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The Philippines votes Right

PHILIPPINE STAR/KRIZ JOHN ROZALES

Many analysts and pundits got this election wrong.

First, they were analyzing the candidates and the election using the lens of morality and values. In other words, this election was a fight between “good” and “evil,” with one side reportedly the evil empire and the other, righteous rebels. This was also supposed to be a fight between honesty and good governance vs corruption.

Or, they try to explain the people’s vote as some kind of amnesia because the voters were not educated on the horrors of martial law.

Second, they confused technology with politics, i.e., they said that one side was a master of social media and that’s why one side won. The voters — the “bobotantes” — were a gullible mass, easily manipulated by Tiktok or Facebook posts. They ascribed no human agency to the voters, i.e., they were just mechanistic devices manipulated by social and mass media. Perhaps, it’s a reflection of so-called analysts’ elitist (matapobre) views of the great majority.

What is striking in the analyses, even by so-called political analysts, is the absence of politics, i.e., the people’s vote does not reflect a political viewpoint or political vision.

I contend, however, that this election has shown us that the Philippine electorate has shifted definitively to the Right. For this, blame Duterte.

Here, in the Philippines, we normally don’t ascribe political forces as Right or Left, other than to the Makabayan Bloc, which is only a marginal political player due to the absence of ideological, programmatic political parties. Most candidates are populists, catering to the broad masses with simplistic appeals.

In my view, Duterte has changed that. He represents the Right. Why is that?

He represents Fiscal Conservatism. Despite his populist rhetoric, Duterte is fiscally conservative, shown by the tightfistedness of his Finance Secretary, Sonny Dominguez. His administration increased revenue collection and was very prudent in expenditures, leading to an improvement in the country’s credit rating. Even during the height of the pandemic, while other countries like the US and Japan busted budgets, the administration’s COVID expenditures were relatively modest as a percentage of GDP.

He represents Law and Order. He won the presidency in 2016 as a tough, no-nonsense former City Mayor promising to make war on criminals and drug addicts. He has delivered on his promise with a harsh crackdown that critics say was characterized by human rights abuses.

While President Duterte won with some assistance from the communist Left and briefly flirted with them by appointing them to Cabinet positions, he has turned fiercely anti-communist. His administration has passed an anti-Terrorism law and created a National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) with a well-funded program to eliminate the communist insurgency.

He’s Pro-Business and has cut taxes. While Duterte appeared populist and anti-business in the 2016 elections, his actions speak otherwise. He listened to the concerns of Business and vetoed the End ENDO (End of Contract) bill. Through the CREATE (Corporate Recovery and Tax Incentives for Enterprises Act) law, his administration has cut taxes for businesses, from 30% to 25% for big corporations and down to 20% for MSMEs, giving a windfall to Business. His administration has passed many pro-business laws, such as the Ease of Doing Business Act, Amendments to the Corporation Code, Real Estate Investment Trust Revised IRR, an EO liberalizing satellite internet, the Personal Property Act, lifting the mining permit and open-pit mining ban, etc.

He has adopted liberal, pro-growth policies. His administration dismantled the NFA (National Food Authority) rice import monopoly — which no administration before him dared to do — and liberalized rice importation through the Rice Tariffication Act. Rice prices stabilized and he became more popular than ever, to the consternation of protectionists, leftists, and populists.

He lifted the ban on the issuance of mining permits and reversed the Gina Lopez-initiated open-pit mining ban. He has liberalized foreign investments through the three laws, namely, the Retail Trade Liberalization Law, the Amendments to the Foreign Investment Act, and the Public Service Act (PSA) Amendments. In particular, the PSA Amendment is historic because it removed foreign ownership restrictions in transport and telecommunications, which had been in place since 1935, while safeguarding national security. It will usher in competition in industries presently dominated by monopolists and duopolists — a very liberal (even Teddy Roosevelt-like) act.

Despite the Duterte administration’s pro-business policies, his administration has passed the most social legislation of any President: the Universal Health Care Law, the Institutionalization of the Conditional Cash Transfer, the Mental Health Care Act, the 1,000 Day Law (for newborns), and the 150-day Maternity Leave Law.

In foreign policy, Duterte is labeled as pro-China but he’s more pragmatic than ideological. The fact of the matter is that he renewed the VFA or Visiting Forces Agreement with the United States. In the recent voting to eject Russia from the Human Rights Council in the United Nations, the Philippines was one of the few Asian countries which voted “yes,” in alignment with the United States and other Western countries. Other countries like Singapore, Thailand, and Indonesia abstained while Vietnam sided with Russia and voted “no.”

We can therefore sum up Dutertismo as Rightist: Pro-business, Anti-Communist, Pro-Law and Order, Liberal and Pro-growth economic Policies with social inclusion, and Pragmatic Foreign Policy.

In surveys showing that President Duterte remains overwhelmingly popular with high approval ratings (almost 80%) and in the overwhelming electoral mandate given to the Marcos-Duterte tandem, the Filipino voters have moved solidly Right and are giving their nod to the Rightist direction of the country.

The victory of Ferdinand Marcos, Jr. (BBM) must, therefore, be seen not through the lens of the 1970s. It doesn’t represent historical amnesia but a vote today, 34 years after the Yellow revolution. On the contrary, the BBM-Duterte tandem must be seen as an extension of Dutertismo and the fusion (the Unity, which is the theme of the BBM campaign) of Rightist forces in the country.

The one area where Marcos-Duterte can’t be called Rightist is on the issue of divorce and abortion. BBM has expressed support for divorce and selected cases of abortion. Again, the political alliances explain this stance with the Yellow forces allied with the Catholic Church and therefore opposed while the Red forces are allied with non-Catholic religious groups and in favor.

Even if President Duterte had not openly endorsed BBM, the BBM-Sara team must be seen in the context of Dutertismo. BBM failed to win over Leni Robredo for VP in 2016 but his partnership with Sara Duterte catapulted him in the 2022 polls. Duterte’s party, the PDP-Laban, also endorsed BBM-Duterte. For the very first time, the voters have elected a President and Vice-President from the same team, clearly seeing them as one. Remarkably, both garnered almost the same number of votes, so voters saw them as a team.

