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As Asia strives to spur births, Philippines wants fewer babies

The government, led by President Ferdinand Marcos Jr., warns that the country can’t achieve broad economic success without addressing demographic challenges. -- Bloomberg

As birth rates plummet across Asia and beyond, the Philippines stands out for having among the highest fertility ratios in the region.

For years, the Southeast Asian nation has wrestled with a dilemma considered enviable in countries like Japan and South Korea, where governments are offering cash incentives for couples who have children. As many countries record more deaths than births, the Philippines is a bright star for those who believe a young labor force portends greater productivity.

But officials in the Philippines, which has 113 million people, see the issue differently. The government, led by President Ferdinand Marcos Jr., warns that the country can’t achieve broad economic success without addressing demographic challenges.

The Philippines, despite sterling growth rates for most of the past decade, still ranks among the poorest in the neighborhood and lowering the birth rate — which is more than twice South Korea’s — is a key strategy for development metrics. Changing attitudes around family planning has proved a tall order in the Catholic-majority country. Elevated fertility rates are intertwined with religious and cultural expectations, and also underscore weak access to contraceptives and health care services.

One-third of the output gap between the Philippines and its well-off Asian peers can be “attributed easily to the fact that we haven’t entered the demographic dividend,” said Arsenio Balisacan, secretary of the National Economic and Development Authority.

Though a smaller labor force might be a problem in wealthy nations, Mr. Balisacan said officials in those places have the money to invest in technology and development. In the Philippines, more people are putting great strain on limited resources. The government has made family planning one of its biggest budget priorities this year.

“The most basic, most fundamental problem is to get our poor out of their situation and improve access to services so that everybody’s lifted up,” he said.

The verdict is mixed on what a declining population means for the world. Fertility rates are easing as incomes rise and access to contraceptives improves, on top of changing attitudes among women about having children later in life, or not at all. The United Nations now expects the number of people to peak at 10.4 billion by 2100, a decline from earlier estimates exceeding 11 billion.

Even if shrinking population is good for things like environmental sustainability, graying demographics present challenges, including rising health care and retirement costs. Nowhere is that thesis more testable than in Asia, where fertility rate declines are among the most extreme.

In Japan, where birth rates have dropped for years, the government announced fresh measures to boost the numbers, paving the way for doubling the budget spent on children. In China, the population shrank last year for the first time since the 1960s, and officials are campaigning to change decades-old attitudes about the size of families.

The numbers are even starker in South Korea, which holds the unfavorable crown of having the world’s lowest fertility rate, at 0.78 children per woman. Officials are turning to robots and drones to fill gaps in military recruitment.

The Philippines is among a handful of places that will account for more than half of the projected increase in global population through 2050, according to the United Nations.

Mr. Balisacan, a prominent Filipino economist, said the Philippines must capitalize on a “demographic sweet spot” in which population growth is less than the rate of growth of the labor force. The country cannot push up gross domestic product unless enough quality jobs are created.

From that vantage point, Mr. Balisacan said it’s relatively easy for policymakers in wealthy nations like Japan to address declining birth rates. “Just relax your immigration policy,” he said. “I’d rather have that problem.”

There are some signs of progress. The Philippines’ fertility rate fell to 1.9 children per woman in 2022, according to preliminary government data, though it’s hard to gauge the impact of pandemic-related restrictions. That’s down from 2.7 five years earlier — and below the 2.1 typically viewed as the level at which a population replaces itself from one generation to the next.

As the Philippines aspires for demographic dividend, it has to pay attention to the quality of the workforce, the participation of women and other minority groups and other factors that tend to breed inequality, said Lisa Grace Bersales, executive director of the country’s Commission on Population and Development.

The population commission is working on a five-year action plan targeted for release this quarter or next, according to Ms. Bersales. Aside from addressing reproductive health needs, the action plan will bring issues like education, employment, migration and climate change in a holistic approach on demographics, she said.

Family planning also saw a boost after the passage of a landmark reproductive health law in 2012. The legislation expanded access to contraceptives, fertility control, sexual education and maternal care in the Philippines.

In Manila, the nation’s capital, Junice Melgar said more women in poorer neighborhoods now seek out her organization for advice.

“We discovered there was a great need,” said Ms. Melgar, executive director at Likhaan Center for Women’s Health Inc., a nonprofit group established in 1995. Since the pandemic, she said, there’s been “an open clamor” for information about contraceptives.

The uptick in public awareness has paid dividends. About half of today’s married Filipino women don’t want additional children, according to the statistics agency. Women in rural areas — where contraception is typically less accessible — had a higher fertility rate of 2.2 children per woman last year, compared to 1.7 in urban areas.

The Marcos government is giving “prime importance” to its youth labor force by allocating funds to hire graduates for internships and helping them look for jobs, according to the Budget Secretary Amenah Pangandaman.

During a speech before investors at the New York Stock Exchange in September, Mr. Marcos underscored that push and touted the youth’s readiness to work.

“We are, I believe, the youngest country in Asia,” he said. “And with the graying of other countries around the region, this gives us an advantage.” — Bloomberg

Manufacturing activity expands in May

A worker uses a microscope at an electronics manufacturing assembly plant in Biñan, Laguna, April 20, 2016. — REUTERS

MANUFACTURING ACTIVITY in the Philippines further expanded in May as new orders and production grew at a faster clip, S&P Global said.

The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) rose to 52.2 in May from an eight-month low of 51.4 in April, signaling “further improvement in operating conditions.”

