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North Korea unveils new nuclear warheads as US air carrier arrives in South Korea

North Korea and South Korea as seen a screenshot from Google Maps.

SEOUL/BUSAN – North Korea unveiled new, smaller nuclear warheads and vowed to produce more weapons-grade nuclear material to expand its arsenal, state media said on Tuesday, as a US aircraft carrier arrived in South Korea for military drills.

North Korea‘s Korean Central News Agency (KCNA) released photos of the warheads, dubbed Hwasan-31s. Leader Kim Jong Un visited the Nuclear Weapons Institute and inspected new tactical nuclear weapons and technology for mounting warheads on ballistic missiles, as well as nuclear counterattack operation plans, KCNA said.

Nuclear experts said the images could indicate progress in miniaturizing warheads that are powerful yet small enough to mount on intercontinental ballistic missiles capable of striking the United States.

“It has something more powerful in a smaller space. That’s worrisome,” said Kune Y. Suh, professor emeritus of nuclear engineering at Seoul National University, comparing the new warheads to the 2016 version.

Kim Dong-yup, a former South Korean naval officer who teaches at Kyungnam University, said the images appeared to show “a miniaturized, lightweight and standardized warhead” intended for use with at least eight different delivery platforms listed in posters on the wall, including missiles fired from submarines.

“Now that the delivery vehicles are nearly ready, they would churn out warheads to secure second strike capabilities – perhaps hundreds, not dozens – while running centrifuges even harder to get weapons-grade nuclear material,” he said.

Kim Jong Un ordered the production of weapons-grade materials in a “far-sighted way” to boost its nuclear arsenal “exponentially” and produce powerful weapons, KCNA said.

He said the enemy of the country’s nuclear forces was not a specific state or group but “war and nuclear disaster themselves,” and the policy of expanding the arsenal was solely for defensive purposes and regional peace and stability.

 

US EXERCISES

In Washington, White House national security spokesperson John Kirby said the United States remained willing to discuss verifiable denuclearization of the Korean peninsula, but North Korean had shown no desire for such talks.

“So we will continue to make sure that we have the appropriate military capabilities and the appropriate readiness to use those capabilities if need be, to protect our national security interests and those of our allies,” he said, referring to large-scale military exercises underway with South Korea.

Kim was also briefed on an IT-based integrated nuclear weapon management system called Haekbangashoe, which means “nuclear trigger”, whose accuracy, reliability and security were verified during the simulation of a nuclear counterattack, KCNA said.

North Korea fired short-range ballistic missiles on Monday and conducted a nuclear counterattack simulation last week against the U.S. and South Korea, which it accused of rehearsing an invasion. A commentary in North Korea‘s Rodong Sinmun said the US-South Korea military exercises amounted to “an open declaration of war.”

KCNA said the North Korean military simulated a nuclear airburst with two tactical ballistic missiles equipped with mock warheads and tested a nuclear-capable underwater attack drone.

It said the Haeil-1 drone reached a target in waters off the northeast coast after cruising along a “jagged and oval” 600km (373-mile) course for more than 41 hours.

South Korean President Yoon Suk Yeol said Pyongyang did not deserve “a single penny” of economic aid while pursuing nuclear development, his spokesman said.

A South Korean military spokesman said additional analysis would be needed to verify whether North Korea‘s new warheads were deployable. He said the report on the underwater drone was most likely “exaggerated and fabricated.”

 

US CARRIER STRIKE GROUP

On Tuesday, a US carrier strike group led by the Nimitz docked at South Korea‘s Busan naval base after joint drills. It was the carrier‘s first visit in nearly six years and coincides with the 70th anniversary of the U.S.-South Korea alliance.

South Korean Rear Admiral Kim Ji-hoon said the joint exercises were intended to improve US extended deterrence – a reference to the US nuclear umbrella protecting its ally – given the evolving North Korean threat.

The strike group commander, Rear Admiral Christopher Sweeney, said his ships were prepared for any contingency.

“We don’t seek conflicts with (North Korea). We seek peace and security. We’re not going to be coerced, we’re not going to be bullied and we’re not going anywhere,” he told reporters. – Reuters

US regulator cites ‘terrible’ risk management for Silicon Valley Bank failure

REUTERS

WASHINGTON – A top US regulator told a Senate panel on Tuesday that Silicon Valley Bank did a “terrible” job of managing risk before its collapse, fending off criticism from lawmakers who blamed bank watchdogs for missing warning signs.

In the first congressional hearing into the sudden collapse of two US regional lenders and the ensuing chaos in markets, both Democratic and Republican lawmakers pressed the Federal Reserve’s top banking regulator on whether the central bank should have been more aggressive in its oversight of SVB.

“It looks like regulators knew the problem, but no one dropped the hammer,” said Senator Jon Tester, a Democrat.

Michael Barr, the Fed’s vice chairman for supervision, criticized SVB for going months without a chief risk officer and how it modeled interest rate risk, which he said “was not at all aligned with reality.” Fed supervisors had flagged such issues with bank management, but they went unaddressed, he added.

“The risks were there, the regulators were pointing them out and the bank didn’t take action,” he said.

The failures of SVB, and days later, Signature Bank, set off a broader loss of investor confidence in the banking sector that pummeled stocks and stoked fears of a full-blown financial crisis. A deal to rescue Swiss giant Credit Suisse last week and a sale of SVB’s assets to First Citizens Bancshares this week has helped restore some calm to markets, but investors remain wary of more troubles lurking in the financial system.

