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AirAsia awaits delivery  of A321, A330 aircraft

LOW-COST carrier AirAsia Philippines expects the delivery next year of five A321s and five A330s Airbus aircraft apart from 20 leased planes to support its growth projection.

“We are lucky that we have an order book of over 400 planes. The order book starts next year with the delivery of five A321s,” said Anthony Francis Fernandes, chief executive officer of Capital A Berhad, the holding firm for the travel and lifestyle group.

“In between, we are taking from the leasing market both new planes and old planes. We just signed about 20 more aircraft. It’ll be a mixture of taking what are the available Airbuses,” he said.

AirAsia Communications and Public Affairs Country Head Steve F. Dailisan said the airline is also looking at the delivery next year of bigger planes, which will be five A330s.

In February, the airline announced its commitment to bring its fleet back to the pre-pandemic level, which is 24 aircraft. It is currently operating 18 aircraft, just four away from this year’s target, Mr. Dailisan said.

“I’m invigorated and energized to put in more investment in the Philippines, not just in the airline but now we have our Superapp and aircraft service business. We are very committed to the Philippines,” Mr. Fernandes said.

“It is our smallest market but I think it really should be one of our biggest markets as it sits on the doorsteps of North Asia,” he added.

Aside from fleet expansion, Mr. Fernandes is focusing on processing the airline’s refund to customers. “We are hoping to sort that out by October or November,” he said.

This year, the airline aims to refund the remaining 21% or P9.07 million of its refunds. Data from AirAsia show that it has completed 79% or P34.76 million of its total P43.83 million refunds.

The airline is also looking at improving its products and adding more destinations.

“We want to bring in Face ID here, we’re gonna have WiFi on the plane and we will add new destinations on top of what we are doing with our Superapp,” Mr. Fernandes said.

Through Superapp, AirAsia customers can fly via other airlines, avail of ride-hailing services, and book travel packages.

Meanwhile, Mr. Fernandes said a quicker way to decongest the Ninoy Aquino International Airport (NAIA) is to build better road infrastructure for other airports.

“I call the government to look at building a train and better bus services to Clark [International Airport],” he said.

He also said airport operations and management should be under a mix of government and private entities.

On Friday, the Department of Transportation and the Manila International Airport Authority submitted a joint proposal to upgrade NAIA under a solicited public-private partnership. Under the proposal, the private concessionaire will have 15 years to operate the airport and recover its investment. — Justine Irish D. Tabile

Digital doubles, fake trailers: AI worries Hollywood actors before labor talks

ARTIFICIAL intelligence erased 40 years from Harrison Ford’s face for certain scenes in the newest Indiana Jones film, Indiana Jones and the Dial of Destiny.

LOS ANGELES — A search for Wes Anderson on YouTube turns up trailers that the famed director with a distinctive style appears to have made for adaptations of Star Wars, Harry Potter, and The Lord of the Rings featuring Bill Murray, Scarlett Johansson and other stars.

Artificial intelligence (AI) allowed people with no real actors and far smaller resources than major Hollywood studios to generate the fake movie trailers, feeding debate on the issue that will be on the bargaining table when the SAG-AFTRA actors union begins labor talks with studios on June 7.

AI already has divided studios and striking film and television writers, who want assurances that the emerging technology will not be used to generate scripts.

SAG-AFTRA wants to ensure its members can control use of their “digital doubles” and ensure studios pay the actual actors appropriately, said Duncan Crabtree-Ireland, the union’s chief negotiator.

“The performer’s name, likeness, voice, persona — those are the performer’s stock and trade,” Mr. Crabtree-Ireland said. “It’s really not fair for companies to attempt to take advantage of that and not fairly compensate performers when they’re using their persona in that way.”

Tom Cruise and Keanu Reeves already have been the subject of widely viewed unauthorized deepfakes — realistic yet fabricated videos created by AI algorithms. Mr. Reeves called the technology “scary,” in part because it can be deployed without actors’ input.

Interest in generative AI exploded globally after the November launch of ChatGPT, the fastest growing app of all time, by Microsoft Corp-backed OpenAI. US and European regulators have demanded guardrails to prevent misinformation, bias, violation of copyrights, and invasion of privacy.

