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PHL unlikely to reach the upper end of 2025 target

A man arranges fruits at a stall in Quezon City, Dec. 29, 2024. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Aubrey Rose A. Inosante, Reporter

THE PHILIPPINES may have difficulty achieving the upper end of the government’s 6-8% gross domestic product (GDP) growth target amid heightened global uncertainties this year.

Asked if the country could hit 8% growth this year, Finance Secretary Ralph G. Recto told BusinessWorld: “6-6.5% [growth] is doable for 2025.”

Mr. Recto, however, said the outlook will depend on “inflation, interest rates, and strength of US dollar.”

The Philippine economy expanded by 5.6% last year, slightly faster than 5.5% in 2023 but fell short of the government’s revised 6-6.5% target.

The National Economic and Development Authority earlier said the GDP growth was hampered by extreme weather events, geopolitical tensions, and subdued global demand — which is now considered as the “new normal.”

Multilateral lenders World Bank and the Asian Development Bank project the Philippines to grow by 6.1% and 6.2% in 2025.

In an e-mail interview with BusinessWorld, Ateneo School of Government Dean Philip Arnold “Randy” P. Tuaño said the Philippines will “face difficulty” meeting the 8% growth target.   

“It was relatively easy to achieve a 7% to 8% growth in the 2022-2023 period as we have been coming from a low-income base during the pandemic,” Mr. Tuaño said.   

“Even then, 5% to 6%, while a respectable rate of growth, would make it difficult to achieve significant growth in income among the middle class and vulnerable in the next few years,” he added. 

HSBC economist for ASEAN Aris D. Dacanay said that achieving an 8% growth rate is possible, but “a tall order.”

He cited global and domestic headwinds, including a sluggish Chinese economy, tariff risks, and climate-related impacts on the agricultural sector.

“This isn’t to say the Philippines won’t grow. Growing by 6.3%, we expect it to be one of Asia’s top performers in 2025 with the business process outsourcing sector (BPO), digitalization, and household consumption — sectors of the economy that are not subject to tariff risks — leading the charge,” he told BusinessWorld via e-mail.

In a note, Citi downgraded its 2025 GDP forecast to 5.9%, from 6% previously, after the weaker-than-expected growth momentum in 2024.

“Still, recent activity data such as income remittances  continue to suggest that domestic demand would remain well-supported. Commercial bank loans rose 11.1% year on year in November 2024 suggesting robust business activities and consumption growth… Furthermore, continued monetary easing and more moderate inflation are also expected to support domestic demand expansion in 2025,” Citi said.

MORE INVESTMENTS NEEDED
Mr. Recto said the upper end of the government’s target “can only be achieved if private investments double or triple.”

Department of Budget and Management (DBM) Principal Economist Joselito “Jojit” R. Basilio said the economy is likely to post 6-7% growth this year, although the upper end of the target “remains doable under certain circumstances.”

“Aside from the government’s continued ramping up of spending on public construction, recently approved PPPs (public-private partnership) projects should complement the aggressive ‘Build Better More’ program,” he said.

“But there are conditions that can push the economy to do more and grow by 7% to 8% in 2025,” he added.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said hitting the upper end of the 2025 goal is a “long shot, realistically.”

“This would require more foreign and local investments, more tourists especially foreign, more merchandise exports that all generate more jobs and other economic opportunities that lead to higher per capita income,” he said.

To drive faster growth this year, Mr. Tuaño said the government should accelerate infrastructure projects and push regulatory reforms to boost investments, especially outside of the main urban centers.

The government should also invest in human resource development via education, healthcare, technological upgrading, and boost small businesses to drive growth, he said.

“Some potential opportunities for growth include stronger consumption driven by remittance growth and continuous expansion of services, and also the rebound of tourism,” Mr. Tuaño said.

Citi said continued policy easing by the Bangko Sentral ng Pilipinas will support GDP growth this year. It maintained its expectation for a 25-basis-point (bp) rate cut this month.

“We expect the BSP to cut again in June and August, skipping April, partly to ascertain a few outcomes, including the potential increase of US tariffs and possible impact on global trade and US dollar-Philippine peso, the Fed’s rate cut decisions, the Philippines’ midterm election campaigning’s potential positive impact on domestic demand (although investment may see some delays from the 45-day pre-election ban on project disbursement) etc,” Citi said.

The Monetary Board has cut benchmark borrowing costs by a total of 75 bps since it began its easing cycle in August 2024, bringing its key rate to 5.75%.