Senior members of the Senate Banking Committee agreed with Mr. Barr that the banks had been mismanaged and former executives should be held responsible, but also questioned how the banks could collapse so quickly with regulators on the case.

Mr. Barr told the committee he first became aware of the interest rate risk issues at SVB in mid-February, while Fed supervisors had been raising issues with the bank directly in months prior to that.

“The failure of Silicon Valley Bank, Signature Bank and the general turmoil in the banking sector are the direct result of the failure of regulators, including the agencies we have before us today,” said Senator Steve Daines, a Republican.

Mr. Barr was challenged on whether the Fed’s annual “stress test” of large banks would have identified risks at SVB, given that recent tests have not explored how banks could weather rapidly rising interest rates, even as the Fed aggressively hiked borrowing costs in a bid to stem inflation.

“It was like somebody going in for a test for COVID and getting a test for cholera,” said Sen. John Kennedy, a Louisiana Republican.

Mr. Barr agreed it would be “useful” to test for higher rates as well, and said he was looking to expand the breadth of the test in the future.

Regulators have vowed to review their rules and procedures after the twin failures while insisting the overall system remains sound. Mr. Barr added he welcomed external reviews of regulators’ work and expects the Fed to be “accountable” for any shortcomings that are unearthed.

Mr. Barr and FDIC Chairman Martin Gruenberg both stressed in their remarks that depositor funds are safe and sound.

Both indicated they are looking into tightening rules for banks and applying stricter oversight for firms similar to SVB.

Some Democrats, including major bank critic Senator Elizabeth Warren of Massachusetts, have also argued a 2018 bank deregulation law is to blame. That law, mostly backed by Republicans but also some moderate Democrats, relaxed the strictest oversight for firms holding between $100 billion and $250 billion in assets, which included SVB and Signature.

Mr. Barr said he anticipated the Fed would need to strengthen capital and liquidity standards for firms with more than $100 billion in assets.

The hearing is the first of what is expected to be several examining the banking tumult. The House Financial Services Committee will hear from the same regulators Wednesday, and congressional leaders have already said they want to question the former CEOs of the two banks on what went wrong. – Reuters

Building pathways for change: 35 vibrant years and beyond for P&A Grant Thornton

On to a more vibrant tomorrow: P&A leaders pose onstage to mark the momentous event.

Marking milestones is easy; making each one count is a feat. And for P&A Grant Thornton, a leading business advisor for scores of dynamic organizations across the country, celebrating its anniversary means so much more than showing appreciation to its clients, its people, and other stakeholders for their unwavering support. It means laying the groundwork to achieve more in the vibrant years ahead.

Last February 15, 2023, P&A Grant Thornton celebrated its 35th Anniversary with clients and other stakeholders whose loyalty and trust have always fueled the Firm’s insatiable drive to achieve and be more.

“2023 marks the 35th Anniversary of Punongbayan & Araullo, now known in the business as P&A Grant Thornton. Turning 35 is an important moment for our firm. Our journey has been marked with huge opportunities, and just like many businesses, several challenges too,” Ms. Marivic Españo, the Firm’s Chairperson and CEO, said in her opening speech. “We are fortunate to reach this point of our history largely because of clients and friends in the business community and profession who have all bestowed their invaluable confidence and continuing support for our Firm and our people.”

It was a night of warm cheer and good tidings, a meaningful homage to the decades-old institution that slowly but surely rose to prominence as a powerhouse where transformational leaders are mentored and trained. It is, after all, the concrete proof of every employee’s hard work and the organization’s relentless pursuit of all things noble and helpful for its clients. “As a leader, my primary responsibility was to transform the organization that was handed to me by our past leaders to become a stronger and more beautiful one,” said Ms. Españo. Indeed, P&A Grant Thornton is a valued member of the profession today.

The Firm’s promise of excellence, integrity, and quality service

The women supporting P&A Grant Thornton visionaries: The Firm’s Founders Ben Punongbayan and Joe Araullo with their loving spouses Ms. Evelyn Punongbayan and Ms. Amparo Araullo

P&A Grant Thornton was born in 1988, a product of the dream of two visionaries and prominent names in the Philippine accounting profession. Early on, it relied on three core principles that its Founders, Mr. Ben Punongbayan and Mr. Joe Araullo, passed to all staff for them to embody — excellence, integrity, and commitment to provide quality service to its clients.

“We consistently received, annually, very good ratings from clients in our customer satisfaction survey. This great recognition gives us the greatest feeling of all — that we are well-liked by our clients. We are happy and proud to continue to work together with [our clients] in the next 35 years and beyond,” Ben Punongbayan shared during the event.

“From the start, Ben and I planted some characteristics of the Firm that carried us, and which are present even until today. These values were passed on from one generation of leaders to the next and carried over from one Partner to another — traits that distinguish P&A Grant Thornton leaders and staff, and which make the Firm stand out today,” Joe Araullo quipped during his short, but engaging speech at the Anniversary Celebration.

Indeed, these qualities allow the Firm to shine and power through amidst adversity. From its humble beginnings as the “little firm that could” with only seven people and two Partners, it has grown to become a formidable presence in the realm of business advisory and as a leader in the ASEAN region which implements global standards and practices.

The P&A Grant Thornton promise

P&A Grant Thornton Founders Ben Punongbayan and Joe Araullo share a toast with GT Regional Head for Network Capabilities – Asia Pacific Rodger Flynn

The program, held in the regal ballroom of the Fairmont Hotel in Makati, was a success. Aside from celebrating the Firm’s achievements, the Partners also expressed their commitment to shape a more vibrant tomorrow by employing bold perspectives, utilizing divergent thinking, and forging paths with clients, government, nongovernment organizations, and other stakeholders.

