Philippines’ Marcos open to a troop pact with Japan

February 13, 2023 | 10:33 am

050722_PBBMpressbriefing02_kjrosales — President Ferdinand Marcos Jr. answers questions from the media after his first Cabinet meeting in Malacañan Palace, July 5, 2022. — PHILIPPINE STAR/KRIZ JOHN ROSALES

MANILA – President Ferdinand Marcos Jr said on Sunday he saw no reason why the Philippines should not have a Visiting Forces Agreement (VFA) with Japan if it would boost maritime security and ensure greater protection for Filipino fishermen.

Marcos, however, also told reporters he would exercise care in pursuing a potential pact with Tokyo “because we do not want to appear provocative.”

Marcos’ first visit to Japan since taking office came after he recently granted the United States access to additional military bases in the Philippines under a VFA, a move which China said undermined regional stability and raised tensions. The VFA provides rules for the rotation of thousands of U.S. troops in and out of the Philippines for exercises.

“If it will be of help to the Philippines in terms of protecting, for example our fishermen, protecting our maritime territory … I don’t see why we should not adopt it (VFA),” Marcos told reporters before returning home on Sunday, according to an official transcript.

Marcos was in Japan for a five-day visit, to forge closer security ties with Tokyo, which in December announced its biggest military-build up since World War Two, fuelled by concerns about aggressive Chinese actions in the region.

Marcos and Prime Minister Fumio Kishida penned a deal to allow their armed forces to work together during disaster relief, an agreement seen as a step towards a broader pact that could allow the countries to deploy forces on each other’s soil.

“I always think about the need to protect our fishermen. We need to show clearly we are patrolling our waters and making sure that our maritime territory is clearly recognised,” Marcos said.

The Philippines has a VFA with the United States, while Tokyo has VFAs with Australia and Britain, and also hosts the biggest concentration of U.S. forces abroad.

Japan held military exercises with the United States and the Philippines as recently as October, and its military presence in the Philippines could help counter Chinese influence in the South China Sea, much of which Beijing claims, including the territory that Manila considers its own.

Kishida said the Philippines and Japan had agreed to try and establish a framework that would “strengthen and smooth the process of holding joint exercises”.

In an interview with Nikkei on Sunday, Marcos said his country could be pulled into a possible conflict in the Taiwan Strait because of its proximity to the self-ruled island regarded by China as a breakaway province.

“When we look at the situation in the area, especially the tensions in the Taiwan Strait, we can see that just by our geographical location, should there in fact be conflict in that area … it’s very hard to imagine a scenario where the Philippines will not somehow get involved,” Marcos said. — Reuters

Philippines gets $13B in Japanese investment pledges

February 13, 2023 | 6:10 am

The Philippines got $13 billion in investment pledges and contributions during President Ferdinand R. Marcos, Jr’s five-day trip to Japan.

In his arrival speech on Sunday, the president said the commitments from Japanese companies could create more than 24,000 jobs.

He said he had briefed Japanese business leaders and potential investors during roundtable meetings on “the new and better business climate and investment environment in the Philippines.”

“Key private sector representatives were with me and engaged with Japanese industry giants to seize the economic opportunities now present in the Philippines,” he said. — Kyle Aristophere T. Atienza

BSP may deliver 50-bp hike — poll

February 13, 2023 | 12:33 am

A vendor sells floral bouquets with onions, garlic and pepper ahead of Valentine’s Day. Prices of onions and other food products have surged in recent weeks, driving inflation to a fresh 14-year high in January. — PHILIPPINE STAR/EDD GUMBAN

THE BANGKO SENTRAL ng Pilipinas (BSP) is widely expected to raise benchmark interest rates at its meeting on Thursday, with some analysts forecasting a 50-basis-point (bp) increase after inflation accelerated to a fresh 14-year high in January.

A BusinessWorld poll last week showed 17 out of 18 analysts see the Monetary Board hiking its benchmark interest rate at its first meeting of the year on Feb. 16.

Nine analysts see the BSP raising borrowing costs by 50 bps, while eight analysts anticipate a 25-bp increase. Only one analyst expects the BSP to keep rates unchanged.

“January’s inflation data was a huge surprise, smashing expectations of a possible deceleration. The rise in inflation was broad-based, reflecting how entrenched current price pressures are,” ANZ Research economist Debalika Sarkar said in an e-mail.