“The upturn was supported by a solid rise in both output and factory orders, with firms also expanding their workforce numbers for the first time in four months. More encouragingly, vendor performance improved in May for the first time in almost four years. Companies reported that improved logistics routes helped shorten delivery times,” Maryam Baluch, economist at S&P Global Market Intelligence, said in a report released on Thursday.

Manufacturing Purchasing Managers’ Index (PMI) of select ASEAN economies, May 2023May marked the 16th straight month that the PMI reading stood above the 50 mark which denotes improvement in operating conditions. A reading below 50 signals deterioration.

The headline PMI measures manufacturing conditions through the weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%), and stocks of purchases (10%).

The Philippines had the third-highest PMI reading among five Association of Southeast Asian Nations (ASEAN) member countries, behind Thailand (58.2) and Myanmar (53). On the other hand, factory output activity contracted in Malaysia (47.8) and Vietnam (45.3).

“The improvement in the health of the Filipino manufacturing sector during May was driven by quicker expansions in both factory orders and manufacturing output, which have now risen each month since September 2022,” S&P Global said.

The rise in new orders was driven by “stronger demand conditions and the acquisition of new clients,” it added.

“Demand from foreign markets also fared well in the latest survey period, with export volumes growing solidly, albeit at a slightly softer pace compared to April,” S&P Global said.

After three months of decline, manufacturing firms resumed expanding their workforce in May “at the strongest pace since October last year.”

“Businesses expanded their hiring activity for the first time in four months, and at the strongest pace since October last year,” it added.

Increased demand also prompted firms to boost buying activity in May.

“In anticipation of future demand, manufacturing firms were keen to raise their inventory levels. Stocks of pre-production items rose further, thereby extending the current sequence of growth seen since September 2021, while manufacturers also raised their holdings of finished items following back-to-back months of depletion,” S&P said.

Improvements in the supply chains resulted in shorter delivery times for inputs in May, which “marked the first time in 46 months that the respective seasonally adjusted index posted above the neutral 50 threshold.”

While May data showed a “re-intensification of price pressures,” S&P Global noted the inflation rates for input prices and output charges were softer than historical average.

“Firms noted that high energy, material and supplier costs were passed on to clients in response to sharper cost inflation,” it said.

Despite this, S&P Global said that the outlook for the future output growth remains “broadly optimistic.”

“In terms of future output, firms remain largely upbeat, though confidence did take a slight hit and dipped to an 11-month low,” Ms. Baluch added.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said that the expansion in new orders and output in May signaled “robust demand onshore.”

“Lead times also improved showcasing improved supply chain conditions. One additional positive development was the improvement in employment with the uptick in manufacturing activity translating to more jobs,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that easing inflation led to improved factory output.

Headline inflation slowed to 6.6% in April from 7.6% in March.

The Bangko Sentral ng Pilipinas (BSP) projects inflation to slow to within the 5.8-6.6% range in May.

The Philippine Statistics Authority is set to release May inflation data on June 6.

However, this is still above the central bank’s 2-4% target range and 5.5% full-year forecast.

On the other hand, Mr. Ricafort noted that elevated inflation and rising interest rates could lead to higher borrowing and financing costs, which could impact manufacturing activity.

Since May last year, the BSP has raised key interest rates by 425 basis points to 6.25%. — Luisa Maria Jacinta C. Jocson

Economists still skeptical about Maharlika fund after Congress approval

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

By Kyle Aristophere T. Atienza, Reporter

ECONOMISTS remain skeptical about the newly passed Maharlika Investment Fund (MIF) bill, saying it still contains provisions that could affect the independence of government financial institutions (GFIs) and the central bank.

Filomeno S. Sta Ana III, coordinator of the Action for Economic Reforms, said it is “redundant” to call the fund an investment mechanism to finance development programs because even without it, “GFIs that are ordered to contribute to Maharlika are using their funds to contribute to Philippine development in different ways.”

“The problem with Maharlika is it doesn’t really know what it wants to do,” he said in a Facebook Messenger chat.

Congress approved on Wednesday the bill creating the country’s first sovereign wealth fund.

Under the bill, the Land Bank of the Philippines and the Development Bank of the Philippines are mandated to contribute P50 billion and P25 billion, respectively, to the Maharlika Investment Corp. (MIC), which has the control over the fund. The National Government is also required to contribute P50 billion to the MIC.

Funds from the Philippine Amusement and Gaming Corp. and proceeds from privatization and transfer of government funds may also be used for the MIF.

“As a consequence of diverting capital from GFIs, Maharlika impinges on integrity and independence of decision making of these GFIs,” Mr. Sta. Ana said.

The Bangko Sentral ng Pilipinas (BSP) is also asked to contribute 100% of its dividends to MIC in its first two years. After the two-year period, the BSP’s contribution drops to 50% of its dividends, with the remaining 50% to be deposited into a special account holding its capital build-up funds.

Former central bank deputy governor Diwa C. Guinigundo warned that using BSP dividends as seed capital for the MIF would further delay the central bank’s capital buildup.

“Now you have the Maharlika Investment Fund. So instead of the initial estimate that it would take eight years to recapitalize the central bank fully, P200 billion out of its own dividends, it will now be extended to about 17 years,” Mr. Guinigundo said in an interview with One News Channel’s The Chiefs. “Now, anything can happen.”

The  former BSP official said that to replenish public money that will be used for the Maharlika fund, the government would be forced to either increase taxes or borrow money domestically or abroad — or do both.

Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said the use of BSP dividends for the MIF “could mean lower revenues for the government and thus can result in higher taxes.”

“Trading off the government’s limited funds from one use to another obviously carries with it significant opportunity costs along with conflicts of interest to its proposed board members,” he said via Messenger chat.

“The speed with which the MIF has been passed is a clear sign that not all concerns have been addressed.”

Mr. Sta. Ana also questioned the MIF bill’s objective, which is to promote socioeconomic development by making “strategic and profitable investments in key sectors to preserve and enhance long-term value of the Fund,” obtaining “the optimal absolute return and achievable financial gains on its investments,” and satisfying “the requirements of liquidity, safety/security, and yield in order to ensure profitability.”

“But this contradicts the objective of growing the funds, because financing development like infrastructure projects is not exactly about growing money or earning high financial return,” Mr. Sta. Ana said.

INVESTMENTS
Under the bill, the MIC board can approve the fund’s investments in commodities, fixed-income instruments, corporate bonds, equities, Islamic investments, joint ventures, mergers and acquisitions, as well as real estate and infrastructure projects.

The fund can also invest in projects that “contribute to sustainable development” and “with sustainable and developmental impact.”

For global investment banker Stephen Cuunjieng, the list of investments that the MIC board can approve is too broad.

“The purpose in the Senate bill seems to imply without stating it that it’s for national development so that would assume it’s to be used domestically only. But if you read (the bill), the fund can invest in foreign bonds. Basically it says I can invest in practically anything,” he told OneNews Channel.

“What I’m allowed to invest in, which is delineated in the law, seems to be much broader and more open, so in other words it’s kind of really up to the fund managers and the board to decide what to do or not.”

Public budget analyst Zyza Nadine M. Suzara said the public needs to “closely monitor” how funds for the MIF will be incorporated in next year’s national budget.

“When budget legislation for the 2024 national budget begins, we need to watch out how much the appropriations for MIF will be and how the limited fiscal space will be reallocated,” she said via Messenger chat. “What programs and projects will be deprioritized and therefore lose appropriations in order to give way for Maharlika?”

The proposed 2024 national budget has been set at P5.75 trillion.

Enrico P. Villanueva, a senior lecturer of money and banking at the University of the Philippines Los Baños, said the public should be vigilant on the MIC, the fund’s holder, which is empowered by the bill to “acquire and hold… assets and incur… liabilities in connection with its operations.”

“It elicits fears of corruption and distrust of government. Hope is better pinned on grassroots development corporations,” he said via Messenger chat.

According to the bill, the MIC board may request Congress for legislation to increase MIC’s capitalization.

“The most effective way of raising funds is by strengthening institutions,” Mr. Lanzona said. “Strengthening institutions that go after corrupt people and appropriating ill-gotten wealth not only raise revenues for the government but also increase the credibility of its institutions.”

Many Filipino parents go through pains of lengthy adoption process

ZACHERY PERRY-UNSPLASH

By Luisa Maria Jacinta C. Jocson, Reporter

IDA MARIE M. CASTRO, a 57-year-old mother, described the process of adoption in the Philippines as “heartbreaking.”

“My heart was breaking just going through the extent of the process,” the sales director said in a Facebook Messenger chat. “Every time there was an interview, I felt my son Paulo was in danger of being pulled away from us.”

At one point, she thought about going somewhere the adoption officers wouldn’t find them.

“My entire experience in the adoption process was horrible,” Ms. Castro said. “It was so unfair for strangers to look into our lives and take a snapshot of one afternoon and make a report about it.”

In 2015, the Social Welfare department accredited the Castros to become foster parents of a foundling, pending the adoption process.

It has been eight years of home visits, paperwork, fees and waiting since the Castros started the whole thing, and it has yet to be completed.

There are about 1.8 million orphaned and abandoned children in the Philippines, according to data from Philippines Without Orphans. From 2009 to 2021, there were 8,258 children declared legally available for adoption, government data showed.

The adoption process is expensive, long and known for its bureaucratic bottlenecks.

Declaring a child available for adoption is a stringent process, Arlyne A. Fernandez, executive director at Virlanie Foundation, Inc. said via Zoom.

“It’s the role of the social worker to exert all efforts to locate the family and see why they were abandoned,” she said. “It takes us six months to a year, at most three years, before we can make sure that this child has no family.”

Announcements on the radio, television and social media have to be made. If a child is found abandoned, the government starts the process of declaring the child legally available for adoption.

Esther Elizabeth Suson, content manager at Generations—Home, noted that since the process of searching for the child’s biological family could take years, they encourage families to also consider foster care, not just adoption.

“While these children wait for their certification declaring a child legally available for adoption or to be reunified with their biological families, they can experience the love, safety and care of a family,” she said.

Ms. Fernandez said time is one of the biggest challenges during the adoption process.

“We are happy when a child can get adopted in two years,” she said. “Some get older and are never adopted. There’s a different process for children with special needs. Some children with past trauma and abuse must be processed before they are considered for adoption.”

Once approved for adoption, the child is then set up to be matched with their potential parents. The matching committee is composed of a panel of experts that include psychologists, pediatricians, lawyers, and government officials.

“Not everyone can just decide to adopt,” Ms. Fernandez said. “There are many presumptions on adoption. People think they can go to an adoption center and pick out a child. That’s not how it works.”

Parents must attend seminars and orientations and meet all qualifications. They must be at least 15 years older than the child.

