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PHL faces challenges in securing ‘A’ credit rating

REUTERS

THE PHILIPPINES is still determined to secure an “A” sovereign credit rating before the end of the Marcos administration, although Finance Secretary Benjamin E. Diokno said it may be more challenging amid uncertainties in the global markets.

“Given the current global environment, getting an ‘A’ rating promises to be challenging,” he told reporters in a press chat on Friday.

Last week, Fitch Ratings downgraded the US debt rating to “AA+” from “AAA” due to a likely fiscal deterioration over the next three years and growing government debt burden.

“At a time of uncertainty in the global market, the Philippines is doing quite well,” Mr. Diokno said. “Our ultimate goal is to get an ‘A’ rating before the end of the President’s term.”

The Philippines currently falls short of the “A” rating across three major debt watchers, with Moody’s Investors Service rating the country at “Baa2,” S&P Global Ratings at “BBB+,” and Fitch Ratings at “BBB.”

All three have assigned a “stable outlook” for the Philippines, indicating that no rating changes may occur in the next 12 to 18 months. 

“An upgrade to ‘A’ rating will result in improved perception of the local and international business and financial communities on the country and will help reduce the government’s borrowing cost,” Mr. Diokno said.

“In turn, this will increase investment due to higher investor confidence and will eventually help in achieving the country in its long-term economic plans,” he added.   

The Philippines’ outstanding sovereign debt hit a record P14.15 trillion as of end-June.

Finance Undersecretary Zeno Ronald R. Abenoja said interest payments constitute about 10-11% of the government’s budget.

For next year, the government’s debt service program is set at P1.91 trillion, of which P670.47 billion will go to interest payments. 

“With the credit rating upgrade, it will lower the borrowing cost of the government that will provide savings for the National Government,” Mr. Abenoja said.   

He also said that the savings from lower borrowing costs could be allocated to the government’s priority projects.

Meanwhile, BSP Governor Eli M. Remolona said the credit default swap (CDS) spread of the Philippines on a five-year horizon is around 69-70 bps, which mirrors a CDS spread of a country with an “A” rating.   

The CDS spread is a market-based measure of a country’s likelihood of defaulting within a certain period of time.

“The CDS market is anticipating our single ‘A’ rating. Credit rating agencies look at the country’s governance and the fiscal policies to pursue [in deciding their debt ratings]. For the Philippines, they see our policies are good enough, including being able to help the poor,” Mr. Diokno said in mixed English and Filipino.   

Still, debt watchers are being careful in giving credit ratings due to the backlash they received during the global financial crisis, Mr. Diokno said.   

The three major agencies were criticized for exaggerated ratings of risky mortgage-backed securities back in 2008, which gave investors false confidence that they were safe for investing.

Mr. Remolona said the debt watchers are more “conservative” now.

To achieve the “A” credit rating, the BSP and the Department of Finance organized an InterAgency Committee on the Road to A Credit Rating Agenda in 2019.   

The body aims to coordinate the efforts of member agencies in implementing the Road to A Roadmap. It also aims to enhance engagements with analysts, investors, and credit rating agencies.

“It is important to note that we managed to maintain investor grade ratings even during the pandemic, while other countries were downgraded,” Mr. Diokno said.  “We’re fully aware that this is not going to be a walk in the park. But we are committed to work unceasingly to achieve our lofty goal.” — Keisha B. Ta-asan

Meralco expects 5% growth in energy sales in second half

MANILA ELECTRIC Co. (Meralco) expects its energy sales to grow by 5% in the second half of the year, boosted by an increase in residential and commercial sales volumes, an official said.

“We are projecting close to 5% growth for the second half, mainly driven by residential and commercial [segments] still,” Ferdinand O. Geluz, first vice-president and chief commercial officer of Meralco, said in a press briefing last week.

The power distributor’s full-year energy sales growth target is at 4%, Mr. Geluz said.

In the first half, Meralco’s energy sales went up by 3.4% year on year to 24,792 gigawatt-hours (GWh) from 23,968 GWh, boosted by a growth in the consumption of the commercial segment.

Meralco said it registered an all-time high commercial sales volume of 9,162 GWh in the period, 10.3% higher than 8,305 GWh previously, while residential sales volume rose by 1.4% to 8,629 GWh from 8,506 GWh. Industrial sales volume, however, decreased by 2.2% to 6,929 GWh from 7,085 a year prior.

Meanwhile, the power distributor’s chairman said they are looking at emerging technologies to help address the country’s power supply needs but noted that the Philippines cannot do away with “conventional” power sources like coal and gas.

“We get excited about new technologies right, simply because it’s new. Nuclear, hydrogen, ammonia, everything under the sun that scientists, or magicians can conjure up. But the reality is that is not what this country needs, and these are not quick fix solutions,” said Manuel V. Pangilinan, chairman and chief executive officer of Meralco.

Mr. Pangilinan said renewable energy sources alone cannot address supply-demand issues because of their intermittency problems.

“What this country needs where there is a very thin margin of supply to demand are very conventional power plants. Probably more gas than coal. We have to approach it on that basis. Everybody wants a quick fix solution, there is none,” he added.