The consumer price index (CPI) climbed 8.7% year on year in January from 8.1% in December. This was the fastest growth in 14 years or since the 9.1% logged in November 2008.

Security Bank Corp. Chief Economist Robert Dan J. Roces said the BSP is expected to respond to the latest inflation print with a “more aggressive monetary policy stance.”

“While the central bank was previously believed to be on track to increase interest rates by only 25 bps in its next meeting, we now think a 50-bp hike may be in the cards, given the potential for hot inflation to drive higher inflationary expectations,” Mr. Roces said in an e-mail.

Philippine inflation appears to be on a different trajectory from the rest of the region mainly due to food inflation, Capital Economics Senior Asia Economist Gareth Leather said.

“As is the case in many other parts of the world, an outbreak of avian flu is putting upward pressure on egg prices. But severe storms in the Philippines, which have damaged harvests, have also led to a jump in the prices of fruit and vegetables,” Mr. Leather said in a note on Friday.

Food inflation quickened to 11.2% in January from 10.6% a month ago and 1.6% in January 2022, driven mainly by higher prices of vegetables, fruits, dairy products and eggs. This was the fastest food inflation since the 11.3% in March 2009.

“Having hiked interest rates by 350 bps so far, we had originally penciled in a 25-bp increase for the central bank’s meeting on Thursday. But the unwelcome increase in inflation last month along with BSP’s hawkish comments have prompted us to change this to a 50-bp increase,” Mr. Leather said.

‘PERSISTENT’
Persistent core inflation is another concern for economists.

Core inflation, which discounts food and fuel volatile prices, jumped to 7.4% in January from 6.9% in December and 1.8% in the same month in 2022. This is the fastest core inflation since 8.2% in December 2000.

“This suggests that the underlying drivers of inflation may be moving away from a transitory nature, and rather the result of more persistent factors such as an unsolved food supply problem which drives up costs and bleeding into the core,” Mr. Roces said.

He noted the BSP should take a proactive stance “in controlling inflation and anchoring inflation expectations to prevent the economy from spiraling out of control.”

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said faster January inflation confirmed his observation that consumer demand remains resilient, particularly among the middle- and upper-income households.

“Whether this is still due to pent-up demand, dissavings and access to consumer credit, or some combination, producers/distributors are seemingly still confident to pass on the costs to consumers… Since there seems to be limited consumer pushback to ongoing pass-through dynamics, BSP may be left with no choice but to settle for a more hawkish push for its terminal policy rate to be signaled starting this month,” Mr. Asuncion said.

If rates are hiked by 50 bps on Thursday, he noted the BSP “will disengage from the Fed and raise the risk of a terminal rate exceeding 6% especially if faster disinflation in succeeding months is nowhere to be seen.”

On the other hand, China Banking Corp. Chief Economist Domini S. Velasquez expects the BSP to raise interest rates by 25 bps this week.

“Our projections show that inflation is on a downward trend, albeit from a higher base given January’s 8.7% print. Supply-side issues remain to be the major driver of inflation and non-monetary measures are urgently needed to bring food prices down,” she said.

Starting February, Ms. Velasquez said the BSP is expected to slow tightening as the full impact of last year’s rate hikes have yet to be felt.

Ms. Sarkar said the BSP would have to cap inflation expectations.

“This backdrop clearly points to an extended rate hike cycle that now threatens to extend into second quarter of 2023. Our revised policy rate forecast for 2023 signals two more hikes of 25 bps each at the March and May meetings, taking the terminal rate to 6.50%,” she said.

The Monetary Board might also revise its full-year inflation forecast upward, she added.

The BSP sees inflation averaging 4.5% this year before easing to 2.8% in 2024.

“On the plus side, the peso has stabilized at a stronger level compared to late last year, which will help quell imported inflation,” Oxford Economics Assistant Economist Makoto Tsuchiya said in an e-mail.

The peso rebounded back to the P54 a dollar from its record-low of P59 in October. The local unit closed at P54.42 a dollar on Friday, strengthening by three centavos from its previous close.

“Our baseline currently assumes 25-bp rate hike at each of February and March meeting. However, depending on the magnitude of rate hike next week, there is a scope for the BSP to tighten further than we currently anticipate,” Mr. Tsuchiya said.

Miguel Chanco, chief emerging Asia economist at Pantheon Macroeconomics, said the BSP is dealing with inflation that is mainly driven by supply shortages, in which rate hikes are unlikely to help directly.