The victory is also the culmination of the anti-Yellow counter-revolution started by Duterte. Who represents anti-Yellowism more than Marcos?

Interestingly, the BBM-Duterte team doesn’t have leftists in its alliance, unlike Duterte in his 2016 campaign, and therefore, may not have the baggage of leftist policies in mining, social welfare, and land reform that Duterte had in the early years of his administration.

As for the opposition, it is not Left in contrast to the Marcos-Duterte Right. It’s more precisely Yellow (not Pink), representing the old alliance of anti-Marcos oligarchs, Catholic Church hierarchy, hard leftist and left-of-center forces, and middle-class elements that toppled Marcos in the People Power Revolution. It ran a values-based campaign, anchored on “honesty,” “human rights,” and “good governance.” However, the voters showed that those issues are irrelevant to their lives. Instead, they have judged the Yellow People Power Revolution to have failed and ushered in a Red or Rightist counter-revolution.

The problem of the opposition is that while it takes a liberal stance concerning human rights, it’s illiberal in its economic philosophy. Its foundational ideology is economic protectionism and economic nationalism, reflected in the protectionist 1987 Yellow Constitution with its Filipino First and Filipino Only provisions. (It explains the negative vote of Yellow Senators, Francis Pangilinan and Risa Hontiveros, against the liberal PSA Amendment). Its approach to so-called social justice concerns is heavily statist and emphasizes distribution without increased productivity. This is reflected in the 1987 Comprehensive Agrarian Reform Law, which substituted an inefficient and corrupt government for the landlord, and imposed restrictions on the farmer. The problem is that this law made farmers poorer and the countryside more vulnerable to criminality and drug addiction.

Its foreign policy is strongly pro-American and anti-China. As I mentioned before, this can be traced back to the American support to the Yellow forces for removing Marcos from Malacañang (“cut and cut cleanly,” said US Senator Paul Laxalt) and his exile to Honolulu.

Judging from the results of the election, with the BBM-Duterte tandem getting a majority mandate, the first-ever in the history of Philippine elections, the opposition will be in the political wilderness for some time. The Filipino voters have shifted hard to the Right. So pronounced is this shift that the Left failed to win even in the party-list elections (with the possible exception of the Kabataan party-list with a single representative) which they have traditionally dominated. If BBM lives up to the Rightist promise and delivers a successful presidency, Sara Duterte will become his successor. That will be 12 more years when the opposition will be out of power.

The danger, of course, is that a weak opposition may tempt the ruling power to commit abuses. It’s important, therefore, for the Yellow opposition to do a self-examination and review its alliances and political philosophy, which the Filipino majority have overwhelmingly rejected, to recoup from its political losses.

As for President-elect Ferdinand Marcos, Jr. (BBM), his takeaway should be to continue and extend the Rightist policies of Dutertismo. Reversing the Rice Tariffication Law, a great legacy of President Duterte, for example, would go against the Rightist principles that voters put him in power for.

Instead, he must pursue policies that promote Law and Order, Economic Liberalism, Fiscal Prudence, Pro-Growth and Pro-Business with inclusion, a balanced Foreign Policy, and anti-Communism. That is the key to his success as a president.

Oh, I can already see the objections to this analysis. Unlike in the rest of the world, Filipino voters supposedly don’t think politically that way. They can’t distinguish between Right and Left. What explains their votes is that they are manipulated receptors of social media disinformation. They are “bobo.”

 

Calixto V. Chikiamco is a member of the board of IDEA (Institute for Development and Econometric Analysis).

totivchiki@yahoo.com

Motorsports, an election stress buster

JCOMP-FREEPIK

This election exercise was physically, mentally, and emotionally exhausting regardless of which side of the political fence you stood on. Now that the dust has settled, we all deserve a break from the toxicity of it all.

Hobbies are the best diversions. They make you happy, feed your soul, and keep you young. For myself and many others belonging to Generation X, motorsports is our hobby of choice. Inside every grown man (and many a woman) is a young tyke with a need for speed. Whether a taipan, top executive, or entrepreneur, many fantasize about racing at top speed in a bona fide sports car.

Motorsports have had a long history in the Philippines spanning more than 50 years. Its heyday was in the 1970s and early ’80s when rallies dominated the scene. Old timers will remember Dante Silverio, Pocholo Ramirez, Arthur Tuazon, and Freddie Masigan as the vanguards of the sport. For a brief moment, the Philippines even hosted several grand prix races in Greenhills, Luneta, and Cebu where racers from Asia and Europe participated. In the 1980s, several Filipino rally drivers competed regionally, including MP Turbo’s Mike Potenciano.

Car rallies took a back seat in the 1990s as circuit racing emerged. With the support of Toyota Racing Development (TRD), the Corolla Cup racing series became the entry point for fledgling racecar drivers. Champions of the Corolla Cup got to compete in the higher league Toyota Formula 3. We remember Tyson Sy, Gabby Dela Merced, and Enzo Pastor as being the fastest drivers of their generation.

The 2000s saw the rise of JP Tuazon’s Ford Focus Cup, Ford Fiesta Cup and, later, the Toyota Vios Cup. JP is the son of the motorsports legend, Arthur Tuazon. As many as 60 cars participated in these circuit races which were held in the Clark international speedway, Subic, and the Batangas Racing Circuit. Young guns like Dominique Ochoa, Red Diwa, and Sam YG reigned supreme.

After the Vios Cup, motorsports lay low for a few years, except for a few rally crosses and drifting races at the Driftwood Adventure Park and R-33 race track.

Following the pandemic-induced hiatus, three young Filipino motorheads are again fanning the flames for motorsports in the Philippines. The trio, collectively known as the Radical Group PH (@radicalcarsph on Instagram), is composed of Enrique Hormillo, Antonio Brias, and Mark Stöckinger.

