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Banks seen to cope with SVB contagion

TONY WEBSTER-FLICKER

THE ASIA-PACIFIC banking sector, including in the Philippines, has reasonable buffers to cope with possible contagion effects from the failure of Silicon Valley Bank (SVB), S&P Global Ratings said.

“Asia-Pacific banks are well-placed to absorb potential contagion effects emanating from the SVB collapse. Direct exposures are negligible, and secondary impacts are manageable,” S&P said in a note released on Thursday.

S&P said it believes the fallout from SVB would be manageable at current rating levels across Asia-Pacific banks. Of around 380 banks and nonbank financial institutions it rates in the region, S&P said it does not anticipate any rating actions directly related to the SVB default.

SVB became the biggest bank in the United States to fail since the global financial crisis in 2008. Its sudden closure rattled markets, raising concern over its possible impact on the global banking sector.

Of the 18 banking jurisdictions it covers in Asia-Pacific, S&P said economic risk trends are stable in 17 jurisdictions, including the Philippines. Only New Zealand’s economic risk trends are negative.

“While the failure of SVB has no immediate impact on the ratings on Asia-Pacific banks, the knock-on effects could yet have an effect. Stresses that banks can comfortably take in their stride could morph into bigger problems that are difficult to predict. They could also connect or combine with other stresses causing a confluence of negative developments that could yet test buffers across the Asia-Pacific banking sector,” S&P said.

Unlike SVB, securities held typically by Philippine banks could have been as high as one-third of their books in 2020 and 2021 when interest rates were extremely low, S&P Director and Lead Analyst for South and Southeast Asia Ivan Tan said. This was higher compared with the average South and Southeast Asian banks.

“So, when 2022 came around, and just before the Bangko Sentral ng Pilipinas (BSP) started to hike rates, you can see the holdings of investment securities come down. So, on average if you look at the banking system now, it is around 15-20% of their books,” Mr. Tan said.

He noted that SVB had investment securities make up close to 55% of its total balance sheet.

In a webinar, S&P Senior Director and Sector Lead Gavin Gunning said banks in the Asia-Pacific region are well-placed to absorb any contagion effects from the SVB collapse due to certain macro and sector-wide funding and liquidity indicators.

“Deposits from domestic households constitute a significant portion of total deposits in the Asia-Pacific banking sector. And further to that, liquidity levels are at least adequate across every one of the top 60 banks in Asia-Pacific,” he said.

In the Philippines alone, the capital adequacy ratio of big banks stood at 16.5% while the common equity tier 1 ratio hit 15.4% as of end-June 2022, based on the central bank’s latest report on the Philippine financial system.

Both figures were well above the BSP minimum requirements of 10% and 6% respectively. Meanwhile, banks’ liquidity coverage ratio reached 192.5% as of end-June last year, almost double the 100% minimum regulatory requirement of the central bank. 

However, Mr. Gunning said they acknowledge buffers may be challenged if contagion effects worsen.

“If contagion risk stemming from SVB default would be more complex or would be more troublesome than we currently envisage, then Asia-Pacific banking systems, despite being well-buffered, could be challenged,” he said.

He also noted that nonbank financial institutions (NBFIs) could be negatively affected quickly if contagion risks were amplified. 

“We note that the NBFI sector is weaker than the banking sector and typically involves smaller, more concentrated and less systemically important entities,” he said. 

But governments in the Asia-Pacific may lend extraordinary support for most banking systems if a crisis occurs, he added. 

Earlier this week, BSP Governor Felipe M. Medalla has assured markets that Philippine banks have no direct exposure to the SVB collapse.

The Bankers Association of the Philippines also said that developments in the US financial system have no “substantial or material impact” on the Philippine banking industry. — Keisha B. Ta-asan

BIR goes after firms issuing fake receipts

Bureau of Internal Revenue (BIR) Commissioner Romeo D. Lumagui led the filing of criminal complaints against “ghost companies” issuing fictitious receipts before the Department of Justice in Manila on March 16, 2023. — PHILIPPINE STAR/EDD GUMBAN

THE BUREAU of Internal Revenue (BIR) on Thursday filed criminal complaints before the Department of Justice (DoJ) against four suspected “ghost” corporations allegedly behind the sale of fake receipts, which have cost the government around P25.5 billion in revenue losses.

BIR Commissioner Romeo D. Lumagui, Jr. said the government will go after not just the companies that issued these fraudulent receipts, but also their buyers.

“We are just getting started. The financial magnitude of this syndicate issuing fictitious receipts is alarming. They are profiting from businesses through convincing their clients to ghost our tax authority,” he said in a statement.