“Our long-term term view for rates this year includes the potential for a rollback of the rate hikes enacted, most likely in the fourth quarter, when inflation returns more comfortably to the target range and when the growth picture is likely to be much less robust,” he added.

Meanwhile, Philippine National Bank economist Alvin Joseph A. Arogo said the BSP will continue to mirror the US Federal Reserve’s tightening this year.

The US Fed slowed its pace of policy tightening earlier this month, raising interest rates by just 25 bps. The Fed has so far delivered 450 since March 2022, bringing its key rate to a range of 4.5-4.75%.

“Since the Fed is on track to hike by a total of 75 bps this year, PNB Research’s forecast is for the policy rate to reach 6.25% in 2023. Given the elevated inflation rate for the most part of 2023, our baseline view is that a rate cut is most likely only in 2024,” Mr. Arogo said.

After Thursday, the Monetary Board’s next policy review is set on March 23. — Keisha B. Ta-asan

PHL secures $600-M investment pledge from MVP, Mitsui

February 13, 2023 | 12:32 am

PBBM-Fumio Kishida — President Ferdinand R. Marcos, Jr. shakes hands with Japan’s Prime Minister Fumio Kishida after a joint press conference in Tokyo, Feb. 9, 2023. — COURTESY OF PRESIDENTIAL COMMUNICATIONS OFFICE

THE PHILIPPINES has secured a $600-million investment pledge for its infrastructure projects from Metro Pacific Investments Corp. (MPIC) Chairman Manny V. Pangilinan and Japan’s Mitsui & Co., according to Malacañang.

“We signed an agreement with Mitsui and several parties and management to commit to invest $600 million in infrastructure,” Mr. Pangilinan was quoted as saying in a statement released by the Presidential Communications Office (PCO) on Sunday.

Mr. Pangilinan made the remarks during a Feb. 8 dinner with President Ferdinand R. Marcos, Jr. that was hosted by MPIC and Mitsui executives in Tokyo, Japan.

News reports last month indicated Mitsui was interested in buying a stake of up to 20% in MPIC, whose interests include toll roads, power, hospitals and water. At that time, MPIC clarified that no final decision has been made.

Mitsui had committed to investing in the Philippines’ agriculture, infrastructure, renewable energy, and digital transformation, which are among the Marcos government’s priority areas, the Palace said.

“We can point to so many of the developments that happened in the Philippines with the assistance of the different Japanese funding agencies and government-to-government arrangements, the commercial arrangements — and these have been to the benefit of both our countries,” Mr. Marcos said at the meeting.

He also vowed to boost ties with Japanese companies including Mitsui as they have been “dormant to a degree” during the pandemic.

“It is a particularly auspicious time that we come again now simply because we have to now restart our own economies, we have to transform our economies,” he said.

‘READY TO GO’
During Mr. Marcos’ visit, the Philippines signed 35 letters of intent with Japanese companies engaged in manufacturing, infrastructure development, energy, transportation, healthcare, renewable energy and business expansion.

Some of the deals are “ready to go,” Trade Secretary Alfredo E. Pascual said in a separate PCO release on Sunday.

“Some are already registered with the Board of Investments (BoI),” he said.

Trade Undersecretary Ceferino S. Rodolfo said they are tracking $10 billion worth of investments from Mr. Marcos’ five-day official visit to Japan.

“That would be about P500 billion or P550 billion (worth of investments),” Mr. Rodolfo said at a media forum on Saturday.

He noted the BoI has already recorded P414 billion worth of registered investment as of Feb. 9, almost half of its P1-trillion investment target this year. The BoI may also revise its full-year target due to the surge in investments, he added.

“We have already reached P414 billion (registered investments). That means that our target of P1 trillion, we have already hit more than 40% of that,” Mr. Rodolfo said in mixed English and Filipino.

The registered investments as of Feb. 9 is also nearly 60% of the P729-billion investments approved by the BoI in 2022.

The surge in investments was recorded as information technology-business process management (IT-BPM) companies transferred their registration to the BoI from the Philippine Economic Zone Authority (PEZA), which allowed them to implement work-from-home arrangements and enjoy fiscal incentives. The registration transfer ended on Jan. 31, with around 50% of over 1,000 IT-BPM locators transferring their registration to the BoI.

“We really credit a big part of that to the strong efforts of the President to promote the Philippines… Those visits really created a pipeline of strong interest from investors such that these investments are the ones that actually registered with the BoI, not the ones that have just signed a letter of intent,” Mr. Rodolfo said.