“There is no firm that embraces our culture of collaboration, innovation, and quality service more than P&A Grant Thornton. That is why your anniversary’s theme of Shaping a Vibrant Tomorrow is so fitting, because it is exactly what you have been doing all these years and what we have no doubt you will continue doing in the years ahead,” Mr. Peter Bodin, CEO of Grant Thornton International, said in his message during the event.

The P&A Grant Thornton story: Past, present,
future

The Firm’s Partners also articulated their promise to create a place where their people will flourish and eventually become transformational leaders. Ben Punongbayan attributes the success of the Firm to its people. He said, “Over the years, all and every batch of our personnel have responded favorably and determinedly to the great challenge of professional work.”

On the other hand, Ms. Paz Malubay, Partner and Business Process Solutions Practice Leader, narrated, “From the start, we believed that our success depends on our people, in nurturing their growth and development, and in building a relationship of creative collaboration. This is what we call providing a great People Experience.”

The Partners shared the Firm’s commitment to demonstrate its support to sustainability goals, specifically on gender equality, quality education, decent work, good health, and economic growth, and responsible consumption and production. These commitments were wholeheartedly embraced by the next leadership team of the Firm.

All in all, the celebration was one for the books which ended with a poignant performance from the Philippine Madrigal Singers. It will be remembered by guests as a night marked by optimism and professional fervor, qualities that the Firm will carry as it continues with its journey. For P&A Grant Thornton, building pathways for change means laying the groundwork for bold and divergent thinking in a business landscape that calls for innovation and transformation. From the Founders to the next generation of leaders of the Firm, which were announced at the end of the program, the Firm remains strongly committed to grow with its clients and its people. This is true evidence that P&A Grant Thornton has been securely established firmly deep in the ground. As Ben Punongbayan said, “Certainly and surely, P&A Grant Thornton will pass the extreme test of time.”

 

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Marcos pushes for MUP pension reform

Soldiers are seen at the Philippine Army’s 126th Founding Anniversary in Fort Bonifacio, Taguig City, March 22, 2023. — PHILIPPINE STAR/KRIZ JOHN ROSALES

By Kyle Aristophere T. Atienza, Reporter

THE FINANCE DEPARTMENT on Tuesday warned of a possible “fiscal collapse” should the government fail to reform the pension system for retired military and uniformed personnel (MUP).

At a Palace news briefing, Finance Secretary Benjamin E. Diokno said President Ferdinand R. Marcos, Jr. will push for the passage of the bill seeking to reform the MUP pension program, saying the current setup is unsustainable and could lead to “fiscal collapse.” 

The government has set aside P120-130 billion for the pension program for this year alone, Mr. Diokno said.

“Right now, the situation is so bleak. For example, if you compare the current operating expenditures, the maintenance and operating expenditures of the whole AFP (Armed Forces of the Philippines) with the capital outlays… it is actually much less than the amount of pension that we are allocating for the retirees,” he said. 

Mr. Diokno warned that the pension for retired military and uniformed personnel could account for as much as one-third or one-fourth of the AFP’s budget in the future. 

“It’s not sustainable. I said if this goes on, there will be a fiscal collapse,” he added. 

The MUP pension program covers members of the AFP, Bureau of Jail Management and Penology, Bureau of Fire Protection, Philippine National Police, Philippine Public Safety College, Coast Guard, and Bureau of Corrections. 

‘RIDICULOUS’
Mr. Diokno said that under the current setup, the pension of retired personnel increases by 100% when the salary of the incumbent personnel is doubled.

He noted that a military or uniformed personnel who chooses to retire after 20 years of service can already receive a pension, since there is no minimum “pensionable” age. Some personnel even get recruited at the age of 20 so they can retire by 40, he added.

“Military people, they live longer than us…some at the age of 90. So, they retire at 40 to get their pension up to age 90. Isn’t that ridiculous,” Mr. Diokno said.

The average monthly pension of a military personnel is around P40,000, according to the Finance chief.

“Compare that to what SSS (Social Security System) retirees get, it’s P4,528 and what a GSIS (Government Service Insurance System) personnel get, P13,600,” he said. “So the pension that is received by a military pensioner is nine times higher than the average pension of a pensioner under SSS and three times higher than the average pension under GSIS.”

POLITICAL CAPITAL
As part of the MUP pension reform, Mr. Diokno said they want to require all active military personnel and new entrants to contribute to their pension, instead of the government fully funding it.

“All those who are in active service and new recruits will have to pay their way, no longer free. There’s unanimity. We talked to [Defense] Sec. [Carlito G.] Galvez, [Jr.], we talked to [Interior] Sec. Benhur Abalos and they generally agreed with all the four [options],” he said.

The Finance chief also proposed to stop automatically indexing the retirees’ pension to the salary of active personnel of similar ranks, and to raise the age that military and uniformed personnel get their pension to 57 from the current 56.

The proposed reform will be applied to all active personnel and new entrants, he added.

Mr. Diokno expressed confidence that the bill would be passed by Congress this year, saying the President is “willing to risk his political capital for this.”

“Mr. Marcos also has very strong control of both Houses of Congress — so it’s going to be less problematic for him to push forward such a major reform.”

The Finance chief does not believe the proposed reforms would demoralize military and uniformed personnel, saying the government had already doubled their salary in 2018.

“I think they also understand that they have to cooperate with the rest of society. Otherwise, our deficit will blow up.”