As of end-2022, coal still dominates the country’s power generation mix at 59.57%, while natural gas accounts for 16.04% and renewable energy at 22.13%.

“These are the things that Meralco should be focusing on. New plants, new gas plants, existing gas plants, if you can buy into them, why not right? Because that is needed by the country as a very basic need,” Mr. Pangilinan said.

AUGUST GENERATION CHARGE
Meanwhile, Joe R. Zaldarriaga, Meralco’s vice-president and head of corporate communications, said the generation charge for August will likely decrease amid lower demand.

“While we have yet to receive the final billings from our suppliers, we expect a possible decrease in the generation charge this month. We’ve seen reduced demand in the last supply month, which likely led to lower Wholesale Electricity Spot Market (WESM) prices,” Mr. Zaldarriaga said.

The generation charge accounts for more than half of a consumer’s total monthly electricity bill.

In July, Meralco cut the overall electricity rate by P0.72 per kilowatt-hour (kWh) to P11.18 per kWh on lower generation charges.

Last month, the power distributor sourced 15% of its supply requirement from WESM.

“We are optimistic that these factors would be enough to bring down the overall electricity rate for this month,” Mr. Zaldarriaga said.

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. — A.E.O. Jose

Rates of Treasury bills, bonds may climb

STOCK PHOTO | Image by RJ Joquico from Unsplash

RATES of Treasury bills and bonds on offer this week could rise as the market continues to react to Fitch Ratings’ downgrade of the United States last week.

The Bureau of the Treasury (BTr) will auction off P15 billion in Treasury bills (T-bills) on Monday, or P5 billion each in 91-, 182- and 364-day papers.

On Tuesday, it will offer P30 billion in reissued seven-year Treasury bonds (T-bonds) with a remaining life of six years and two months.

T-bill rates may track the increase seen in secondary market yields after Fitch downgraded the US’ credit rating, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

At the secondary market on Friday, the 91- and 364-day T-bills went up by 0.18 basis point (bp) and 7.87 bps week on week to end at 5.7015% and 6.1975%, respectively, based on the PHP Bloomberg Valuation (BVAL) Service Reference Rates data published on the Philippine Dealing System’s website.

Meanwhile, the 182-day T-bill inched down by 1.13 bps week on week to end at 5.9234%.

Fitch on Tuesday downgraded the US government’s top credit rating, a move that drew an angry response from the White House and surprised investors, coming despite the resolution of the debt ceiling crisis two months ago, Reuters reported.

Fitch downgraded the United States to “AA+” from “AAA,” citing fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations that threaten the government’s ability to pay its bills.

“Global markets are still in shock of the US downgrade and are still recalibrating,” a trader said, adding that the reissued seven-year T-bond could fetch yields of 6.4% to 6.5%.

“The upcoming six-year Treasury bond average auction yield could be similar to the comparable six-year PHP BVAL yield at 6.39% as of Aug. 4,” Mr. Ricafort said.

T-bill and T-bond yields could rise amid hawkish signals from the Bangko Sentral ng Pilipinas (BSP), he added.

The BSP said it was ready to tighten monetary policy as necessary to keep a lid on price pressures, Reuters reported.

Though prices cooled for a sixth straight month, the BSP said that upside risks from wage and transport fare hikes and bottlenecks in food supply remain.

BSP Governor Eli M. Remolona, in a television interview, reiterated the central bank’s readiness to act to bring inflation back to its target and anchor consumer price expectations.

“If supply-side shocks are large enough and they are not compensated by weaker demand, then yes we will have to raise again,” Mr. Remolona said. “We are not out of the woods yet.

The consumer price index rose 4.7% in July, slower than the 5.4% in June and 6.4% seen in July 2022. This marked the 16th month that inflation exceeded the central bank’s annual 2-4% target range.

Last week, the BTr raised P15 billion as planned via the T-bills it auctioned off, with total bids reaching P45.103 billion or more than three times the amount on the auction block.

Broken down, the Treasury made a full P5-billion award of the 90-day T-bills as tenders for the tenor reached P20.867 billion. The average rate for the three-month paper went down by 38.7 bps week on week to 5.224%, with accepted rates ranging from 5.123% to 5.34%.

The government also raised P5 billion as planned from the 182-day securities as bids stood at P13.309 billion. The average rate for the six-month T-bill was at 5.789%, down by 3.4 bps from the previous week, with accepted rates at 5.46% to 5.83%.

Lastly, the BTr borrowed P5 billion as programmed via the 364-day debt papers as demand reached P10.927 billion. The average rate of the one-year T-bill went up by 2.6 bps to 6.21%. Accepted yields were from 6.1% to 6.27%.

Meanwhile, the reissued seven-year bonds to be offered on Tuesday were last auctioned off on July 18, where the government raised the programmed P30 billion at an average rate of 6.299%.

The BTr wants to raise P225 billion from the domestic market this month, or P75 billion via T-bills and P150 billion via T-bonds.