Since he assumed office in July 2022, Mr. Marcos has visited Indonesia, Singapore, United States, Cambodia, Thailand, Belgium, China, Switzerland, and Japan.

Mr. Rodolfo said more investments are also entering the Philippines due to the country’s “welcoming attitude” towards foreign direct investments (FDIs).

“The President has ordered an Executive Order (EO) on green lane so that all projects that are generated, including those generated through presidential visits, will be provided a green lane treatment when they enter the Philippines,” Mr. Rodolfo said.

Terry L. Ridon, a public investment analyst, said Mr. Marcos’ Japan trip was more productive than his visit to Davos, Switzerland last month for the World Economic Forum “and probably all his previous trips combined.”

“Japan has been a long-standing bilateral partner, and the trip cements Tokyo’s continuing commitment to funding the country’s development, such as building the North South Commuter Railway and other high-impact projects,” he said via Messenger chat.

Investment pledges from Japanese semiconductor and electronics companies are among the most significant commitments secured by the Philippines from Japan’s private sector, Mr. Ridon said.

The Palace earlier said pledges from the Japanese electronics companies could amount to billions and could generate more than 10,000 jobs for Filipinos.

Commitments secured by the Philippines from Japanese firms also covered the sectors of energy, healthcare, logistics and warehousing, and education, among others.

MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave and Kyle Aristophere T. Atienza

Higher tax on luxury items not enough to address inequality — experts

February 13, 2023 | 12:31 am

man-shopping mall-louis-vuitton — A Louis Vuitton store is seen in the Makati central business district in this file photo. — REUTERS

By Kyle Aristophere T. Atienza, Reporter

THE PROPOSAL to increase taxes on luxury goods could boost government revenues but more fiscal measures are needed to fix inequality gaps in the Philippines, according to economists.

President Ferdinand R. Marcos, Jr. last week backed a bill increasing the tax rate on nonessential items or luxury goods to 25% from 20% previously.

“This may generate incremental tax revenues, but the reality is that the government still requires additional structural revenue reforms to finance spending necessary to reduce scarring (from the pandemic),” Renato E. Reside, Jr., a professor at the University of the Philippines School of Economics, said via Facebook Messenger chat.

House Committee on Ways and Means Chairman Jose Maria Clemente S. Salceda, the proponent, said raising taxes on luxury goods could generate about P15 billion in additional revenues for the government.

Emy Ruth D. Gianan, an economics professor at the Polytechnic University of the Philippines, said a higher tax rate on high-end items would only affect big spenders.

The luxury tax, which is likened to a value-added tax, can broaden the government’s tax base, she said via Facebook Messenger chat.

“If our goal is to just increase government revenues, this would already help,” she said.

Mr. Salceda last month said his proposal was in response to calls from international organizations for the imposition of a wealth tax in the Philippines.

“But a wealth tax is necessary if the government is working towards a more transformative and equitable society,” Ms. Gianan said, adding that another concern is the capacity to implement “such a radical tax.”

Oxfam International and its Philippine affiliate have said the inequality experienced in the Philippines is “starker” with the nine richest Filipinos having more wealth than the bottom half or 55 million of the population.

A group of progressive lawmakers have been calling for a wealth tax since 2021 as the country faced severe economic challenges due to the strict lockdowns. The proposal was among the major topics in the presidential campaign last year, with left-leaning candidates backing it.

John Paolo R. Rivera, an economist at the Asian Institute of Management, said the bill’s proponents should ensure that middle-class Filipinos, who are already heavily taxed, would not be disadvantaged.

“Not all luxury items are made equal so it might be sound to look at the scope further on who is actually buying these items,” he said via Messenger chat.

According to the bill, nonessential goods are jewelry, whether real or imitation, perfume and eau de toilette, yachts, and wristwatches, bags, wallets, and belts costing more than P50,000.

The bill also covers residential property worth more than P100,000 per square meter, alcoholic and non-alcoholic beverages worth more than P20,000 per liter, paintings over P1 million, antiques valued at P100,000 and above, and brand-new or secondhand automobiles worth at least P1 million.

Aside from higher taxes on luxury goods, the Marcos administration should also push for a corporate income tax on non-resident foreign technology giants, said Raymond A. Abrea, a tax reform advocate and founder of tax hub Asian Consulting Group.