Hormillo has been racing go-carts since he was 14 and is both the driving coach and business manager of the group. Brias is the technical director, having graduated from the Royal College of London with a degree in Auto Engineering. He was once the chief engineer of Ferrari Philippines. Stöckinger is a famed Filipino driver who raced for the Lotus F1 Team, the Status Grand Prix, and Formula Renault. Stöckinger leads the drivers academy of the Radical Group.

In 2019, Radical Group PH obtained the rights to distribute Radical cars in the Philippines and organize races according to Fédération Internationale de l’Automobile (FIA) standards.

For those unaware, Radical is based in the United Kingdom and is the world’s largest manufacturer of track sportscars. Radical cars offer the best of both worlds — they are faster than supercars but priced at a fraction of a Porsche. With more than 2,000 cars sold worldwide, Radical has also become a specialist in organizing races. There are Radical Cup races in the UK, Scandinavia, Canada, the US, South Korea, Australia, and the Middle East.

Radical has nine sportscar models in its lineup, two of which are available in the Philippines, the SR1 and SR3. Both are open top models.

The SR1 is the first step in the Radical ladder. They are ideal for enthusiasts looking to take their circuit driving to the next level. The SR1 has a 182-horsepower engine that takes you from one to 100 kph in 3.5 seconds. It has a top speed of 222 kph. It is as fast as an Aston Martin Vantage, but nimbler.

Hormillo says that the SR1 is ideal for those training to become competitive drivers. It is forgiving of mistakes but rewards you if you get the technique right. The SR1 is equipped with on-board telemetry and videos that allow you to replay and analyze your drive.

The SR3 is a more sophisticated sports car. Not only is it slightly bigger, it also has more torque. Its engine has a power output of 226 horsepower that takes you from 0 to 100 kph in 3.1 seconds. Its top speed is 237 kph.

This SR3 is equipped with all-new electrical architecture that allows the driver access to more data and feedback than the SR1. It also features a multi-function steering wheel with a built-in LCD display to bring real-time information to the driver. The steering wheel is akin to those used in high-level Le Mans cars.

The SR3 is for the gentleman driver who insists on the best when playing on the track. It is half the price of a comparable supercar.

Radical Cars Philippines carries all the spare parts and maintenance facilities to keep the car in top condition. They even offer garage services, right on the race track, for a small fee.

For those who wish to try out track racing without the responsibility of purchasing their own car, Radical Cars has a program called Arrive & Drive. For a minimum fee, one gets a dedicated car for one race season that includes the maintenance crew, car fluids and brakes, and three sets of tires. One season is comprised of three weekends where Fridays are dedicated to testing and practice laps, Saturdays are for qualifying heats, and Sundays are for sprint and endurance races. Additional practice days can be arranged. The winner of the Philippine Radical Cup gets to compete in the UK as the Philippine representative in the global grand prix.

All those who purchase a Radical sports car or subscribe to the Arrive & Drive program will be trained by Marlon Stöckinger who heads the Radical Training Academy.

The men behind Radical Philippines are committed to the vision of reviving motorsports in the Philippines. At first, they admit, motorsports will be confined to “gentlemen drivers,” mostly from the business community. The cost of entry could be prohibitive, after all. But as circuit racing becomes more popular, the trio hopes to attract more sponsors to make it more affordable for the next generation of Filipino drivers. With support from the government and private sponsors, Philippines motorsports can be completive again as it was in the ’70s.

For the next few weeks, I will be at the racetrack in Clark to clear my head and shake off the election stress. By the end of it, I will emerge refreshed, ready to fight another day.

 

Andrew J. Masigan is an economist

andrew_rs6@yahoo.com

Facebook@AndrewJ. Masigan

Twitter @aj_masigan

The powerful machine that brought Bongbong to victory

PHILIPPINE STAR/ RUSSELL PALMA

IN THE DAYS following the landslide victory of Ferdinand Marcos, Jr., friends and colleagues in the US and Europe with memories of his father’s kleptocracy asked me how this could have happened. With all the forces working in Marcos’ favor, a more pertinent query might be: What was going to stop it?

If you spent time before the Philippines’ presidential election in the Manila area, you might have been forgiven for thinking that Marcos’ chief opponent, Leni Robredo, would waltz into office. She appeared to have the support of the urban professional class, civil-society advocates, students, and portions of the business elite. Her last rally, in the financial district, was attended by hundreds of thousands of people. In tony neighborhoods, like White Plains in Quezon City, Robredo posters far outnumbered those for Bongbong, as Marcos is known. (I was reminded of Brooklyn, where I lived during the 2016 US election, with its Hillary Clinton paraphernalia.) Drive an hour or so north and the picture changed dramatically. A massive truck dealership along a highway sported Bongbong billboards along the length of its roof — a political marker as much as the geographic end of the Manila exurbs.

Like the 2016 US election, the lead-up to Bongbong’s win was influenced by a formidable social media machine, one that sought to sanitize the autocratic rule of his father. Ferdinand Marcos, who declared martial law in 1972, was forced to flee in 1986 amid a popular uprising, deep recession, debt spiral and the erosion of US support for his regime. “They presented fake news and revisionist history,” Robredo voter Mark Domingo, 42, told me after the extent of the Marcos landslide became clear. He held the hand of his wife, Amor, as they sat in a volunteer compound expressing ire for Meta Platform, Inc.’s Facebook and TikTok, Inc. Social media companies “have ruined the Philippines,” he said.

At the same time, Marcos, unlike Trump, led a disciplined campaign. He shied away from direct engagement with the media, leaving image promotion to social media — Filipinos are among the world’s most active users — and scripted campaign events.

In fact, the Marcos’ campaign was light on policy specifics, which reduced the chances he’d trip. It also allowed people to project onto him what they wished, and conversely, gave him an opportunity to gin up nostalgia for glory days that never existed. The strategy worked for a range of reasons. While gross domestic product surged at the start of the year, the pandemic recession was a deep one that’s left lasting trauma. The nation has one of the youngest populations in Asia, something normally considered a plus. It also means a big cache of voters either weren’t alive or were very young when Marcos Sr. ruled with an iron fist and looted state coffers. When his epic flaws are pointed out, many fans shrug and say it means nothing to them, or worse, claim it’s fake news.

