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How to be a techie

MARVIN MEYER-UNSPLASH

It is never too late to liberate yourself from an assistant and take things into your hands. It is the best thing you can do to keep your brain healthy.

Executives are spoiled in that they do not even need to think of bills, cut off dates, and other routine must-do or must-pay tasks. We always turn to an Executive Assistant, or these days a Virtual Assistant, to do the work for us.

I met a former bank executive who took these things into his own hands. Every month, he would open his laptop and pay the bills on their due dates, do the payments online, and this started six years ago. He was 81 years old. He was living life in retirement and just had a few dogs, a cook, and a driver to answer his daily needs. It is never too late to learn how to do these tasks even if you are just 60 or 70 years of age. All it takes is to sit down and tell yourself you can do it.

This retiree also played the stock market online. Every day he would devote a few hours to checking on his portfolio and make orders to buy, sell, or hold. As a former banker, he was organized and was a fastidiously neat worker who had a place for everything and everything in its place.

Having spent a few Sundays with him as he would invite us over for lunch or coffee, I observed his habits and hope that someday I could be as orderly with my bank details, my bills and credit cards. I thought that even in retirement or semi-retirement, one must have control over bills and confidential matters, and not just turn them over to our staff or even relatives.

My brother who is 82 still is on Viber, text, and e-mail and this keeps his mind busy and active. So, for me, being the youngest of the retirees, I challenged myself to learn a few more techie things.

Here are some ideas you can start with:

1. Pay bills online. It is now so easy to use an online bank account to pay Meralco, PLDT, mobile company bills.

2. Listen to audiobooks. The eyes get strained when we read the written word all the time. Download apps like Audible.com and find your favorite books to listen to, rather than read them or keep books that will get dusty on your shelves.

3. Bank online. New apps now allow you to deposit checks without having to visit your bank or sending someone to the bank physically. It has been a breeze depositing a check virtually.

4. Download Spotify to listen to the music of your era or to listen to podcasts of speeches, or other interesting topics discussed by experts. You have no need for Compact Discs (CDs) or USB sticks to put in your laptop.

5. Learn how everything works through Bluetooth. Get Bluetooth speakers which are so portable you can take them literally everywhere and just connect to your mobile phone (with wifi of course).

6. Play games on your mobile phone. You can pass the time and keep your brain active by doing puzzles, word games, and even Solitaire on your phone. They say it’s good for the brain to work different parts of it, not just the analytical side.

It is never too late to start. You may ask a very patient middle-aged person to teach you as the young seem to be impatient when it comes to teaching the old. They do not know why we do not get it right away. They forget we are digital immigrants while they are digital natives, being able to intuit everything without an operating manual.

But, do start. It is a liberating experience to know how to manage our affairs even without virtual or real assistants. You can start with making lists of what you ask others to do for you. Then start crossing them out as you learn to do it yourself. Even the act of crossing out an item off in your “things to do” is liberating.

Before you lose your memory, train your brain. Train it to think not only on problem-solving but on routine tasks as well. Paying bills, checking bank accounts, transferring money — these will become routine once you get the hang of it.

Challenge yourself to do the unthinkable — like letting go of your assistant. They have been half our brains and we are held hostage because we become too dependent on others.

Challenge yourself while helping your brain stay healthy. It may be the best gift you can give yourself this Christmas.

This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines or MAP.)

 

Chit U. Juan is a member of the MAP Diversity & Inclusion Committee and the MAP Agribusiness Committee. She is the Chair of the Philippine Coffee Board, and a Councilor of Slow Food for Southeast Asia.

map@map.org.ph

pujuan29@gmail.com

The Top 10 fiscal and monetary news stories of 2022

Here is this column’s assessment of important macroeconomic events this year especially in the fiscal and monetary sectors, five global and five national. Covered are the major economies in the world arranged by region, and biggest GDP size per region.