One challenge faced by adopted children is being integrated into the new family unit.

“It can be as simple as adjusting to a new kind of cooking or a new room, or as complex as learning how to call the parents ‘mom’ and ‘dad,’” Ms. Suson said. “For adoptees with biological children, their challenges may be in helping their children integrate as a family while celebrating the diversity of how they joined it.”

“Despite stereotypes in local media that adoptees feel like outcasts in their adoptive families, they can and do feel loved, cared for and accepted depending on how well their parents and communities raise them,” she added.

Older children are less likely to be adopted.

“In the Philippines, most parents want to adopt a younger child,” Ms. Fernandez said. “It’s hard when they’re older. When the child is 16 years old, the chances of them being adopted are slim.”

Paulo Roman A. Castro, Jr., an orthopedic surgeon and medical director at the Pasig City General Hospital, who is also Ms. Castro’s husband, said the adoption process is extensive, especially amid a coronavirus pandemic.

“Due to the pandemic and with physical restrictions, the documents were presented as judicial affidavits, with an initial hearing via Zoom,” he said in a Messenger chat. “The schedules for subsequent hearings were discussed at this meeting, which stretched to more than a year.”

They hired a lawyer specializing in family law. They also had to meet financial and psychological requirements and pass national agency clearances. The documents were submitted to a regional trial court in Pasig City that specializes in family matters in 2021.

FOR SALE
Strict adoption measures are meant to prevent child trafficking and abuse. Last year, the Social Welfare department reported cases of illegal adoption on social media.

Ex-Senator Leila M. de Lima in 2019 sought an investigation of infants being sold both online and offline for as little as P300 each across Southeast Asia, including the Philippines.

In the Philippines, babies were being sold outside public hospitals and in slums, she said, citing news reports. Poverty remained to be one of the major drivers of child trafficking, she added.

Still, the government is trying to make the adoption process less taxing.

Last year, ex-President Rodrigo R. Duterte signed into law a measure that made domestic adoption an administrative process instead of a judicial one, making it more efficient.

Before this, adoption was separated into two phases — the pre-adoption administrative phase and finalization of adoption, the judicial phase, which is costly and lengthy, National Authority for Child Care (NACC) Social Welfare Officer Imelda R. Ronda said in an e-mail.

If all requirements are completed on time, the NACC could issue an adoption order in six to nine months.

“It is important that the processes for adopters are made simple, swift, and inexpensive,” she said. “This is a significant progress because it encourages more adopters to go through the legal adoption process.”

Carmela Andal-Castro, a child protection advocate, family lawyer and member of the NACC panel of experts, said the law speeds up the domestic adoption process.

“It is a welcome development in the adoption and child protection space,” she said in an e-mail. “Domestic adoptions are now administrative and therefore need not be filed and adjudicated in courts. This means that the steps and expected timelines are now made simpler and faster.”

Prospective adoptive parents can save time and resources, she said, adding that it’s also for the best interest of the child. “The sooner a child is matched to adoptive parents, the sooner the adjustment process can begin for both the child and their new family.”

Ms. Fernandez said that the law would encourage more Filipinos to adopt locally. “Making the process administrative would mean encouraging more local families to adopt children in the Philippines, which would maintain the cultural background of the child. It will be an easier adjustment.”

Ms. Suson said protection measures have not changed.

These are meant to protect the child from neglect and potentially abusive parents, Ms. Ronda said. “Otherwise, it would be excruciating and frustrating especially on the part of the child if the placement with the adopter is disrupted. We also would like to ensure that both the child and adoptive families are psychologically prepared as they navigate through this new life of having each other.”

Ms. Fernandez said there are still many children who have been “illegally adopted” — those whose birth certificates were faked. “It’s not fair to the child,” she said, adding that the law now grants amnesty to parents guilty of faking their child’s birth certificate.

Ms. Suson said the process of certifying children as available for adoption should be streamlined. “One reason many parents who have diligently completed all documentary requirements still face delays is because they wait for a match.”

“The process needs to be fast-tracked. With so many documents to go through, the child usually has already grown up with us. The shorter the child’s stay with us, the better,” Ms. Fernandez said.

Ms. Castro, the foster parent, said social workers need to be better trained.

“A number of social workers were assigned to us through the years, and the experience becomes very subjective — based on the biases and mood of the social worker,” she said. “Some had a heart for adoption, the adoptive parents and the adoptee; one had an arrogant and nonchalant approach.”

She also said some documents, including the foundling certificate, are “detached from describing human beings.”

In the case of Paulo, who is turning eight in July, his foundling certificate narrates the inhuman conditions of how he was abandoned.

“The foundling certificate contained what looked like product specifications,” Ms. Castro said. That’s what I’m so heavy-hearted about because my son does not deserve a permanent document describing him that way because it was but a fleeting moment of his existence. The birth certificate with us as parents is the only document that should be existing.”

PHL hopes to attract more offshore wind power investments

A wind farm is seen in Pagudpud, Ilocos Norte. — PHILIPPINE STAR/KRIZ JOHN ROSALES

THE government is hoping to attract more offshore wind power projects, after the Board of Investments (BoI) approved three offshore wind projects worth a total of P390 billion in the first quarter.

Trade Secretary Alfredo E. Pascual said the three offshore wind power projects of wpd Philippines  have a total capacity of 1,300 megawatts (MW) and are located in Cavite, Negros Occidental, and Guimaras.

In his speech at the Offshore Wind Conference in Taguig City on Thursday, Mr. Pascual said the Philippines is a suitable place for offshore wind investments due to its geographical position.   