The MUP pension program covered 137,649 retired personnel in the first quarter of 2023, the Budget department said in January.

The proposed MUP pension reform is among the legislative priorities of the Marcos administration. It is still pending at the committee level in both houses of Congress.

“We need to pass the MUP pension bill as the current set up might lead to disintegration of the pension as a whole,” House Public Order and Safety Committee Chairman and Santa Rosa City Rep. Dan S. Fernandez said in a Viber message.

Mr. Fernandez said they are just waiting for the House defense panel, the lead committee, to call for a hearing on the bill.

“The pension for AFP-DND (Department of National Defense) for 2021 was 112% of base pay while in the PNP, the pension was 50% or one half of base pay of active policemen. The average pension of all MUP was 70% of [their] base pay,” he said.

The lawmaker noted that the pension of a retired AFP member is larger than the base pay of an active soldier.

“A retired general can get as much as P190,000 monthly pension for life which will redound to a P800-billion budget for the next 20 years,” he said.

A similar bill was certified as urgent by former president Rodrigo R. Duterte in 2019, but it failed to pass the 18th Congress.

“The challenge might be on retiring personnel who do not have enough safety nets or have not transitioned towards managing investments,” Hansley A. Juliano, a political economy researcher, said via Facebook Messenger chat.

“This doesn’t even include retiring officers who are receiving larger sendoffs. If there’s a sizable [number] of them complaining or who are serving as the constituencies of certain politicians or political parties, you can expect them to be the basis of opposition to the bill,” he said.

Mr. Juliano said the bill might also trigger opposition from families of military and uniformed personnel.

“It is very likely that families who will be vulnerable will lobby against the bill. House members who tend to maintain ‘clientelistic’ ties to these communities will likely be forced to choose to either please the constituency or obey the President.”   

LANDBANK-DBP merger eyed before yearend

PRESIDENT Ferdinand R. Marcos, Jr. supports the merger of state-run lenders Land Bank of the Philippines (LANDBANK) and Development Bank of the Philippines (DBP), Finance Secretary Benjamin E. Diokno said.

“The merger will take effect before the end of the year,” he told a Palace briefing after a meeting with Mr. Marcos on Tuesday.

Mr. Diokno said the merger of the two state-run banks would create the “number one bank in the Philippines,” overtaking Sy-led BDO Unibank, Inc. (BDO) as the largest lender in terms of assets.   

“The President expressed the desire to merge the two [banks], to make it the biggest bank of the country because of the recent financial developments abroad. And that’s really the best practice: the biggest bank is usually owned by the state,” he said.

Mr. Diokno said the President instructed them to ensure “none of the services provided by either bank will be lost” during the merger process.

“We assured him that with the merger, because both the LANDBANK and DBP are universal banks, they do almost the same, except that one is focused on agriculture and the other one on industrial projects,” the Finance official said. 

Mr. Diokno said the merger will result in savings for the government of about P5.3 billion per year or at least P20 billion for the next four years.

“This is even understated because this does not include revenues that can be derived from the sale of redundant assets of DBP’s various properties such as its head office in Makati, a property in BGC (Bonifacio Global City), various branch properties, equipment and licenses, and income that can be derived from the proceeds of such sale,” he added.

LANDBANK, which would be the surviving entity, has 752 branches nationwide while DBP has 147 branches.

Only 22 branches of the DBP will be retained, Mr. Diokno said.

However, the merger of the two banks would lead to retrenchment of workers.

“Definitely jobs will be lost because of the redundancy and the branches will be reduced,” Mr. Diokno said, adding that any affected employees would be given “attractive” packages.

Enrico P. Villanueva, senior lecturer of economics at the University of the Philippines Los Baños, said the move would lead to a “stronger, well-capitalized, government development bank.”

Mr. Villanueva said in a Facebook Messenger chat that there will be efficiency gains from the merger.

“We have seen that acquiring other banks usually bodes well — there will be more assets to mobilize, more accessibility to the public,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said via Viber.

“Absorbing the top professionals to run the surviving entity would be extra help,” he added.

When he was running for vice-president in 2016, Mr. Marcos said merging the two state-run banks would result in a commercial bank, removing their ability to provide loans for farmers.

Mr. Diokno, however, said Mr. Marcos might have changed his position due to recent “international developments.”

“I know that he was for this proposal,” he said.

The global banking sector has been rattled by the collapse of Silicon Valley Bank and Signature Bank in the United States, and the rescue of Credit Suisse.

The Bangko Sentral ng Pilipinas (BSP) has assured the banking system is strong and “prepared to withstand possible shocks” arising from the failure of these US banks.

Assets of the Philippines’ largest banks grew by nearly 10% in the fourth quarter of 2022, according to the BusinessWorld’s quarterly banking report released in January.   

BDO remained the largest bank in terms of assets with P4.01 trillion as of the fourth quarter of 2022, followed by state-owned LANDBANK with P3.16 trillion and Metropolitan Bank & Trust Co. with P2.92 trillion.

Mr. Diokno said merging the two state-run banks would free up public funds that could be used for socioeconomic programs.

He also said the plan is consistent with the Marcos administration’s rightsizing initiatives.

“We’re not saying that the current system is broken, but as policy makers we have to constantly seek better ways of doing things especially if we want to improve the performance of a particular government agency.” — Kyle Aristophere T. Atienza

RCEP to take effect in PHL by June — official

Container vans are seen inside the Manila South Harbor, Metro Manila Feb. 15, 2016. — REUTERS/ROMEO RANOCO

THE REGIONAL Comprehensive Economic Partnership (RCEP) will likely take effect for the Philippines around June, a Trade official said on Tuesday.