1. G7, China, and Russian growth declined significantly.

The Group of Seven (G7) industrialized countries — the United States of America (US), Canada, Japan, Germany, the United Kingdom (UK), France, Italy — renewed their growth slowdown this year after a modest recovery last year. And for the first time since 1991 or three decades ago, China this year will grow below 6%, aside from 2020’s global contraction. Russia will have another contraction as a result of the various sanctions against it after its invasion of Ukraine. But most ASEAN (Association of South East Asian Nations) countries will have faster growth this year than last year.

2. G7 countries have hit 37 to 70 years inflation rate highs.

This year, Germany has experienced the worst inflation rate since 1952. The US, UK, and Japan have hit their highest inflation rates in 41 years, while Canada, France, and Italy have had 37-to-40-year highs. Their economic sanctions against Russia and their impact on global energy prices, oil-gas-based fertilizers and industrial goods, have backfired against the G7 while Russia, the target of heavy sanctions, experienced only a 20 year high.

Asians (except Japan and South Korea) experienced inflation rates of at most 14-year highs, including the Philippines (see Table 1).

3. Public debt-to-GDP ratio remained high.

Public debt exploded in many countries in 2020-2021, and are projected to remain high in 2022. In the G7, only Germany and the UK will have a debt-to-GDP ratio of below 100%. Russia surprisingly has only 16%. Three Asians are doing well in their fiscal restraint — Taiwan, Indonesia, and Vietnam. Their debt-to-GDP ratios are below 41%.

4. Government bond rates are double or triple the 2021 levels.

This is true especially for G7 and other rich countries. I list in Table 2 the peak interest rates for 10-year bonds from 2020-2022. For Asians with already high rates in 2021 (at least 3%), the increase in 2022 is not significant.

5. There have been huge interest rate hikes by central banks to control inflation, currency depreciation worldwide.

In the US for instance, interest was only 0.5% last April, and is now 4.5%. This led to huge currency depreciation in many countries around the world as many dollar investments abroad flowed back to the US. To control further hemorrhage, other countries also raised their interest rates. Canada went from 1% last April to 4.25%, and Euro area like Germany, from zero to 2.5%. At least three Asian nations — the Philippines, Indonesia and Vietnam — have high rates at 5.5-6% (See Table 2).

6. The Philippines in the top five fastest growing economies among the world’s top 50 largest economies.

It seems that of the world’s largest economies, the fastest growing in 2022 will be Malaysia and Vietnam, to be followed by India, Bangladesh, and the Philippines. I see three factors for why this happened.

One, President Ferdinand Marcos, Jr.’s lifting of all forms of COVID-19 lockdown in the country. Two, the formation of a competent, experienced economic team led by Finance Secretary Benjamin Diokno, Bangko Sentral Governor Felipe Medalla, Economic Planning Secretary Arsenio Balisacan, and Budget Secretary Amenah Pangandaman. Three, the series of Philippine Economic Briefing investment roadshows held here and abroad — Singapore, Jakarta, New York City, and Washington DC — where the economic team explained and highlighted recent major economic reforms like the liberalization in the Public Service Act, Foreign Investment Act, and Retail Trade, and assured businesses that no major tax hikes will happen.

7. The Philippines experienced its highest inflation rate in 14 years — 8%.

Despite the series of interest rate hikes by the central bank, the inflation rate has continued its upward trend. The huge depreciation of the peso in recent months and the continued high global energy prices contributed to this. But average inflation for 2022 will only be around 5.8%.

8. The budget deficit remains above P1 trillion, while financing/borrowings will remain at P2 trillion/year.

This is the big fiscal burden created by the Duterte administration’s irrational and prolonged pandemic lockdown which led to business closures from 2020 to early 2022, its huge vaccine procurement spending and the seemingly timetable-less giving of ayuda or subsidies, plus the irrational pension program for military and uniformed personnel (MUP). The MUP, because they do not contribute to their pensions, keep all their salaries and allowances, and their bloated retirement pensions are shouldered by taxpayers once more.