“Renewable energy isn’t merely an option for us but a necessity. Thus, our government is ardently promoting using and developing renewable energy sources,” he said.

Mr. Pascual said the country needs 52,800 MW of renewable energy capacity to achieve its target of having 50% share of renewable energy in the country’s power generation mix by 2040.   

“Energy demand in the Philippines is growing in line with our country’s projected strong economic growth at 6% to 7% in this and the coming years. The demand for energy, especially for green energy, is expected to outpace our current supply level,” Mr. Pascual said.   

“We, therefore, welcome Chinese and other foreign investment in renewable energy projects in the Philippines,” he added.   

Investors in renewable energy such as wind power can avail of tax and other incentives under the 2022 Strategic Investment Priority Plan (SIPP) and the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE). The Renewable Energy Law also offers income tax holidays, duty-free importation, and tax exemption of carbon credit.

In April, President Ferdinand R. Marcos, Jr. issued Executive Order No. 21, which mandated the creation of a policy and administrative framework for the development of local offshore wind resources, as well as the integration of required permits to the Energy Virtual One Stop Shop system.   

As of December 2022, the country awarded 190 onshore and offshore wind energy service contracts. — R.M.D.Ochave

MPIC defers vote on proposed market delisting 

By Adrian H. Halili

THE CONSORTIUM of companies that plan to take Metro Pacific Investments Corp. (MPIC) private has requested to defer the shareholders’ vote on its delisting to a later date or after the release of a report explaining the basis of the bidders’ tender offer price.

In a regulatory filing on Thursday, GT Capital Holdings, Inc. said the bidders sent a notice to MPIC to delay the voting on the proposed voluntary delisting from the main board of the Philippine Stock Exchange.

GT Capital disclosed on April 27 that its consortium with Metro Pacific Holdings, Inc., MIG Holdings Inc., and Mit-Pacific Infrastructure Holdings Corp. was planning to make a tender offer to acquire all outstanding MPIC common shares other than those they already own.

The latest notice to MPIC said that the fairness opinion and valuation reports for the tender offer on the minority shares have not yet been completed in time for the annual stockholders’ meeting on June 6 when the voting was supposed to take place.

MPIC said the consortium had requested a special stockholders’ meeting, which will be held on a later but unspecified date.

“Deferring the shareholder approval will allow the report to be made available prior to the special shareholders’ meeting and thus provide shareholders an opportunity to study the same and better appreciate the basis for the tender offer price and the proposed voluntary delisting,” the company said.

It said that once the report has been finalized, another notice of intent will be submitted to undertake another tender offer, which will replace the previous notice submitted by the consortium.

The consortium previously offered to acquire MPIC’s common shares at P4.63 apiece, which represents a 22% premium over the company’s one-year volume-weighted average price.

Under the tender offer, First Pacific, through Metro Pacific Holdings, will spend around $90 million to increase its stake by as much as 3.8%, while GT Capital will pay $70 million for an additional 2.9% stake. Mit-Pacific Infrastructure Holdings will buy up to 20% and MIG Holdings will acquire up to 10%.

In a separate disclosure, MPIC said that it had accepted the request to defer the vote to a later date.

“We will inform the shareholders of any material developments on this particular agenda item as necessary,” MPIC said.

The company said earlier that its shareholders are not obligated to tender their shares even if they had voted in favor of delisting. It added that the decision to proceed with the delisting is subject to achieving the 95% tender offer acceptance threshold for voluntary delisting.

ANALYSTS WEIGH IN
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said MPIC might be reconsidering delisting from the stock exchange as many shareholders had opposed the low tender offer price offered by the bidders.

“It seems that the company is reconsidering the tender offer and delisting as many minority shareholders have recently been voicing their opinion regarding the price,” Mr. Limlingan said in a Viber message.

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said the delisting vote’s deferral was the right move to give minority shareholders time to review the fairness opinion and valuation report of the bidders.

“It is also an opportunity for the bidders to reconsider their tender offer price,” he added.

However, Mr. Colet said the minority shareholders are not likely to change their minds unless the tender offer price is improved.

“Many shareholders have already formed a strong view as to what they think MPI is worth,” he said, referring to MPIC’s ticker symbol. “They have done their analysis based on publicly available information and brokerage research reports, and the emerging consensus is that the offer of P4.63 per share does not reflect a fair tender offer price.”

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said shareholders may still vote in favor of the delisting even after seeing the reports.

“Some shareholders may believe that the benefits of delisting, such as increased flexibility and reduced regulatory oversight, outweigh the costs,” he said in a Viber message.

Mr. Arce noted that other shareholders might be “unwilling to take the risk of staying listed, given the current volatility of the stock market.”

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

On Thursday, shares in MPIC rose by 0.46% or two centavos to P4.37 apiece.

The end of an era for Eat Bulaga But who gets the name?

FACEBOOK.COM/EBDABARKADS

AS the mainstays of the 44-year-old noontime show Eat Bulaga — Vicente “Tito” Sotto III, his brother Marvic Valentin “Vic” Sotto, and Jose Maria “Joey” de Leon (collectively known as Tito, Vic, and Joey or TVJ) — bade farewell yesterday after a bitter breakup with production company Television and Production Exponents, Inc. (TAPE), signs point to the very name of the show likely going with them.

The Intellectual Property Office of the Philippines’ (IPOPHL) registration of the Eat Bulaga name reveals that TAPE has control over it for the next 13 days, until June 14, 2023. However, this trademark only covers merchandise like clothing and printed materials.