Actors and writers envision various scenarios in which studios could try to cut costs and boost revenue using generative AI, which can be fed existing material and pump out new content. The technology already is used to erase age marks or alter mouth movements to sync with words when programming is dubbed in various languages.

Actor Leland Morrill said he has worked on sets where he was surrounded by cameras taking pictures from all angles.

“With that type of content, they could use you for part of it, and then create the rest of the character, and then we’re not on set anymore and nobody gets paid,” Mr. Morrill said at a multi-union rally in Los Angeles.

Producer, writer, and former Family Ties actress Justine Bateman, holds a degree in computer science and has been sounding the alarm about AI. She said companies could allow fans to make their own Star Wars movie, and add themselves for an extra fee.

Or, a studio could take footage from a popular 1980s TV show such as Family Ties and make a new season with AI.

YOUNGER YOU
Some actors have signed off on specific uses of AI.

The upcoming Indiana Jones movie features scenes where 80-year-old star Harrison Ford appears 40 years younger. He said Walt Disney Co.’s Lucasfilm used images of his face that were shot during Indiana Jones films in the 1980s.

“It’s fantastic,” Mr. Ford raved about his youthful on-screen appearance in an interview with late-night host Stephen Colbert.

James Earl Jones, now 92, agreed to allow AI to replicate the menacing voice he gave to Darth Vader, according to Vanity Fair, so the character could live on. AI helped Disney put the late Carrie Fisher in 2019 film The Rise of Skywalker, with the blessing of her daughter.

SAG-AFTRA’s Mr. Crabtree-Ireland said actors have varying comfort levels with how AI is used, which is why the union will advocate for informed consent in talks with the Alliance of Motion Picture and Television Producers (AMPTP), the group that represents Disney, Netflix Inc., and other studios. — Reuters

A representative for the AMPTP had no comment on its position on use of AI with actors.

In negotiations with the Writers Guild of America (WGA), the AMPTP proposed discussing the topic once a year, which the Guild viewed as an attempt to avoid the issue. The WGA has been on strike over AI and compensation since May 2.

If SAG-AFTRA cannot reach a deal on AI and other issues, actors also could go on strike, which would pile more pressure on the studios. Ahead of negotiations, SAG-AFTRA leaders have asked members to provide authorization to call a strike if needed. Voting on a strike authorization ends Monday.

Both unions want safeguards in place before AI becomes widely used.

Ms. Bateman, a former SAG board member, derides AI as “automatic imitation” that could lead to a future filled with rehashed entertainment from the past.

“I don’t want to live in that world,” Ms. Bateman said. “What’s the next genre in film? What’s the next genre in music? You’re never going to see anything like that if we’re all using AI.” — Reuters

Entertainment News (06/06/23)

The Flash holds previews

THERE will be previews of The Flash before it opens in cinemas this week. Fans can catch a sneak preview in select cinemas nationwide on the evening of June 13, one day before the film opens wide across the Philippines. The ticketing site for The Flash is already live at https://www.theflashmovie.com.ph/ and includes the list of preview cinemas. The Flash is distributed worldwide by Warner Bros. Pictures and is set to open in theaters across the Philippines beginning June 14.

Gucci launches video series

A NEW video series directed by two-time Academy Award-winning filmmaker Sharmeen Obaid Chinoy brings Annie Lennox, Halle Bailey, Julia Roberts, Idris Elba, Alia Bhatt, Serena Williams, John Legend and Gucci CHIME co-founder Salma Hayek Pinault together to speak out about what equality means to them, as the campaign ushers in a new decade of support for gender equality. On June 1 ten years ago, Gucci, together with co-founders Beyoncé Knowles-Carter and Salma Hayek Pinault, founded the Gucci CHIME campaign, dedicated to advancing gender equality around the world. Ten years after Gucci hosted The Sound Of Change: Live, a global concert that raised $3.9 million to support girls and women around the world, Gucci CHIME has raised $21.5 million, which has helped 635,000 girls and women globally through more than 500 projects in 92 countries through 185 non-profit partners. To honor a decade of impact, Gucci enlisted longtime Gucci CHIME Advisory Board member and collaborator Sharmeen Obaid Chinoy to lens a 35-video series that documents a wide range of artists, activists, organizers, and advocates chiming in on what equality means to them. The films will be available to stream on Gucci’s social channels and official YouTube account. Beyoncé’s song “Freedom,” from her pioneering visual album Lemonade, scores the videos.