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

Electric means business

Diamond Auto Group EV Corp. (DAGEVC) displays two of Dongfeng’s full-electric offerings, the Rich 6 pickup (P2.76 million), and EV30 panel van (P1.9 million). — PHOTO BY KAP MACEDA AGUILA

Diamond Auto Group EV Corp. is going all in on Dongfeng’s full electrics

IF YOU HAVEN’T gotten a whiff of it yet, full-electric vehicles are clearly not a passing fancy or a novelty. Just ask the folks of Diamond Auto Group EV Corp. (DAGEVC), who are going all in on the trend, excuse me, evolution of mobility.

The company, which was once a dealership group of Mitsubishi Motors Philippines Corp., now oversees the importation and local distribution of Chinese automotive brand Dongfeng — specifically its commercial electric vehicles. The company said in a release, “With a strong foundation of more than 50 years (and) excellent track record in the automotive industry, we are committed to bring in sustainable transportation, bring the latest and innovative electric vehicles that are revolutionizing the way we travel, and be the forerunner in the electrification of light commercial vehicles in the country.”

To reiterate, DAGEVC is not taking over importation and distribution of the Dongfeng portfolio here. It is zooming in on the latter’s full-electric offerings. In a recorded message, DAGEVC Chairman George Blaylock said, “For some time now, we’ve seen the growth in the EV market,” a development that is also “being seen locally.”

He continued, “This new group will be taking an active role and move into this (space). We hope we’ll be able to bring the EV experience to greater heights.”

Construction is ongoing on what will be the group’s flagship Dongfeng EV dealership — located in San Isidro, Cainta Rizal, along Marcos Highway. Eyed to open in September, this facility will showcase the lineup of vehicles the company is initially making available.

It is a complete and formidable one. Headlining the portfolio is the Rich 6, said to be the first fully electric pickup available in the local market. It can muster 350 kilometers on a full charge, with an electric motor that submits 161hp and 420Nm. The Rich 6, priced at P2.76 million, gets LED headlights, an LCD instrument cluster display, and rotary drive selector dial.

The EC36 (P1.78 million) is an eight-seater passenger van with an output of 80hp and a range of 300 kilometers. DAGEVC positions the model as ideal for shuttle services.

Enterprises looking for cargo delivery vans can be served by the EV30 panel van (boasting 94hp and 230Nm). The vehicle, priced at P1.9 million, can be loaded with up to 5.6 cubic meters of cargo through its wide barn doors. A light panel van, the EC35, is also available. This can dish out 80hp and 200Nm, and DAGEVC said this has a “strengthened chassis for greater load with a 5.1-cubic-meter cargo box space and 300 km (of) range.” It is priced at P1.75 million.

A light-duty cab and chassis product, the EC31 (P1.68 million) offers 80hp and 200Nm of torque and 300 kilometers of range; the medium-sized EV35 (P2.475 million), can carry 1,650kg and travel 280 kilometers per full charge. Its motor serves up 134hp and 230Nm. Lastly, the large EV45 (P3.35 million) can accommodate up to 2,200kg with its 161hp, 320Nm electric motor. It can travel up to 350 km, and gets keyless entry, power windows, and LCD instrument cluster display.

Replying to a question from “Velocity,” company officials said the company is looking into making the offerings more customizable to serve varied business applications — including, for instance, refrigeration or air-conditioning of the rear cargo hold.

The priority for now remains to be B2B customers, and the company is counting on the mandatory requirement to electrify government and corporate fleets per the Electric Vehicle Industry Development Act (EVIDA). Rule V, Section 20 states that industrial and commercial companies, public transport operators, and “government fleets,” “shall ensure that at least 5% of their fleet, whether owned or leased, shall be EVs within the timeframe indicated in the CREVI (Comprehensive Roadmap for the Electric Vehicle Industry).”

Besides, it makes sound business sense while being good for the environment, insisted DAGEVC. Aside from reducing a firm’s carbon footprint, going electric means “less moving parts, lower maintenance costs, and less downtime” while realizing savings on fuel.

Certainly, there are a couple of Dongfeng products that can appeal to B2C buyers as well (specifically the pickup and passenger van), and DAGEVC is also hoping that as the positive reputation of EVs continues to be established in the country, more people will look at these full-electric options not just as a novelty but a practical choice they can quickly fit into their lifestyle.

For more information, call Diamond Auto Group EV Corp. at (02) 8244-1544.

DITO expects 5% revenue contribution from enterprise segment in first year

DITO Telecommunity Corp. expects its enterprise business to contribute 5% to its top line in the first year from its launch and by 18% in the next three years.

“Our outlook moving forward is we want the enterprise segment to be 5% of our revenue contribution up to 18% in the next three years,” Evelyn B Jimenez, chief commercial officer of DITO, said at a media briefing on Thursday.

Ms. Jimenez said a new offering that targets micro, small, and medium enterprises is one of the products the company is looking to launch within this semester.

“In the latter part of this year, we are (also) going to launch a new prepaid portfolio targeting the high-usage segment,” she said.

In 2023, the company launched two businesses: mobile postpaid plans and DITO Home Wifi.

“We have launched two major businesses: mobile postpaid because we are already targeting the higher segment and come July, we launched DITO Home, in which we received close to 30,000 applications in less than a month,” said Ms. Jimenez.

SIM REGISTRATION
Meanwhile, the company said it is confident on the turnout of the SIM (subscriber identity module) registration as it shows that it has about 8 million subscribers.