Mr. Lumagui said the taxpayers and businesses found to have used these fake receipts will also be subjected to a BIR audit.

The BIR chief personally went to the DoJ to file the complaints against four corporations for violating Sections 254, 255, and 267 of the National Internal Revenue Code of 1997.

A BIR statement identified the four companies as Buildforce Trading, Inc., Crazykitchen Foodtrade Corp., Decarich Supertrade, Inc., and Redington Corp.

“These four corporations have no real businesses apart from selling receipts so they can sell these to other buyers or companies who will use them as deductions to their expenses,” Mr. Lumagui told reporters in Filipino on Thursday.  

“It is clear that this is in violation of our law on tax evasion. In addition to this, their tax liabilities with all the penalties and surcharges will be imposed,” he added.

The complaint against these four companies stems from the raid conducted by the BIR in December 2022. At that time, BIR officials seized thousands of illegal receipts, invoices, and other documents inside a condominium in Quezon City.

“As a result of these companies’ fraudulent tax schemes, the government is losing an estimated total deficiency income tax amounting to P17.63 billion and total deficiency value-added tax amounting to P7.91 billion, for taxable years 2019-2021, inclusive of surcharges and interests,” the BIR said.

Mr. Lumagui said the losses from fake receipts could even have reached “hundreds of billions.”

“We have a list of buyers and sellers of these fictitious receipts. Our main goal here is to put these fraudulent activities to a halt with the high hopes of increasing voluntary tax compliance,” Mr. Lumagui said, adding that the agency is currently preparing cases against the buyers of fake receipts.

In February, the BIR filed tax evasion cases against 74 individuals and corporate taxpayers worth P3.58 billion.

The agency has also been cracking down on sellers of illicit cigarettes and vaping products. In December, the BIR filed a P1.2-billion tax evasion case against five vape traders.

The BIR set a collection target of P2.6 trillion this year, 11% higher than the P2.34-trillion revenues it collected last year. — Keisha B. Ta-asan

Supreme Court says senior citizens’ discount covers interment service

Relatives visit a public cemetery in Manila in this undated file photo. — PHILIPPINE STAR/WALTER BOLLOZOS

SENIOR CITIZENS are entitled to a 20% discount on interment services, which are covered by the funeral and burial expenses provided for under the law, the Supreme Court (SC) said.

In a statement on Thursday, the High Court said it granted the government’s appeal to overturn a Cagayan de Oro trial court’s 2018 ruling that excluded interment services from the mandated senior citizen discount.

“The Senior Citizens Act is a law created to grant a bundle of benefits in favor of senior citizens or those at least 60 years old, giving flesh to the declared policy of motivating senior citizens to contribute to national building and encouraging their families and communities to reaffirm the Filipino tradition of caring for them,” the SC said, citing the ruling penned by SC Associate Justice Rodil V. Zalameda.

The petition was filed by the Office of the Solicitor General, Office of the Senior Citizens Affairs (OSCA) and the Department of Social Welfare and Development (DSWD).

In 2018, the Cagayan de Oro Regional Trial Court (RTC) Branch 17 sided with Pryce Corp., Inc., a company that sells memorial lots and provides interment services, which claimed interment services were not covered under the Expanded Senior Citizens Act of 2010.

The RTC had said digging of land for the dead, filling a gravesite with concrete and other services during an actual burial were not subject to the 20% discount for senior citizens.

The trial court added that the implementing rules and regulations (IRR) of the Expanded Senior Citizens Act of 2010 explicitly mentioned that only the purchase of a casket or urn, embalming service, use of a hospital morgue and the transportation of the body to the intended burial site were the services entitled to the 20% discount.

The Supreme Court disagreed, saying the law’s IRR does not provide for an exact definition of “funeral and burial services.” It noted that the scope of discounted services is not limited to the ones listed under the IRR.

The High Court said that a burial service refers to any service offered in connection with the “final disposition, entombment or interment of human remains.”

“The Court found that the exclusion by the RTC of interment services from the coverage of the 20% senior citizen discount is not provided under the law, and that the IRR, which does not explicitly exclude interment services, cannot be interpreted to support the lower court’s Resolution. It stressed that a law cannot be amended by a mere regulation, and the administrative agency issuing the regulation may not enlarge, alter, or restrict the provisions of the law it administers,” the SC said.

The law upheld the state’s obligation under the Constitution to implement social security programs for elderly citizens, it said.