Netflix stars in fan event this month

HENRY Cavill, Jamie Dornan, Gal Gadot, Chris Hemsworth, Arnold Schwarzenegger and more Netflix stars will debut news, exclusives, and more to fans all over the world from a live event in São Paulo called Tudum: A Global Fan Event – LIVE from Brazil. After two years as a virtual event, the 2023 Tudum livestream will be broadcast live in front of thousands of fans in São Paulo, Brazil to audiences around the world on June 18 at 4:30 a.m. Philippine Standard Time. Tune in on Netflix’s YouTube (YouTube.com/Netflix) to watch global stars reveal exclusive news and debut never-before-seen footage, trailers and first looks at favorite shows, movies, and games. Learn more at: Tudum.com/event.

Music fest marks Oh Flamingo! anniv

CO-PRODUCED by GNN Entertainment Productions, the Filipino alt-rock band Oh, Flamingo! will mark their 10th year in the music scene with a festival, a concert, an anniversary tribute, and a fan’s day all rolled into one. Dubbed Oh, Flamingo!: 10th Birthday, the event will feature performances by Ourselves The Elves, Ang Bandang Shirley, DJ Love, The Itchyworms, Ena Mori, DJ Love, SPIT, The One Pesos, and T33G33. Oh, Flamingo!: 10th Birthday is set to take place at 123 Block in Mandala Park, Mandaluyong City on July 15 from 4 p.m. onwards. There will be a dedicated space for lifestyle, art, and brand merchants. Limited-edition merch will be available at the venue. Tickets to the show are now available via bit.ly/HBDOHFLAM10.

F&S sells stake in AirAsia PHL

ROMERO-LED F&S Holdings, Inc. has sold its shares in AirAsia Philippines as it concentrates on its power and ports businesses, the company said on Monday.

In a press release, it said shares in the budget carrier owned by lawmaker Michael Odylon L. Romero and his wife Sheila B. Romero are to be bought by AA Com Travel Philippines, Inc.

“The sale makes it the sole local owner and majority shareholder of the country’s third-largest airline,” it said.

The remaining 40% is owned by Capital A Berhad founders Anthony Francis Fernandes and Datuk Karmarudin Menarum.

“We are excited at the opportunity to consolidate our business enterprises and realign them to focus more on our core businesses in power and ports,” said Ms. Romero, chairman of F&S Holdings.

“Needless to say, we did not want to undertake this while the pandemic was ongoing, and nearly every business — particularly air travel — was severely hampered. That would not embody the kind of relationship we had with our partners,” she added.

Meanwhile, CapitalOne Energy Corp. is set to be integrated into the Romero group’s power generation companies, which include investments in the renewable energy sector, which include Fort Pilar Energy, Inc. and Belgrove Power Corp.

CapitalOne is currently expanding its solar power portfolio with the development of new sites in Cagayan, Nueva Ecija, Batangas, Marinduque and Palawan, which will have a combined capacity of 180-megawatt-peak.

“We wish nothing but the best to our former partner in AirAsia Philippines, as well as to AA Com. May they continue to fly high and reach new heights,” said Ms. Romero.

She said the Romero group would continue to “invest aggressively” in the family’s core businesses in Globalport 900, Inc. terminals, which she said now operates 10 local ports.

When Mr. Fernandes was asked in a media roundtable on Monday regarding the ownership of the airline, he said: “Come back to me in one-and-a-half month. Ownership will be solved. It is important for the airline but we’ll make the proper announcement at the proper time.” — Justine Irish D. Tabile

Metro Manila retail reaps post-pandemic gains

People walk around a mall in Quezon City, June 22, 2022. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Joey Roi Bondoc

THE Philippine retail sector has been growing steadily after the government lifted most of mobility restrictions across the country.

Mall operators and retailers are reporting a rebound in consumer traffic and some even note that revenues are even stronger compared to pre-pandemic levels.

Colliers believes that the retail sector is one of the most dynamic segments of the property sector and we see it continuously outperforming other segments as malls serve as Filipinos’ de facto public spaces.

The entry of more foreign retailers should make the mall scene more dynamic, exciting, and competitive. This should result in a further evolution of the Philippine mall culture, benefitting consumers.