“The SIM registration is the coming out party of DITO. With nearly 8 million subscribers, you can’t deny that although we are a far third, we are in the running,” said Adel A.Tamano, chief administrative officer of DITO.

At the end of the registration and reactivation period, the National Telecommunications Commission recorded a total of 113.97 million SIM cards registered or 67.83% of the total 168.02 million subscribers.

About 7.74 million out of this are DITO subscribers, which represents 51.72% of its 14.96 million total subscribers.

“What you see is the percentage registered against what we published. What we published is our cumulative activations since we launched in March 2021. But if you talk about our real customer base, who are revenue-generating and active, we are close to 100% registered,” said Ms. Jimenez.

She said this is the reason the company is not worried about those that did not register because the business is protected by the registration of its core base.

“Now we are at around 7.8 million (subscribers), so we are probably looking at around 9 to 10 million (subscribers) by the end of the year,” she added.

Aside from this, Ms. Jimenez said the company is also confident in the growth in its average revenue per unit (ARPU) and daily activations since the SIM registration.

“Our revenue now compared to last year, we are already at 60% growth from last year, so revenue is definitely continuing to increase. Even ARPU is also increasing, now it is 13% increase ever since the SIM registration,” she said.

“Our average daily activations also increased by around 15% after SIM registration. So, things are doing really well for the business,” she added.

At present, the company has an ARPU of P107 for prepaid P107, which it is targeting to increase to P125 towards the end of the year. — Justine Irish D. Tabile

Two measures of global economic and corporate health flash red

LONDON — Two measures of corporate and economic health were flashing red on Friday as shipping group Maersk reported a fall in global demand for sea containers and advertising giant WPP said clients in the US tech sector were slashing their marketing spend.

A.P. Moller-Maersk lowered its estimate for global container trade this year as companies reduce inventories and higher interest rates and recession risks in Europe and the United States drag on global economic growth.

The company, one of the world’s biggest container shippers, said it expects container volumes to fall by as much as 4%. It had previously forecast a decline of no more than 2.5%.

Maersk controls about one-sixth of global container trade, transporting goods for retailers and consumer companies such as Walmart, Nike and Unilever.

WPP, the world’s largest advertising group, warned that US tech clients had pulled back spending in the second quarter, which Chief Executive Mark Read said took the company by surprise.

“Spend will pick up after a period of time, but I think we are nervous for the rest of the year because we can’t get total clarity on when that’s going to happen,” he told Reuters.

The retreat in spending led WPP to follow rival Interpublic — which last month also blamed tech clients cutting marketing budgets — in lowering its growth forecast for this year, to 1.5-3.0% from 3-5%.

That was a stark contrast from February, when WPP, which owns the Ogilvy, Grey and GroupM agencies, reckoned clients would spend on marketing through any downturn to prop up sales and justify price rises.

Analysts said the news reflected caution among companies wrestling with higher borrowing costs and consumers tightening their own budgets amid a cost of living crisis.

Marketing spending is often the first to get cut when companies are worried about a strain on cash.

WAIT AND SEE
“Corporations are in wait-and-see mode when it comes to splashing the cash and handing margin over, at a time when demand is very tough to profile,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

Apple on Thursday warned that its sales would decline for the fourth quarter in a row, although Amazon.com, Inc. was more upbeat, reporting sales growth and profit that beat Wall Street’s expectations.

The signs of economic turbulence will underscore concerns that a bounce in China’s economic activity after Beijing lifted its long COVID lockdowns will prove short-lived. Companies had bet that a Chinese rebound would help offset the impact from slowdowns in the US and European economies.

The scope of stimulus Beijing has offered to revive the economy so far has underwhelmed the market.

Global firms from consumer goods giant Unilever to automaker Nissan 7201.T and machinery maker Caterpillar have warned of slowing earnings there as the world’s second-largest economy loses its post-pandemic spring.

Expectations for second-quarter earnings were already low due in part to China’s weakness. Refinitiv I/B/E/S data show European companies are expected to report their worst quarterly results in years. US results have been better than expected, but as of Friday were still posting a 4.2% year-over-year drop in second-quarter earnings, mostly due to the energy sector.

The International Monetary Fund last week said that it expects global economic growth to slow this year, led by advanced economies even as food prices have come down and the March banking turmoil has been contained.

It expects the global growth to slow to 3% this year and next, from 3.5% last year.

Echoing Maersk, DHL Group, among the world’s biggest shippers, said on Tuesday it saw drops of 16% and 7.1% respectively in air and ocean freight volumes in the first half, particularly on routes between China and its two biggest trading partners, the United States and Europe.

“I don’t know that we’ve ever seen freight demand fall this far so fast and for so long without an accompanying economic recession,” logistics firm Knight-Swift chief David Jackson said in a post-earnings call last month. — Reuters

Palay output growth estimated at 1.6% in three months to June

PRODUCTION of palay, or unmilled rice, in the second quarter was estimated to have risen 1.6% year on year during the second quarter, the Philippine Statistics Authority (PSA) said.

The PSA estimate for palay volume was 4.27 million metric tons (MT), higher than the actual output of 4.20 million MT a year earlier. The estimate was based on the standing crop as of June 1.