“It would be unreasonable to infer that Congress intended to differentiate between the deceased’s final solace for the purpose of granting the 20% discount absent a clear legislative intent to the contrary,” the tribunal said, citing SC Associate Justice Amy C. Lazaro-Javier’s separate concurring opinion.

The High Court has yet to upload its ruling on its website. — John Victor D. Ordoñez

Philippines falls to 54th spot in UNCTAD’s Frontier Technology Index

The logos of Microsoft Corp. and OpenAI, as well as the ChatGPT 4 name, are seen in this photo illustration. — PHOTO ILLUSTRATION BY JONATHAN RAA/NURPHOTO VIA REUTERS CONNECT

THE PHILIPPINES fell 10 spots to rank 54th out of 166 countries in utilizing frontier technologies for 2022, according to the United Nations Conference on Trade and Development (UNCTAD).

UNCTAD said in its Technology and Innovation Report that the Philippines’ ranking in the Frontier Technology Index was lower compared with 44th place in the previous year’s index.

Frontier technologies refer to artificial intelligence (AI), the internet of things (IoT), big data, blockchain, 5G, 3D printing, robotics, drones, gene editing, and nanotechnology.

The Philippines had a score of 0.62, equivalent to an “upper-middle” score, slightly higher than the previous score of 0.60.

The Philippines ranked higher than its neighbors such as Vietnam (62nd rank), Brunei (69th), Indonesia (85th), Cambodia (112th), and Myanmar (133rd).  However, it lagged other Southeast Asian nations such as Singapore (3rd), Malaysia (32nd), and Thailand (49th).

The United States led all countries in the 2022 index, followed by Sweden.

“Although developing countries are the least prepared to use frontier technologies, several economies in Asia have made important policy changes that have enabled them to perform better than expected according to their gross domestic product (GDP) per capita,” the UNCTAD said in a separate statement.

The index ranks 166 countries based on information and communication technology (ICT), skills, research and development (R&D), industrial capacity and finance indicators.

The Philippines saw a decline in ranking for the following indicators: ICT (94th from 76th last tear), R&D (52nd from 46th), industry (3rd from 2nd) and finance (80th from 52nd).

However, it improved its ranking for the skills indicator (79th from 88th).

Meanwhile, the UNCTAD said that the 17 frontier technologies covered by the report could have a market value of over $9.5 trillion by 2030, but warned that developing economies are left behind as developed economies are seizing most of the opportunities. 

The 17 frontier technologies include IoT, concentrated solar power, blockchain, nanotechnology, big data, 5G, biofuels, electric vehicles, gene editing, robotics, drone technology, 3D printing, wind energy, biogas and biomass, green hydrogen, solar photovoltaic, and AI.

“Developing countries must act quickly to benefit from this opportunity and move to a development trajectory leading to more diversified, productive and competitive economies. Previous technological revolutions have shown that early adopters can move ahead quicker and create lasting advantages,” the UNCTAD said. 

UNCTAD Secretary-General Rebeca Grynspan said that developing countries could grow their economies by crafting related policies.

“This new wave of technological change will have a formidable impact on the global economy. Developing countries must capture more of the value being created in this technological revolution to grow their economies,” she said.

“Missing this technological wave because of insufficient policy attention or lack of targeted investment in building capacities would have long-lasting negative implications.”

Sought for comment, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message the Philippines should differentiate itself further in the higher end of the value chain that requires greater use of technology, and boost enrollment in science, technology, engineering, and mathematics courses to ensure there are skilled graduates.

“However, this requires more financial resources especially on technology infrastructure, with the objective of further boosting productivity especially the shift to digital transactions from manual processes in government, agriculture (increased mechanization), manufacturing, and in other institutions,” he added. — Revin Mikhael D. Ochave

ICCP cited by The Asset for role in the Best IPO of 2022

The ICCP team headed by its President & CEO Valentino S. Bagatsing (center) and Managing Director Manny P. Ocampo (inset).

Investment & Capital Corporation of the Philippines (ICCP) was cited during the recent The Asset Triple A Country Awards for Sustainable Finance 2022 for its participation as bookrunner in the P6.4-billion initial public offering (IPO) of Citicore Energy REIT Corporation (CREIT). The offering was recognized as the Best IPO in the Philippines during the awards.

According to The Asset, CREIT “is the first renewable energy-focused real estate investment trust (REIT) in the Philippines and the first non-real estate company to list via REIT in the Philippine Stock Exchange (PSE). As such, it was structured differently from other local REITs as all deposited properties are leased out to renewable energy generators.”