Mr. Basilio said private consumption is expected to recover strongly, increasing by 6% in 2025 due to stabilized inflation and lower interest rates.

“The domestic demand is also anticipated to shift from ‘being subdued’ to one of gaining its momentum,” he said.

Mr. Basilio also noted that agricultural output is anticipated to make “a strong rebound” this year.

However, Mr. Dacanay said relying on fiscal and monetary policy to boost growth will be difficult.

“The government is in the midst of consolidating its fiscal resources from the pandemic, while the Federal Reserve puts a floor under how much the Bangko Sentral ng Pilipinas can cut policy rates to boost growth,” Mr. Dacanay said.

RISKS TO THE OUTLOOK
Analysts cited geopolitical tensions and uncertainty as one of the downside risks to the Philippines’ economic outlook.

“Downside risks include geopolitical risks and uncertainties in global trade markets, considering further that goods export sector performance has been relatively anemic,” DBM’s Mr. Basilio said.

Mr. Tuaño said other downside risks include slower export growth due to “tariff escalation in the developed world… and natural disasters taking a toll on productive labor and capital.”

On the other hand, key upside risks include improved labor market conditions and election spending.

“For the current year, election spending is expected to result in increased economic activities, including advertising and campaign-related expenses in transport, hospitality, retail trade and others,” DBM’s Mr. Basilio said. — with inputs from Aaron Michael C. Sy

BSP: Shift from ‘obsolete’ OTPs to more secure methods needed

By Luisa Maria Jacinta C. Jocson, Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) is seeking to veer away from the use of one-time passwords (OTPs) in favor of more secure and advanced authentication methods.

“Our objective is to make it future proof. You know how technology is. If you say that what we have right now is efficient, then by next week or next year, it may no longer be,” BSP Deputy Governor Elmore O. Capule said in a seminar over the weekend.

“We are encouraging the banks to go on a higher level of protection. While what we have now may be sufficient for now, we want them to continually upgrade,” he added.

The BSP said OTPs as an authentication method are becoming “obsolete.”

Other central banks in the region, like Singapore, have begun to gradually phase out OTPs as a means for bank account logins, amid increasing instances of financial scams such as phishing.

“That’s where we are coming from, we are looking at banks having more sophisticated methods,” Mr. Capule added.

The BSP recently released a draft circular seeking to strengthen the regulatory framework on IT risk management of banks and nonbanks.

Under the draft rules, the central bank is seeking to limit the use of interceptable authentication mechanisms, such as OTPs through short message service (SMS) or e-mail, as these can be shared or intercepted by third parties.

It cited the “increasing prevalence of social engineering attacks aimed at obtaining login credentials.”

“Our basis is it really depends on how sophisticated your system and the bank are. Like if we’re talking about a rural bank or thrift bank, perhaps we will be satisfied with the OTPs,” Mr. Capule said.

“But if you are looking at, let’s say, digital banks, then being a digital bank means your system should be more robust and more advanced. So, we are trying to influence their behavior.”

Mr. Capule said the goal is to eventually veer away from OTPs to adopt more advanced security methods.

The central bank will need to consult with the industry to discuss the transition, he added.

“Of course, we have to listen to them, realistically, how long will it take you to change technology,” he added.

CHALLENGES
Meanwhile, analysts said moving away from the use of OTPs will help strengthen the security of the banking system but noted implementation will be difficult given the lack of technology and infrastructure.

“Transitioning from OTPs to more secure methods like biometric authentication, behavioral biometrics, and passwordless systems could significantly reduce risks,” said Dominic Vincent D. Ligot, founder of Cirrolytix, and AI, technology and research consultant for the IT and Business Process Association of the Philippines.

“However, the implementation of such technologies is not without its challenges. The cost and infrastructure required to deploy these advanced security measures can be substantial, and not all institutions may be equipped to handle such an overhaul promptly.”

Fintech Alliance.PH Founding Chairman and Rizal Commercial Banking Corp. Executive Vice-President and Chief Innovation and Inclusion Officer Angelito “Lito” M. Villanueva said the move to limit OTP is “critical.”

“Relying on SMS or e-mail for OTPs is no longer sustainable, as these methods are inherently susceptible to interception, phishing, and SIM-swapping attacks,” he said.

Ronald B. Gustilo, national campaigner for Digital Pinoys, said the proposed rules are a significant step to address security vulnerabilities in the system.

OTPs offer a basic level of protection but are not foolproof, he added.

“It’s susceptible to interception, which is a weak link, especially when paired with the limited cybersecurity awareness of some users,” Mr. Gustilo said.