This as the Department of Trade and Industry (DTI) aims to deposit the instrument of ratification for the Philippines’ participation in the mega-trade deal by April 3.

“On or before April 3, we plan to deposit the instrument of ratification. We still have to deposit the instrument of ratification and then you’ll have to count 60 days from deposit and then the RCEP will take effect for the Philippines,” Trade Assistant Secretary and Philippines’ lead negotiator for RCEP Allan B. Gepty told reporters on the sidelines of an event in Makati City.

The Philippines was the last participating country to ratify the RCEP after the Senate gave its concurrence on Feb. 21. The ratification faced delays due to concerns over the safeguards for the local agriculture sector.   

Mr. Gepty said the RCEP will take effect in the Philippines around June if the instrument of ratification is sent to the Association of Southeast Asian Nations (ASEAN) secretary-general by April 3.

Asked about the delay, Mr. Gepty said the Philippines has yet to finish the domestic preparations needed before the RCEP’s implementation. Previously, the DTI said the RCEP is expected to take effect around May. 

“When RCEP takes effect, we should be done with the necessary issuances. We have to make all the necessary issuances like executive order (EO) and Customs memorandum order so that we will have no problems in the implementation part. The preparations should jibe,” he added.

Mr. Gepty previously said President Ferdinand R. Marcos, Jr. will issue an EO that will contain the schedule of the country’s tariff commitments. This EO will be used by the Bureau of Customs as a basis to apply the tariffs under the RCEP.   

Billed as the world’s biggest free trade agreement (FTA), the RCEP involves a third of the global economy as the participating countries include the members of ASEAN, Australia, China, Japan, New Zealand, and South Korea. The RCEP officially entered into force on Jan. 1 last year.   

RCEP participating countries are expected to have increased trade among RCEP participants as the FTA allows minimal to zero restrictions on quantity, tariffs, or import taxes.

“Philippine exporters gain a market of 15 countries representing nearly 30% of the world’s population, economy, and trade. RCEP gains outweigh the losses. Among others, we need to take advantage of the enhanced trade facilitation provisions that make cross-border trade simpler and faster,” Trade Secretary Alfredo E. Pascual previously said. — Revin Mikhael D. Ochave

BSP sees cross-border payment connectivity in 2-3 years

Bangko Sentral ng Pilipinas Governor Felipe M. Medalla poses for a photograph in his office at Manila, Nov. 18, 2022. — REUTERS/ELOISA LOPEZ/FILE PHOTO

CROSS-BORDER PAYMENT connectivity may be implemented in two or three years in the Philippines as it seeks to keep up with its Association of Southeast Asian Nations (ASEAN) peers, the Bangko Sentral ng Pilipinas (BSP) chief said on Tuesday.

BSP Governor Felipe M. Medalla said he is looking forward to working with other central banks in the region to ensure cross-border payment connectivity is implemented. 

“Our vision really is to be one with ASEAN-5 to have cross-border payments,” Mr. Medalla said in a seminar hosted by Bank Indonesia (BI) in Bali, Indonesia.

In November 2022, the BSP signed a memorandum of understanding (MoU) with other central banks in the ASEAN region to strengthen collaboration on payment connectivity.

The MoU on Cooperation in Regional Payment Connectivity (RPC) was signed with the BI, Bank Negara Malaysia (BNM), Monetary Authority of Singapore (MAS), and Bank of Thailand (BoT) on Nov. 14.

The RPC is expected to contribute in accelerating economic recovery and promoting growth as it aims to foster a more inclusive financial ecosystem by enabling fast, seamless, and cheaper cross-border payments across the region.

Implementation of cross-border payment connectivity will support and facilitate international trade, investment, and other economic activities. The cooperation will include a number of modalities, including QR code and fast payment.

“We will continue to work closely with our ASEAN counterparts to achieve our financial inclusion goals. At the regional level, our arrangements in ASEAN put us in a unique position to engage in knowledge and experience sharing in digital financial inclusion,” Mr. Medalla said. 

He also said promoting and facilitating the development of digital infrastructure and platforms is crucial to addressing internet connectivity issues in underserved areas in the country.

By doing so, access of individuals and small businesses to digital financial services may increase, the BSP chief said.

“We want to reduce the number of excluded people to below 30%. The 2021 number is now 44%, and we’re certain that 2023 numbers are much lower and we are on our way towards 30% or lower excluded,” Mr. Medalla said. 

Based on BSP data, about 22 million Filipinos gained access to formal financial accounts between 2019 and 2021, but 34.3 million adults remained unbanked. This brought the country’s banked population to about 56% of all adults in 2021, up from just 29% in 2019.

Meanwhile, the share of digital payments in the total volume of retail transactions in the country rose to 30.3% in 2021 from 20.1% a year earlier. The value of payments done online also represented 44.1% of total retail transactions last year.

The BSP wants 50% of total retail transactions done digitally and to bring at least 70% of Filipino adults into the financial system by this year under its Digital Payment Transformation Roadmap.

“Indeed, although we are a traditional central bank that is very concerned with price stability…all of these three strong pillars, it’s a pity if it’s not inclusive. Financial inclusion is a very important part of our strategic objective,” Mr. Medalla said.

Last week, the BSP and four other central banks in the region announced it will connect their domestic instant payment systems (IPS) through the Bank for International Settlements’ (BIS) Nexus Project.

