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Sun Life Investment sees base effects pulling down GDP in Q2

BW FILE PHOTO

SUN LIFE Investment Management and Trust Corp. said on Wednesday that economic growth in the second quarter will continue to slow, dragged down by the high year-earlier base.

Sun Life Investment President Michael Gerard D. Enriquez at a virtual briefing said only that projected gross domestic product (GDP) growth will average 5.35% for the year, with a low of 4.30% and a high of 6.40%.

No specific estimate for the second quarter was provided, other than to describe the indicator for the period as slightly lower. First quarter GDP had come in at 6.4%.

Sun Life Investment is factoring in a 63% chance of a US recession, which Mr. Enriquez characterized as “not too severe.”

However, he said even a mild recession might prompt the Federal Reserve to start aggressively cutting rates.

He added that a US recession will likely have an impact on Philippine exports.

Mr. Enriquez said that with inflation stabilizing in the Philippines and in the US, the Bangko Sentral ng Pilipinas (BSP) and the Fed are expected to be less aggressive in tightening policy.

Sun Life Investment projects the consumer price index (CPI) to average 5% in 2023, with the low of 3% and a high of 7%. The official BSP target band is 2-4%.

“Commodity prices are coming off from highs. But weather-related risk (i.e., weak El Niño) is (a factor), but early imports of rice, grains and livestock could mitigate this,” Sun Life Investment said.

The company’s base case has the BSP holding its current rate at 6.25% before cutting as early as in the fourth quarter or early next year.

Mr. Enriquez noted that any cuts are not expected to approach the levels that rates touched before the pandemic.

“They will probably be lower than they are right now but not as low as prior to the pandemic,” Mr. Enriquez said. — Aaron Michael C. Sy

ERC issues 33 show-cause orders against power co-ops, distributors 

THE Energy Regulatory Commission (ERC) has issued 33 show-cause orders against electric cooperatives (ECs) and private distribution utilities (DUs) for failing to submit information regarding pass-through fuel costs to consumers.

In a statement on Wednesday, the Commission warned 25 ECs and three private DUs of possible penalties.

“The ERC emphasized that the submission of reports related to fuel charges is a condition for the grant of authority to charge generation rates under their PSAs (power supply agreements),” the ERC said.

The ERC said the ECs are: Abra Electric Cooperative, Inc.; Aklan Electric Cooperative, Inc.; Albay Electric Cooperative, Inc.; Camiguin Electric Cooperative, Inc.; Capiz Electric Cooperative, Inc.; Camarines Sur II Electric Cooperative, Inc.; Cebu I Electric Cooperative, Inc.; Central Negros Electric Cooperative, Inc.;  North Cotabato Electric Cooperative, Inc.; Davao Norte Davao Oriental Electric Cooperative, Inc.; Don Orestes Romualdez Electric Cooperative, Inc.; Iloilo III Electric Cooperative, Inc.; and Kalinga Apayao Electric Cooperative, Inc.

The Commission said it also issued show-cause orders against La Union Electric Cooperative, Inc.; Northern Davao Electric Cooperative, Inc.;  Oriental Mindoro Electric Cooperative, Inc.; Pampanga III Electric Cooperative, Inc.; Pampanga Rural Electric Cooperative, Inc.; Surigao Sur II Electric Cooperative, Inc.; Zambales II Electric Cooperative, Inc.;  Ilocos Sur Electric Cooperative, Inc.; Isabela II Electric Cooperative, Inc.;  Lanao Del Norte Electric Cooperative, Inc.;  Pangasinan III Electric Cooperative, Inc.; and Zamboanga Sur I Electric Cooperative, Inc.

The private DUs are Iligan Light & Power, Inc.; Mactan Electric Co., Inc.; and Olongapo Electric Distribution Co.

The ERC said that the DUs not in compliance with reporting requirements fail to meet their obligation to procure least-cost power.

The ERC currently conducts fuel audits on ECs and DUs to verify the accuracy of fuel charges imposed on consumers.  — Ashley Erika O. Jose

The BoI next door: Registering IT-BPM companies

The pandemic brought in a huge wave of change to the workplace. The physical boundaries of work have blurred. Most are no longer confined to the four corners of the office. As many have seen, and probably experienced, most office jobs can now be done almost anywhere.