Cybersecurity firm Kaspersky reported that the Philippines recorded the highest number of financial phishing attempts targeting business devices in Southeast Asia in 2023.

Earlier data from the BSP also showed that 59.48% of cyber fraud losses among BSP-supervised financial institutions (BSFIs) in 2023 were attributed to account takeovers, identity theft, and phishing.

Overall, cyber fraud losses surged by 212% compared with 2022.

Instead of OTPs, the BSP is pushing to shift to stronger authentication mechanisms such as biometric authentication, behavioral biometrics, passwordless authentication, and AI.

“BSP’s recommendations for alternative authentication methods, such as biometric and passwordless systems, are certainly forward-looking. These methods are harder to replicate or intercept, making them more secure,” Mr. Gustilo said.

However, adopting these methods will be costly and difficult to implement.

“The transition to these methods will require investments in infrastructure, user education, and regulatory support. It is a necessary shift, though, as it ensures the security and trust of the financial system in the long run,” Mr. Gustilo said.

“While transitioning to these advanced methods may require significant investment and user education, the long-term benefits far outweigh the costs,” Mr. Villanueva said.

Among the security features mentioned by the central bank, Mr. Gustilo said biometric authentication would likely be the easiest to implement.

For example, biometric authentication such as fingerprint or facial recognition is already being used as a security measure for mobile devices.

“Biometric authentication is the most realistic and immediate solution for many BSFIs as most smartphones already support these features,” he said.

“Other options such as passwordless authentication could also be implemented relatively quickly, especially for financial institutions that already leverage apps and digital ecosystems.”

Allan S. Cabanlong, regional director for Southeast Asia at the Global Forum on Cyber Expertise, also noted the need to be inclusive when implementing these technologies, citing its availability to the general public.

“For example, what if the user does not have a cellphone capable of doing that, then they have no other option to use OTP,” Mr. Cabanlong said in mixed English and Filipino via phone call.

There are still many consumers that do use devices capable of utilizing biometrics, he added.

Mr. Cabanlong also raised concern about how registration processes would go, as most rely on OTP.

“Assuming there’s no OTP, how would you register new users? What is the authentication method if there’s no OTP? There is still a need for KYC (Know Your Customer) in the registration.”

STRENGTHEN THE SYSTEM
In the meantime, the central bank can also push to strengthen OTP systems.

“Enhancing the security features of OTPs — for instance, by including more transaction details in the messages — can be a useful interim measure,” Mr. Ligot said.

“It could help in ensuring that even if an OTP is intercepted, the lack of contextual data would make it harder to misuse.”

Under the draft rules, the BSP also called for OTP messages to be more personalized and contain sufficient transaction details to allow the customers to accurately identify or verify the transaction.

Analysts said institutions must also put the effort to educate the public on how to be more vigilant against these cyberattacks.

“Ultimately, educating users on the proper management of their digital credentials and the handling of authentication messages is crucial. Awareness and vigilance can significantly mitigate the risks associated with OTPs and other forms of digital authentication,” Mr. Ligot said.

Mr. Villanueva said organizations must adopt “a proactive approach to stay ahead of cybercriminals.”

“This includes continuous monitoring, regular security audits, and fostering a culture of cybersecurity awareness among users,” Mr. Villanueva said.

“By phasing out outdated authentication methods and embracing modern, resilient technologies, we can significantly mitigate the risks posed by social engineering and other evolving threats.”

PCCI opposes P200 daily wage hike

Workers are seen at a construction site along Commonwealth Ave in Quezon City, Jan. 30, 2025. — PHILIPPINE STAR/NOEL B. PABALATE

THE PHILIPPINE Chamber of Commerce and Industry (PCCI) is opposing the proposed P200 across-the-board daily minimum wage hike for workers.

“A blanket national minimum wage (hike) does not take into account the differences in the cost of living across regions as well as the unique needs of businesses based on the specific industry, location, and type of labor they need. Cities have higher costs of living versus rural areas,” said PCCI President Enunina V. Mangio in a statement on Monday.

The business group’s statement came after a House Committee on Labor approved last week a bill that will grant a P200 across-the-board wage increase for private-sector workers.

“Legislating a single wage for all areas can harm businesses in lower-cost regions and remove the flexibility of the Regional Wage Boards to set wages that are aligned with the situation in the local areas. This could lead to business inefficiency and stagnation,” Ms. Mangio said.