China’s role in the Philippines also has become a double-edged sword. While Beijing has helped bankroll much-needed new infrastructure, its reach into the South China Sea has hurt coastal communities that earned their livelihoods on the water for generations. During a visit in 2019, I met fishermen who claimed Marcos’ father brought strength and respect to their country. China wouldn’t dare push them around if he were still alive and in power, they asserted.

Bongbong deftly tapped into this angst on social media. But he also benefited from the careful construction of allegiances with regional political bosses. His family is from northern Luzon, the biggest and most populous island. His running mate, Sara Duterte, who’s also the daughter of the outgoing president, drew support from the southern stronghold of Mindanao, where she was a mayor (like her father).

Religion, too, came through for Bongbong and Duterte. In the Philippines, faith means mainly Christianity, particularly Catholicism — before its American administration, the country had been a Spanish colony for three centuries. While the Catholic Church played a huge role in rallying opposition to Marcos’ father, its influence is in relative decline. Prevalent now are American-style megachurches, as well as congregations that appear to resemble conservative evangelical groups. Iglesia Ni Cristo (INC), which disdains the Catholic Church, is the most prominent. It threw its weight behind Bongbong and did the same for Rodrigo Duterte in 2016.

INC, as it is known, demands complete obedience from its members — and delivers bloc votes to candidates it endorses. Founded in the early 20th century, the group has grown in stature and influence over the past few decades, along with peers. “Though comprising a small minority dwarfed by the Catholic Church, these churches have been able to mobilize financial and electoral power through careful organization and disciplined pastoral teaching,” John Choo, Evelyn Tan, and Daniel P.S. Goh, wrote in a 2020 report for the ISEAS Yusof Ishak Institute in Singapore. (INC endorsed the successful presidential runs of Benigno S. Aquino III in 2010 and Gloria Macapagal-Arroyo in 2004, suggesting an ability to spot winners and shape them.)

In the end, Marcos’ triumph was driven by several mutually reinforcing factors, from the urban-rural divide and the electoral weight of religious fault lines, to economic lopsidedness and perceptions of identity. These themes, of course, are recognizable beyond the Philippines, having propelled the 2016 Brexit vote in the UK and the likely return of Republican control of Congress in November. But while historical parallels make the outcome seem all but inevitable, the disappointment among Marcos’ opponents underline the benefit of hindsight.

In the early hours of Tuesday morning, as the crushing size of Bongbong’s victory sank in, Robredo supporters gathered at a volunteer center in central Manila. They shed a few quiet tears, sang, held hands, and nibbled at some comfort takeout from McDonalds. That contrasted with the wild scenes outside Marcos’ headquarters. There, less than an hour earlier, a writhing crowd of flag-waving, cheering supporters — few of whom wore face masks, which are still required — crowded around your columnist, shouting and gesticulating. They blocked traffic and climbed on cars.

That ephemeral moment could portend a much longer legacy. The Philippines limits presidents to single six-year terms, a product of the post-1986 constitutional overhaul designed to prevent another dictatorship. Will the machine that delivered Bongbong to the top job outlast him? Sara Duterte and her backers may well be counting on it.

BLOOMBERG OPINION

Airbnb updates platform, expands search function

Airbnb, a home sharing service, rolled out a search function that allows guests to look for places to stay based on their style, location, and proximity to a travel activity, instead of just the destination city.

Announced May 12, Airbnb Categories organizes listings in 56 categories, giving users the option to look for A-frames and castles through the “style” theme; homes on a lake, or near a national park through the “location” theme; or homes near spots for surfing, camping, or skiing through the “activity” theme.

Airbnb’s feature update — “the biggest in a decade,” it said — also includes a one trip, two stays option (Split Stays); and additional travel protection (AirCover). 

“The way people travel has changed forever. That’s why we’re introducing the biggest change to Airbnb in a decade,” said Brian Chesky, chief executive officer and co-founder of Airbnb, in a statement. 

He added that these changes reflect the longer trips people are now taking, as well as their willingness to be more flexible about where they live and work. 

Despite global deterrents such as the Omicron coronavirus variant and inflation, Airbnb’s “nights and experiences” in the first quarter of 2022 exceeded 100 million for the first time, said Amanpreet Bajaj, Airbnb general manager for Southeast Asia, India, Hong Kong, and Taiwan, in an e-mail. (“Nights and experiences” is a metric that measures nights and the number of seats for experiences booked on the platform.)

“This demonstrates strong global demand for travel and the incredible resilience of our business — which enables us to offer the most comprehensive protection in the travel industry, included free in every stay,” said Mr. Bajaj. 

LONGER TRIPS

Given that half of the nights booked on Airbnb in the last three months were for trips that lasted a week or more, the home sharing service also introduced Split Stays, which allows guests to divide their time between two different homes.  

“The function will take into account the trip’s start and end dates, the distance between listings, and any filters added,” Mr. Bajaj said. The proximity of the homes will depend on the guest’s initial search: a search within a town may yield listings from different neighborhoods, while a search for an entire island may yield listings that are further apart.  

Meanwhile, AirCover is free travel protection that encompasses booking protection guarantee (in which guests get a similar or better home in the event a host cancels a booking); check-in guarantee (in which guests get a similar or better home in the event they can’t check into a booked home); get-what-you-booked guarantee (in which guests get a similar or better home if a booked home isn’t as advertised); and a 24-hour safety line (in which guests get access to trained safety agents in case they feel unsafe). 

“We’re … giving you the confidence to book knowing that Airbnb’s got your back,” said Mr. Chesky. — Patricia B. Mirasol

 

SIDEBAR | Amazing views and spacious stays 

Based on a wishlist of crowdsourced from both locals and international travelers, Airbnb is anticipating “great interest” in local Airbnb Stays categorized under: Amazing Views, Bed and Breakfasts, Farms, Off-the-Grid, Islands, Lakefronts, and Treehouses.  