While there is an ongoing debate on whether full remote work arrangements are sustainable, the perks of not having to go to the physical office are undeniable. Apart from getting to save on fare or gas money, significant time is saved from being spared the long queues, dreary commutes and the horrible traffic. Needless to say, the peace of mind gained from avoiding the commute is such a blessing.

It is not surprising then that the loudest clamor for remote work has arisen in businesses where work can be accomplished substantially using digital technology. While such businesses have implemented hybrid work arrangements, there are some whose hands are (were) tied — registered business enterprises (RBEs) in the Information Technology-Business Process Management (IT-BPM) industry overseen by Investment Promotion Agencies (IPAs) administering ecozones or freeports.

As discussed by my colleague in a previous article, as a general rule, IT-BPM RBEs registered with IPAs (such as PEZA) must operate exclusively within the designated ecozone or IT park/building. Otherwise, they risk losing their tax incentives. Moreover, the transfer of equipment outside of the ecozone requires prior approval of the IPA. These restrictions made work-from-home (WFH) arrangements tedious and costly to implement. Soon enough, a crisis loomed over the industry with businesses forced to deregister from PEZA or even pull out from the Philippines.

To resolve the conundrum, the Fiscal Incentives Review Board (FIRB) released several issuances, the most notable of which was FIRB Resolution No. 026-22 authorizing IT-BPM RBEs registered with IPAs to register their projects or activities with the Board of Investments (BoI). This was followed by FIRB Resolution No. 033-22 which extended the effectivity of FIRB Resolution No. 026-22 from Dec. 31, 2022 to Jan. 31, 2023. Implementing guidelines, and supplemental ones, were soon issued, the latest of which is FIRB Advisory No. 004-2023, to answer common questions raised about the registration guidelines.

FIRB Advisory 004-2023 clarified that the registration of IT-BPM RBEs with the BoI is not a transfer of registration. Rather, it is an additional registration on top of the IT-BPM RBEs’ existing registration with the concerned (or original) IPA. The FIRB clarified that no additional incentives are received by virtue of the additional BoI registration. Instead, the fiscal incentives will be governed by the BoI registration, which effectively allows IT-BPM RBEs to implement 100% WFH arrangements indefinitely, as management deems necessary. Non-fiscal incentives and the terms and conditions of registration will continue to be governed by the original IPA.

The FIRB also reiterated that IT-BPM RBEs registered with their original IPAs starting Sept. 15, 2022 are excluded by FIRB Resolutions 026-22 and 033-22. The FIRB emphasized that beginning Sept. 15, 2022, IT-BPM enterprises that wish to avail of 100% WFH arrangements should register with the BoI directly. Otherwise, such RBEs will be required to work within their designated ecozone or IT park/building.

It is important to note that the additional BoI registration only covers existing registered projects/activities. New and expansion projects will be subject to separate registrations with the BoI in order to enjoy 100% WFH arrangements.

Penalties await IT-BPM RBEs that implement 100% WFH arrangements in 2023, but fail to register with the BoI by Jan. 31, 2023. Penalties include 100% of the regular corporate income tax for the month/s of non-compliance (with no adjustments based on the extent to which the 30% WFH threshold was exceeded). The FIRB further stated that the penalty is without prejudice to the suspension or withdrawal of the IT-BPM RBEs’ tax incentives or cancellation of their Certificate of Registration, after further evaluation by the original IPA or the FIRB.

Though also registered with the BoI, from a compliance perspective, the monitoring function still rests with the original IPA. The relevant certificates, such as Certificate of Authority to Import, Certificate of Entitlement to Tax Incentives, and Value-added Tax Zero-rating Certificate will continue to be processed and issued by the original IPA. The FIRB emphasized that IT-BPM RBEs will continue to observe the procedural requirements of the original IPA, even after they are registered with the BoI, unless otherwise declared.

