inflation was above the BSP’s 2-4% target.   

The BSP projects inflation to average 6.1% this year, higher than 5.8% last year, before easing to 3.1% in 2024.   

Earlier this month, the Monetary Board hiked the policy rate by 50 basis points to 6%, the highest in nearly 16 years. It has raised the benchmark interest rate by a total of 400 bps since May 2022.

Mr. Medalla also told reporters the Philippines might reach its growth target of 6-7% this year due to strong pent-up demand. The economy grew by 7.6% in 2022. — Keisha B. Ta-asan

PEZA approves P3.8-B investments in February

THE PHILIPPINE Economic Zone Authority (PEZA) approved P3.8 billion worth of investments in February, more than double the investments approved a year ago.

PEZA Officer-in-Charge Tereso O. Panga said the board had given the green light for 12 new and expansion projects worth P3.8 billion during its Feb. 23 meeting. This is 112% higher than the P1.792-billion approved investments in February 2022.

“Among the approved projects, five of these are for export manufacturing, three for facilities, one for information technology, one for logistics, one for utilities, and one expansion for a manufacturing ecozone,” he said in a statement on Monday.

These projects will be located in Taguig City, Laguna, Batangas, Tarlac and Palawan, Mr. Panga added.

Month on month, the February tally was lower than the P6.39 billion worth of investments from 19 projects that the PEZA board approved in January.

In 2022, PEZA approved P140.7 billion worth of investments from 198 new and expansion projects, up 103% year on year.

“At the rate we are going now, PEZA has achieved the level of annual investments (P140.2 billion) approved in 2018. That means that the country’s ecozones and high-performance investments are back to the pre-pandemic, even surpassing the 2018 level,” Mr. Panga said.

He said the higher investment pledges mean the economy is on its way to recovery.

“For this year, we are targeting (growth of) 8% for jobs, 9% exports, and 10% investments,” Mr. Panga said.

The PEZA has endorsed 21 economic zone development projects to the Office of the President as of this year, he said.

These projects are now awaiting President Ferdinand R. Marcos, Jr.’s proclamation order.

“Once proclaimed, these projects will bring in P21.207-billion investments,” Mr. Panga said.

Among the ecozones awaiting the president’s proclamation are Ayala Malls Capitol Central, Alta I-Hub, Robinsons Cyberpark Bacolod, SM City Santa Rosa IT Center, ArcoVia City, Parqal and 8912 Asean Avenue.

In 2022, the PEZA Board approved 29 applications for new and expansion projects for ecozones, which are estimated to bring in P96.215 billion of investments. Of the 29 projects, eight are to be located in the Calabarzon region.

Meanwhile, Mr. Panga said the PEZA is anticipating more investments in the country’s ecozones following Mr. Marcos’ foreign trips. 

“We also expect more projects this year as a result of our investment missions in Japan, Taiwan, South Korea, Switzerland, Mongolia, the USA and the other upcoming trips,” he said.

Mr. Panga also called for a review of Republic Act (RA) No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act and the amendment of RA 7916 — the Special Economic Zone Act or PEZA law.

“PEZA is lobbying for the revisit of the CREATE Act and the amendment of the 28-year-old PEZA law to better adapt to the changes in the market and the current movement of the country’s investment and business climate,” he said.

PEZA oversees 421 ecozones hosting 4,346 locators. The ecozones have generated of 1.8 million direct jobs. — R.M.D.Ochave

Manila needs to show better enforcement to exit FATF ‘gray list’

A Philippines peso note is seen in this picture illustration on June 2, 2017. — REUTERS

THE PHILIPPINES will need to improve law enforcement against money laundering and terrorism financing if it wants to exit the Financial Action Task Force’s (FATF) “gray list” by January 2024, the central bank governor said.

“We hope we are able to satisfy them with just better enforcement,” Bangko Sentral ng Pilipinas (BSP) Governor Felipe M. Medalla told reporters on the sidelines of an economic briefing hosted by the Philippine Chamber of Commerce and Industry on Monday.   

“Hopefully (the Philippines) will be out (of the list by January 2024). But of course, there’s a possibility that it will take longer to get out. Some countries took four years to get out and they had to do a lot,” he said.   