The new projection is 0.2% lower than the initial forecast of 4.28 million MT issued on April 1.

In the three months to June, the harvest area for the quarter is estimated to have increased by 0.8% year on year to 961.14 thousand hectares. If realized, yield per hectare will grow 0.7% to 4.44 MT.

“As of June 1, 2023, about 840.51 thousand hectares or 87.4% of the 961.14 thousand hectares updated harvest area of standing crop have been harvested with recorded palay output of 3.76 million metric tons,” the PSA said.

Of the standing palay yet to be harvested, 96.9% were at the maturing stage, while 3.1% were at the reproductive stage.

The PSA also reported that corn production is estimated to have declined 0.5% to 1.48 million MT, based on the standing crop as of June 1.

The new estimate was 0.3% higher than the 1.47 million MT issued on April 1.

The PSA cut its harvest area estimate by 2.6% to 408.89 thousand hectares, while the assumed yield per hectare is estimated to have risen by 2.3% to 3.61 MT.

“As of June 1, 2023, the updated area harvested for corn was 323.92 thousand hectares or 79.2% of the 408.89 thousand hectares updated area of standing crop with reported corn production of 1.25 million metric tons,” the PSA said.

Of the standing crop, 86.5% were at the maturing stage, while 13.5% were at the reproductive stage. — Sheldeen Joy Talavera

Toyota Land Cruiser 250 presented to the world

Two iterations of the Toyota Land Cruiser 250 — PHOTO FROM TOYOTA MOTOR CORP.

Hybrid powertrain to make debut in iconic model

LAST WEDNESDAY, at exactly 10 a.m. Japan Standard Time, Toyota Motor Corp. (TMC) unveiled the all-new Land Cruiser in an event streamed online via YouTube. This model is affixed with a “250” appendage on its moniker and, hence, shouldn’t be confused with the previously launched (and selling like hotcakes) Land Cruiser 300.

TMC is still officially calling the LC250 a prototype, with a launch “planned for the first half of 2024 in Japan,” according to a company release. TMC Director and Operating Officer Simon Humphries presided over the 20-minute introduction of the LC250 (and Japan-exclusive LC70), noting that the Land Cruiser nameplate is already 72 years old.

It was, he narrated, “the time of Kiichiro Toyoda, founder of Toyota Motor Corp., (when) the company was only 14 years old, a disruptive start-up in the automotive world.” Today, Mr. Humphries continued, the Land Cruiser is sold in 170 countries and regions around the world. “(It) literally put Toyota on the map.” The nameplate has cumulatively sold about 11.3 million units worldwide.

“From prairies to deserts, from the North to the South poles, it is safe to say, Land Cruiser has seen more sides of life than any other automobile in history,” he boasted.

The Land Cruiser has been traditionally divided into three iterations: the station wagon “that always showcases the latest technologies and has evolved into the flagship model” (currently the 300 Series); a heavy-duty version “with outstanding durability and off-road driving performance (the 70 Series),” and a light-duty model “that provides ease of handling and comfort on an off-road base as a lifestyle and practical choice for customers (Prado).”

Enter the 250 Series, which is said to be a result of instructions from former TMC President (now Chairman) Akio Toyoda. “The Land Cruiser should be a car that supports people’s lives and local communities, so the light-duty model must return to the true form that customers are looking for,” he had said to the development team.

The group interpreted the directives as “returning to the origin of the Land Cruiser,” resulting in a “simple and sturdy vehicle that can be trusted by customers to fulfill their lifestyle choices and practical needs.”

Mr. Humphries described the 70 as the “essence” of Land Cruiser, the 300 as its “pinnacle,” and the 250 as its “core.” While sharing a GA-F platform with the 300, it will banner for the first time in an LC a hybrid powertrain (among others) and electric power steering, while improving on a “basic performance as an off-roader.” Versus the current-generation Prado, the LC250 is 100 millimeters longer (at 4,925mm); 95mm wider (at 1,980mm), 20mm taller (at 1,870mm), and with a wheelbase 60mm longer (at 2,850mm).

The executive shared that TMC sought the opinion of Dakar Rally champion Akira Miura in developing more intuitive cockpit controls. “We designed (these) to be easy to identify and operate by feel alone,” said Mr. Humphries.

Meanwhile, the 250’s overhangs have been kept short, “proportions are calculated for maneuverability in extreme environment,” and the vehicle gets a low beltline, slim A-pillars, and an angular construction for better visibility.

Significantly, TMC will be marketing the Land Cruiser 250 to the North American continent (the 300 isn’t). Although it’s too early to tell, there’s a good chance that the Philippines will get that (aforementioned hybrid) variant, powered by a 2.4-liter Hybrid Direct Shift (eight speed) delivering 330ps and 630Nm. Other options include an exclusively ICE (internal combustion engine)-powered trim, one fitted with a 2.8-liter turbo with 48V generator, a diesel, and a 2.7-liter six-cylinder gas grade. — Kap Maceda Aguila

ACEN still looking to pursue net-zero goal

AYALA-LED ACEN Corp. will continue to pursue its net-zero emissions target, even amid the absence of a committed goal in the upcoming edition of the Energy department’s Philippine Energy Plan.