Another important consideration in WFH and hybrid work arrangements is the mobility of the equipment used in the business. Generally, equipment which was imported tax and duty-free that is taken out of the ecozone would be subject to import tax and duties. To avoid this, all IT-BPM RBEs registered with the BoI need to secure a Tax Exemption Indorsement (TEI). A blanket TEI may be issued which will cover all imported goods as of Jan. 31, 2023 that availed of the import tax and duty exemption in relation to a registered project. This reduces the administrative burden of securing TEIs on a per-equipment basis. It is also comforting to note that the FIRB recognizes the peculiarity of the IT-BPM sector, where a strict one-to-one ratio of computer/IT equipment to employee more often than not, does not apply. The IT-BPM RBE would simply need to provide an explanation if the number of laptops or devices exceeds the number of employees availing of the WFH arrangement.

With the registration period now closed, and the BoI registrants now in the implementation phase, the latest clarifications on the BoI registration guidelines make it easier for IT-BPM RBEs to adopt a 100% WFH arrangement. Our incentives authorities have truly embraced the mandate to ease the doing of business in the Philippines.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co.

 

Dorothy Jane Puguon  is a manager at the Tax Services department of Isla Lipana & Co., the Philippine member firm of the PwC network.

(02) 8845-27 28

dorothy.jane.puguon@pwc.com

La Salle battles Letran for the top 2 spot in PBA D-League

Team Standings
**Marinero-San Beda 5-1
EcoOil-La Salle 4-1
Wangs Strikers-Letran 3-2
Perpetual 3-3
CEU 3-3
PSP 2-4
xAMA 0-6
** — semis
x — eliminated

Game Today
(Ynares Sports Arena)
4 p.m. — EcoOil-La Salle vs Wangs Basketball @27 Strikers-Letran

DEFENDING titlist EcoOil-De La Salle and Wangs Basketball @27 Strikers-Letran wrangle for the No. 2 seed and the last outright semifinal ticket in the 2023 PBA D-League Aspirants’ Cup today at the Ynares Sports Arena in Pasig.

Game time is at 4 p.m. with the winner securing the other Final Four ticket after Marinerong Pilipino-San Beda clinched the top seed and the first semifinals bonus.

The Red Lions notched their fifth straight win against Centro Escolar University (CEU), 81-72, to finish at 5-1, leaving the Green Archers (4-1) and the Knights (3-2) in a dispute for second place.

Favor is on De La Salle University as the title holder and with an intact core but San Juan de Letran University is poised to stand tall and give its rival a run for its own money with a three-game winning streak to ride on.

Coach Rensy Bajar, who is out for a breakthrough feat in his debut year with the Knights after taking over from Bonnie Tan.

Letran lost its first two games via heartbreakers at the buzzer but recovered in time by stringing three wins in a row, none bigger than the 62-61 triumph over Perpetual to stay alive in the Top-Two race.

De La Salle, for its part, is not keen on looking far ahead regardless of their placings entering the playoffs.

“We want to focus on just getting better. It’s a building block on where we want to be.

“We’re not concerned with the standings at this point,” said assistant coach Gian Nazario in lieu of Topex Robinson.

The loser of the match will be relegated to the quarterfinals, where the third and fourth-ranked teams will enjoy win-once bonuses. Perpetual (3-3) and CEU (3-3) have yet to determine their playoff seedings as PSP (2-4) is already a lock at No. 6. — John Bryan Ulanday

Nuggets favored to rout Heat for first NBA title

NIKOLA JOKIC — VMARINKOVICOFFICIAL

THE DENVER Nuggets had to wait a week to learn who they will play in the franchise’s first trip to the NBA Finals.

After the Miami Heat outlasted the Boston Celtics in seven games, Denver was quickly installed by sportsbooks as the heavy favorite to win the title. That includes at BetMGM, where the Nuggets opened at -350 on Monday, and the line had shortened even further to -375 by Tuesday night.

The sportsbook also reported that the most bets on exact series outcome was Denver to sweep Miami in four games — with 41 percent of the total bets at +450. The shortest odds belong to the Nuggets at +225 to win in five games, followed by Denver at +325 to win in seven.

The story has been similar at BetRivers, where the Nuggets opened as -400 favorites to beat the Heat (+300), with the line shifting slightly to -385 Tuesday. Denver has accounted for 20.7 percent of all NBA title futures money wagered at the sportsbook since the market opened.