The Paris-based FATF has kept the Philippines on its gray list of jurisdictions subjected to increased monitoring for “dirty money” risks since June 2021.   

To be removed from the list, the Philippines has committed to comply with 18 action plan items. Progress reports are submitted to the FATF in three reporting cycles in a year — January, May and September.

Mr. Medalla said the government might have to hire more people to conduct investigations and file cases related to dirty money, like what Pakistan did.

“I was told Pakistan actually ended up hiring 3,000 more people just to follow up all the investigations and filing of cases (related to) terrorist financing,” he said.

In October, Pakistan was removed from the dirty money watchdog’s enhanced monitoring list after meeting 34 action items in two concurrent action plans over four years.

The Anti-Money Laundering Council (AMLC), on the other hand, said implementing the International Co-operation Review Group’s (ICRG) action plan to address the country’s strategic deficiencies is a whole-of-government concern.   

“All anti-money laundering and counter-terrorism financing players, such as supervisors, regulators, law enforcement, prosecutors, other government agencies, and covered persons, are required to demonstrate progress in resolving all action plan items, wherever applicable,” the AMLC said in an e-mail.

The National Anti-Money Laundering and Countering the Financing of Terrorism Strategy has also been updated to incorporate the ICRG action plan. The strategy will be implemented through subcommittees, composed of various government and law enforcement agencies.”

“With the cooperation and commitment of all agencies concerned, the AMLC is optimistic that the country can promptly resolve its remaining strategic deficiencies to finally exit the gray list,” it added.   

Based on the FATF’s latest assessment, the Philippines needs to show it is implementing effective risk-based supervision of designated nonfinancial businesses and professions. These include jewelry dealers, real estate brokers and developers and service providers for financial businesses. 

The dirty money watchdog also said the country must improve monitoring controls to mitigate financial crimes associated with casino junkets.

The FATF said it would continue to track the country’s progress in ensuring beneficial ownership information is streamlined and up to date for better access of law enforcement agencies. — Keisha B. Ta-asan

Debt-to-GDP ratio seen to ease after 2024 — PIDS

PHILIPPINE STAR/WALTER BOLLOZOS
Economic managers are targeting 6-7% GDP growth this year, slower than the 7.6% GDP expansion in 2022. — PHILIPPINE STAR/WALTER BOLLOZOS

THE PHILIPPINES’ outstanding debt as a share of the gross domestic product (GDP) will remain high in the medium term, easing only after 2024, Philippine Institute for Development Studies (PIDS) researchers said.

“Projections show that the debt ratio will decline after 2024 if there are no policy reversals or structural breaks and no new substantial debt,” PIDS researchers said in a study titled “Fiscal effects of the COVID-19 pandemic: Philippine debt sustainability.”

The PIDS study showed the debt-to-GDP ratio might peak at 66.8% this year until 2024, before easing to 66.4% in 2025, 66% in 2026 and 65.7% in 2027.

“So long as the National Government does not acquire substantial new debt, it will gradually decline over the succeeding years as the GDP growth rate increases. If these hold true, the baseline scenario shows that the level of debt is still manageable and sustainable,” PIDS added.

The Philippines sharply accumulated public debt during the coronavirus pandemic, bringing its debt-to-GDP ratio to 60.9% as of end-2022.

This is slightly above the 60% threshold considered manageable by multilateral lenders for developing economies, but much higher than the pre-pandemic level of 39.6% in 2019.

The government aims to bring down the debt-to-GDP ratio to less than 60% by 2025, and to 51.5% by 2028.

“The reasons for the high debt precipitated by the COVID-19 pandemic are not as deep-rooted (or self-inflicted) as in past debt episodes. It is instead the result of a large exogenous shock to growth and revenues and of the government’s accumulation of cash reserves as a precautionary move in the event of a long-haul public health crisis,” PIDS said.

At the end of 2022, the National Government’s outstanding debt stood at P13.42 trillion, higher by 14.4% from P11.73 trillion at the end of 2021.

The think tank identified several shocks that may increase Philippine debt, such as slower GDP growth and a weaker peso.