Holiday spending stoked the country’s retail segment in the fourth quarter of 2022. An upside for the sector is that Filipinos continue to spend even after the festive season and despite elevated prices, although inflation is starting to cool down at least for the first four months of 2023.

Given a sanguine macroeconomic as well as business and consumer confidence outlook, Colliers believes that the retail sector will continue to grow for the remainder of the year, resulting in greater absorption of mall space and marginal rise in lease rates. However, the delivery of substantial new supply starting the second half of 2023 will be a major concern, as this will likely raise vacancy rates across Metro Manila and as more operators compete for retailers willing to take up brick and mortar mall spaces.

Now is an opportune time for landlords planning to take advantage of retail sector’s recovery to launch retail real estate investment trust (REIT). Lease rates are starting to rise, that’s why retailers should be quick in locking in prime spaces in major business districts.

Meanwhile, given the growing interest from foreign retailers, Colliers recommends that mall operators seize the demand from these firms by taking into account their sizes and fit out requirements. Online and offline shopping will continue to complement each other, which should compel mall operators and retailers to ramp up their omnichannel strategies.

AN OPPORTUNE TIME TO LAUNCH RETAIL REITS
Colliers believes property developers with retail footprint should consider divesting malls into their REIT portfolio especially now that the retail segment is recovering. Malls generate recurring income and are now a viable REIT asset class as vacancies are declining and lease rates are starting to increase.

In our view, developers should carefully assess which retail outlets to add to their REIT portfolio and should consider projected mall space absorption as well as profiles of retailers willing to take up brick-and-mortar spaces. Developers should take advantage of renewed interest from foreign and homegrown retailers as well as continued expansion of Philippine economy that is mainly driven by personal consumption expenditure.

LOCK IN SPACE IN PRIME LOCATIONS
Colliers believes that retailers should be quick in securing mall spaces in key business districts across Metro Manila now that vacancy rates are declining while rents are gradually increasing. In our view, this trend is likely to persist in the market as footfall is rebounding across the capital region.

We still see substantial vacancies in selected malls in Quezon City, Bay Area, and Alabang and retailers should further explore the viability of opening physical space in these locations.

Looking forward, we see heightened competition for prime retail space, especially in key business districts that will house new and expansive office and residential towers.

SEIZE DEMAND FROM FOREIGN RETAILERS
Colliers sees an improving demand for physical space from foreign retailers. We attribute this to improving consumer demand on the back of sustained macroeconomic expansion and the enactment of measures that further relax the country’s retail regulatory environment.

Mall operators should capture demand from foreign retailers planning to enter the country by taking into account their size and fit-out requirements.

MALL SPACE TAKE-UP RISES
In the first quarter of 2023, vacancy rates across malls in the capital region dropped to 14% from 15.4% in the fourth quarter of 2022. Major developers have reported that consumer traffic has now reverted to 90-100% of pre-COVID levels. Some mall operators even noted that footfall especially in the fourth quarter of 2022 was even greater than pre-pandemic levels.

With rising purchasing power due to improving consumer confidence (according to the latest central bank survey) and personal income tax cuts implemented by the government, retailers have been active in taking up physical mall space.

While online shopping will remain relevant among Filipino consumers (especially among young shoppers), Colliers expects in-store shopping will continue to rebound, as shown by relentless absorption of physical mall space within Metro Manila.

In our view, mall operators should not consider online presence as competition but as a necessary complement to retailers’ omnichannel strategies. Both retailers and mall operators unable to update their omnichannel presence will be left behind.

Colliers is optimistic that sound macroeconomic fundamentals are likely to support the retail sector’s growth over the next 12 months. The reactivation of high-density retail, staging of various events at malls’ activity centers, and renewed interest in experiential retail should entice more Filipinos to visit physical malls and further stoke spending.

 

Joey Roi Bondoc is the research director at Colliers Philippines.

Gov’t fully awards Treasury bill offer at slightly higher yields

STOCK PHOTO | Image by RJ Joquico from Unsplash

THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Monday as yields only rose marginally on expectations that inflation slowed further in May.

The Bureau of the Treasury (BTr) raised P15 billion as planned from the T-bills it auctioned off on Monday with total bids reaching P27.653 billion or almost twice the amount on offer.