BetRivers did report a $4,000 title bet placed on Miami at +1400 that would pay out $56,000. Another bettor placed an $8,000 wager on Denver at +230 that would collect $18,400.

Nuggets star Nikola Jokic is the heavy favorite to take home NBA Finals MVP honors.

He is being offered at -335 at BetRivers, where he has drawn 72.1 percent of the money wagered on the MVP market despite being backed by just 30.4 percent of the total tickets. Teammate Jamal Murray has drawn 9.2 and 13.5 percent of the action, respectively, the second most among players on both teams.

The Heat are led by Jimmy Butler, who has been backed by 5.2 percent of the money and 9.7 percent of the tickets at +300.

Mr. Jokic is an even heavier favorite at BetMGM at -350, followed by Butler at +350 and Mr. Murray at +1200. — Reuters

Red Bull, Raph Trinidad bring Wake Paradise to life in Palawan

FILIPINO wakeboarding prodigy and Red Bull athlete Raph Trinidad showcased his arsenal of skills on some of the islands of Palawan during Wake Paradise.

FILIPINO wakeboarding prodigy and Red Bull athlete Raph Trinidad showcased his arsenal of skills on some of the most breathtaking islands of Palawan during Wake Paradise. The latest project by Red Bull aims to promote the sport in the country and shed light on Trinidad’s rapid rise to the top of the wakeboarding world.

Hailing from Liloan island in Cebu, Raph Trinidad started his wakeboarding journey at the ripe young age of 14. With such an early starting point to get his foot in the sport, Mr. Trinidad quickly acquired the necessary skills to compete at such a high level and establish himself as a household name in the wakeboarding scene.

In his past international competitions, Mr. Trinidad bagged silver in the 2019 World Cable Wakeboard Championship Men’s Open in Buenos Aires, Argentina, and the 2022 IWWF World Championship in Pathum Thani, Thailand. Mr. Trinidad’s amazing feats during this run cemented him as the current number two wakeboarder in the world.

Mr. Trinidad left spectators in awe with his wide range of wakeboarding stunts infused with a twist. Straying away from the conventional method of being pulled by ropes connected to systems and winches, Mr. Trinidad pushed the limits of his skills in the open seas of Palawan. Propelled forward by the speed and engine power of a bangkarera, Wake Paradise redefined the boundaries of the realm of wakeboarding while showcasing Mr. Trinidad’s passion and love for the sport.

The success of Wake Paradise showed Red Bull’s dedication to giving wings and empowering athletes to break barriers and aim to inspire them to pursue their dreams. In the process, Mr. Trinidad also solidified his position as a sports icon, setting the bar immeasurably higher for the next generation of wakeboarders and water sports enthusiasts nationwide.

ROS Elasto Painters sign acquired Mac Belo to one year contract

RAIN or Shine (ROS) and trade acquisition Mac Belo ended nearly two weeks of negotiations and finally came to terms on a one-year contract on May 31.

The Elasto Painters acquired the rights to Mr. Belo in a trade with Meralco in exchange for Norbert Torres last May 18. But since Mr. Belo no longer has a live contract with the Bolts, the E-Painters had to sign him to a fresh deal first before officially welcoming him on board.

The athletic wingman out of Far Eastern University is expected to get his chance to shine with the E-Painters after spending most of his two-year stint with the Bolts either on the bench or in sickbay.

“We will give him the opportunity to revive his career, to gain his confidence,” said coach Yeng Guiao.

Mr. Belo is tipped to make his ROS debut in the PBA On Tour this week.

Meanwhile, NLEX filled up a hole in the frontcourt with the entry of 6-foot-7 Ben Adamos via a swap with Phoenix.

“As of now ang bigs ko lang sila Mike Miranda and Jake Pascual. I need a big badly,” NLEX mentor Frankie Lim said of Mr. Adamos, whom he previously coached during his previous job at Perpetual Help in the NCAA.

“He can help us in so many ways, including rebounding and stretching the floor. He has a big upside,” he added.