According to the PCCI, Congress should leave the determination of wage hikes to the Regional Wage Boards, which were “created and designed to set region-specific rates based on the local cost of living.”

Ms. Mangio said that although the wage hike is meant to improve the livelihood of workers, it is expected to lead to higher labor costs, which may lead to a spike in the cost of goods and services.

“Micro, small, and medium enterprises (MSMEs) are already operating on tight margins. The mandated wage hike will force these small enterprises to shoulder higher payroll expenses,” she said.

“For some businesses, particularly those in low-margin industries like retail, hospitality, and agri-food, the wage increase forces them to pass on the cost to consumers,” she added.

This inflationary effect, she said, will erode purchasing power, which will negate the intended benefit of the wage increase while reducing jobs in the market.

“Making everyday items more expensive will simply offset the benefits of a higher wage, especially for workers in the low-income brackets. But the inflationary effect will bear down more on workers in the informal sector who are not bound by the minimum wage law,” she added.

The PCCI noted the across-the-board wage increase is expected to push microenterprises to shift operations to the informal sector to cut costs.

Only 25-30% or 10-12 million of the total employed workforce are in the formal sector, while the informal sector accounts for 40-50%, representing 15-20 million workers.

“A legislated minimum wage hike not only exacerbates the already rising cost of goods and unemployment but also fails to provide long-term solutions for productivity and competitiveness,” said PCCI.

“Instead of legislating wages, our wage policy should have a comprehensive approach that balances the needs of workers with the capacity of businesses and ensures that MSMEs continue to thrive while still providing fair wages,” it added. — Justine Irish D. Tabile

Beyoncé wins top Grammys prize for first time with Cowboy Carter

BEYONCÉ receives Album of the Year award for Cowboy Carter during the 67th Annual Grammy Awards in Los Angeles, California, Feb. 2, 2025. — REUTERS/MARIO ANZUONI

LOS ANGELES — Beyoncé won the top prize at music’s Grammy Awards on Sunday, taking album of the year for the first time in her career with her country album Cowboy Carter.

The superstar singer triumphed over Taylor Swift, Billie Eilish, and others to claim the trophy that had eluded her even as she collected more lifetime Grammys than any other artist.

“I just feel very full and very honored. It’s been many, many years,” Beyoncé said on stage on Sunday.

Rapper Kendrick Lamar claimed record of the year and song of the year for “Not Like Us,” a diss track in his feud with Canadian rapper and singer Drake.

“Pink Pony Club” singer Chappell Roan was named best new artist and used her time on stage to urge record labels to pay musicians a living wage with healthcare benefits. She recalled a time when she felt “dehumanized” to not have health insurance. “Labels — we got you, but do you got us?” she said.

This year’s Grammy festivities were revamped to be part awards show and part fundraiser for people affected by the wildfires, which were contained on Friday after killing 29 people and displacing thousands including many musicians.

Broadcast live on CBS, the show opened with an all-star rendition of “I Love LA” featuring Altadena-based band Dawes backed by John Legend, Brad Paisley, St. Vincent, and Brittany Howard.

“Tonight, we decided we are not just celebrating our favorite music. We are also celebrating the city that brought us so much of that music,” said host Trevor Noah, who directed viewers to donation options throughout the show.

Grammy winners are chosen by the 13,000 singers, songwriters, producers, engineers and others who make up the Recording Academy. — Reuters

Grammys 2025: And the winners are…

LOS ANGELES — The 67th Grammy Awards, the highest honors in the US music industry, were handed out at a ceremony on Sunday, broadcast on CBS and hosted by Trevor Noah.

The following are the winners in the televised ceremony.

Album of the Year — Cowboy Carter, Beyoncé

Record of the Year — “Not Like Us,” Kendrick Lamar

Song of the Year — “Not Like Us,” Kendrick Lamar

Best New Artist — Chappell Roan

Best Pop Vocal Album — Short n’ Sweet, Sabrina Carpenter

Best Pop Duo/Group Performance — “Die With A Smile,” Lady Gaga and Bruno Mars

Best Latin Pop Album — Las Mujeres Ya No Lloran, Shakira

Best Country Album — Cowboy Carter, Beyoncé

Best Rap Album — Alligator Bites Never Heal, Doechii

Senate OKs Meralco franchise bill on final reading

PHILIPPINE STAR/RYAN BALDEMOR

THE SENATE on Monday approved on third and final reading a proposed measure that will extend Manila Electric Co.’s (Meralco) franchise for another 25 years.