“We are happy to be part of this pioneering deal which supports the growth of renewable energy with its unique structure in support of climate finance,” said ICCP President & CEO Valentino S. Bagatsing. ICCP believes that the capital markets remain a viable option to raise long term funds for the expansion of businesses and in institutionalizing ESG initiatives.

The Asset‘s annual Triple A award is the most prestigious award in the industry for banking, finance, treasury, and capital markets. In addition to the key transactions, The Asset is recognizing a number of regional issuers and advisers for their roles in leading landmark deals and advancing the ESG conversation.

 


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PLDT to buy Lopez-led Sky Cable for nearly P6.8B

By Justine Irish D. Tabile, Reporter

PANGILINAN-led PLDT Inc. announced on Thursday that it is fully acquiring Sky Cable Corp. for P6.75 billion in a move that will expand its coverage and services.

In a disclosure to the Philippine Stock Exchange, the telco company said that its board of directors cleared the agreement it entered with sellers Sky Vision Corp., ABS-CBN Corp., and Lopez, Inc.

Lopez-led Sky Cable provides broadband, enterprise cable broadband, pay television, and cable services.

PLDT said the transaction is expected to strengthen both companies’ coverage and services, especially in remote areas. The deal is also seen to boost customer experience through the combined capabilities of PLDT and Sky Cable.

The sale and purchase agreement covers 100% of Sky Cable’s total issued and outstanding capital stock consisting of around 1.38 billion common shares.

The purchase price translates to around P4.9 per share or a total of P6.75 billion, of which 94% is to be paid on the deal’s closing date, with the remaining 6% upon the delivery of a tax clearance issued by the Bureau of Internal Revenue.

The purchase price is based on the agreed equity valuation of Sky Cable’s shares as of Dec. 31, 2022.

PLDT said the acquisition will result in the full consolidation of Sky Cable in the telco giant’s financial statements.

“The financial condition of PLDT, including its leverage, is not expected to be significantly affected by the proposed acquisition,” the company said.

In a separate disclosure, ABS-CBN said its board approved the sale of its interests representing 58.7% of Sky Cable’s stock, directly or indirectly. It expects to receive P4 billion in gross proceeds.

“The proceeds to be received by Sky Vision will be used, among others, to settle its obligations, including its obligations to ABS-CBN,” the company said, adding that the sale “will also allow ABS-CBN to focus its resources on content creation.”

“This was a strategic decision resulting from, among other things, the significant capital expenditure requirements of Sky Cable to maintain its competitiveness,” the company said.

Market analysts said the acquisition will allow PLDT to assert dominance in the telecommunications sector.

“PLDT’s acquisition of Sky Cable’s broadband business will allow the telco to interconnect its network with that of Sky Fiber’s nationwide, in its bid to further assert its dominance in the sector,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

“This would provide much-needed funding to the troubled and cash-strapped network,” he added.

AP Securities Inc. Equity Research Analyst Carlos Angelo O. Temporal said that the transaction will expand PLDT’s coverage.

“The acquisition will expand PLDT’s broadband subscriber base as the transaction will allow the telco giant to absorb Sky Cable’s fiber broadband subscribers, akin to what happened to Sun Cellular subscribers,” Mr. Temporal said.

He added that there could be a potential synergy to be developed through Sky Cable’s cable or satellite platform, as PLDT has a stake in Cignal Cable Group.

“Beyond these, the acquisition could lead to a strong partnership between ABS-CBN and PLDT which could benefit the former’s entertainment and media business through the latter’s financial muscle and vast network,” he said.

Meanwhile, the Philippine Competition Commission (PCC) said it could not comment at this stage of the transaction as the final valuation of the acquisition will determine if it is subject to notification.

Beginning March 1, acquisitions that breach a “size of party” of P7 billion and a “size of transaction” of P2.9 billion require transacting parties to notify the PCC for a mandatory merger review.

The “size of party” refers to the value of assets or revenues of the parent entity of either transacting entity, while the “size of transaction” refers to the value of assets or revenues of the acquired party and the entities it controls.

PLDT shares closed lower by P10 or 0.76% at P1,300 apiece on Thursday. ABS-CBN shares declined by five centavos or 0.68% to finish at P7.26 each.

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.

ACEN to acquire portfolio of eight operating wind projects in Texas

AYALA-led ACEN Corp. through its joint-venture company, UPC Power Solutions LLC, is set to acquire the portfolio of eight operating wind projects in northern Texas, the renewable energy company said on Thursday.

“We’ve long set our sights on the US as our next market following our sustained success in the Asia Pacific. We are committed to enact the accelerated green energy transition globally, and these new partnerships ensure that ACEN is well-placed to harness the vast opportunities in the US renewables space,” Patrice R. Clausse, chief executive officer of ACEN International, said in a statement.