The Road Warriors gave up guard Reden Celda and former 3×3 player Tzaddy Rangel to get Mr. Adamos. — Olmin Leyba

Wild shock for Medvedev, Djokovic accused of fanning political flames, Fernandez beaten

PARIS — Daniil Medvedev became the highest-ranked player to exit the French Open after losing a marathon encounter against Brazilian qualifier Thiago Seyboth Wild on a windy Tuesday, while Novak Djokovic found himself at the center of a political storm.

Iga Swiatek gave herself an early birthday gift a day before turning 22 by dismissing Cristina Bucsa 6-4 6-0 as world number seven Ons Jabeur beat Lucia Bronzetti 6-4 6-1 and 16-year-old Mirra Andreeva earned her first Grand Slam main draw win.

World number two Mr. Medvedev emerged as a surprise contender for the Paris title following his Rome triumph but the Russian blew his chance in gusty conditions on Court Philippe Chatrier as Wild sealed a 7-6(5) 6-7(6) 2-6 6-3 6-4 victory.

Kosovo’s tennis federation said Novak Djokovic risked aggravating an already tense situation after the world number three wrote on a camera lens that Kosovo was “the heart of Serbia” following his first-round win a day earlier.

Some 30 NATO peacekeeping soldiers were injured on Monday in clashes with Serbian protesters in the northern Kosovo town of Zvecan, where Mr. Djokovic’s father grew up.

“The comments made by Djokovic at the end of his match against Aleksandar Kovacevic, his statements at the post-match conference and his Instagram post are regrettable,” Kosovo tennis federation chief Jeton Hadergjonaj said.

The French Tennis Federation, which organizes the Roland Garros tournament, said in a statement: “The same rules apply to all four Grand Slams. The tournament referee and Grand Slam Supervisors ensure that these rules are complied with.

“Messages are passed on to the teams of any players concerned by such matters.”

Last year’s runner-up Casper Ruud advanced to the next round by thumping Swedish qualifier Elias Ymer 6-4 6-3 6-2 and he was joined by sixth seed Holger Rune who dug deep to get past Christopher Eubanks 6-4 3-6 7-6(2) 6-2.

Alexander Zverev exited Roland Garros in agony last year after rolling his ankle during his semifinal against Rafa Nadal but the German celebrated a winning return by beating Lloyd Harris 7-6(6) 7-6(0) 6-1.

Veteran Gael Monfils lit up Court Philippe Chatrier in the night session with a scintillating performance as the 36-year-old Frenchman dug deep to battle past Argentine Sebastian Baez 3-6 6-3 7-5 1-6 7-5.

TEENAGE SENSATION
Ms. Andreeva announced herself to the world when she stunned 2021 US Open runner-up Leylah Fernandez 6-3 6-4 in Madrid last month and also defeated Beatriz Haddad Maia and Magda Linette before falling to eventual champion Aryna Sabalenka.

The Russian qualifier broke new ground at the majors with a 6-2 6-1 win over former world number 18 Alison Riske-Amritraj.

Brenda Fruhvirtova, another 16-year-old seeking a statement win, crashed out following a 6-4 6-2 defeat by Elena Rybakina as the Wimbledon champion continued her quest for a second Grand Slam title.

American sixth seed Coco Gauff also shook off a slow start to seal a 3-6 6-1 6-2 victory over Spain’s Rebeka Masarova but it was bad news for former world number one Victoria Azarenka who was dumped out by Canada’s Bianca Andreescu 2-6 6-3 6-4. — Reuters

Milo energizes kids with Sports Clinics nationwide

MILO launched recently its Sports Clinic Program on May 7 in Ayala Malls nationwide. The launch event took place in six different Ayala Malls nationwide and opened the event to every parent and kid who wants to know more about which sport they might be interested in doing this summer.

Designed to empower and nurture young athletes, these programs aim to inspire the next generation of sports champions through expert coaching and top-notch facilities. During the launch event, moms identified the benefits and reasons why they want to enroll their kids to the Milo Sports Clinic Program and topping the list is the values they learn in sports such as discipline, camaraderie, and sportsmanship. They also shared that they involve their kids to play sports not only for increased physical activity but also to help their mental strength as well.

With a rich heritage of supporting youth sports development, Milo has been a trusted ally for parents and children alike. The Sports Clinic Programs represent a significant milestone in the brand’s commitment to fostering a love for sports, healthy competition, and overall well-being among children across the globe.