The House of Representatives last November approved on third reading House Bill No. 4122, which seeks to impose a 12% value-added tax (VAT) on non-resident digital service providers such as Spotify and Netflix.

Arjan P. Aguirre, who teaches politics at the Ateneo de Manila University, said proponents of the bill increasing the tax rate on luxury goods should show there is a steady pattern of consumption of luxury items through the years.

“They should clearly show, too, this pattern will continue and will produce the intended outcome of additional P15 billion in government revenues,” he said via Messenger chat.

Meralco secures 300-MW deal for emergency power supply

February 13, 2023 | 12:07 am

MANILA Electric Co. (Meralco) has secured another 300-megawatt (MW) emergency power supply to partly cover its 670-MW deal with a unit of SMC Global Power Holdings Corp. that remains suspended.

“Out of the 670-MW supply that we lost from SPPC (South Premiere Power Corp.), we have secured another 300 MW that will last until Feb. 25. Hopefully, that will help augment the supply that we badly needed and manage somehow the costs,” Joe R. Zaldarriaga, Meralco’s spokesperson and head of corporate communications, said in a media briefing last week.

The emergency power supply agreement (EPSA) was secured on Feb. 3 with Aboitiz Power Corp.’s GNPower Dinginin Ltd. Co. (GNPD).

“Following the expiration of its contract with GNPD, Meralco executed another EPSA with the generation company for the supply of 300-MW baseload capacity,” Meralco said in a separate statement.

However, Meralco said its new EPSA with GNPD is not a fixed-rate contract.

“The EPSA lessens Meralco’s exposure to the Wholesale Electricity Spot Market (WESM) and in turn, shields its customers from volatile and potentially higher generation costs,” the power distributor said.

Mr. Zaldarriaga said the remaining 370 MW will be sourced from the spot market.

Meralco said the contract forms part of its efforts to ensure sufficient supply and manage electricity rates as a result of the cessation of the supply covered by its power supply agreement with SPPC. The deal was subjected to a writ of preliminary injunction issued by the Court of Appeals.

In December, Meralco secured an EPSA for 300 MW with AboitizPower for a rate of P5.96 per kilowatt-hour (kWh) from Dec. 15, 2022 until Jan. 25, 2023. The power was sourced from AboitizPower’s power plant under GNPD.

The 670-MW capacity is supposed to be covered by Meralco’s PSA with SPPC, which was agreed upon in 2019 for a period of 10 years at P4.2455 per kWh. However, the deal was indefinitely suspended after the injunction issued by the appellate court in January.

Last year, SMC Global Power sought a temporary rate increase, jointly filed with Meralco, saying that SPPC and another unit San Miguel Energy Corp. incurred a combined loss of P15 billion. The rate increase was meant to recover part or P5 billion of the units’ losses.

The company cited a “change in circumstance” when surging fuel costs breached the price range contemplated during the execution of the contracts with Meralco. However, the ERC denied the petition, saying this had no basis as the PSA is a fixed-rate contract.

Meanwhile, Meralco said that it is crucial to secure a new EPSA as the Malampaya gas field is under maintenance shutdown from Feb. 4 to 18.

Meanwhile, Meralco said the overall rate for a typical household decreased by P0.0106 per kWh to P10.8895 per kWh in February, from P10.9001 per kWh in January due to a lower generation charge.

Households that consume 200 kWh would see their monthly bills decline by P2.13, while those consuming 300 kWh will see their bills go down by P2.71 in February.

Residential customers consuming 400 kWh and 500 kWh will see their monthly bills decline by P3.04 and P2.39, respectively.

The power distributor said the generation charge went down by P0.2137 to P6.9154 per kWh from P7.1291 per kWh a month ago due to lower costs from WESM and independent power producers (IPPs).

Meralco said WESM charges declined by P3.7370 per kWh due to the improved Luzon power grid situation as power demand also decreased.

Meralco added that the secondary price cap, a preventive mitigating measure to avoid excessively high electricity prices, was not triggered in January for the first time since October 2021.

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

Hypnotic binakol the highlight of Algodon fashion show

February 13, 2023 | 12:07 am

Filipino supermodel Jo Ann Bitagcol-thumb — PEPITO ALBERT ended the show with a beautifully sculpted, bell-sleeved jacket in gray, worn bare-chested by 1990s Filipino supermodel Jo Ann Bitagcol. — PHOTOS BY NELSON VILLARICA

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CLOTHES in cotton rarely make the news, having the reputation of being safe and reliable. A fashion show at the Pinto Art Museum on Feb. 5 subverted all that by showcasing cotton clothes made from the traditional abel iloko (or iloco) fabric of the Ilocos region.