Among Filipinos, “there is a strong interest in spacious stays that can accommodate large families or groups,” according to Amanpreet Bajaj, Airbnb general manager for Southeast Asia, India, Hong Kong, and Taiwan. 

The top summer destinations in the Philippines, ranked by Airbnb searches in the first quarter of 2022 by Philippine guests are:

  1. Angeles, Central Luzon 
  2. Subic, Central Luzon 
  3. Mabalacat, Central Luzon  
  4. Antipolo, Calabarzon  
  5. Calatagan, Calabarzon  
  6. Cagayan De Oro City, Northern Mindanao  
  7. Panglao, Central Visayas  
  8. San Juan, Calabarzon 
  9. Bacolod, Western Visayas  
  10. Silang, Calabarzon

A summer drive with a new Lexus

Beat the heat with a long-awaited road trip aboard the Lexus RX or the Lexus IS

The call of the open road is difficult to ignore during the summer season. A trip to the beach, mountains, or other cities with family and loved ones is a great way to rest and rejuvenate the soul. These experiences are priceless, and as such, your mode of transportation should be equally rewarding. Here are two iconic Lexus models that will complement your driving personality.

Choose the Lexus RX, and be treated to Zero % interest for up to 18 months and Free Two Year Periodic Maintenance Service. The RX is the very first luxury crossover SUV to proudly wear the Lexus badge. When it made its debut in 1998, it laid the foundation for what would be a highly successful nameplate. To date, the RX is the most popular model sold by Lexus Philippines. It isn’t surprising, really, considering how the model has evolved, not just in appearance, but in build quality, technology, and practicality.

Choose the Lexus IS, and get Free Two-Year Periodic Maintenance Service. For the driving enthusiast, the Lexus IS sport sedan is the obvious choice for carving through the roads. An exhilarating drive awaits you from behind the wheel. Since the debut of its first-generation IS in 1999, the model has pursued the thrill of driving unique to compact rear-wheel-drive sports sedans. The IS has captured the hearts of over a million enthusiasts around the world, and the number is growing.

With summer in full swing, now is the time to plan that great escape with the Lexus that will fulfill your desires.

The RX 350 (P4,498,000) asserts its presence on a variety of roads and diverse driving conditions. Under its hood is a 3.5-liter V6 direct-injection engine mated to an eight-speed automatic transmission. Keeping things in control is Adaptive Variable Suspension which continually adjusts shock absorber damping rates in realtime. Not only does this inspire driver confidence, but it also keeps the ride buttery smooth–as expected from a Lexus.

The RX 350 F Sport (P5,158,000) shares the same ‘F’ spirit and enhances the sporty driving experience with a few key features. Inside are unique F Sport dials with full-length illuminated needles that add an element of excitement. The cabin is decked out in dimpled leather with an exclusive perforated finish on the steering wheel and shift knob. And then there are the aluminum pedals, exclusive to F Sport models.

The IS 300h (P2,978,000) and IS 300h Premier (P3,328,000) were built in the philosophy of pleasing aesthetic and emotional values to pursue linear operation that is faithful to driver intention. In creating the desired driving sensation, Lexus engineers returned to the basics to evolve a comfortable driving experience.

The IS F Sport (P3,808,000) is fitted with 19-inch multi-spoke wheels in a dark metallic finish that pays homage to the RC and LC models. Keeping in contact with the road underneath are 235/40 R19 tires for the front and 265/35 R19 for the rear. These performance tires offer the necessary grip and stability needed during spirited driving.

To learn more, visit the Lexus website at lexus.com.ph or visit our social media pages on Facebook and Instagram @lexusmanila

To arrange a consultation with your personal sales consultant, visit the Lexus Remote page.

You may also download the MyLEXUS App available on both Android and iOS users to receive live updates and access other premium services.

 


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‘Revenge travel’ to boost brand sales — ShopBack

COCO ROSALES-UNSPLASH

The tourism industry will make a comeback this year as people take advantage of loosened restrictions and go on a “revenge travel” spree, according to ShopBack, a cashback reward program.

“We expect travel to be one of the big [sales drivers],” Prashant Kala, Philippine country head of ShopBack, told BusinessWorld in a May 5 Zoom call. Shopback aims to push P24 billion in sales to its brands in 2022, up from P15 billion last year.

The app will hold a three-day promotion May 16–19, offering up to 100% cashback from travel industry partners such as Agoda, Klook, and Trip.com. It also plans to double the number of companies offering e-vouchers (currently about 20) within the next few months.

Popular domestic destinations in the cashback reward program include Boracay, Palawan, Cebu, Baguio, and Batangas.

Per ShopBack data, domestic travelers tend to be families; international travelers, meanwhile, tend to be couples. Popular international destinations include the US and Singapore.

ShopBack saw spikes in flight and hotel bookings between October and November 2021; and in February, when the Omicron coronavirus variant did little to dampen Holy Week and Labor Day plans.

Public transport stakeholders in the Philippines have been making improvements on infrastructure as early as August 2021 in anticipation of the post-quarantine travel demand.

According to the latest Economic Impact Report of the World Travel and Tourism Council (WTTC), travel and tourism in the Philippines will reach an annual growth rate of 6.7% in the next 10 years, exceeding its overall economy average growth rate of 5.6 %.

The country logged 202,700 foreign tourist arrivals as of April 7, a majority of which come from the United States, Canada, the United Kingdom, South Korea, and Australia. — Patricia B. Mirasol

Udenna open to deals after report owner eyeing asset sales

Conglomerate Udenna Corp. is open to exploring potential deals, its president said on Friday, after a report that its tycoon owner was considering selling businesses collectively worth several billion dollars.

Dennis A. Uy, whose business empire expanded rapidly under the country’s outgoing President Rodrigo R. Duterte, is looking at sales of a South China Sea gas field and a commercial land lease firm at the site of a former US military base, sources familiar with the matter told Reuters.

Mr. Uy acquired the Malampaya gas field from Chevron and Shell for roughly $1 billion, while Clark Global City also cost $1 billion, the sources said. The assets are subsidiaries of Udenna Corp.