With an 18-1-0 vote, senators approved House Bill No. 10926, which will allow the power provider to continue constructing, operating, and maintaining its electric distribution systems in areas such as Metro Manila, Bulacan, Cavite, Laguna, Batangas, and Rizal.

“We believe that we can improve Meralco’s services and provide better and more reasonable electricity prices,” Senator Emmanuel Joel J. Villanueva, who sponsored the measure, told the plenary following the approval.

“So again, we stand by our ‘yes’ vote knowing that this measure not only renews a franchise but also strengthens our country’s energy security and consumer rights.”

Under the bill, Meralco will have to allow Filipinos to hold at least 30% of its outstanding capital stock, or a higher percentage, or face franchise revocation.

It must also submit an annual report of its finances and operations to the Philippine Congress by April 30 after the measure takes effect. The report must include details on its rollout of services, audited financial statements, and plans to expand its business.

The power distributor may face a fine of P1 million for each working day of noncompliance if it fails to submit the yearly report.

Under the Electric Power Industry Reform Act (EPIRA) of 2001, power suppliers are mandated to ensure a reliable supply of electricity in a “least-cost manner” or at reasonable rates.

In his third address to Congress in July last year, President Ferdinand R. Marcos Jr. sought a review of EPIRA to address issues affecting the energy sector, particularly high energy prices.

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

Bagets musical adaptation in the works

THE POSTER of the original 1984 movie Bagets. A theater adaptation is in the works.

THE HIT 1984 comedy film Bagets will be given new life through a stage adaptation, Bagets the Musical, the show’s producers announced on Friday.

The musical centers on five friends who are coming of age, played in the original film by Aga Muhlach, William Martinez, JC Bonnin, Herbert Bautista, and Raymond Lauchengco.

Set to arrive in 2026, the theater project is produced by Viva Communications, Inc., and the Philstar Media Group through Philstar Next, its division that handles ventures beyond news publishing.

Philstar Media Group Executive Vice-President Lucien C. Dy Tioco said in a Facebook post that the agreement is for the two companies to “co-produce an adaptation of one of the iconic films that defined the ’80s generation.”

Present at the contract signing on Friday were Mr. Dy Tioco, Philstar Media Group President and Chief Executive Officer Miguel G. Belmonte, Viva Communications Chairman and Chief Executive Officer Vicente R. del Rosario, Jr., and Viva Communications President and Chief Operating Officer Vincent G. del Rosario III.

While the cast and crew behind the musical are still being organized, the producers have revealed that audiencegoers can expect it to hit the stage by the first quarter of 2026. — BHL

T-bills fetch lower rates as BSP signals more cuts

BW FILE PHOTO

THE GOVERNMENT on Monday increased the volume of Treasury bills (T-bills) it awarded for a fourth straight week as the papers fetched lower rates and strong demand after the Bangko Sentral ng Pilipinas (BSP) signaled more policy easing ahead.

The Bureau of the Treasury (BTr) raised P27.6 billion from the T-bills it auctioned off on Monday, higher than the P22-billion plan, as total bids reached P70.649 billion, more than thrice as much as the amount on offer but lower than the P91.06 billion in tenders seen on Jan. 28.

The oversubscription prompted the Treasury to double its acceptance of non-competitive bids for the three- and six-month papers to P5.6 billion each for the fourth consecutive T-bill auction.

Broken down, the Treasury borrowed P9.8 billion via the 91-day T-bills, higher than the programmed P7 billion, as tenders for the tenor reached P27.95 billion. The three-month paper was quoted at an average rate of 5.101%, down by 1.2 basis points (bps) from the 5.113% seen at the previous auction, with accepted rates ranging from 5.05% to 5.123%.

The government also made a P9.8-billion award of the 182-day securities, above the P7-billion plan, as bids stood at P22.35 billion. The average rate of the six-month T-bill stood at 5.477%, 1.1 bps lower than the 5.488% fetched previously. The tenders accepted by the BTr carried rates of 5.418% to 5.518.

Lastly, the Treasury raised P8 billion as planned via the 364-day debt papers as demand for the tenor totaled P20.349 billion. The average rate of the one-year debt decreased by 5.3 bps to 5.671% from 5.724% previously, with bids accepted having rates of 5.6% to 5.72%.

At the secondary market before the auction, the 91-, 182-, and 364-day T-bills were quoted at 5.2786%, 5.5219%, and 5.7118%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data provided by the Treasury.

The government upsized its T-bill award as it saw strong demand, with the papers’ average rates declining week on week and settling below prevailing secondary market levels, the BTr said in a statement.