In a regulatory filing, ACEN said that UPC Power signed a purchase and sale agreement with GlidePath Power Solutions LLC for the acquisition of 136 megawatts (MW) of wind assets.

“The latest milestone marks ACEN’s anticipated entry to the fast-growing US renewables market as it expands its geographic footprint beyond the Asia Pacific region,” ACEN said.

ACEN said that the sale is pending regulatory approvals including the Federal Energy Regulatory Commission (FERC), which serves as an independent agency and regulator of interstate transmission of electricity, natural gas, and oil.

The renewable energy company said that the wind operating assets will generate about 360 gigawatt-hours (GWh) of wind energy per year, which can power around 24,000 households.

Last year, ACEN, through its subsidiary ACEN USA LLC partnered with Pivot Power Management (PivotGen) and UPC Solar & Wind Investments LLC to explore opportunities to acquire operating wind projects in the US.

“We are excited to announce this acquisition. We look forward to successfully repowering the portfolio so that these projects can continue to deliver clean, renewable power and provide jobs and economic opportunity in local communities,” Tim Rosenzweig, chief executive officer and co-founder of PivotGen, said.

At the local bourse on Thursday, shares in the company declined by five centavos or 0.83% to end at P6 apiece. — Ashley Erika O. Jose

JFC posts 26% income rise to P7.6B as sales grow

LISTED food service company Jollibee Foods Corp. (JFC) reported 26.4% higher attributable net income for 2022 to P7.56 billion from the previous year’s P5.98 billion after an increase in system-wide sales.

In a press release, JFC Chief Executive Officer Ernesto Tanmantiong said in a press release that last year’s sales growth was driven by a 27% same-store sales increase, 6.1% from new stores, the impact of the Milksha acquisition, and a 5.2% gain from foreign currency translation.

“Off-premises channels, particularly delivery showed continued resilience and we expect sustained robust growth as we improve further our digital touchpoints,” he said.

Mr. Tanmantiong added that dine-in sales improved due to the easing of restrictions in locations where the company operates.

In its disclosure to the stock exchange, JFC said its 2022 revenues grew by 38% to P211.9 billion from the P153.58 billion it saw in 2021.

System wide-sales, which measures all sales to consumers, rose by 40.2% to P296.82 billion the P211.72 billion previously.

The company’s net sales increased by 37.9% to P196.66 billion from P142.59 billion in the previous year.

The company’s expenses also increased by 36.7% to P27.01 billion from P19.8 billion in the previous year.

Mr. Tanmantiong said the JFC group sustained its “global expansion momentum.”

“We opened 542 stores and grew store network by +9.2% versus prior year, exceeding our guidance for 2022,” he said.

“This is the highest number of stores opened in a single year in JFC’s history,” he added.

Consolidated earnings before interest, taxes, depreciation, and amortization (EBITDA) rose by 32.2% to P31.2 billion from P23.6 billion.

For the fourth quarter of 2022, attributable net income plummeted by 90.3% to P320 million from P3.28 billion in the same quarter in 2021. The company also reported a 99% fall in net income to P31 million from the P3.25 billion previously recorded.

The lower profit came despite a 38.5% increase in system-wide sales to P85.94 billion from P62.03 billion previously. Revenues increased by 36.8% to P61.55 billion from P45 billion, while EBITDA grew by 3% to P8.21 billion from P7.97 billion.

Operating income in the three-month period decreased by 23.7% to P1.88 billion from P2.47 billion due to provisions to curtail non-priority brands at P600 million and increased advertising and promotional spending as a percentage of system-wide sales at 3.4% versus 2.9% previously.

OUTLOOK FOR 2023
JFC said that based on its target for 2023, the group projects full-year system-wide sales to grow between 15% and 20%, with a same-store sales growth of 7% to 10% and a store network increase of not less than 5%.

The company said operating income is expected to grow in the range of 20% to 25%.

Additionally, it plans to open 550 to 600 owned and franchised stores in 2023. Last year, it opened 542 stores, expanding its store network by 9.2%.

JFC expects this year’s capital spending at P17 billion to P19 billion.

“Looking ahead, while we expect macroeconomic challenges to persist in 2023, we are confident that the JFC Group is resilient and well-positioned to drive near-term growth. We have clear priorities on profitability while we continue to invest strategically to deliver long-term growth and value for our shareholders,” Mr. Tanmantiong said.