“The results show that the government is most vulnerable to a real GDP growth shock. If COVID-19 cases surge, there might be cause for the government to continue implementing social assistance/interventions for those affected while still spending to stimulate the economy,” it said.

Economic managers are targeting 6-7% GDP growth this year, slower than the 7.6% expansion in 2022.

Another risk, PIDS said, is a sudden increase in spending due to natural disasters and “realized contingent liabilities from social security institutions, public-private partnerships, or underfunded pension plans of uniformed personnel.”

Despite the elevated debt, the think tank said the government should continue spending to jumpstart the economy.

“Fiscal stimulus is especially needed on items with large multiplier effects (i.e., infrastructure) and to address the risks of scarring (i.e., human capital investments),” PIDS said.

To bring down debt, PIDS said there should be “no policy reversals that compromise the revenue-raising capacity, unnecessarily increase the spending burden on the National Government or negatively impact existing measures that led to the improvement of debt before the pandemic.”

“There needs to be a consideration that debt recently increased because of the pandemic crisis and not because of any fundamental issues or problems with policies and institutions,” it added. — Luisa Maria Jacinta C. Jocson

Meralco core net income rises 10% to P27 billion

MERALCO.COM.PH

Energy sales up 6%, surpass pre-pandemic levels

MANILA Electric Co. (Meralco) reported a 10.2% increase in consolidated core net income to P27.11 billion in 2022 from P24.61 billion a year earlier as strong energy sales exceeded pre-pandemic levels.

“Record high in revenues and billed volume as well,” Meralco Chairman Manuel V. Pangilinan said in a virtual briefing on Monday, describing the listed electricity seller’s performance last year. “It was a good accounting for a major portion of the national power system and power demand in the country.”

Betty C. Siy-Yap, the company’s senior vice-president and chief finance officer, said energy sales increased by 6% to 48,916 gigawatt-hours (GWh) in 2022 from 46,073 GWh in the previous year, driven by sustained growth across all customer segments.

At the height of the pandemic in 2020, Meralco’s consolidated energy sales were recorded at 43,572 GWh, down from 46,871 GWh in 2019.

Reported net income, which is adjusted to exclude one-time charges, reached P28.43 billion, up by 21% from P23.50 billion a year earlier.

For the year, Meralco reported consolidated revenues at P426.53 billion, up by 33.9% compared to P318.55 billion recorded in 2021.

The share of the commercial segment in the sales mix continued to increase, the power distributor said. It accounted for 36% of total energy sales last year from 33% in 2021. Residences contributed 35%, down from 37%, while the industrial segment’s share was recorded at 29% from 30% in 2021.

In power generation, PacificLight Power Pte. Ltd. recorded a core net income of P12.1 billion, significantly higher than the P2.2-billion profit in 2021.

Meralco unit Meralco PowerGen Corp. (MGen) owns 58% of PacificLight, which owns and operates a combined cycle turbine power plant in Jurong Island, Singapore.

Power generation subsidiary MGen contributed P5.5 billion to Meralco’s consolidated core net income in 2022, higher than the P1.2 billion seen in 2021.

CIS Bayad Center, Inc. contributed P67.2 million to Meralco’s consolidated core net income.

Meralco Industrial Engineering Services Corp., the engineering and construction arm of Meralco, and its two units contributed about P427.6 million to Meralco’s revenue.

The company’s costs and expenses also increased by 40.5% to P406.35 billion from P289.21 billion a year ago.

“We hope to improve on those profit, financial numbers this year but it’s too early to say [and] to provide any guidance but [the] first month was quite good and certainly better than last year’s first month,” Mr. Pangilinan said.

Consolidated capital expenditures hit P42.6 billion, higher by 54.9% than P27.5 billion in 2021, driven by the distribution utility’s projects.

The company also reported a 7% increase in its customer count to 7.63 million in 2022 from 7.41 million previously.

Meanwhile, Meralco’s average retail rate went up 15.5% to P9.52 per kilowatt-hour (kWh) from P8.24 per kWh due to an increase in pass-through charges amid high global fuel prices, as well as higher spot market prices and peso depreciation.