The T-bills fetched lower yields after BSP Governor Eli M. Remolona, Jr. said they could slash benchmark interest rates by 50 bps this year, with a cut on the table at the Monetary Board’s Feb. 13 policy meeting, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Since Governor Remolona said they could cut rates by up to 50 bps, with the current policy rate at 5.75%, investors are trying to lock in short-term rates,” a trader said in a text message.

Mr. Remolona said the central bank may cut benchmark interest rates by 50 bps this year as “policy insurance” against risks, adding that the reductions could be implemented in increments of 25 bps each in the first and second semesters.

The Monetary Board has slashed borrowing costs by 75 bps since starting its easing cycle in August last year.

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

The Treasury is looking to raise P203 billion from the domestic market this month, or P88 billion from T-bills and P115 billion from T-bonds. — A.M.C. Sy

DoubleDragon says Hotel101 moving closer to Nasdaq listing

HOTEL101GLOBAL.COM

DOUBLEDRAGON Corp.’s (DD) subsidiary, Hotel101 Global Pte. Ltd., is nearing its $2.3-billion (P130 billion) listing on the Nasdaq Stock Exchange in the United States after meeting all requirements.

Hotel101 filed and passed its F-4 registration statement on Saturday, Feb. 1 (local time), or Friday, Jan. 31 (New York time), DD said in an e-mailed statement on Monday.

“This marks a significant step forward as it moves closer toward its upcoming $2.3-billion (P130-billion) US Nasdaq listing, following months of rigorous preparation and compliance with the US Securities and Exchange Commission (SEC) and Nasdaq’s registration and listing requirements,” DD said.

The F-4 registration statement is a filing required by the US SEC for the registration of certain securities by foreign issuers.

DD is set to be the first Filipino company to have a subsidiary listed and traded on the Nasdaq.

Hotel101 will list on the Nasdaq via a merger with JVSPAC Acquisition Corp. The two entities signed a merger agreement in April last year.

The combined entity will trade under the ticker symbol “HBNB.”

DD said it is poised to generate P51.3 billion in fresh equity capital, led by the upcoming Nasdaq listing of Hotel101, the equity follow-on, and the real estate investment trust (REIT) public listing of its subsidiary, CentralHub.

Meanwhile, DD said in a regulatory filing that it started the offer period for its bond offering worth up to P10 billion on Monday as the company grows its cash reserves.

The offer period for the seven-year peso retail bond issuance will run until Feb. 14, with the target listing on the Philippine Dealing and Exchange Corp. on Feb. 21.

DD said it received the bond offering’s order of registration and permit to sell, dated Jan. 31, from the Philippine SEC.

The bond issuance consists of a P5-billion base offer and a P5-billion oversubscription option, priced at 7.77% per annum. It is the second tranche of DD’s P30-billion shelf-registered retail bonds program, with the third and final tranche planned for issuance by next year.

The second tranche received a PRS Aaa credit rating with a stable outlook from the Philippine Rating Services Corp. (PhilRatings), which means that the offering has marginal credit risk and the rating is likely to remain unchanged in the next twelve months.

DD previously said the issuance will be its lone peso retail bond offering for 2025.

The company previously said the bond issuance will help boost cash reserves, which will subsequently improve its balance sheet.

DD tapped Land Bank of the Philippines, RCBC Capital Corp., and Unicapital, Inc. as the joint issue managers, joint lead underwriters, bookrunners, and selling agents for the issuance.

In November, DD ended the offer period for its P10-billion fixed-rate peso retail bond issuance two days earlier than planned due to high investor demand.

It was priced at 8% per annum and was the first tranche of the company’s P30-billion multi-year retail bond issuance.

DD is engaged in real estate development, including retail leasing, office leasing, hospitality, and industrial leasing.

On Monday, DD shares were unchanged at P9.70 apiece. — Revin Mikhael D. Ochave

Meteor Garden’s Barbie Hsu dies of flu

TAIPEI — Taiwanese actor Barbie Hsu, who rose to fame across Asia as the romantic lead in the 2001 television drama Meteor Garden, has died of influenza aged 48, her sister said on Monday.

Known by the nickname “Big S,” Ms. Hsu died on a family holiday in Japan, said sister Dee Hsu, in news that became the most searched item on China’s Weibo microblogging service.

“My dearest and most kindhearted sister Barbie Hsu died of influenza-induced pneumonia and unfortunately left us,” Dee, known as Little S, said in a statement.