“The decision for ACEN to set a net-zero target and 100% RE (renewable energy) was made independent of the decision of the DoE’s (Department of Energy) on this point. So, it does not really change our particular position — it is a commitment we have made and intend to stand by,” Miguel G. de Jesus, chief operating officer of ACEN, said at the BusinessWorld Insights forum on July 26.

The listed energy company of the Ayala group has committed to fully transition the company’s power generation portfolio to 100% RE by 2025.

ACEN has said it aims to achieve its near-term emission reduction by 2030, deliver its long-term emission reduction targets by 2040, and neutralize residual emissions to achieve net zero by 2050.

The Energy department earlier said that it will not commit to a net-zero emissions target yet because it plans to focus more on increasing the share of RE in the power mix and possibly deploying more emerging clean technologies.

The DoE is set to release its new Philippine Energy Plan within this year, which is expected to include a higher share of renewable energy and a target share of nuclear energy capacity. Currently, the government is aiming to increase the share of RE to 35% by 2030 and 50% by 2040.

Net zero refers to reducing greenhouse gas emissions to as close as zero while also offsetting any remaining greenhouse gases in the atmosphere.

“We have also gone through the process of trying to look for transition mechanisms for some of our thermal assets and we recognize that we are relative newcomers compared to some of the energy players who have larger footprints. In some senses, that makes it a little bit easier for us to pivot,” Mr. De Jesus said.

For its part, the energy company is aiming to grow its RE portfolio to 20 gigawatts by 2030. To date, it has around 4,200 megawatts of attributable capacity spread across the Philippines, Vietnam, Indonesia, India, and Australia.

“We believe in the RE trajectory and are quite committed to ensure that we hit our 2030 target,” he said. — A.E.O. Jose

Audrey Hepburn from the man who knew her best

VIRTUALLY every person on Earth has seen the face of actress Audrey Hepburn at least once. Just like the image of her contemporary Marilyn Monroe in a billowing white dress, Audrey Hepburn’s image in a slinky black Givenchy gown in her role as Holly Golightly in Breakfast at Tiffany’s has been frozen in time to serve as a snapshot of showbiz glamor. This same image of her has been reproduced millions of times on posters, T-shirts, coffee mugs, and masses and masses of kitsch. But beyond that face, and beyond the movie roles that made that face enduringly famous for decades, how many people actually know her?

An exhibit called “Intimate Audrey” seeks to reintroduce her to the world, redirecting the light far from the flashbulbs of Hollywood to the more intimate glow which shone from a singular, extraordinary woman. The 730 square-meter exhibition, featuring photographs, scenes from her films, voice recordings, letters, and sketches from the actress premiered in Belgium (her birthplace) in 2019, then moved to Holland (where she spent World War II). The Manila stop is its first in Asia — thanks to the efforts of FashX, a fashion trade and licensing company in the Philippines, after its founder Carmina Sanchez-Jacob fell in love with the exhibit in Amsterdam. The exhibition runs from Aug. 1 to Oct. 29 in S Maison at Conrad Manila in Pasay City.

No less than her own firstborn, Sean Ferrer (with her first husband, fellow actor Mel Ferrer), took media guests and First Lady Liza Araneta-Marcos around on the last day of July for the exhibit’s opening.

For 30 years, Mr. Ferrer has been curating his mother’s physical memories, and composing them all into an exhibit, covering her childhood, her fame, her family, and her work as an ambassador with the United Nations Children’s Fund (UNICEF). True to her final role as a humanitarian, proceeds from the exhibit will go to children’s charities. Profits will go to EURORDIS — Rare Diseases Europe — as well as other charitable projects, according to the exhibition’s website.

“Obviously, we don’t do this to make her any more famous, because she’s permanently viral. We do this to raise monies for children’s charities and so forth,” said Mr. Ferrer in an interview with BusinessWorld.

EARLY CHILDHOOD
Audrey Hepburn was born on May 4, 1929 as Audrey Kathleen Ruston in Ixelles, one of the municipalities of Brussels. She was the only child from the second marriage of her mother, the Baroness Ella van Heemstra (her mother’s childhood home was Huis Doorn, the estate where the deposed Kaiser Wilhelm II spent his years in exile after World War I) to British subject Joseph Victor Anthony Ruston. The name by which she would be later known came from her father’s impression that he was connected to the aristocratic Hepburn family, transforming his and his daughter’s name to Hepburn-Ruston. Her parents divorced when Audrey was six. She called this “the most traumatic event in my life,” according to Enchantment, Donald Spoto’s biography of the actress.

While there are photographs of a young Audrey and her father in the exhibit, there is also one of an adult Audrey and her father in the 1960s. She had tracked him down in Dublin through the Red Cross. In Audrey Hepburn, An Elegant Spirit, a biography Mr. Ferrer wrote about his mother, he said, “The man she had longed for her entire childhood was in reality an emotional invalid. And so my mother did it: she stepped forward and hugged him, knowing full well that was going to be it. She chose to forgive him, instinctively, in one instant.”