On Thursday, Jollibee shares fell by 4.02% or P9 to close at P215 apiece. — Adrian H. Halili

Are they for real? South Korean girl band offers glimpse into metaverse

SOUTH Korean girl group MAVE:

SEOUL —  Less than two months ago, the first music video by South Korean girl quartet MAVE: went viral, racking up nearly 20 million views on YouTube and setting the stage for potential global success.

At first glance, MAVE: looks like any other idolized K-pop band — except it only exists virtually. Its four members — SIU, ZENA, TYRA and MARTY — live in the metaverse, their songs, dances, interviews, and even their hairstyles created by web designers and artificial intelligence.

“When I first saw Mave, it was a little confusing to tell whether they were humans or virtual characters,” said Han Su-min, a 19-year-old in Seoul. “Because I use metaverse platforms with my friends often, I feel like I could become their fan.”

The group’s almost human-like avatars provide an early glimpse of how the metaverse is likely to evolve as South Korea’s entertainment and tech industries join hands in the fledgling technology.

It also represents a serious push by tech giant Kakao Corp. to become a dominant force in entertainment. Apart from backing MAVE:, Kakao launched a 1.25 trillion won ($960 million) tender offer last week to buy South Korean K-pop pioneer SM Entertainment.

SM is home to popular K-pop groups such as Girls’ Generation, H.O.T., EXO, Red Velvet, Super Junior, SHINee, NCT Dream and Aespa.

Kakao declined comment on how it would balance the demands of managing real and virtual bands.

The company’s bet on the metaverse bucks a global trend. Big tech companies from Facebook parent Meta Platforms, Inc. to China’s Tencent Holdings are now reining in their spending on virtual worlds to ride out the economic downturn.

Kakao has said earlier that it has invested 12 billion won in Metaverse Entertainment, a subsidiary it formed with gaming firm Netmarble Corp. to create MAVE:.

But the company declined to make any income forecasts from the venture.

MAVE: is an “ongoing” project to explore new business opportunities and find ways to work around technological challenges, said Chu Ji-yeon, who heads Metaverse Entertainment.

FOUR LANGUAGES
The concept is not new in South Korea. In 1998, virtual singer Adam was launched, and two decades later, K-pop girl group K/DA, inspired by characters from video game League of Legends, also made a debut. Neither took off.

But South Korean technology has made much progress since then in creating virtual characters. MAVE: is more natural-looking thanks to new tools and artificial intelligence that developers used to create facial expressions and small details like streaks in hair, viewers say.

With the aid of an AI voice generator, its members can speak four languages — Korean, English, French, and Bahasa. But they can’t speak in response to prompts and have to rely on scripts prepared by humans.

The group’s voices heard in the debut single “Pandora” and the choreography in the music video were created by human performers and processed by motion capture and real-time 3D rendering technologies.

Experts say the COVID-19 pandemic aided the growth of such virtual characters, as many K-pop companies pivoted to online content to satiate home-bound fans.

“Fans became more used to consuming non-face-to-face content and communication with their idol groups for nearly three years,” said Lee Jong-im, a pop culture critic who teaches at Seoul National University. “It seems they have become more accepting of the concept that virtual and actual idol groups can integrate.”

While virtual groups like MAVE: are making headlines for their novelty, questions remain over whether they can match the interaction between conventional popular bands and their legions of fans.

“Virtual idols will move exactly as they are manufactured. And without any unpredictability, they will become something close to video technology, not K-pop,” said Lee Gyu-tag, an associate professor of cultural studies at George Mason University Korea.

Yet, MAVE:’s creators and entertainment industry officials are upbeat about its potential.

“With so many comments received from all over the world, I’ve realized that viewers do want something new and that they are rather open-minded,” said Roh Shi-yong, chief producer of a weekly music show on local TV station MBC that aired MAVE:’s performance twice.

“The metaverse era is coming.” —Reuters

AI comes for the DJ: London partygoers rave to robot beats

POSSESSED PHOTOGRAPHY/UNSPLASH

LONDON — In front of an empty DJ booth at an East London nightclub, partygoers danced to AI-generated beats in a unique experimental rave that sought to test whether an app can match the vibe of real-life records and a mixer.

Artificial intelligence (AI) has been touted as a great disruptor in recent months. ChatGPT, a text-based chatbot developed by OpenAI that can draft prose, poetry or even computer code on command, has gained widespread attention in Silicon Valley, spurring investors to pour money into AI-focused startups.

On Feb. 17, AI came for the DJ.

“Algorhythm” — hosted in The Glove That Fits bar — was billed as one of the first of its kind by its promoter George Pinnegar.