“I was grateful to be her sister in this life and that we got to care for and spend time with each other. I will always be grateful to her and miss her!”

The sisters first found fame with their pop group S.O.S., but Ms. Hsu’s leading role in the romantic Taiwanese soap Meteor Garden cemented her popularity.

She was married to Korean rapper Koo Jun-yup “DJ Koo” for nearly three years after ending an 11-year marriage with Chinese entrepreneur Wang Xiaofei. She is survived by two children. — Reuters

BPI posts record profit

BW FILE PHOTO

BANK of the Philippine Islands’ (BPI) net profit rose by 20% year on year to a record-high P62 billion in 2024 driven by double-digit revenue growth.

This translated to a return on equity of 15.1% and return on assets of 2%, the bank said in a disclosure to the stock exchange.

For the fourth quarter alone, BPI’s net income grew by 8% year on year to P14.1 billion.

Its financial statement was unavailable as of press time.

The bank’s revenues increased by 23% to P170.1 billion last year, it said.

This came as its net interest income rose by 22.3% to P127.6 billion, driven by a 16.8% expansion in its average asset base expanded 16.8%.

Its net interest margin widened by 22 basis points (bps) to 4.31%, it added.

“Further boosting revenues was the 25.3% increase in non-interest income to P42.6 billion, driven by higher income from the credit card, wealth management and bancassurance businesses, as well as gains from securities trading,” BPI said.

Meanwhile, its operating expenses increased by 21.3% to P83.8 billion due to higher manpower, technology, and volume-related costs.

Its cost-to-income ratio went down by 71 bps to 49.3%.

BPI also set aside loan loss provisions of P6.6 billion last year, up 65% from the 2023 level.

The bank’s loans stood at P2.3 trillion at end-2024, expanding by 18.2% year on year. This total includes the loan portfolio that BPI acquired from Robinsons Bank Corp. following their merger that took effect in January 2024. Excluding the boost from Robinsons Bank, BPI’s own loans grew by 13% last year.

“Institutional loans grew 11.1%, while non-institutional loans soared 41.7%, driven by strong growth across all portfolios led by Business Banking, up 126%, Personal Loans, up 92.1%, and Microfinance, up 62.3%,” BPI said.

Its nonperforming loan (NPL) ratio stood at 2.13%, with its NPL coverage ratio at 106.2%.

On the funding side, BPI’s total deposits rose by 13.9% to P2.6 trillion, which it said was mainly driven by an increase in time deposits.

“Total funding grew 14.2% to reach P2.78 trillion, driven by a shift from time deposits to bonds issuance as a more cost-efficient funding source, leading other borrowed funds to rise 19%,” it said.

“The bank’s CASA (current account, savings account) ratio was 63.2%, with the loan-to-deposit ratio at 87.5%, while CASA versus total funding was at 59.5% and loan-to-total funding was at 82.3%.”

BPI’s assets expanded by 14.9% to P3.3 trillion at end-2024.

Total equity was at P430.5 billion. Its indicative common equity Tier 1 ratio was at 13.8% and its capital adequacy ratio of 14.5%, both above regulatory requirements.

BPI’s shares climbed by P3.80 or 3.27% to close at P120 apiece on Monday. — A.M.C. Sy

NAC reaches deal with Sumitomo Metal to sell Coral Bay stake

NICKELASIA.COM

NICKEL ASIA Corp. (NAC) has signed a deal to sell the company’s entire 15.625% stake in Coral Bay Nickel Corp. (CBNC), a nickel processing operator, to Sumitomo Metal Mining Co., Ltd. (SMM).

In a regulatory filing on Monday, NAC said that it had signed a share purchase agreement (SPA) with SMM to sell NAC’s 15.625% stake in CBNC.

“NAC has jointly signed the SPA with SMM, effective today (Feb. 3), for the sale of all of the CBNC shares in accordance with the terms and conditions of the SPA,” the company said.

“The purchase price of the CBNC shares is based on the carrying amount of the CBNC shares in NAC’s financial statements as of Sept. 30, 2024,”it added.

According to the company’s third-quarter financial statement, NAC’s net assets in CBNC amounted to P23.81 billion, while the company shares were worth P680.4 million as of Sept. 30.

Earlier, NAC disclosed that it was in talks with SMM, the majority shareholder of CBNC, to sell its stake in the processing plant operator.

CBNC operates the Coral Bay high-pressure acid leach (HPAL) processing plant in Rio Tuba, Palawan, which processes metals from lateritic nickel ore. The metals are converted into nickel and cobalt-mixed sulfide.