Asked about the report, Udenna President Raymundo Martin M. Escalona said investor confidence was returning after the pandemic which had hit the profitability of Udenna’s businesses.

“There has been renewed interest in discussing several partnership and strategic alliance opportunities with the group,” Mr. Escalona said, without elaborating.

In the first four years of the Duterte presidency, unlisted Udenna has nearly quadrupled its portfolio to include infrastructure, gaming, shipping, education, construction, fast food, tourism, and sports cars.

It was not immediately clear why Mr. Uy, the top campaign contributor of Duterte in his 2016 presidential run whose term will end next month, would be putting the assets up for sale.

Analysts and bankers say Mr. Uy is under pressure to sell assets to trim debt that was generated by acquisitions.

Shares in two listed Uy firms tumbled on Friday following the report. Telecom operator DITO CME and Chelsea Logistics lost 7.7% and 5%, respectively, while the broader stock index slipped 2.3%.

Not all of Mr. Uy’s companies lost ground on Friday, with shares in oil retailer Phoenix Petroleum trading up 0.4%, while casino-resort developer PH Resorts Group rallied 5%, two days after announcing a capital infusion from a Filipino billionaire. Reuters

Kids later than sooner: South Korean women freeze eggs as child-rearing costs surge

UNSPLASH

SEOUL — In South Korea, fewer women are having children and those who do are in no rush. The sky-high costs of housing and education make financial security a must. Social mores also dictate the need to be married.

Lim Eun-young, a 34-year-old public servant, says she is not ready to start a family due to the costs and as she only began dating her boyfriend several months ago. But worried that her biological clock is ticking, she had some of her eggs frozen in November.

Ms. Lim was one of about 1,200 unmarried single women who underwent the procedure last year at CHA Medical Center — a number that has doubled over two years. CHA is South Korea’s largest fertility clinic chain with about 30% of the IVF market.

“It’s a big relief and it gives me peace of mind to know that I have healthy eggs frozen right here,” she said.

Freezing eggs to buy reproductive time is an option increasingly explored by women worldwide. But in South Korea, which has the dubious distinction of having one of the world’s lowest fertility rates, the dramatic jump in women using CHA’s services throws into sharp relief the economic burdens and social constraints leading to decisions to delay or even forgo having children.

The fertility rate — the average number of children born to a woman over her reproductive life — in South Korea was just 0.81 last year. That compares with an average rate of 1.59 for OECD countries in 2020.

That’s also despite enormous sums spent by South Korean authorities on subsidies and perks for families with children. The government budgeted 46.7 trillion won ($37 billion) last year to fund policies aimed at tackling the country’s low birth rate.

Much of the blame for South Korean reticence to have children is laid on a highly competitive and expensive education system that makes cram schools and private tutoring a fact of life for most kids from a young age.

“We hear from married couples and watch reality TV shows about how expensive it is to raise kids in terms of education costs and everything, and all these worries translate to fewer marriages and babies,” said Ms. Lim.

Housing costs have also surged. An average apartment in Seoul, for instance, costs an estimated 19 years of South Korea’s median annual household income, up from 11 years in 2017.

Cho So-Young, a 32-year-old nurse at CHA who plans to freeze her eggs this coming July, is also keen to get to a better place financially before having a child.

“If I get married now and give birth, I can’t give my baby the kind of environment I had when I grew up…I want better housing, a better neighborhood and better food to eat,” she said.

But even when finances are less of a consideration, being married is seen as a prerequisite to having children in South Korea. Just 2% of births in South Korea occur out of wedlock compared to an average of 41% for OECD countries.

In fact, while single South Korean women are able to freeze their eggs, they can’t legally proceed with a sperm donation and the implanting of an embryo unless married — an issue thrust into the spotlight by Sayuri Fujita, a Japanese celebrity and single mother based in South Korea who had to go back to Japan for a sperm donation.

That needs to change, argues Jung Jae-hoon, a social welfare studies professor at Seoul Women’s University, noting marriages in South Korea dropped to a record low of 192,500 last year. That’s down around 40% from a decade earlier. Even when looking at marriage levels in 2019 to discount the effect of the pandemic, the decline is still a huge 27%.

“The least the government can do is to not get in the way of those out there who are willing to shoulder the financial burden of having a baby,” he said.

Even more worrying are the statistics showing a sharp drop-off in willingness to have children at all.

Some 52% of South Koreans in their 20s don’t plan to have children when they get married, a massive jump from 29% in 2015, according to a survey conducted in 2020 by the country’s gender and family ministry. ($1 = 1,276 won) — Reuters

With China in focus, Biden makes $150 million commitment to ASEAN leaders

REUTERS

WASHINGTON — US President Joseph R. Biden, Jr., opened a gathering of Southeast Asian leaders with a promise to spend $150 million on their infrastructure, security, pandemic preparedness and other efforts aimed at countering the influence of rival China. 

On Thursday, Mr. Biden started a two-day summit with the 10-nation Association of Southeast Asian Nations (ASEAN) in Washington with a dinner for the leaders at the White House ahead of talks at the State Department on Friday. 

Mr. Biden smiled broadly as he took a group photo on the South Lawn of the White House before the dinner with representatives from Brunei, Indonesia, Cambodia, Singapore, Thailand, Laos, Vietnam, Malaysia, and the Philippines. 

While Russia’s invasion of Ukraine is on the agenda, Mr. Biden’s administration hopes the efforts will show the countries that Washington remains focused on the Indo-Pacific and the long-term challenge of China, which it views as the country’s main competitor. 

In November alone, China pledged $1.5 billion in development assistance to ASEAN countries over three years to fight COVID and fuel economic recovery. 

“We need to step up our game in Southeast Asia,” a senior US administration official told reporters. “We are not asking countries to make a choice between the United States and China. We want to make clear, though, that the United States seeks stronger relationships.” 

The new financial commitment includes a $40 million investment in infrastructure intended to help decarbonize the region’s power supply and $60 million in maritime security, as well as some $15 million in health funding to aid in early detection of coronavirus disease 2019 (COVID-19) and other respiratory pandemics, an official said. Additional funding will help the countries develop digital economy and artificial intelligence laws. 