Meanwhile, there’s a pending application for the Eat Bulaga trademark that covers entertainment services as well as merchandise, filed by TAPE co-founder Antonio Tuviera and TVJ back in Feb. 27 this year, showing there may be plans to bring the Eat Bulaga brand elsewhere.

According to a statement issued a day after TVJ announced their departure, TAPE is “saddened by the turn of events” but respects the decision of the hosts.

Abangan ninyo ang mga bagong magpapasaya at magpapatibok ng ating mga puso. Aasahan ninyo ang mas masaya, mas nakakaaliw at higit pa sa isang libo’t isang tuwa na Eat Bulaga (Stay tuned for more enjoyable and exciting things ahead. Expect a more fun, more entertaining Eat Bulaga, with more than a thousand and one joys),” read the statement signed by Romeo Jalosjos, Sr., and shared on Instagram by Bullet Jalosjos, the company’s chief finance officer.

On May 31st, the program’s iconic triumvirate of hosts said online that they would be parting ways with TAPE, this as the show was halted just as it was about to go on air on its usual timeslot on GMA. The announcement, according to an insider, was supposed to have been made live on air.

Later that day, GMA Network released a statement saying that they still have a block time agreement with TAPE until the end of 2024.

“We are saddened by the unexpected turn of events,” said GMA, which has been the home of Eat Bulaga for the last 28 years. “Together with all the Filipino fans, we pray for a smooth and swift resolution of their issues.”

It is unclear if only TVJ will be leaving the show or if some of the show’s many co-hosts will be joining them. This as rumors swirl online that the trio will be moving to a rival network.

Last month, the trio said that TAPE owed Vic Sotto and Joey De Leon at least P30 million each for 2022. Following the media buzz on the issue, Mr. Vic Sotto informed members of the press after a briefing for his upcoming sitcom Open 24/7 that TAPE had settled the debt.

Salamat at na-media at nabayaran (I’m thankful that it was reported by the media and we were paid),” he said.

Relations between the three hosts and TAPE chairman Romeo Jalosjos, Sr. have reportedly been strained since Mr. Tuviera stepped down from the helm of the production company in early 2023, and the Jalosjos family started to make changes in the show.

BusinessWorld tried to contact TAPE, Inc. for comment but was told by the office secretary that only TAPE, Inc. president Jalosjos is authorized to comment on the issues and that “packed schedule po siya ngayon kasi ang dami niyang meetings.” — Brontë H. Lacsamana

First Pacific: New advisor prompts deferred MPIC vote

First Pacific Co. Ltd. said the consortium that seeks to acquire Metro Pacific Investments Corp. (MPIC) has tapped another independent financial advisor (IFA) for the valuation report.

“There have been some developments in terms of the IFA and the finalization of the report,” said Stanley H. Yang, head of corporate development at First Pacific, in a briefing on Thursday.

In April, a consortium backed by First Pacific, GT Capital Holdings, Inc. and Japan’s Mitsui & Co. Ltd. announced a tender offer to buy minority shareholdings in the infrastructure conglomerate.

As part of the Securities Regulation Code of the Securities and Exchange Commission (SEC) and the voluntary delisting rules of the Philippine Stock Exchange (PSE), the consortium has to appoint an accredited IFA to undertake an evaluation of MPIC and issue a fairness opinion.

Mr. Yang said before the April tender offer notice to PSE, an evaluation was done on the 12 accredited firms, which include auditing and accounting firms, and investment banks.

“In light of the nature and size of the transaction and also considering that MPIC has foreign shareholders and its investor base and substantial public float, the consortium limited its selection to the accredited IFAs that are affiliated with an international firm,” he said.

Based on the said criteria, Mr. Yang said the previous firm tasked to deliver the reports was selected from PSE-accredited firms and chosen on the basis that its engagements were of a limited scope relative to other available accredited IFAs.

“After the evaluation, this firm that was selected was engaged by the consortium to act as IFA,” he said. “I am not at liberty to disclose the name because of the confidentiality of this process.”

The day after the consortium announced its offer, the PSE’s nod was sought to clear the process, which Mr. Yang said typically takes two to three weeks. Unfortunately, the IFA’s confirmation process was delayed, he added.

“Rather than taking two weeks, it took longer and there was a decision made earlier this week, on Tuesday, where we as a consortium along with the valuation provider, were informed that the independence of the provider was not accepted by the PSE after a consultation with SEC,” he said.

“Because the requirement is to have an accredited valuation report fairness opinion provider, then the consortium has to appoint another provider to do the work and this will take longer to complete the process,” he added.

With the new IFA on board, the consortium will continue to work towards finalizing and issuing the third-party independent valuation report.

“I think it’s important for the market to understand that the delay is really stemming from the time to have all of the necessary steps ready,” Mr. Yang said.

“Because the new firm, the valuation provider, is just starting, they will have to do the work in terms of the valuation and the analysis of MPIC. We would want them to finish it completely as quickly as possible, but I think the guidance would be within a month,” he said.

The new advisor will have to complete its report first before it will be applied for PSE clearance.

Mr. Yang said the selected firm has no previous or existing business relationships with MPIC or any of the consortium members.