The Nexus, a prototype developed by the BIS Innovation Hub Singapore Centre, connects payment system operators with the Eurosystem’s TARGET Instant Payment Settlement (TIPS), Malaysia’s Real-time Retail Payments Platform (RPP) and Singapore’s Fast and Secure Transfers (FAST).

Based on the MoU on Cooperation in RPC, the BI, BNM, BSP, MAS and the BoT will leverage experiences from Phase I and Phase II of the Nexus project to connect IPS and facilitate cross-border transactions for about 500 million people in the region. — Keisha B. Ta-asan

Metro Pacific acquires 16% stake in SPNEC for P2 billion

PANGILINAN-led Metro Pacific Investments Corp. (MPIC) is set to acquire 1.6 billion shares equivalent to a 16% stake in SP New Energy Corp. (SPNEC) for P2 billion.

“Our thrust of pursuing renewable energy brings the MVP Group one step closer to fulfilling our mission of creating long-term value for our stakeholders through responsible and sustainable investments,” MPIC Chairman Manuel V. Pangilinan said in a disclosure.

MPIC said that the shares priced at P1.25 apiece are sold by Solar Philippines Power Projects Holdings, Inc. (SPPPHI), which will be using the proceeds to fund SPNEC’s land investments in Nueva Ecija where it plans to build Asia’s largest solar project.

“We have long seen a partnership with MPIC to be the key to unlock the potential of our project pipeline. We are humbled and grateful for this opportunity and believe that SPNEC now has the final ingredients to realize the value of our developments for the benefit of all stakeholders,” said Leandro Antonio L. Leviste, president and chief executive officer of SPPPHI.

MPIC said that the payment for the initial acquisition will be funded by internally generated cash. The investment is seen to expand the group’s investment in the renewable energy sector, which is in line with the Department of Energy’s mission of increasing the share of renewables in the country’s energy mix to 35% by 2030.

The completion of the transaction is still subject to regulatory approvals and execution of a separate agreement, which will grant MPIC the option to increase its interest in SPNEC to 43% after the energy company increases its authorized capital stock to P50 billion.

The increase in SPNEC’s capital stock to P50 billion from P10 billion will be through an asset-for-share swap that will infuse SPPPHI energy assets, at a capacity of more than 8 gigawatts, into SPNEC.

Once realized, the acquisition will give MPIC the option to become the single largest shareholder of SPNEC, and Mr. Pangilinan will become chairman of the board of SPNEC.

“This is the first of several agreements through which the MPIC Group may acquire up to a total of about 19 billion common shares of SPNEC, subject to relevant approvals, with the goal of making SPNEC the largest renewable energy company in the Philippines,” said MPIC.

On Tuesday, shares in MPIC climbed by 4.09% or 15 centavos to P3.82 each, while SPNEC shares went up by 3.57% or six centavos to P1.74 apiece.

MPIC is one of three key Philippine units of Hong Kong-based First Pacific Co. Ltd., 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 D. Tabile

Puregold net income up 13.5% to P9B as sales rise

LISTED retailer Puregold Price Club, Inc. recorded a 13.5% increase in consolidated net income to P9.23 billion in 2022 from P8.18 billion in the previous year due to higher sales.

“[Puregold] has sustained a growth path throughout the pandemic by being a reliable partner to its suppliers and leveraging its reach and scale to bring value to its community of carded members,” the company said in a disclosure on Tuesday.

The company’s revenues increased by 16.1% due to an 11.7% growth in same-store sales. It did not give out specific figures.

“The company still sees continuous growth in its topline in the coming years due to country’s healthy underlying fundamentals, underserved demand and relatively raw retail landscape,” the company said.

Puregold said that consolidated net sales grew by 12.3% to P184.30 billion from the P164.13 billion it saw the previous year, driven by same-store sales growth and new-store growth.

Operating expenses rose by 10.7% P22.52 billion from P20.35 billion previously.

“The increase in operating expenses was primarily attributable to higher employee costs, utilities expense and lease-related charges partially offset by execution of productivity initiatives,” Puregold said.

Cost of sales also increased by 12.3% to P150.48 billion from the P134.04 billion reported in the previous year.

Gross profits, likewise, grew in 2022 by 12.4% to P33.82 billion from P30.08 billion last year.

Year to date, the company added 24 new Puregold stores, bringing the group’s total network to 525 stores.

In ended 2022 with 452 Puregold stores, 22 S&R membership shopping warehouses, and 48 S&R New York Style quick service restaurants.

On the stock market on Tuesday, shares in Puregold rose by 0.9% or 30 centavos to close at P33 apiece. — Adrian H. Halili

Women in and making art

AGNES ARELLANO’S Black Magdalene

New exhibit works at enriching conversations and discussions on the gender divide

By Giselle P. Kasilag

“THERE are not enough female voices in the visual arts,” declared Michelle Nikki Junia, vice-chairperson of the Board of Trustees of the Cultural Center of the Philippines (CCP).

“While 51% of the visual artists today are women, according to the National Museum of Women in the Arts in Washington DC, they are less represented in exhibitions and galleries. In the Philippines, we have 17 Filipino visual artists who are named and conferred the National Artists Award — the highest recognition given to individuals for their significant contributions in Philippine arts and culture. And guess what? All of them are male. While the other art fields —  music, dance, theater, and film have women National Artists, visual arts have always been dominated by male artists.”

This imbalance appeared to weigh heavily on the management of the country’s premier cultural institution when it opened its first traveling exhibition of the year entitled “WOMAN: Thesis and Antithesis”. The show not only celebrates National Women’s Month but also marks the CCP’s first partnership with the Yuchengco Museum in Makati.