The US Coast Guard will also deploy a ship to the region to help local fleets counter what Washington and countries in the region have described as China’s illegal fishing. 

Still, the commitments pale in comparison to China’s deep ties and influence. 

Mr. Biden is working on more initiatives, including “Build Back Better World” infrastructure investment and an Indo-Pacific Economic Framework (IPEF). But neither are finalized. 

The summit marks the first time that ASEAN’s leaders gather as a group at the White House and their first meeting hosted by a US president since 2016. 

Eight ASEAN leaders are expected to take part in the talks. Myanmar’s leader was excluded over a coup last year and the Philippines is in transition after an election, though Mr. Biden spoke to the country’s president-elect, Ferdinand Marcos Jr., on Wednesday. The country was represented by its foreign affairs secretary at the White House. 

ASEAN leaders also visited Capitol Hill on Thursday for a lunch with congressional leaders. 

CONCERN OVER CHINA 

The countries share many of Washington’s concerns about China. 

China’s assertion of sovereignty over vast swathes of the South China Sea has set it against Vietnam and the Philippines, while Brunei and Malaysia also lay claim to parts. 

Yet countries in the region have also been frustrated by a US delay in detailing plans for economic engagement since former President Donald Trump quit a regional trade pact in 2017. 

“The US should adopt a more active trade and investment agenda with ASEAN, which will benefit the US economically and strategically,” said Malaysian Prime Minister Ismail Sabri Yaakob on Thursday. 

The IPEF is set to be launched on Mr. Biden’s trip to Japan and South Korea next week. But it does not currently offer the expanded market access Asian countries crave, given Mr. Biden’s concern for American jobs. 

Analysts say that even though ASEAN countries share US concerns about China, they remain cautious about siding more firmly with Washington, given their predominant economic ties with Beijing and limited US economic incentives. 

Kao Kim Hourn, an adviser to Cambodian Prime Minister Hun Sen, told Reuters that the country would not “choose sides” between Washington and Beijing although US investment in his country is growing. 

On Wednesday, Hun Sen was the target of a shoe-throwing protester prior to his first visit to the White House over a tenure that began in 1985. The Cambodian leader has faced criticism from activists for suppressing dissent. — Reuters

What are stablecoins, the asset rocking the cryptocurrency market?

PIXABAY.COM

LONDON — Most cryptocurrencies have a major problem with price volatility, but one sub-category of coins is designed to maintain a constant value: stablecoins.

As cryptocurrency prices plummeted this week, with bitcoin losing around a third of its value in just eight days, stablecoins were supposed to be isolated from the chaos.

But an unexpected collapse in the fourth-largest stablecoin TerraUSD, which broke from its 1:1 dollar peg, has brought the asset class under renewed attention.

Here’s what you need to know:

WHAT ARE STABLECOINS? 

Stablecoins are cryptocurrencies designed to be protected from the wild volatility that makes it difficult to use digital assets for payments or as a store of value.

They attempt to maintain a constant exchange rate with fiat currencies, for example through a 1:1 US dollar peg.

HOW IMPORTANT ARE THEY? 

Stablecoins have a market cap of around $170 billion, making them a relatively small part of the overall cryptocurrency market, which is currently worth around $1.2 trillion, according to CoinMarketCap data.

But they have surged in popularity in recent years. The largest stablecoin, Tether, has a market cap of around $80 billion, having surged from just $4.1 billion at the start of 2020.

The No.2 stablecoin, USD Coin, has a market cap of $49 billion, according to CoinMarketCap data.

While data on the specific uses of stablecoins is hard to come by, they play a crucial role for cryptocurrency traders, allowing them to hedge against spikes in bitcoin’s price or to store idle cash without transferring it back into fiat currency.

In its biannual financial stability report on Tuesday, the US Federal Reserve warned stablecoins are increasingly used to facilitate leveraged trading in other cryptocurrencies.

From 2018 onwards, stablecoins have increasingly been used in international trade and as a way to avoid capital controls, says Joseph Edwards, head of financial strategy at crypto firm Solrise. The stablecoin Tether in particular is used for trade in and around China and South America, he said.

HOW DO THEY WORK? 

There are two main types of stablecoin: those which are backed by reserves comprising assets, such as fiat currency, bonds, commercial paper, or even other crypto tokens, and those which are algorithmic, or “decentralized.”

Major stablecoins such as Tether, USD Coin, and Binance USD are reserve-backed: they say that they hold enough dollar-denominated assets to maintain an exchange rate of 1:1.

The companies say that one of their stablecoins can always be exchanged for one dollar.

Asset-backed stablecoins have come under pressure in recent years to be transparent about what is in their reserves and whether they have sufficient dollars to back up all the digital coins in circulation.

Meanwhile TerraUSD is an algorithmic stablecoin. This means it does not have reserves. Instead, its value was supposed to be maintained by a complex mechanism involving swapping TerraUSD coins with a free-floating cryptocurrency called Luna to control supply.

WHAT CAN GO WRONG?

TerraUSD’s stability mechanism stopped working this week when investors lost faith in Luna, amid a broader downturn in cryptocurrency markets. TerraUSD’s price crashed to as low as 30 cents.

In theory, asset-backed stablecoins should hold firm despite this.

But Tether also broke away from its dollar peg for the first time since 2020 on Thursday, dropping to as low as 95 cents.

Tether sought to reassure investors, saying on its website that holders were still able to redeem their tokens at the 1:1 rate.

WHAT DO REGULATORS SAY? 

While regulators globally are trying to establish rules for the cryptocurrency market, some have highlighted stablecoins as a particular risk to financial stability – for example, if too many people tried to cash out their stablecoins at once.