MPIC is an infrastructure investment company with holdings in Manila Electric Co., Metro Pacific Tollways Corp., Maynilad Water Services, Inc., and Metro Pacific Health Corp., among others. It is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Justine Irish DP. Tabile

Fruitas Holdings to acquire cloud kitchen company Fly Kitchen

FRUITAS Holdings, Inc. has acquired full ownership of cloud kitchen business Fly Kitchen Inc. in its efforts to increase market share, the company said on Thursday.

“The purchase of Fly Kitchen fits our strategic objective to remain competitive in the digital arena. The startup complements our present activities and will enable us to accelerate the growth of this new source of revenue and profit,” said Fruitas President and Chief Executive Officer Lester C. Yu in a statement.

In a separate disclosure, the company said that under the agreement, it will acquire all 2,000 outstanding shares of Fly Kitchen, which will become one of its subsidiaries.

The transaction was closed on June 1 and comes after Fruitas launched its cloud-based kitchen business Nube Kuxina in the third quarter of 2022.

“Among Fly Kitchen’s key assets are the leasehold interests in its four kitchens, all of its inventory and equipment, recipes, and other technical know-how,” the company said.

It added that the payment would be below 10% of the total assets and book value of Fruitas as of March 31, 2023. It has yet to disclose the price per share of the acquisition.

The company said the acquisition will enable it to significantly expand its cloud kitchen business and “efficiently serve its customers,” as it aims to introduce its food and beverage products such as Fruitas fresh juices, Ling Nam, Soy & Bean, and Sabroso Lechon.

Founded in 2020, Fly Kitchen, was able to expand into four strategic kitchen locations: Makati City, Pasig City, Mandaluyong City, and Quezon City. It has a combined cooking area of 200 square meters and caters to more than 10 brands. It has also developed strong connections with third-party food aggregators like Foodpanda and Grabfood. 

“We are optimistic about the future of Fly Kitchen because many Filipinos have changed their eating habits. This will enable us to continue to reorient our company and strengthen our visibility online,” Mr. Yu added.

During the first quarter of this year, the listed food and beverage retail operator tripled its net income to P19.2 million from P6.4 million in the same period last year.

On Thursday, Fruitas shares fell by 2.44% or P0.03 to P1.20 apiece. — Adrian H. Halili

SMPC set to ship second trial coal exports to Japan

SEMIRARA Mining and Power Corp. (SMPC) is poised to make its second trial shipment of coal to Japan this month, as part of its goal to expand its market while also reducing its dependency on China.

“China is still our main foreign buyer, but with their industrial output growing slower than expected, we want to develop other Asian markets like Japan,” SMPC President and Chief Operating Officer Maria Cristina C. Gotianun told the stock exchange on Thursday.

SMPC said it is set to export about 50,000 metric tons (MT) of coal to Japan for Shikoku Electric Power Corp.’s 700-megawatt (MW) coal-fired ultra-supercritical power station.

Its first trial shipment to Japan was made in January when it sold 78,410 MT of mid-grade coal to J-Power, a utility company that is also an operator of coal, hydroelectric, wind, and geothermal power stations.

Ms. Gotianun said the integrated energy company is targeting to export around 30% of its full-year sales target of between 15 million MT and 16 million MT.

For the January-to-March period, SMPC said its coal shipments to China decreased to 1.1 million MT from 2.2 million MT, though it still accounted for 72% of its exports.

The energy company said it considered South Korea as a steady market at 300,000 MT accounting for about one-fifth of its export sales. The rest of its exports are for Japan at 5% and Brunei at 3%. — Ashley Erika O. Jose

Killing me softly

MOVIE REVIEW
The Whale
Directed by Darren Aronofsky

(Warning: plot details explicitly discussed)

DARREN ARONOFSKY’s The Whale (2022) adapted Samuel D. Hunter’s play to the big screen and we more or less know how the film has fared: made respectable money from a small ($3 million) budget, won Brendan Fraser an Academy Award for playing a morbidly obese man trying to re-connect with his estranged daughter, provoked either ecstatic or angry reactions from a broad range of critics.

Aronofsky was smart enough to consult with the Obesity Action Coalition, and the statement on their website is interesting: they did not have any input on the decision to cast Fraser, nor did they have any input about the design and appearance of the suit meant to make the actor look like he weighed 600 pounds; they did find Fraser “highly receptive” to their suggestions about how to approach his role, and felt he did “a remarkable job.” They admitted to taking part in the production to “help make sure” the character is portrayed in a “realistic” way, but didn’t explicitly say it was realistic; they hedged a little saying “how individuals experience obesity varies,” but admit “SOME people may have had (the same) experiences.” Tactfully worded, and about the best the production could hope for, considering this may have been a late innings consultation. Stayed clear of a full-throated approval, but no violent objections.

I do like what they have to say about the title: “‘Whale’ is often a derogatory term used for people with obesity. However, after reading the play and seeing the movie… it has a much deeper meaning.” These people take context into consideration, how cool is that?

Oh, what did I think of it? Well let me tell you.

If I were asked for the least appropriate filmmaker to direct a film about an obese man, Aronofsky would be near the top of the list. From Requiem for a Dream to The Wrestler to Black Swan to mother! He’s traded in body horror and sadism, and nearly every time you end up wondering if any of that was worth it. An Aronofsky film about an obese man should be more of the same, and there are passages in the film — Charlie (Fraser) stuffing his face full of greasy fried chicken; Charlie masturbating to porn; Charlie trying to clean himself; Charlie throwing up; Charlie simply trying to lift his carcass up out of a sofa — that rate up there, maybe even worse, because the effects and the context in which they take place are so grimly realistic.