“This is our joint museum effort to highlight a thematic exhibition that explores the role of women within herself and in society,” said Yvonne Yuchengco, chairperson of the Yuchengco Museum, Inc.

The bulk of the exhibition are works from the 21st Century Art Museum or simply 21AM. This is essentially the CCP visual arts and ethnographic collection together with the defunct Museum of Philippine Art (MOPA) but with cyberspace as an additional platform. Complimenting it are key pieces from the Yuchengco collection.

The show is curated by Yuchengco Museum’s Jeannie Javelosa and features works by 45 artists — 24 are female and 21 are male. It is divided into two sections. At the ground level are works that show how women are represented in art and society. At the third floor, on the other hand, are artworks created by women.

According to Con Cabrera of the CCP Visual Arts and Museum Division, barely 20% of the 21AM collection is by women.

“The disparity was very evident when we were thinking about this exhibition, so it was the direction of Ms. Jeannie Javelosa of having the woman as the subject matter for this floor. Most of the collection come from the ’60s, ’70s. ’80s and we all know that most artmaking depicts women as ‘in the everyday’ — the labandera (laundress), the women in the fields, the mother and child, and the family. This is evident in the collection here,” Ms. Cabrera told BusinessWorld.

A stunning black and white work by National Artist Cesar Legaspi, Maiden with flowers, strikingly illustrates this point with three female figures adorned with flowers. Here, women are perceived as beautiful, delicate creatures.

A cluster of pieces by Antonio Austria offer a colorful rendering of a folksy representation of women. They are seen as mothers and wives busy with household concerns.

A group of works by National Artist Benedicto “Bencab” Cabrera features portraits that represent women as individuals. But these are clustered around an imposing acrylic portrait entitled A Gobernadorcillo and his Wife — the woman once again a nameless though a very prominent figure.

There is also the tale of two works by National Artist Vicente Manansala: an enchanting mother and child piece contrasting decisively with Bottle Gatherers which is a dark and grim depiction of women as bottle and junk gatherers.

The second piece, held in storage for a long time, revealed a surprise when it was treated for reframing. When the backing was removed, another painting was revealed but in a portrait orientation and without a date and signature. Ms. Cabrera explained that it was a common practice for artists to recycle their canvas. They displayed the piece based on the orientation of the painting that was signed and dated with the assumption that this was the piece that the artist intended to be seen.

WOMEN’S ART
From the ground level, guests are directed to the third level where the second part of the exhibition is located. Here, art by women artists take centerstage.

“Most of the artists in this space are Thirteen Artist awardees. It is very interesting how different the works here are,” said Ms. Cabrera who also pointed out the inclusion of many prints in the exhibition. This, she explained, was because the Printmakers Association of the Philippines enjoys the support of the CCP and their works, therefore, have been well-represented in the 21AM collection.

“The women artists are very pivotal in the history of printmaking in the Philippines. We have Imelda Cajipe Endaya and her Forefathers series. There are a few Forefathers in the CCP collection which we also displayed already last year in the retrospective that we had for her. Even the push for the retrospective of women artists [is an] active effort of the CCP. So, before Imelda Cajipe Endaya was Ofelia Gelvezon Tequi. And in the future we hope to show more retros by women,” she added.

On this level, guests are greeted by Agnes Arellano’s Black Magdalene — a life-size figure of a naked woman with her arms wide open. On her feet are black skulls and red roses. Around her are very graphic pieces from the likes of Ivi Avellana Cosio with images of two red squares enveloped by silver squares against a black backdrop. It appears to be in conversation with Phyllis Zaballero’s Requiem I and Flora Mauleon’s Confrontation Between Interplanetary Occupants.

And from this central area, the exhibition continues to branch off into many directions — of women artists creating works that reflect how they see themselves, other women, and society at large, ranging from the most abstract to the most graphic. One can move from the socio-political commentaries of Ms. Tequi to the powerful florals of Betsy Westendorp with ease. This range is also reflected in the choice of materials. It is not uncommon to see textiles and other everyday objects in many of the artworks on exhibit as many women make use of items that they handle on a daily basis, Ms. Cabrera added.

Yet even with space after space after space filled with art by women, the gap between the representation of the male and the female artists is undeniably wide. The question is how to ensure that women are consistently represented throughout the year and not just during National Women’s Month.

“There is a law that requires all government agencies to allot a specific amount of their budget for projects that are related to women and gender and development,” CCP vice-president and artistic director Dennis Marasigan told BusinessWorld. “For the CCP this year, we made sure that there are programs that are either specifically geared towards these themes — the theme of gender and development — or that we include and make sure that there are components on the programs that address these concerns.”

Mr. Marasigan added that he is currently the chairman of the Gender and Development Committee of the CCP which he hopes would ensure that this directive will move from being a requirement to something that would be deeply entrenched in the CCP’s programming.

He also said that a handbook on safe spaces is in the works to address many of the concerns related to gender and development. This, he hopes, can become a model for other organizations to follow suit.

Indeed, awareness of this disparity can spark others to contribute to narrowing the gap. The statistics shared by Ms. Junia is staggering. But the statistics can be changed.

“WOMEN: Thesis and Antithesis” looks at this issue and hopes to start enriching conversations and discussions on the gender divide,” Ms. Junia stressed. “While the numbers tell different things, it doesn’t equate that men artists are better than their women counterparts. This prevailing notion should be put to rest because women have always been at the creative forefront.”

“WOMAN: Thesis and Antithesis” is on view at the Yuchengco Museum, RCBC Plaza, Ayala Ave., Makati, until June 24.