In its stability report, the Fed warned that stablecoins are vulnerable to investor runs because they are backed by assets that can lose value or become illiquid in times of market stress. A run on the stablecoin could therefore spill over into the traditional financial system by creating stress on these underlying assets, it said. — Reuters

Jetmakers’ inflation shield no match for soaring costs

EMBRAER

DUBLIN — Inflation clauses that determine how much airlines pay for new jets have jumped into a “hyper-escalation” band, pushing up aircraft prices but still leaving manufacturers unable to fully pass on their soaring costs, industry executives told Reuters. 

The hike to the top inflationary band is a rare move in the industry, potentially triggering a rise in airfares by airlines while manufacturers will also be left out of pocket, experts warned during major gatherings over the past week in Dublin, the center of the global aviation finance industry. 

Airlines buy jets at a basic price agreed in confidential negotiations but the final price includes adjustments for inflation during long production waiting times, based on US factory input and labor costs, wherever the planes are built. 

For years, these “escalation” clauses discreetly swelled the profits of planemakers as price revisions exceeded their long-term purchasing costs, people familiar with the contracts say. 

Now, with key US cost indices rising by the largest amount in over a decade, the price adjustments are steeper and the cushion between escalation and real costs has vanished. 

“It’s always been a windfall game for the (manufacturers) so long as they’re efficient enough to make sure their own costs don’t grow as fast as the escalation,” AerCap Chief Executive Aengus Kelly told the Airline Economics conference. 

The rapid spike means some manufacturers may be left out of pocket as the clauses were negotiated during an era when inflation fears were low. 

Yet leasing companies who secured limits to their exposure during that decades-long lull in inflation will be in a more comfortable position than some competitors, Mr. Kelly said. 

“It’s certainly something that we’re watching carefully… We’re seeing very strong inflation pressures in the United States,” said Steven C. Udvar-Hazy, senior vice-president at Tokyo Century leasing unit Aviation Capital Group. 

“The inflationary environment in the United States is of concern to us because that can have knock-on effects on escalation in the broader supply chain,” he told the Airfinance Journal conference. 

SHARED RISK 

Inflation is a double-edged sword for aircraft leasing companies that own half the world’s fleet. 

They benefit from the impact of inflation on the value of aircraft they own. But they must also contend with rising purchase prices, prompting some to insist on escalation caps. 

Exact terms depend on the buyer. But in one common type of structure, the lowest escalation band is paid entirely by the airline or leasing buyer and tends to be capped at rates averaging around 3%, sources familiar with the process said. 

After that, there may be a second band up to around 5% where manufacturers carry all the additional risk. 

When inflation kicks into the highest tier of all, triggering so-called “hyper-escalation” clauses, the two sides typically agree to split the extra burden, they said. 

“That is where we are now, in the hyperinflation band, and this is causing a lot of pain for everyone,” a senior industry source told Reuters. 

In rare cases, preferred clients may have a get-out clause allowing both sides to walk away from the deal entirely if inflation shoots beyond an extreme level, one source said. 

Airbus, Boeing, and Embraer declined comment on contractual matters. All are said to face tough negotiations over price clauses on future airplane deals. 

“We don’t see the current high levels of inflation very often but the impact of what is happening is huge. Escalation is going to be a big topic going forward,” Embraer Commercial Aviation Chief Executive Arjan Meijer told Reuters. — Reuters

Tycoon close to outgoing Philippine president mulls sales of big assets — sources

BW FILE PHOTO

A tycoon and close associate of outgoing President Rodrigo R. Duterte is considering selling businesses collectively worth several billion dollars, including a South China Sea gas field and a commercial land lease firm at the site of a former US military base, two sources familiar with the matter said on Thursday. 

Dennis A. Uy, chairman of conglomerate Udenna Corp. and listed Chelsea Logistics, has seen rapid growth and diversification of his business empire during the six-year presidency of Mr. Duterte, who leaves office next month. 

The assets he is considering selling are the Malampaya gas field, which Mr. Uy had acquired from Chevron and Shell for approximately $1 billion, and Clark Global City, which also cost $1 billion, the sources told Reuters, declining to be identified as they were not authorized to speak to media. 

They said buyers had been looking at prospects for some of Mr. Uy’s other businesses, including oil retailer Phoenix Petroleum and his new telecom firm DITO, plus schools and food businesses he operates. 

It was not immediately clear why Mr. Uy, the top campaign contributor of Mr. Duterte in his 2016 presidential run, was putting the assets up for sale. His representatives did not immediately respond to requests for comment. 

Mr. Uy, 48, is one of the Philippines’ leading entrepreneurs, whose appetite for risk and acquisitions saw him build the bulk of his empire in just a few years. 

Udenna Corp. nearly quadrupled its portfolio to more than 100 firms in the first four years of the Duterte presidency, in sectors from gaming, shipping, education and construction to fast food, ferries, tourism, telecoms and sports cars. 

The company has long insisted it received no preferential treatment under Mr. Duterte and all businesses and contracts were acquired fairly. 

Mr. Duterte will make way for Ferdinand “Bongbong” R. Marcos, Jr., the son of the notorious dictator, who won a presidential election by a landslide on Monday. 

ANNOUNCEMENT ‘IMMINENT’ 

Included in the preferred bidders for deals for Malampaya and Clark Gateway — the developer and landlord of a 177-hectare (437.4-acre) business district near Clark international airport — is billionaire Enrique K. Razon, Jr., one of the sources said. 

The transactions have been in the works for “some months already,” the source said, adding “an announcement looks imminent.” 

Mr. Razon, Philippines’ third richest man with a net worth of $5.8 billion based on a Forbes ranking, did not immediately respond to a request for comment. 

His Bloomberry Resorts announced on Wednesday it had signed a deal to invest in Mr. Uy’s integrated casino-resort projects in Clark and the central province of Cebu. 

The Malampaya gas field fuels power plants that deliver about a fifth of the Philippines’ electricity requirements. In December Mr. Uy’s Udenna said Malampaya may operate for several more years beyond its projected 2027 project life. 

The proposed assets sales come after the pandemic decimated the profitability of many of Uy’s businesses. 

Udenna’s total liabilities rose by nearly half to P254 billion ($4.85 billion) in 2020 from P171 billion in 2019, latest available data from the corporate regulator showed. — Reuters