“If we can have AI make beautiful music and we can play that to each other, I think that’s probably why it’s there. That’s why it’s a gift,” Mr. Pinnegar told Reuters.

Powering the night’s pulsating techno and rhythmic drumbeat was Mubert, the app created by a team of Ukrainian and Russian developers.

Mubert uses human-made loops and samples to generate brand-new tracks. Users can like or dislike the app’s generative music, and the app adapts accordingly.

Musicians who created the samples then get a cut when their sounds are used.

For Mubert’s CEO, Paul Zgordan, the rise of AI will inevitably result in some musicians losing jobs.

“We want to save musicians’ jobs, but in our own way,” Mr. Zgordan told Reuters via videolink from the Armenian capital Yerevan.

“We want to give them this opportunity to earn money with the AI. We want to give people new (jobs),” the 35-year-old executive, who is also a DJ and musician, said.

PRETTY GOOD JOB
The DJ booth, usually the focus of parties, was left empty as an experiment to see how revelers would react to the AI DJ.

A few hours into the night, some of the revelers had made up their minds.

“It could be more complex,” said Rose Cuthbertson, a 24-year-old AI master’s student. “It doesn’t have that knowledge of maybe other electronic genres that could make the music more interesting. But it’s still fun to dance to.”

Taking a break from dancing, Pietro Capece Galeota was more complimentary.

“It’s been doing a pretty good job so far,” the 26-year-old computer programmer said outside the venue.

Yet for Mr. Zgordan, there’s more work to be done if Mubert wants to have similar functionalities to ChatGPT.

“There is no ChatGPT for music because music is more complex,” he said. “For now technology is not ready.” — Reuters

San Miguel reports P43-B core income

SAN MIGUEL Corp. (SMC) said on Thursday that it booked a consolidated core net income of P43.2 billion and a reported net income of P26.8 billion in 2022, without disclosing comparative figures.

In a press release, it said the income figures reflected “the impact of unrealized losses on the revaluation of its foreign currency-denominated long-term debt.”

Ramon S. Ang, SMC president and chief executive officer, said: “Our strong top line performance is a clear indication of our economy’s continuous recovery as well as the strong consumer demand for our products and services.”

Consolidated revenues last year reached P1.5 trillion, a 60% growth from the P941 billion reported in 2021.

Income from operations increased by 10% to P134.5 billion due to the performance of its subsidiaries, as well as cost management efforts.

The company’s earnings before interest, taxation, depreciation, and amortization (EBITDA) grew by 3% to P165 billion.

San Miguel Food and Beverage, Inc. posted a 16% growth in revenues to P358.9 billion due to higher selling prices of products and sustained volume growth.

The unit’s net income rose by 10% to P34.7 billion and its operating income increased by 11% to P48.7 billion.

The company’s beer unit, San Miguel Brewery, Inc., reported a 17% increase in revenues to P136.2 billion, due to volume growth while its net income rose by 6% to P21.8 billion.

Additionally, Ginebra San Miguel, Inc. registered 11% higher revenues at P47.3 billion. Its net income hit P4.5 billion, 9% higher than the previous year.

San Miguel Foods reported a 16% growth in revenues to P175.3 billion and a 21% increase in net income to P9.2 billion.

Power subsidiary San Miguel Global Power Holdings Corp. posted a 66% surge in consolidated revenues to P221.4 billion from P133.7 billion previously. Its operating income declined by 22% to P28.9 billion, while net income plunged by 80% to P3.1 billion.

It said that by the end of 2022, coal prices reached $404.07 per metric ton (MT), coming from $170.23 per MT at end-2021.

Additionally, Petron Corp. posted a 96% surge in revenues to P857.6 billion from P431.1 reported the previous year, due to higher oil prices.

Net income for Petron grew 9% to P6.7 billion from P6.1 billion while operating income rose by 12% to P19.2 billion from P17.2 billion.

“We remain strongly committed to executing on the long-term growth strategy we’ve laid out for our company, that will also significantly benefit our country,” Mr. Ang said.

On Thursday, SMC shares were unchanged at P111 apiece. — Adrian H. Halili

Leonor lives!