The Milo Sports Clinic Programs offer an extensive range of activities catering to various sports disciplines, including football, basketball, athletics, swimming, and many more. By partnering with renowned sports academies and experienced coaches, Milo ensures that participants receive the highest quality training and guidance. The programs cater to different age groups and skill levels, providing a tailored approach to enhance each athlete’s abilities.

Trump vows to end birthright citizenship for children of immigrants in US illegally

REUTERS

WASHINGTON — Donald Trump said on Tuesday that if elected president again in 2024 he would seek to end automatic citizenship for children born in the United States to immigrants in the country illegally, a plan that contradicts how a 19th century amendment to the US Constitution long has been interpreted.

Mr. Trump, the frontrunner for the Republican presidential nomination in an increasingly crowded field of candidates, said in a campaign video posted to Twitter that he would issue an executive order instructing federal agencies to stop what is known as birthright citizenship. Any such action by Trump would be certain to draw a legal challenge.

Birthright citizenship arises from the Constitution’s 14th Amendment, which was ratified in 1868, three years after the conclusion of the American Civil War that ended the practice of enslaving Black people in Southern states and overturned a Supreme Court ruling that had held that slaves and free African Americans were not entitled to US citizenship.

The amendment granted citizenship to all persons “born or naturalized in the United States,” including formerly enslaved people, and has been interpreted to apply whether or not parents were in the country legally.

The proposed executive order, planned for the first day of a second Trump term in office, would require that at least one parent be an American citizen or lawful permanent resident for their children to become automatic US citizens, his campaign said in a press release.

While president in 2018, Mr. Trump said he planned to issue an executive order to limit birthright citizenship, but never followed through. Many legal scholars at the time were skeptical that Mr. Trump could use executive authority to roll back the right.

Mr. Trump on Tuesday also criticized President Joseph R. Biden, the Democrat who defeated him in 2020 and is seeking re-election in 2024, for record numbers of migrants caught crossing the border illegally in recent years, calling the citizenship right for children born on US soil a “magnet.” Mr. Trump noted that many countries restrict birthright citizenship for non-citizens.

Mr. Trump has sought to appeal to Republican voters on his party’s right flank who support a crackdown on immigration. As president, Mr. Trump pursued hardline policies toward immigration and took steps toward building a wall along the US-Mexico border that he had promised as a candidate in 2016. — Reuters

China starts drilling a 10,000-meter deep hole into Earth’s crust

BLOOMBERG

CHINESE scientists have begun drilling a 10,000-meter (32,808 feet) hole into the Earth’s crust, as the world’s second largest economy explores new frontiers above and below the planet’s surface.

Drilling for what is set to be China’s deepest ever borehole began in the country’s oil-rich Xinjiang region on Tuesday, according to the official Xinhua News Agency. Earlier that morning, China sent its first civilian astronaut into space from the Gobi Desert.

The narrow shaft into the ground will penetrate more than 10 continental strata, or layers of rock, according to the report, and reach the cretaceous system in the Earth’s crust, which features rock dating back some 145 million years.

“The construction difficulty of the drilling project can be compared to a big truck driving on two thin steel cables,” Sun Jinsheng, a scientist at the Chinese Academy of Engineering, told Xinhua.

President Xi Jinping called for greater progress in deep Earth exploration in a speech addressing some of the nation’s leading scientists in 2021. Such work can identify mineral and energy resources and help assess the risks of environmental disasters, such as earthquakes and volcano eruptions.

The deepest man-made hole on Earth is still the Russian Kola Superdeep Borehole, which reached a depth of 12,262 meters (40,230 feet) in 1989, after 20 years of drilling. — Bloomberg

Young South Koreans drive shift in attitudes to Japan as ties thaw

A MAN walks along a nearly empty street in Seoul, South Korea, July 12, 2022. — REUTERS

SEOUL — Jeong Se-ah feels happy to see Tanaka, a Japanese bar host character from the early 2000s created by a South Korean comedian, because he revives her teenage memories of watching animations from the neighboring nation.

The 24-year-old office worker is one of a growing number of young South Koreans drawn to the products and culture of Japan, coming to see it as more of a friend than a foe that colonized the country 70 years ago, unlike previous generations.