Filinvest Land posts 24% income decline to P2.9B

FILINVEST Land, Inc.’s attributable net income in 2022 declined by nearly 24% to P2.89 billion from the P3.80 billion it saw in the previous year, due to higher expenses.

In its consolidated income statement filed on Tuesday, the company reported its after-tax income at P3.52 billion last year, down 18.3% from P4.31 billion in 2021.

In a separate press release, the company announced a 12.4% increase in revenues to P19.94 billion from P17.74 billion in the previous year, driven by revenues from its residential business.

“Residential revenue… grew due to accelerated construction progress and strong performance of its housing projects in Cavite, Laguna, and Rizal, and its medium-rise condo projects in Metro Manila and Davao,” the company said.

Real estate sales grew by 13.9% to P12.84 billion from the P11.27 billion reported in 2022.

Reservation sales grew by 13% to P18 billion driven by the launching of seven new residential properties amounting to P5.9 billion in Rizal, Bulacan, Cavite, Pampanga, and Metro Manila.

However, Filinvest Land’s operating expenses also grew by 19.7% to P3.46 billion from P2.89 billion previously.

Mall rental revenues more than doubled to P1.68 billion from P796 million due to mall occupancy growth, a rise in foot traffic, and the removal of rental concessions.

“We anticipate continued growth in mall rental revenues going forward with the improved shopper traffic,” said Filinvest Land President Tristaneil D. Las Marias.

The company also said that rental revenues rose by 13.6% to P6.35 billion from the P5.59 billion it booked the previous year.

Meanwhile, the company’s net income declined by 18% to P3.52 billion including a one-time tax benefit from the Corporate Recovery and Tax Incentives for Enterprises Law.

“We are pleased with the continued growth of our residential business, and we expect to sustain this in 2023. Our efforts to boost our international and local sales networks, as well as our investments on digital and online platforms have proven effective,” Mr. Las Marias said.

“We continue to focus on addressing the needs of our homebuyers,” he added.

On Tuesday, Filinvest Land shares grew by 2.28% or 2 centavos to close at P0.73 apiece. — Adrian H. Halili

US firm Envirotech allots $80M for EV assembly in Clark

US-BASED Envirotech Vehicles, Inc. (EVT) is investing $80 million in a manufacturing plant in the Clark Freeport Zone that will allow the local assembly of electric vehicles as it moves to expand its market presence.

“It is an ongoing cost, so the more we manufacture, the more we do. But the initial investment that we have scheduled right now to build a plant is an $80 million investment over the course of about four years,” EVT President and Chief Executive Officer Phillip Oldridge told reporters on the sidelines of a press conference in Taguig City on Tuesday.

Mr. Oldridge said the electric vehicle (EV) manufacturer is planning to build its facility on 15,000 to 20,000 square meters of land in Clark. It targets to begin construction by October this year.

“We’re hoping to have that entire facility completely finished and up and functioning by December 2025,” he said.

While waiting for the plant’s completion, Mr. Oldridge said that EVT signed a two-year lease agreement with Berthaphil, Inc., a real estate developer in Clark, for the temporary location of its facility. The agreement could be prolonged into five years.

“Right now, we’re going to start the temporary locations and we’re going to use those locations and convert those into parks and parks storage afterwards. And then we’re going to build out a manufacturing facility,” he said.

“Our company is now incorporated, it’s all registered. We are ready to go,” he added.

According to Mr. Oldridge, the planned manufacturing facility will generate around 800 direct jobs spread over three areas: manufacturing, green energy, and technology.

“Indirectly, you’ll probably create another 250 to 400 jobs as we outsource things like tires, brakes, wheels, and wiring harnesses,” he added.

“You’ll have a capacity of about 2,100 vehicles a year. We manufacture classes three, four, five, and six trucks. We also manufacture Class A, B, and C school buses. So up to 84 passengers and school buses and all of those vehicles are electric,” Mr. Oldridge said.

Senate President Juan Miguel F. Zubiri said in the same event that EVT’s plan for local assembly helps the country’s move to modernize public utility vehicles (PUVs).

“With EVT’s operations here, we can really take advantage of the local production of EVs and EV parts for our modernization efforts. This will be a cheaper, quicker, and overall more sustainable way of implementing our PUV modernization,” Mr. Zubiri said.

“On top of EVT being instrumental in greening our transport sector, its EVs will also be a welcome reprieve to rising fuel costs,” he added.

Meanwhile, Finance Secretary Benjamin E. Diokno said the entry of EVT boosts the country’s push for EVs.

“Today’s signing of the lease agreement of EVT marks an important first step in our efforts to develop the EV industry in the Philippines and advance the country’s goal of becoming the regional hub for manufacturing,” Mr. Diokno said.

“There is no better time to set up shop in the Philippines than now,” he said, adding that the government is ready to facilitate EVT’s establishment of a manufacturing plant in Clark.

Trade Secretary Alfredo E. Pascual said that EVT could benefit from the country’s big market, while also tapping the markets of neighboring countries.

“The important thing that you should keep in mind while you’re putting up the manufacturing facilities in Clark, and you have a big market to serve in the Philippines, is that there is a much bigger market around us,” Mr. Pascual said.

He said as part of the Association of Southeast Asian Nations, the Philippines’ market is the bloc’s 10 members “because we enjoy free trade agreements with all these countries.”

“We have of course a bigger grouping, the Regional Comprehensive Economic Partnership, which adds five more countries in the regional bloc. So that’s your whole market for EVs,” he added. — Revin Mikhael D. Ochave

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