Movie Review
Leonor Will Never Die
Written and Directed by Martika Ramirez Escobar

Leonor (Sheila Francisco) is a retired Filipina action filmmaker who nurses a script she dreams of directing someday; meantime she receives a disconnection notice from the power company and her eldest Rudie (Bong Cabrera) schemes to work overseas but can’t bring himself to tell his mother. Humble junkyard welder Ronwaldo (Rocky Salumbides) watches in horror as his younger brother is falsely accused of being a drug pusher and gunned down; Leonor is struck down by a stray television set (don’t ask), suddenly finds herself inside Ronwaldo’s increasingly hazardous storyline; meantime Rudie, staying by his unconscious mother’s side, decides to make a movie of his mother’s unfinished script…

If you’re thinking Filipino version of Everything, Everywhere, All at Once, you’re not too far off, only Martika Ramirez Escobar pulls her film off at a fraction of the Daniels’ budget, which in turn was done at a fraction of Sam Raimi’s Dr. Strange and the Multiverse of Madness catering budget. Metaverses are in, doncha know, the only question being where you happen to be coming from (Marvel Cinematic Universe, indie, Filipino indie) and where you happen to be going (mother coping with grief over lost children, mother attempting to reconcile with estranged child, mother attempting to reconcile with departing child and resurrect her career).

When I say “fraction of the budget” I mean it; where the Daniels (Daniel Kwan and Daniel Scheinert) can afford to depict over a dozen alternate realities, Escobar can only manage two or three; where the Daniels choreograph elaborate wuxia fight scenes involving extended-strap fanny packs, Escobar stages Fernando Poe Jr.-style meat-and-potato fistfights with plenty of gunfire on the side.

Despite which Ms. Escobar manages to serve up her share of oddball details, stuff even the Daniels haven’t thought of: Leonor’s youngest son —  also called Ronwaldo (Anthony Falcon) —  happens to be dead, but spends his time in a semitransparent state, talking to mother and sundry family members when he isn’t busy printing his face out on the photocopier; Rudie, Leonor’s estranged son, has to handle his mother’s eccentricities at the same time he’s attempting to produce her unfinished script at the same time he’s realized his mother has somehow fled her hospital bed into the TV screen playing in the visitor’s lounge.

All wonderfully weird but more wonderful yet is the nonchalance with which Leonor and her family accept it all (the beer session between Rudie, ghost Ronwaldo, and their politician father is worth the price of a ticket). What grounds the proceedings —  what stops the whole confounding confection from just drifting indifferently away —  is Sheila Francisco’s Leonor. She’s not just a dreamer she’s a mother, and not just to her own family but her family up on the big screen. She created them, feels responsible for them, loves them uncritically, even – apparently —  the bad guys.

The scenario Leonor writes is rooted in 1970s and ’80s Filipino action melodrama, in the grand tradition of Ramon Revilla, Joseph Estrada, the aforementioned Fernando Poe, Jr. (“Ronwaldo” incidentally being the pseudonym Poe used when he directed) —  men are men, villains are neanderthal, women are beautiful and otherwise useless in a brawl (I’m looking at you, Rea Molina-as-Isabella, who looks great in a canary feather bikini but is given little else to do, which is the joke). The hero is unfailingly noble if a tad weak on anger management, the villains leer and sneer and dream up sadistic scenarios (Dido de la Paz being the loudest and most sadistic sneerer). Ms. Escobar, a veteran cinematographer, evokes an old-school feel in the action sequences by switching from modern-day wide screen to 4:3 aspect ratio with heavily saturated color palette, adding her own touch by allowing the camera to smoothly pull back or press in (underlining the action), adding editing tweaks to help make Ronwaldo’s evasions and attacks a little more plausible.

Leonor reacts to the escalating near-biblical violence (one incident recalls the story of Jael), expresses grief over the various deaths, at one point apologizing and reminding us that on a certain level she’s responsible. Ms. Escobar doesn’t explore this aspect much — she’s got too many other fish to fry, or otherwise mutilate —  and quickly paints herself in a narrative corner, to the point that she has to take a step back further —  open up yet another alternate verse, so to speak —  and ask herself: how can we end this? What’s the best way out? Her answer recalls Larry Gelbart’s musical City of Angels or Dennis Potter’s finale to Pennies From Heaven and might induce groans or applause, depending on how you’ve been responding so far.

I applauded, for the record.

For every plot hole or loose end left dangling, Escobar delivers yet another startling image for us to either pick up or totally miss: the dream about the snail, the languid flow of MRI images of Leonor’s brain, the young man on the hospital bed congratulated for being pregnant (“it’s a miracle, son!”), the TV interview of a semitranslucent ghost, the mute child who follows Leonor’s adventures through various video screens, the moment when Ronwaldo runs down the long street and screams at the camera “What do I do now?!,” the bonkers physician (Tami Monsod) who updates us on Leonor’s medical condition and dispenses spiritual advice on the side. Critics complain that it’s too strange, too incoherent but Leonor has the answer as always: when in doubt or confused, you can always just shut up and sing.