While several inabel fabrics were used in the show — aptly called Algodon, Spanish for “cotton” — it’s lineup of fashion designers (namely Vic Barba, JC Buendia, Anthony Nocom, Randy Ortiz, and Pepito Albert) prominently utilized the cloth woven in the traditional yet surprisingly modern binakul pattern.

Binakul (meaning “twill” in Ilocano) “can be easily recognized by its uniform, interlocked geometric patterns that result in psychedelic optical art designs, which are said to represent the waves of the sea and, among indigenous peoples of the Cordilleras, protection against malevolent spirits,” said a Yuchengco Museum post on its 2013-14 exhibit, “Art of the Loom: Weaving the Story that is the Binakul”. According to the book Habi: A Journey Through Philippines Handwoven Textiles by Habi: The Philippine Textile Council, “Ancient tribes believed the binakul patterns protected them from vicious spirits — hence their predominant use in the rituals of the upland tribes.” These textiles were hung in homes or used as blankets while sleeping, because the optical illusions created by the lines would confuse evil spirits.

The show opened with Vic Barba’s collection, one awash with gray. Models came out to the song “Money” by The Flying Lizards. Chic jackets in gray showing off the whirlpool binakul pattern accompanied red binakul outfits, making for a striking contrast.

JC Buendia came next, showing off outfits in a pomelo-shaded binakul, ranging from exciting tops tied with string to ladylike skirt-suits and coat dresses.

Anthony Nocom, meanwhile, showed a collection with hints of yellow, such as a gray binakul jacket on a man with a double stripe of yellow running through it. Various splashes of the color were seen throughout, including in a sequined cape on a female model.

Randy Ortiz showed his binakul in a milder shade of yellow, recalling drying grass. These were shown on dresses such as a cocktail-length terno with a low neckline.

Pepito Albert ended the show with a beautifully sculpted, bell-sleeved jacket in gray, worn bare-chested by 1990s Filipino supermodel Jo Ann Bitagcol.

Abel iloko is best known as a household fabric — used in bed covers, blankets, and table runners — although it has been used in fashion more often of late. Its structure as a hand-loomed fabric made with often thick thread in a relatively loose weave, can be a challenge.

Mr. Nocom, for one, had to starch his abel iloko first to give it structure, otherwise, the fabric’s rough weave becomes loose after cutting. Mr. Ortiz expressed no such difficulty, except for the challenges of working with its width — only 22 inches as limited by the looms used to make the handwoven fabric. “The challenge that comes with the fabric is of course, the width is not really something you can play around with. It’s a very cerebral type of collection. How you manipulate it is another challenge,” said Mr. Ortiz.

Not everybody found the fabric difficult to work with. “It’s very easy,” said Mr. Barba about working with abel iloco. “It has body, and because it’s cotton, it’s very breathable.”

The fashion show was the culminating activity of work started by Pinto Art Museum founder Dr. Joven Cuanang back in 2016, who initiated a cotton development project in Pinili, Ilocos Norte. With the help of the local and national government, what initially began as two hectares devoted to cotton farming ballooned to 20. “Painstakingly, over the last six years, we nurtured it from the seed farm to fiber to fashion. Farm-produced cotton has its rightful place in our times. It is part of our cultural heritage. It should be revitalized all over our country,” said Mr. Cuanang in a speech before the fashion show.

“The idea here is to really bring this to the whole world. We’re in for a good start,” said Mr. Ortiz. — Joseph L. Garcia

Menswear designers debut new collections at New York Fashion Week

February 13, 2023 | 12:06 am

FASHION-NEW-YORK-NEW-YORK-MENS-DAY — FOUNDER and artistic director of All Beneath Heaven Jimmy Barker walks amongst models during the presentation of their Fall/Winter 2023 collection at New York Men’s Day during the New York Fashion Week, New York City, Feb. 10. — REUTERS

NEW YORK — From conservative to creative, a gathering of menswear and genderless designers kicked off New York Fashion Week (NYFW) on Friday, showcasing their 2023 fall/winter collections.

Designer Terry Singh said his brand was all about freedom and family, and that he wants to “celebrate who you are now.”

Jimmy Alexander, creator of Los Angeles-based brand All Beneath Heaven, was making his fashion week debut.