Broken down, the Treasury borrowed P5 billion as planned via the 91-day T-bills, with tenders for the tenor reaching P6.589 billion. The average rate of the three-month papers went up by 4.4 basis points (bps) to 5.827% from the 5.783% quoted for the tenor last week, with accepted rates ranging from 5.67% to 5.9%.

The government likewise made a full P5-billion award of the 182-day securities as bids for the tenor reached P11.07 billion. The six-month T-bill was quoted at an average rate of 5.891%, up by 1.2 bps from 5.879% the previous week, with accepted rates from 5.74% to 5.95%.

Lastly, the BTr raised the programmed P5 billion from the 364-day debt papers as demand reached P9.994 billion. The average rate of the one-year T-bill rose by 3.2 bps to 5.98% from the 5.948% fetched for the tenor last week. Accepted yields were from 5.81% to 6%.

At the secondary market before Monday’s auction, the 91-, 182- and 364-day T-bills were quoted at 5.7657%, 5.9630%, and 5.9314%, respectively, based on PHP Bloomberg Valuation Reference Rates data provided by the Treasury.

T-bill yields inched higher ahead of the release of May consumer price index (CPI) data, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Headline inflation likely slowed for a fourth straight month in May amid favorable base effects and a decline in prices of energy and some food items, analysts said.

A BusinessWorld poll of 15 analysts last week yielded a median estimate of 6.1% for May inflation, near the lower end of the 5.8-6.6% forecast of the Bangko Sentral ng Pilipinas (BSP) for the month.

If realized, this would be slower than 6.6% in April but quicker than the 5.4% print in the same month a year earlier.

The May CPI could also exceed the BSP’s 2-4% target for 2023 for the 14th consecutive month.

In the first four months, headline inflation averaged at 7.9%, well above the BSP’s forecast of 5.5% for this year.

The Philippine Statistics Authority will release inflation data on June 6.

Mr. Ricafort added that the higher global crude oil prices recently also contributed to the slight increase in T-bill rates.

Oil prices were up $1 a barrel on Monday after top global exporter Saudi Arabia pledged to cut production by another 1 million barrels per day from July, counteracting the macroeconomic headwinds that have depressed markets, Reuters reported.

Brent crude futures were at $77.21 a barrel, up $1.08 or 1.4%, at 0515 GMT after earlier hitting a session-high of $78.73 a barrel.

US West Texas Intermediate crude climbed by $1.07 or 1.5% to $72.81 a barrel after touching an intraday high of $75.06 a barrel.

Rates also rose amid decreased demand from the previous auction, which was likely due to expectations that the US Federal Reserve would pause its rate hike cycle at its June 13-14 review, which could be matched by the BSP in its own meeting on June 22, Mr. Ricafort said.

The US central bank raised borrowing costs by 25 bps at its May 2-3 meeting, bringing the Fed funds rate to 5% to 5.25%.

The Fed has hiked borrowing costs by 500 bps since March 2022.

Meanwhile, the BSP on May 18 paused its tightening cycle, keeping its policy rate unchanged at 6.25% for the first time after nine meetings.

Since it began its aggressive monetary tightening cycle in May 2022, the central bank had raised borrowing costs by 425 bps.

T-bill yields rose “after the release of stronger than expected US nonfarm payrolls report last Friday,” a trader said in an e-mail.

Data released on Friday showed payrolls in the public and private sector increased by 339,000 in May, Reuters reported.

On Tuesday, the BTr will auction off P25 billion in reissued 10-year Treasury bonds (T-bonds) with a remaining life of four years and nine months.

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

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

‘The Rock’ will return as Luke Hobbs in new Fast & Furious film

DWAYNE “The Rock” Johnson has announced his return to the Fast & Furious film franchise via a video on Twitter.

LOS ANGELES — Dwayne “The Rock” Johnson is returning for an as yet untitled Fast & Furious movie as Luke Hobbs, the actor announced on Twitter on Thursday, after bowing out of the successful franchise in 2021 due to differences with star Vin Diesel.

“Hobbs is back in the Fast and Furious franchise,” Mr. Johnson said in a video message from Hawaii, wearing a lei.

“The next Fast & Furious film you’ll see the legendary lawman in will be the HOBBS movie that will serve as a fresh, new chapter & set up for FASTX: Part II,” he added.