9. Public debt has reached P14 trillion.

The interest payments to service this huge government debt reached P429 billion in 2021, P433 billion as of October 2022, and will likely be P520 billion by end-December (See Table 3). It is never rational and desirable for taxpayers to keep sending money to the government to sustain huge interest payment alone, endless or no timetable ayuda and welfare programs, bloated public personnel lists that need a bureaucracy rightsizing program, and the bloated MUP benefits that need drastic pension reforms.

10. The creation of a sovereign wealth fund (SWF).

The proposed Maharlika Investment Fund (MIF), a SWF act has already passed its third reading in Congress. The idea of creating a SWF is good because it forces a country/the government to find a fiscal surplus somewhere. Funding for the MIF’s capitalization should primarily come from fossil fuel and mining development like the Malampaya gas royalties (about P22 billion/year from 2019-2022), coal royalties and mining taxes, and the privatization of some government corporations like the Philippine Amusement and Gaming Corporation, better known as Pagcor. It is estimated that the privatization of Pagcor will bring the government about P350 billion — right now its annual remittance to the government is only about P15 billion a year.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

Avatar struggles show how Japan is ditching Hollywood

IN ITS ECONOMIC HEYDAY of the late 1980s and early 1990s, there was a curious phenomenon of Hollywood celebrities showing up in Japanese commercials: Arnold Schwarzenegger hawking instant noodles, Harrison Ford pitching Kirin beer. To this day, Tommy Lee Jones still appears in a long-standing series advertising canned coffee.

You won’t, however, see much of the current generation of Hollywood stars — no Dwayne Johnson promoting Toyotas, no Ryan Reynolds plugging energy drinks. That’s not just because Japanese firms don’t have the market budget they once had — Johnny Depp recently advertised Asahi beer — but because of a growing, often ignored fact: In Japan, Hollywood isn’t the draw it used to be.

The US share of the world’s third-biggest box office has been dropping for years, a phenomenon that predates the pandemic and has only been aggravated by it. Four of the top five grossing movies this year are domestic hits, with Hollywood’s only representative the ’80s throwback Top Gun: Maverick.

It’s part of a broader decoupling between Hollywood and Japan. But unlike the woes studios face in China, this is no ideological departure. Japan is a free market, with no equivalent of the quota Beijing places on US movies, nor censors stepping in to prevent their release on moral grounds. Neither is it a pandemic phenomenon. Japan is one of the few countries that largely kept cinemas open during the global outbreak.

Instead, Japanese audiences are favoring domestic fare, a trend accelerated by an increase in big-budget animated movies. Every other film, except Top Gun, in the top five this year is Japan-made and uses animation, led by One Piece Film: Red and Jujutsu Kaisen 0: The Movie. Even James Cameron isn’t immune. His Avatar: The Way of Water debuted at a disappointing third place in Japan, behind two animated motion pictures that have been on screens for weeks. Some estimates say it’s the only market where Avatar failed to debut at number one.

While the first Avatar was a box-office hit in Japan and the country’s 12th-highest grossing movie of all time, tastes have shifted in the decade-plus since. The phenomenon is epitomized by the success of Demon Slayer: Kimetsu no Yaiba — the Movie: Mugen Train — which despite opening in the midst of the pandemic became Japan’s biggest-ever box office hit, toppling a record held since 2001 by Studio Ghibli’s Oscar-winning Spirited Away.

There’s no single reason behind the audience’s changing tastes. But one must be the rising quality of domestic movies. The days of reusing animations and dragging the same action scenes out for episode after episode are over. Japanese animation these days is a big-budget affair, illustrated nowhere better than by the hits from director Makoto Shinkai, the creative force behind Your Name, the 2016 tale of body-swapping teens that is Japan’s fifth-biggest box-office blockbuster. Shinkai’s recently released Suzume, a disaster-themed animated fantasy that’s one of the movies that beat Avatar last weekend, is nearing ¥10 billion ($75 million).