The processed products are shipped and refined in Japan to become components in the electronics, chemical engineering, and aerospace industries. Refined products are also used as battery components for electric vehicles.

Nickel Asia supplies the ore for processing to the Coral Bay plant from its mining operations, namely Rio Tuba in Palawan, Taganito and Tagana-an in Surigao del Norte, the Cagdianao mine in Dinagat Islands, and the Dinapigue mine in Isabela.

Nickel Asia shares rose 4.15%, or nine centavos, to close at P2.26 apiece on Monday. — Adrian H. Halili

New players eye PHL digital bank sector

BW FILE PHOTO

By Luisa Maria Jacinta C. Jocson, Reporter

TWO FOREIGN digital banking players are interested in entering the Philippine market, the Bangko Sentral ng Pilipinas (BSP) said.

“There is no official filing yet, but there are two very interested players. There’s still no formal application because they’re trying to complete the documentary requirements, but they are very much interested,” BSP Deputy Governor Chuchi G. Fonacier said over the weekend.

These potential applicants already operate digital banks in other jurisdictions but will be new players in the Philippines, she added.

The Monetary Board lifted a three-year moratorium on new digital banking licenses effective January.

The BSP is now set to allow four more digital banks to operate in the country, which would bring the total to 10. These can either be new applicants or banks that will convert their existing license to a digital one.

The central bank said applicants must “bring something new to the table” and offer innovative products to better reach underserved and untapped markets. They will also undergo a rigorous licensing process that will evaluate their value proposition, business models and resource capabilities.

There is no definite timeline as to when these potential new players will be awarded licenses as this would depend on their compliance with the central bank’s requirements, Ms. Fonacier said.

“The very requirement of the governor and the Monetary Board is that they should really have a very good value proposition. They should not have an existing business model of another player,” she said.

“We cannot say right away that the two interested (players) will be automatic because they were the first to file. We will base it on the evaluation… It’s not just submitting documentary requirements, but rather, they really need to describe their business model.”

As part of the application process, firms will need to give the BSP a walkthrough of their specific plans and business models, Ms. Fonacier added.

The six digital banks currently operating in the Philippines are Tonik Digital Bank, Inc.; GoTyme Bank of the Gokongwei group and Singapore-based Tyme; Maya Bank of Voyager Innovations, Inc.; Overseas Filipino Bank, a subsidiary of Land Bank of the Philippines; UNObank of DigibankASIA Pte. Ltd.; and UnionDigital Bank of Union Bank of the Philippines, Inc.

ISLAMIC DIGITAL BANKS
Meanwhile, Ms. Fonacier said two Islamic lenders are also looking to set up digital banks in the country.

“When I joined the Malaysian leg in the roadshow, one bank was asking about the possibility of becoming the first Islamic digital bank,” she said. “That was last year, so we said, the moratorium for digital banks will be lifted, so it’s very much possible.”

This Islamic bank is already present in the Philippines and is seeking to venture into digital banking as well, she added.

Another foreign Islamic bank, a “major player in Malaysia,” is also interested in setting up shop in the Philippines, Ms. Fonacier said.

“It will depend on them who will become the first Islamic digital bank.”

The BSP has been working to expand Islamic finance in the country. Ms. Fonacier said they are hoping to encourage more players in Islamic banking.

The three entities with Islamic banking operations in the country are the state-owned Al Amanah Islamic Investment Bank, Maybank Philippines, and CARD Bank, Inc., which opened an Islamic banking branch in Cotabato City last year.

“Right now, there are only three, so maybe it would be good to have up to maybe six or about seven [additional players]. With more players, there would be more competition,” the official said.

“With the roadshows we conducted in Indonesia and Malaysia, we were able to entice a major player in Islamic banking to put up shop or to be present in the Philippine market.”

She added that the central bank is also in support of another Sukuk bond issuance, preferably peso-denominated.

“The Bureau of the Treasury is also mulling another Sukuk sovereign issuance, or it could be a peso Sukuk — that’s what the Governor is saying. We already did a dollar Sukuk. It would be nice to do a peso Sukuk. Those are the major (milestones) we are expecting.”

In December 2023, the Philippine government issued its first-ever Islamic bonds, raising $1 billion from the sale of 5.5-year dollar-denominated Sukuk bonds.

Sukuk or Islamic bonds are certificates that represent a proportional undivided ownership right in tangible assets, or a pool of tangible assets. These assets could be in a specific project or investment activity that is Shari’ah-compliant.

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