“This exercise is really about the people looking at each other in the eyes… being able to be vulnerable with someone,” said Alexander.

New fashion brand Cross Eyed Moose, from One Jeanswear Group, is hoping to take over the accessible premium market.

“Our model is we say it was born in the city and raised in the wild. So basically it’s streetwear, outdoor wear, work wear all combined in one with a color story,” said Jack Gross, the CEO of One Jeanswear Group.

“We want to sell every consumer because we believe the customers are changing their preferences very quickly today,” said Mr. Gross.

In total, 12 menswear designers will show during the two-part presentations.

During NYFW more than 70 brands will be showcasing their autumn/winter 2023 designs around the city, from Feb. 10 until Feb. 15. — Reuters

Grab: Ride-hailing market in provinces to be industry driver

February 13, 2023 | 12:06 am

TRANSPORT network company Grab Philippines said areas outside greater Metro Manila present one of the biggest opportunities for the ride-hailing industry.

Grab Senior Director for Operations Ronald G. Roda said during a media roundtable meeting on Friday that areas outside the nation’s capital need additional transport network vehicle services (TNVS).

“The fresh allocation of TNVS is truly a welcome development,” he said. “Historically, Grab noted strong contributions to the local economies of the cities where it operates, as it creates a domino effect on growth — from driver-partners, merchant-partners and down to the consumers.”

At present, the company’s ride-hailing services are available only in eight to nine cities and municipalities, while its food delivery services are available in 45.

“Lipa City and other Batangas cities have super strong GrabFood and GrabExpress presence but no GrabCars nor motorcycle taxis,” said Mr. Roda.

“We have asked the Land Transportation Franchising and Regulatory Board (LTFRB) to open [TNVS] in new cities,” he added.

Grab is aiming for the opening of TNVS slots in Iligan City, Cagayan de Oro City and Davao City, which it previously requested from LTFRB.

“Davao has already issued a city resolution asking for TNVS, while Cagayan de Oro and Iligan are currently in the process of issuing,” said Mr. Roda.

The company is also asking for additional TNVS slots in the cities of Cebu, Iloilo and Bacolod, as well as in the provinces of Pampanga, Albay and Camarines Sur to meet the growing demand for ride-hailing in the said areas.

In Grab’s estimate, up to 35,000 TNVS licenses should be supplied in provinces based on the total addressable market and activity levels of the current driver pool in December 2022.

Meanwhile, Grab said it is planning to expand the serviced locations of its delivery platform, GrabFood, to 60 this year, from the previous 45.

“We are already expanding. We will expand to an additional 15 cities and municipalities this year, “ Mr. Roda said.

Most of these openings will be in the Visayas and Mindanao, according to Mr. Roda, as the GrabFood service “is fairly everywhere” in Luzon. — Justine Irish D. Tabile

Dogs hit the catwalk at New York Fashion Week

February 13, 2023 | 12:05 am

Humankind’s best friends stole the show at Elysian Impact’s Inaugural CatWalk FurBaby fashion show on Friday during New York Fashion Week.

The event brought together designers, models, and rescue animals for a day of fashion and fundraising for animal welfare organizations.

Ten models wearing outfits designed by the likes of Nicole Miller, Victor de Souza, Brook Wilder and others graced the runway with the four-legged companions.

Dr. Christina Rahm, CEO of DRC Ventures, the event’s lead sponsor — who has three dogs and a cat — manages various brands including a couture luxury pet and human fashion line.

“We started thinking… What are we doing for animals? And my husband, Clayton Thomas, his family, we’re veterinarians, so we decided we’ve really got to do something for animals,” said Ms. Rahm, who created a supplement line and a protective clothing line for animals.

“I wanted them to look fashionable. So we did a couture line as well,” she said backstage ahead of the show. — Reuters

Banking, consumer sectors seen leading Q4 earnings

February 13, 2023 | 12:05 am

BANKS and retailers are seen to have outperformed other listed companies in the fourth quarter of 2022 as the economic reopening provided a needed boost to loan demand and consumer spending.

“Philippine lenders are expected to have improved profitability due to the further reopening of the economy, which led to greater loan demand, higher revenues and better asset quality,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

“Banks may also benefit from higher interest rate income as interest rates were raised to counter elevated inflation,” he added.

The Bangko Sentral ng Pilipinas (BSP) raised the benchmark interest rate by 350 basis points (bps) to a 14-year high of 5.5% in 2022. The central bank will have its first policy meeting for the year on Thursday.