The Fast & Furious franchise has collected more than $7 billion at global box offices, making it the fifth-highest-grossing franchise of all time.

The latest movie, Fast X starring Mr. Diesel and Jason Momoa, debuted last month and landed the second largest global opening weekend of the year, only surpassed by another Universal title, The Super Mario Bros. Movie. It has earned more than $500 million at global box offices.

Mr. Johnson said he and Mr. Diesel have made amends.

“Last summer Vin and I put all the past behind us. We’ll lead with brotherhood and resolve — and always take care of the franchise, characters & FANS that we love,” he said in his post.

The Moana actor went on to explain that he has an “audience first mentality” when it comes to his career and sends love to the entire Fast family.

Franchise veteran writer Chris Morgan will return to oversee the script for the upcoming project and develop Mr. Johnson’s portrayal of the daring diplomatic security service agent he has played in previous films. — Reuters

Is there a business case for Board Diversity?

PAWEL CHU-UNSPLASH

Despite the many studies from different countries on the benefits of board diversity — with at least 90 (and counting) all pointing to a correlation between more women on boards and companies’ better financial performance — there remains skepticism or hesitancy among organizations on adopting policies to make their boards more diverse, and not only in gender, age, and skills, among others. Thus, in my gender equality and women’s economic empowerment advocacy work, I am often asked: “Is there a business case to be made for board diversity?”

REGULATORY ENVIRONMENT FOR BOARD DIVERSITY
The Securities and Exchange Commission (SEC) itself recognizes the importance of board diversity. The Revised Code of Corporate Governance (RCCG) for Publicly Listed Companies (PLCs) recommendation 1.4. states that “the board should have a policy of board diversity.” It further explains: “Having a board diversity policy is a move to avoid groupthink and ensure that optimal decision making is achieved. A board diversity policy is not limited to gender diversity but also includes diversity in age, ethnicity, culture, skills, competence, and knowledge. On gender diversity policy, a good example is to increase the number of female directors, including female independent directors.”

While the SEC continues to adopt a “comply or explain” approach with respect to sustainability reporting, it has taken concrete steps to encourage companies to have more women in their boards.

In March 2022, the SEC launched the gender and development awards to recognize and acknowledge the PLCs with the greatest number of women on their boards. The awards will be continued this year, with an expanded scope to recognize private sector female sustainability champions, young female CEOs, along with female representation in the board room.

WALKING THE TALK
Allow me to share some concrete private sector initiatives that promote board diversity.

At the Institute of Corporate Directors (ICD), the Board of Trustees is diverse with almost parity in gender, with a median age of 63 (the youngest trustee being 45 and the oldest 75), and members having diverse industry skills and experience. The current Board of Governors of the Management Association of the Philippines (MAP) is comprised of four females and five males, likewise almost parity in gender.

BEING PROACTIVE AND INTENTIONAL ON DIVERSITY, EQUITY, AND INCLUSION
The ICD has organized a board diversity, equity, and inclusion (DEI) committee to champion board diversity so that different perspectives and ideas are considered in the exercise of the responsibilities of boards for oversight, decision-making, and governance. Similarly, MAP has its own DEI committee as a separate cluster together with the NextGen committee, recognizing its importance as a management concern and giving focus on programs that will promote DEI, not only in the board but also in all aspects of business.

In 2021, a group of like-minded women organized the NextGen Organization of Women Corporate Directors (NOWCD) to help increase the representation of women leadership positions in public and private company boards which, in 2021, was reported at only 20% in PLCs, below the recommended ratio of at least 30%. Key priority areas of NOWCD are to provide education and training, create meaningful networking for sourcing and placement, expand local and international board opportunities, and build a pipeline of board-ready women.

ICD STUDY ON BOARD DIVERSITY IN PLCS
A key activity of the ICD DEI Committee is to undertake relevant studies, surveys, and dialogue in advancing board diversity and inclusion. In 2022, ICD conducted a study on board diversity in PLCs covering the period 2019 to 2021. Using statistical tools and analysis, the study examined the correlation between the attributes of the boards of 270 active PLCs and their respective returns on equity (ROEs), which are indicators of the companies’ profitability.

The study generated several interesting observations:

• On gender diversity: The presence of women directors in boards in 2020, the start of the pandemic lockdown, showed a significant relationship with ROE. Companies with female directors outperformed companies with an all-male board, though the same was not observed in 2019 and 2021. The percentage of female board members during the three-year period was 17.83% in 2019, 18.82% in 2020, and 19.81% in 2021.