Enrolled at boarding school in England, young Ms. Hepburn was sent back to Arnhem in the Netherlands at the outbreak of World War II in 1939. While first protected from the war’s dangers due to the Van Heemstra family’s status as respected citizens of Arnhem, the war would eventually spare no one. The Dutch famine of 1944-1945, for example, forced Ms. Hepburn and her family to eat bread made from grass, and share broth made from boiling a single potato.

“Don’t discount anything you hear or read about the Nazis. It was worse than you could ever imagine. We saw my relatives put against the wall and shot,” said the actress. “I knew the cold clutch of human terror all through my early teens: I saw it, I felt it, heard it — and it never goes away. You see, it wasn’t just a nightmare: I was there, and it all happened.”

The girl, educated in dance, and with a dream to be a dancer, helped raise funds for the Dutch Resistance movement by giving performances, the audiences forced to be quiet by the fear of arrest: a story she discussed during her screen test for Roman Holiday. “The best audience I ever had made not a single sound at the end of my performance,” the actress later said.

In the exhibit, there is a picture of Ms. Hepburn, taken on her 16th birthday, holding bunches of flowers. The Germans in the Netherlands surrendered to the Allied Forces a day later.

FROM BALLET TO MOVIES
Mother and daughter moved to London after the war to continue Ms. Hepburn’s education in ballet, with Marie Rambert, a collaborator of ballet impresario Sergei Diaghilev, and dancer Vaslav Nijinsky. It was here that she was told that she was too tall and that she had started her ballet training too late, thus limiting a future career as a prima ballerina.

That was when she started acting, taking roles on stage, and then small parts in movies. While shooting another small role in the film Monte Carlo Baby, Ms. Hepburn was discovered by French novelist Collette, who cast her as the lead for her play Gigi. That would lead to her being noticed by Paramount Pictures which chose her to play a princess who spends a madcap day in Rome with a reporter but would have to give up love for duty and return to her royal job in the film Roman Holiday. For that role, she would win her first Oscar at 23. The Vespa scooter from the film can be seen in the exhibit.

“This year is kind of a bittersweet anniversary, because it does mark the 70th birthday of Roman Holiday,” said Mr. Ferrer in a speech. Forty years after the release of Roman Holiday, Audrey died of cancer in 1993.

Other movie roles would follow — in the exhibit, there are stills from Sabrina, Funny Face, Charade; costume swatches on which she made notes, and a whole wall devoted to off-duty pictures with famous friends.

“I think that with each film, it’s hard to say a ‘favorite role,’ because she would kind of do it, and then let it go. But each film represented the beginning of lifelong friendships,” said Mr. Ferrer. “I think that Funny Face had a special place in her heart, because you know, she wanted to be a dancer to begin with. To be able to sort of spread her wings next to Fred Astaire is any woman’s dream come true.” In that movie, Ms. Hepburn played a shy bookstore clerk who becomes a model in Paris, with a solo dance sequence showing the world her love of dance.

FAVORITE ROLE: MOTHER
Her actual favorite role as a mother would also be represented in the exhibit. Special sections are devoted to her marriage to Mel Ferrer — after their divorce, she would marry and divorce once more, to psychiatrist Andrea Dotti, and have another son, Luca; and ended life in the company of fellow actor Robert Wolders — as well as a section with just her son Sean.

There’s her wedding dress by Pierre Balmain, Mr. Ferrer’s christening gown by his mother’s friend, designer Hubert de Givenchy, as well as dozens of photographs documenting a quiet domestic life away from Hollywood.

“I think that if you consider the fact that at the top of her career, she gave up being an actress to become a full-time mother to me because I couldn’t travel anymore, to visit her on the set, that says a lot. She knew that she couldn’t do too many things at once. She gave up her career to be my mom. That’s a huge present,” Mr. Ferrer told BusinessWorld. Ms. Hepburn herself said, “The one thing I dreamed of in my life was to have children of my own. It always boils down to the same thing — not only receiving love but wanting desperately to give it.”

Another cherished role was her work with UNICEF, a decision that goes back full circle to her hardships during the war.

“There’s a big difference between dying of starvation and malnutrition, of course, but I was very, very undernourished. Immediately after the war, an organization, which later became UNICEF, instantly came in with the Red Cross and brought relief for the people in the form of food… I was one of the beneficiaries with the other children. I’ve known about UNICEF all my life,” she said.

A section in the exhibit shows her travels in Ethiopia, Sudan, Guatemala, Honduras, El Salvador, Mexico, Vietnam, Thailand, and Bangladesh, surrounded by the children she helped. In the UNICEF website, she is quoted as saying, “There is a moral obligation for those who have, to give to those who have nothing.” In Enchantment, Donald Spoto quotes her: “Giving is living. If you stop wanting to give, there’s nothing more to live for.”

INNER AND OUTER BEAUTY
It is in these instances that we see a connection between inner and outer beauty, in a world often too eager to appreciate only what can be seen.

Mr. Ferrer told BusinessWorld, in a discussion about his mother’s own beauty: “Without the inner grace and generosity she would have been something else. There is no doubt. I mean, she was not a classic beauty.” Ms. Hepburn herself said, “I never thought of myself as beautiful. I’d like not to be so flat-chested. I’d like not to have such angular shoulders, such big feet, and such a big nose. When you see what is happening in the world, it’s so trivial to talk about looks. Actually, I’m very grateful for what God has given me. And there’s a lot more — so much more — that I must do!”