“Banks could outperform so long as non-performing loans remain low, as their margin may increase in a high interest period,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Mr. Arce and Mr. Limlingan also noted that during the last quarter of 2022, consumers recorded robust spending despite the high inflation.

“For the fourth quarter, consumer companies could still have surprises given that the last quarterly gross domestic product (GDP) report indicated household spending was robust despite inflationary pressures,” said Mr. Limlingan.

Meanwhile, Mr. Arce said the retail sector is also expected to have recorded better fourth-quarter earnings “as consumer traffic has bounced back to pre-pandemic levels.”

“Holiday-induced spending also likely propped up the sector and supported a slight rise in rental income through end-2022,” he said

“The easing of pandemic-related travel restrictions has also allowed a gradual reopening of domestic and international tourism,” he added.

According to Mr. Arce, the inflationary pressures from October to December last year were also offset by consumers’ revenge spending and remittances.

“Despite the rising inflation trend during the October to December stretch, revenge spending provided an additional boost to many sectors and industries,” Mr. Arce said.

“Overseas worker remittances, which remained resilient, were also an important factor in supporting domestic consumer spending,” he added.

Both analysts said that companies that posted their fourth-quarter results last week met their expectations.

Mr. Limlingan said “they have been coming within or above expectations,” although it is still too early to tell with only a handful of companies reporting so far.

“Fourth-quarter corporate earnings are, by far, in line with expectations as Filipino consumers’ propensity to shop and visit brick-and-mortar establishments started to rebound ahead of the Christmas holidays,” Mr. Arce said. — Justine Irish D. Tabile

Who knew that silk, that precious fabric which drove ancient cross-continental trade, could be found in the Philippines?

February 13, 2023 | 12:04 am

SILKWORM moths, eggs-cocoons-thumbs — SILKWORM moths, eggs, and cocoons. — DAVID CLODE-UNSPLASH

SILKWORM moths, eggs, and cocoons. — DAVID CLODE-UNSPLASH

JULIUS LEAÑO, Officer-in-Charge of the Department of Science and Technology – Philippine Textile Research Institute (DoST-PTRI) discussed the progress of the Philippine silk industry during the Philippine Silk Summit in Makati on Jan. 27.

For example, the PTRI has increased its silk cocoon production hubs by 500%, which in turn led to a 1,142% increase in silk production. To understand this scale, consider the amounts of silk products created by Silk Innovation hubs in Kalinga, Negros, and Misamis for various stages of silk production. The one in Negros sees 20 kilos (kgs) of thrown silk — silk turned into yarn — spun per day, while the one in Misamis Oriental produces 30 kgs of dried cocoons, yielding seven kilograms of raw silk, per day. Kalinga produces seven kilos of raw silk a day. According to Mr. Leaño, “The way forward is to have 960 kgs per year production capacity, 9,600 kgs of fresh cocoons produced, and 15 hectares of mulberry plantations supplying about one reeling facility,” he said. They plan to hit these goals by 2025.

In another talk, Carlo Eliserio, Business Manager of the Aklan Fashion Designers Association (AFDA), from a region where a lot of the raw silk goes for weaving, showed various products made using the raw silk. It is usually combined with piña (pineapple leaf fiber) at a 60-40 ratio, producing piña seda, though it can also be combined with cotton and abaca. These textiles are turned into formal Filipino wear such as barongs, and are distributed throughout the country. He also showed various outfits made by his colleagues at AFDA, as well as projects within the community such as teaching inmates how to make bags.

“The main goal of the Seda Pilipinas program is the integration of the value chain. We always look at it from a supply-chain perspective, not disenfranchising the main value chain players, specifically from the farmers all the way to our consumer,” said Mr. Leaño.

He gives an example of a farmer asking for each kilogram of silk cocoons to be sold at an additional P50, raising the price to P250. After some study, and figuring out that the price of silk increases at the weaving level, they figured they can raise prices for raw cocoons at P400 per kilogram. “The engagement of farmers is still crucial,” he said. “Wala nang nagbebenta ng P200 na silk (nobody sells silk at P200). It also diminishes the value of silk.”

“We want to push the value transformation all the way to the farmers,” he said. “Kapag iyong cocoon producers natin, ayaw nang mag-produce ng cocoon…wala na kayong tatahiin (if our cocoon producers no longer want to produce the cocoons, you will have nothing to sew).”