• On the diversity dimensions of age and tenure: the study showed that during the three-year period, age and ROE were significantly and directly related. The higher the mean age of directors, the higher the company’s ROE. However, tenure was not a significant predictor of ROE.

•  With respect to the directors’ field of expertise, companies that performed significantly better than their respective counterparts were those that have non-executives, and directors, with expertise in business management and finance.

What do these findings suggest?

• The presence of women in a board has a significant contribution to the improvement of the ROE of a business entity.

• Having board members with expertise in business management and finance can boost the business’ bottom line.

• The knowledge and experience of directors senior in age should be harnessed to enhance performance. Moreover, a company should adopt a succession plan to recruit young directors.

The undeniable correlation between specific dimensions of diversity and corporate financial performance, as highlighted by the ICD study, reinforces the urgent need for businesses to prioritize board diversity. Recent events have clearly shown the necessity of diverse teams and leaders in navigating the challenges of our rapidly evolving world.

By embracing DEI, companies not only drive business performance but also contribute towards economic and social progress.

The time for action is now, and companies both have the opportunity and responsibility to show commitment to meaningful change. By taking proactive steps to foster diversity, show accountability, and take tangible steps towards inclusion, companies can propel themselves forward and truly embody the values that support both business success and social progress.

This article reflects the personal opinion of the author and does not reflect the official stand of the MAP.)

 

Ma. Aurora “Boots” D. Geotina-Garcia is a member of the MAP DEI Committee. She is vice-chair and president of the ICD, chair of NOWCD and president of Mageo Consulting, Inc., a corporate finance advisory services firm.

map@map.org.ph

magg@mageo.net

Aboitiz firm gets 69% of STEAG State Power

ABOITIZ Power Corp. has completed its acquisition of more shares in STEAG State Power Inc., giving it a controlling stake in the power plant operator.

In a stock exchange disclosure, AboitizPower said it had acquired 167.65 million shares of STEAG State Power for about $36.08 million under a share purchase agreement signed in September last year.

“As of June 2, 2023, AboitizPower holds a 69.4% effective equity interest in [STEAG State Power],” AboitizPower told the stock exchange. 

The acquired shares constitute 35.4% of the outstanding capital stock of the target company, it said.

AboitizPower said the total consideration for the shares included locked box interest at a simple rate of 4% per annum on the basis of a 365-day year from Jan. 1, 2021 to March 31, 2022.

According to its website, STEAG State Power owns and operates a 210-megawatt (MW) coal-fired thermal power plant in Mindanao.

The power plant was established under a build-operate-tansfer partnership with National Power Corp. for a period of 25 years. It started commercial operations in November 2006.

At the local bourse on Monday, shares in the company fell by 35 centavos or 0.94% to end at P37.00 each. — Ashley Erika O. Jose

Arthaland to develop P6-B luxury residence in Makati

Arthaland Corp. is developing a luxury condominium called Eluria in Makati City. — COMPANY HANDOUT

By Brontë H. Lacsamana, Reporter

ARTHALAND Corp. is developing a 31-storey luxury condominium in Makati City, which is expected to generate as much as P6 billion in sales.

Located along Rada Street in Legazpi Village, Eluria features 37 limited edition units designed by Sydney-based architecture and interior design firm FMB Architects.

“The main features of Eluria are, one, the hospitality directors and their personalized level of service, and two, the sustainability,” said Oliver L. Chan, Arthaland’s senior vice-president for sales, leasing, and marketing, at a media briefing on May 30.

The company expects about P6 billion in sales value from the property.

“We can really take care of the residents in a personal way. That is the main concept of Eluria — providing another level of service we have never seen before in this country,” Mr. Chan told BusinessWorld.

“Another thing is, we screen the people who want to buy. What we want to create here is a community of cohesiveness.”

Future residents will have the utmost privacy with at most two units per floor except for the Garden and Penthouse Suites that occupy one floor each. Residents will have direct access to their unit through a private lift.

The smallest condominium unit will have three bedrooms with a floor area of 287 square meters (sq.m.), while the Penthouse Suite will have five bedrooms with a floor area of 578 sq. m.