Dressed in a Japan-inspired retro costume and manga accessories among a crowd waiting for Tanaka to begin a concert near Seoul, the capital, Jeong sang a ditty by a Japanese rock group the entertainer idolizes, X Japan.

“I like Tanaka more than his real self,” Ms. Jeong said. “There is something really charming and touching about him, and I’ve never seen an artist who tries so hard to make eye contact and communicate with every single fan.”

The character’s easy talk about Japan and its culture built on that allure, she added. “There was a social environment that sort of encourages boycotting Japanese culture, but people seem to be accepting it naturally,” Ms. Jeong said.

For his part, Kim Kyung-wook, a once forgotten comedian who has transformed the character into one of South Korea’s hottest YouTube stars and entertainers, said his appeal to the young mattered more than the reason for it.

“I think, for young people, it’s not about why, but just the fact they like something,” said Mr. Kim, who became fascinated by Japanese culture as a teenager, leading him to give the character a style and background missing from the Korean scene.

And his persona’s catchy manner of speaking, wolf-cut hairstyle, retro outfits and mastery of old Japanese and K-pop songs have contributed to that success.

Now Kim exemplifies the changing attitudes of young Koreans as ties with Japan thaw. Prime Minister Fumio Kishida, whose May visit to Seoul was the first by a Japanese leader in 12 years, offered unprecedented personal condolences to wartime victims.

Today’s fervor for Tanaka, with nearly 800,000 Youtube followers, after gigs with famed K-pop stars, such as Taeyang of Bigbang, and a national tour that saw concerts sell out in minutes, is very different from the response to his 2018 debut.

Then, with spats over their shared wartime history flaring between Seoul and Tokyo, Tanaka was hardly popular.

Relations had plunged to their lowest in decades after rows over the neighbours’ history spilled over into trade disputes in 2019, casting a cloud over US-led efforts to counter North Korea’s growing military threat.

DEMAND REBOUND
The quarrels are being left behind as the enthusiasm of young Koreans fuels a sharp rebound in demand for Japanese consumer products.

Last month’s launch of a canned beer by beverage giant Asahi Group Holdings Ltd. 2502.T that is said to better replicate the experience of drinking the draft variety had many enthusiasts camping outside Costco stores in Seoul, ready to sprint to the doors when they opened.

“I’m not a huge fan of Japanese beer, but I saw it on social media, and it’s true that people’s perceptions of Japan have improved a lot,” said Son In-seok, 39, who waited for days to get his hands on the new beer in a convenience store.

South Korean imports of Japanese beer and whisky surged nearly 250% and 300% respectively in the first quarter from the figures of 2020, while inbound garment shipments jumped almost 47%.

That compared with a 90% drop in imports of Japanese beer in 2019, when the intensifying feuds made it an early target of a sweeping boycott.

Some Korean victims of Japanese military brothels and forced labor during its colonial rule from 1910 to 1945 demand an apology and compensation from Tokyo.

But officials say changing attitudes emboldened President Yoon Suk Yeol to risk political backlash with a March offer of compensation for such victims with funds from Korean corporates, rather than Japanese firms, as Seoul’s courts had ordered.

A January poll by Hankook Research showed Japan’s likeability score among Koreans was the highest since 2018, with those aged 29 or younger the most favorable.

China, which had scored nearly twice the levels of Japan in 2019, rated among the lowest, alongside Russia and North Korea.

A March survey by the same pollster showed 40% of Koreans backed Yoon’s compensation plan, with 53% opposed. But more than 51% of respondents aged 29 or less backed it, while 36% viewed it negatively.

Political dynamics are spurring the young to take a less antagonistic view of Japan, said James Kim, a regional specialist at the Asan Institute for Policy Studies.

“China is clearly less preferred than countries like the United States and Japan,” Mr. Kim said, citing Beijing’s curbs on freedom in Hong Kong and during the COVID-19 pandemic.

Even if younger people are not completely satisfied by South Korea’s efforts to resolve thorny historical issues, Mr. Kim added, “They see a more immediate threat and recognize the benefit of aligning with other like-minded democracies in the region.” — Reuters