“She saw herself as a wonderful package of imperfections… I think in her case, the light comes from within,” said Mr. Ferrer.

Hepburn’s face, contrary to her own belief, endures as a symbol of beauty. Mr. De Givenchy once said, “There is not a woman alive who does not dream of looking like Audrey Hepburn.”

“I think it’s not so much about what she looks like,” said Mr. Ferrer on his mother’s enduring legacy. “It’s about what she feels like.

“What she felt like to all those children in Africa — who didn’t know who she was. What she feels like to all the younger generations — a lot of poetic justice there — because it’s the same generations that she fought for as a UNICEF ambassador, who today are carrying her into the future. She’s really become viral also for tweens and teens and kind of has taken the place next to James Dean on that closet door in that teen’s bedroom,” said Hepburn’s son.

“They sense her. Each of them has a little piece of her life. All together, they have a wonderful, kaleidoscopic view of who she was,” he said. “I can only tell you what she said at the end of her life, when I had to tell her myself that we couldn’t get her better.

“She said: ‘How disappointing.’ But at the same time, ‘That’s life. The tall tree has to fall for the sun to shine through, and the little sapling to grow up.’ She saw it as a cycle of life. She was not angry. I think she felt she lived a very fortunate and rich life. I think she was thankful, even though she was taken very young.” — Joseph L. Garcia

Exhibition tickets will be available online via SM Tickets and at all SM Ticket offline locations such as SM Department Stores and SM Cinemas. Exhibition access is priced at ₱850 with a special rate of ₱450 for students, senior citizens, PWDs, national athletes and medal of valor awardees, and allows access for one hour and a half per visit.

World rice price index jumps to near 12-year high in July, says FAO

MUMBAI — The United Nations food agency’s rice price index rose 2.8% in July from a month ago to their highest level in nearly 12 years as prices in key exporting countries jumped on strong demand and India’s move to curb the exports, the agency said on Friday.

The Food and Agriculture Organization’s (FAO) All Rice Price Index, which tracks prices in key exporting countries, averaged 129.7 points in July against 126.2 points for the previous month, the agency said.

The July score was almost 20% higher than the last year’s 108.4 points and the highest since September 2011, it said.

The agency’s overall world food price index also rose in July, rebounding from two-year lows.

India, which accounts for 40% of world rice exports, last month ordered a halt to its largest rice export category to calm domestic prices, which climbed to multi-year highs in recent weeks as erratic weather threatens production.

India, Thailand, Vietnam, Cambodia and Pakistan are among leading exporters of rice. China, Philippines, Benin, Senegal, Nigeria and Malaysia are key importers of the staple. — Reuters

Appellate tax court affirms San Miguel Brewery’s P122-M refund claim

CTA.JUDICIARY.GOV.PH

THE Court of Tax Appeals (CTA) has affirmed its ruling to grant San Miguel Brewery, Inc.’s refund claim worth P122.62 million, representing wrongly paid excise tax on its beer products for the fiscal year 2017.

In a 27-page decision dated Aug. 2 and made public on August 3, the CTA full court said its Third Division did not err when it voided a 2012 Bureau of Internal Revenue (BIR) memo that imposed a 4% annual excise tax above what was mandated under the Tax Code, leading to the court granting the firm’s refund claim.

“The commissioner of internal revenue (CIR) cannot, in exercising such power, issue administrative rulings or circulars inconsistent with the law sought to be applied,” Associate Justice Lanee S. Cui-David said in the ruling, citing the CIR’s authority to interpret provisions of the National Internal Revenue Code.

The tax tribunal said it has jurisdiction to rule on the validity of revenue regulations imposed by the BIR.

“This issue is not novel as it has already been settled in a plethora of cases that the CTA has exclusive jurisdiction to rule on the constitutionality or validity of a tax law and regulation or administrative issuance,” it said.

Under amendments to the Tax Code covering excise taxes on alcohol and tobacco, the excise tax rates on liquor are at P1 per liter if the net retail price per liter of the product is P50.60 or less, and P20 if it is higher than P50.60.

The BIR had imposed excise tax rates per liter of fermented liquors of P15.49 or P20.57 regardless of whether the net retail price per liter of the volume of the liquor product is below or more than P50.60.

Citing provisions of Section 143 of the Tax Code, the CIR argued that the tax court erred when it granted the refund since there was no reclassification of the firm’s San Miguel Light beer product as a variant of an existing product.

The court sided with San Miguel Brewery’s argument that reclassifying San Miguel Light is not an issue in the refund claim, saying the provision had already been repealed by Republic Act No. 10351, or the law on excise tax on alcohol and tobacco products.

Last month, the CTA Special Second Division granted a separate refund claim on overpaid excess taxes worth P146.87 million based on the same voided BIR memo.

Citing the Supreme Court, the tax tribunal said BIR memorandum circulars are considered “general interpretations of tax laws” that could be scrutinized under a court of law.

“The courts will not countenance administrative issuances that override, instead of remaining consistent and in harmony with the law they seek to apply and implement,” the tribunal said. — J.V.D. Ordoñez

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