All units are priced at about P540,000 per sq.m., putting the smallest units at around P140 million to P150 million.

Sheryll P. Verano, Arthaland’s senior vice-president for strategic funding and investments, said the project is being built in partnership with real estate private equity investment company ARCH Capital.

“Arthaland has a 60% interest in the project while ARCH Capital has a 40% stake,” she said.

Eluria’s hospitality directors will train for ten weeks with the International Butler Academy in the Netherlands, famous for training butlers for royal families and high net-worth individuals.

Other amenities at Eluria will include a heated saltwater leisure and lap pool, an indoor children’s playroom, a function hall, a potager garden at the roof deck, and chauffeur shuttle services to select nearby destinations. The building will have eight parking levels, with each unit allowed three slots.

The green developer also ensured that, like its other projects, Eluria is pre-certified gold under LEED (Leadership in Energy and Environmental Design) and on track for a BERDE (Building for Ecologically Responsive Design Excellence) certification.

Eluria is a necessary undertaking for Arthaland because it “reimagines the future of sustainable homes for the sophisticated market,” according to Ms. Verano.

Mr. Chan added that the project may be the most elegant and exclusive of Arthaland’s residential portfolio, but its sustainability thrust will remain equal even to affordable projects like the midscale Una Apartments.

“We’re providing sustainability in all the features of all our properties, whether it’s for the top 1% of society or for everyone else,” he said.

Though Eluria just broke ground in November 2022, eleven of its 37 units have already been sold, including the sole Penthouse Suite. The project is expected to be completed in the second quarter of 2026.

MB orders closure of Pangasinan bank

THE POLICY-SETTING Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) has closed another rural bank, bringing the number of institutions it has shut down this year to five.

The MB has ordered the closure of Bangko Pangasinan – A Rural Bank, Inc. in its Resolution No. 694.A, according to a bulletin posted on the website of the Philippine Deposit Insurance Corp. (PDIC).

The lender was prohibited from doing business in the country on June 1, pursuant to Section 30 of the amended Republic Act. No. 7653 or the New Central Bank Act.

The same resolution directed the PDIC to proceed with the takeover and liquidation in accordance with the PDIC Charter.

Its charter provides that a bank placed under liquidation is no longer permitted to resume banking business and will not be rehabilitated.

With its main branch located in Dagupan City, the rural bank has a total of four branches in Pangasinan, Alaminos City, and in the municipalities of Burgos, Aguilar, and Bolinao.

“The PDIC took over the bank and all its branches, assets, records and affairs on June 2, 2023,” the PDIC said.

Upon placement of a bank under liquidation, the powers, functions and duties of the directors, officers and stockholders of the bank are terminated.

The directors, officers, and stockholders will also be prohibited from interfering in any way with the assets, records and affairs of the bank.

“Therefore, anyone in possession of any asset and/or records of the closed Bangko Pangasinan – A Rural Bank, Inc. is advised not to allow or honor any transaction affecting the same without the consent of the Receiver and to immediately turnover the said assets and/or records to the designated Deputy Receiver,” the PDIC said.

Bangko Pangasinan is the fifth rural bank closed by the BSP this year. The regulator shut down Rural Bank of San Juan in May, Binangonan Rural Bank, Inc. in April, Rural Bank of San Marcelino, Inc. in March and Rural Bank of San Agustin (Isabela), Inc. in January.

Last year, the BSP closed down nine banks, namely the Rural Bank of Galimuyod (Ilocos Sur) Inc., Rural Bank of Polomolok (South Cotabato), Banco Rural De General Tinio (Nueva Ecija), Farmers Savings and Loan Bank (Bulacan), Metro-Cebu Public Savings Bank, Rural Bank of Mahaplag (Leyte), Rural Bank of Salcedo (Ilocos Sur), Rural Bank of San Lorenzo Ruiz (Siniloan), and Rural Bank of San Nicolas (Pangasinan).

In 2021, the number of banks closed by the BSP climbed to 13 from just five in 2020.

Despite the rising number of closed rural banks, central bank data showed that total assets of small lenders rose by 19.8% to P343.84 billion as of end-December 2022 from P287.03 billion a year prior. — K.B. Ta-asan

Shang Properties, Inc. to hold 2023 Annual Meeting of Stockholders on June 28

 

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