At the local bourse on Monday, shares in the company gained P5.60 or 1.81% to end at P314.80 apiece.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

Philex Mining income down nearly 27% to P1.8B

PHILEX Mining Corp. saw its attributable net income drop by 26.9% in 2022 to P1.8 billion from P2.43 billion a year earlier as revenues declined while cost and expenses increased.

In a disclosure on Monday, the listed gold and copper producer also reported a drop in its core income to P1.73 billion last year from P2.53 billion in 2021.

The decrease came after revenues fell 5.5% to P9.26 billion from P9.8 billion previously, while cost and expenses rose 7.9% to P7.12 billion from P6.6 billion, Philex Mining’s financial report showed.

Despite the profit fall, the company maintained a positive outlook for 2023, citing the government’s pronouncement to support the mining industry which it said tempered the impact of the pandemic, the disruption caused by Russia’s war on Ukraine, and the threat of global recession

“We did not expect the global uncertainty to wane, but we were cautiously optimistic that 2022 would be another good year for Philex,” said Philex Mining President and Chief Executive Officer Eulalio B. Austin, Jr.

“There had been operational challenges, coupled with the high levels of global inflation, the volatility of currencies and of metal prices, but with careful planning and adaptation to the changes in business conditions, we were able to achieve our targets,” he added.

Philex Mining Chairman Manuel V. Pangilinan expects the company to grow this year.

“The consensus is that global growth would slow down in 2023,” he said. “This is undoubtedly an impact still of the war in Ukraine and the collateral adverse inflationary effect on food, power, and fuel. Our country will not be spared from this deceleration, but perhaps lesser than other economies. The main hurdles would be inflation and interest rates.”

He cited the recent signing of the term sheet with Macawiwili Gold Mining and Development Co., Inc. (MGMDCI) along with the completed confirmatory drillings that identified additional mineable reserves that extended the company’s Padcal mine life from 2024 to 2027.

He described both as “good starts to what looks like a promising year.”

“Add to this the expected developmental milestones in our ongoing Silangan project and the continued government support and it will be an exciting year for all of us,” he added.

At the start of 2023, Philex Mining signed a term sheet with MGMDCI which sought to “explore commercial, financial, and technical avenues” in preparation for possible shares acquisition of properties adjacent to the existing Padcal mine.

Philex Mining is a holding firm with a business interest in mining, energy, and hydrocarbon. It primarily engages in large-scale exploration, development, and utilization of mineral resources.

On Monday, shares in Philex Mining fell by 4.73% or 14 centavos to close at P2.82 each. — Sheldeen Joy Talavera

AREIT reports higher income after ‘stable’ 2022 operations

AREIT, Inc. posted a 55% growth in net income to P3.4 billion in 2022 as stable operations brought higher revenues for the Ayala-led real estate investment trust (REIT), it said in a disclosure to the stock market on Monday.

The company said the profit figure, which placed the comparative year-ago number at around P2.19 billion, excluded the P549-million decrease in investment properties’ net fair value.

Including the change in value, the company’s full-year net income was at P2.9 billion “on account of the higher interest rate environment.”

The company’s topline last year increased by 53% to P5.1 billion, while its earnings before interest, taxes, depreciation, and amortization (EBITDA) went up by 52% to P3.6 billion. It attributed the “stable operations” mainly to the 98% rise in occupancy and its “strong” collection performance.

AREIT ended the year with a gross leasable area (GLA) of 673,000 square meters (sq.m.) from 549,000 sq.m., and assets under management (AUM) worth P64 billion from P53 billion in 2021.

The company is further targeting to grow its AUM by P10 billion to P15 billion and aims to expand its asset portfolio by about 100,000 sq.m. of GLA from 2023 to 2025.

“The company maintains its thrust to grow and diversify its asset portfolio by sector, location, and income contribution and achieve a total shareholder return range of 10-12%,” AREIT said.

In 2022, the company put in place a property-for-share swap with principal Ayala Land, Inc. in exchange for eBloc Towers 1 to 4 at Cebu IT Park, ACC Tower and Tech Tower at Ayala Center Cebu.

“With the recently concluded acquisition, AREIT outperformed its target to reach P60 billion in AUM by 2022,” the company said.

At the stock market on Monday, shares in AREIT dropped by P0.50 or 0.14% to P35.75 apiece. — Adrian H. Halili

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