Yes, Aronofsky falls into one trap after another, wasting no opportunity to rub your nose in all of it, but — this time at least — you sense something more, a direction — a point even — to all of Charlie’s masochism.

The rest of the film is like a leisurely striptease, pulling away layer after layer till the full motivation for the overeating is revealed. Not especially profound — a combination of guilt and self-hatred — but the process is compelling, and keeps Aronofsky disciplined. He structures the gross-outs to accumulate to a crescendo, and doesn’t for a moment (till the very last moment) sidestep into fantasy, or at least blatant magic realism.

Helps that Aronofsky (like Hitchcock twice before him) leans into the challenge of adapting the story of a man trapped in a confined space — in this case literally can’t even leave his room. His camera swings around, swoops down, pulls away from Charlie as if to fully take in his size; he treats Charlie by turns like a pratfalling Oliver Hardy, a complex medical case study, and a massive monument to his own impending demise.

Also helps that we can identify with much of the horror. Those slices of cold pizza slapped together and drizzled with mayo or ranch — who hasn’t done that, standing in front of an open fridge late at night? That sandwich of cold cuts dipped into the grape jelly? The candy wrappers, an endless row of them, like ants sneaking up to a picnic? I’ve struggled with my weight all my life, I know what it’s like to stare at an unopened Snickers bar with hours left on the clock. Know what it’s like to catch someone staring at me unawares, the look on their face like a mass of writhing grubs exposed when you upturn a rock.

Maybe Hunter’s best gimmick is a mysterious essay of Moby Dick that Charlie keeps reciting over and over again. Clearly written by a grade schooler, Hunter manages the trick of making this piece of writing sound awkward and silly at first, but with each pass growing in significance in your head. Suddenly you see in the essay literary insight; then philosophical weight; then intense self-confession; finally, a moment of naked empathy —

Along with the essay there’s the character of Ellie (Sadie Sink), Charlie’s daughter. At first you wonder what Charlie sees in her (“I just thought that maybe we could spend some time with each other.” “I’m not spending time with you, you’re disgusting.”); on second and third glance she’s even worse — a malevolent sadist on Aronofsky’s level, actively looking through others’ online profiles for a chance to harass, maybe wound. Improbably, Hunter (as interpreted by Sink and helped by Aronofsky) pulls off the stunt of making Ellie’s filterless cruelty seem like a quest for truth and hatred of hypocrisy that actually helps people. You finally see in the way Charlie insists on seeing Ellie what he’s really about: not just an optimist but a desperate romantic whose only arrow in his quiver is optimism. He has to believe Ellie is “an amazing person” because all he has left in this world is his decaying corpulence and his $120,000 in savings — and that he’s keeping for Ellie.

I get it, I really do; The Whale is fake and manipulative and mawkish as hell, and yet Aronofsky and Fraser manage to cut through all the fat with a laser and expose Charlie’s deepest darkest wish — which, coincidentally, is the same wish Jean-Pierre Melville expressed in Godard’s Breathless: to become immortal, then die.

Reading Hunter’s screenplay online one notices Aronofsky made one crucial change: to Hunter’s instruction “fade to black” Aronofsky substitutes a blinding flash of white, and that can mean one of two things: the stereotypical notion of a rapturous ascent (Charlie’s had a heart attack and dropped dead); or, if you’re familiar with Moby Dick you’ll recognize the allusion to the chapter “The Whiteness of the Whale” which discusses all the implications of the color white — its unnatural purity, its terrible absence of color the meaninglessness of which Charlie’s been fighting against all  his life. Almost despite itself (and maybe it’s just me and not anything the film actually has to offer), one of the best of 2022.   

Repower Energy,  Austrian firm Gugler forge deal for seawater pumped storage

REPOWER Energy Development Corp. has signed an agreement with Austria-based Gugler Water Turbines GMBH to develop seawater pumped storage projects in the Philippines.

“We are pleased to enter into a partnership with Gugler — a leading provider of state-of-the-art turbine technology,” Eric Peter Y. Roxas, president and chief executive officer of Repower Energy, said in a media release on Thursday.

Repower Energy, a subsidiary of Pure Energy Holdings Corp., said the memorandum of agreement with Gugler aims to bring seawater pumped storage technology into the country.

“We are looking to replicate Gugler’s success in a similar venture it has in South Korea, to further our ultimate goal of uplifting living standards to communities by providing clean energy,” Mr. Roxas said.

He said the agreement will allow the company to diversify its “capabilities as an emerging player in the hydropower space.”

The energy company said its first project will be a 320-megawatt (MW) seawater pumped storage facility in Luzon.

It added that the elevation of the project will be around 300 meters above sea level, utilizing a lower reservoir for unlimited seawater intake.

Repower Energy said it is now working on securing the necessary endorsement to push through with the project with an initial development of a 50-MW facility.

“The year 2023 promises to be full of potential for [Repower Energy], given our ongoing construction of various run-of-the-river hydropower projects in provinces such as Bukidnon and Quezon,” Mr. Roxas said.

Repower Energy is planning to expand its installed energy capacity by 1 gigawatt in the next five years, with its portfolio mainly focusing on hydropower projects.

The energy company is looking to raise about P1.5 billion through an initial public offering (IPO). It secured clearance from the Philippine Stock Exchange on May 15 for its IPO plan.

Repower Energy is set to offer 200 million primary common shares at a maximum offer price of P5 apiece, with an over-allotment option of up to 30 million shares. — Ashley Erika O. Jose