Meanwhile, the same pressures that impact the movie industry elsewhere also affect Japan. The rise of streaming means that films need to be tent-pole events to get people in seats. Animation directors like Shinkai or Studio Ghibli alum Mamoru Hosoda have become brand names unto themselves, with budgets to match. That pressure for success encourages making movies of established franchises such as One Piece, the long-running pirate series that is Japan’s all-time top-selling manga, or perennial high-school basketball tale Slam Dunk, a movie adaption of which beat Cameron to the top of the box office last weekend.

The rise of high-quality movies from the pages of comic books also means there’s less room for Hollywood’s equivalents. Another reason for its shrinking share is the limited audience for the now-ubiquitous superhero movies. With a few exceptions, such as Avengers and Spider-Man, consumers haven’t taken to them in the way they previously flocked to franchises like Harry Potter or Pirates of the Caribbean. While Black Panther might rank globally as the 10th biggest-grossing movie of the last decade, it scored just $14.7 million in Japan. This year’s Thor: Love and Thunder earned a paltry $9.8 million.

Even Walt Disney Co.’s animation hits seem to be struggling. While 2013’s Frozen grossed nearly $250 million in Japan — fully 20% of its total — recent entries have done startlingly poorly. Last year’s Encanto earned just $6.8 million, Raya and the Last Dragon $3.3 million, and Strange World, released a month ago, less than $1 million. For a Disney-crazy country, that failure should be concerning. Notably, remakes of previous hits like Aladdin and Beauty and the Beast seem unaffected by this disinterest, a further indication that it’s the properties themselves, not the hassle of going to the theater, that’s turning audiences off.

Japan’s success in capturing audiences at home is to be applauded. There’s no question of protectionism here. But it’s hard not to feel a little troubled if this trend continues long term. Among certain generations, despite a lack of a common language, it’s easy to bond over a shared love of Arnie blockbusters or the early career of Leonardo DiCaprio. For that to disappear entirely would be to lose something precious.

Of course, there’s always the alternative: Japan could better export its increasingly high-quality products. Animé already scores highly on Netflix, Inc. worldwide, with more than one generation of westerners having grown up watching Japanese cartoons. Sony Group Corp.’s purchase of animé streaming service Crunchyroll bears close attention.

It’ll be interesting to see if the second season of the Japan-produced Netflix show Alice in Borderland, released this week, resonates with audiences. The first season largely sank without trace abroad, only for the similarly themed South Korean Squid Game to become an international phenomenon. Instead of aging Hollywood stars in Japanese commercials, it might be Japanese stars, real or otherwise, hawking products on western screens.

BLOOMBERG OPINION

Japan minister signs clean energy cooperation document during Saudi visit

PIXABAY

Saudi Arabia and Japan signed a memorandum of cooperation (MoC) on Sunday in the fields of the circular carbon economy, carbon recycling, clean hydrogen and fuel ammonia, the Saudi Energy Ministry said on Twitter.

The MoC was signed by Saudi Energy Minister Prince Abdulaziz bin Salman and Japanese Industry Minister Yasutoshi Nishimura, who is visiting the kingdom, after a meeting in which they both stressed the importance of supporting the stability of global oil markets through encouraging dialogue and cooperation between producers and consumers, the Saudi state news agency (SPA) reported.

The two ministers also highlighted the need to ensure safe supplies from all energy sources to global markets and noted that the kingdom is “the largest dependable source” of crude oil supplies to Japan and “a reliable partner in this aspect” as well, SPA said. — Reuters

Bloomberg has no interest in acquiring Dow Jones or Washington Post, spokesman says

Bloomberg L.P. has no interest in acquiring either Dow Jones or the Washington Post, a Bloomberg L.P. spokesman said in a tweet.

“There have been no conversations with anyone or either organization about an acquisition,” spokesman Ty Trippet said in the tweet, which was retweeted by billionaire owner Michael Bloomberg.

News website Axios reported on Friday that Bloomberg was interested in acquiring either Wall Street Journal parent company Dow Jones from Rupert Murdoch’s News Corp, or the Washington Post from Amazon.com’s Jeff Bezos, citing a source familiar with Bloomberg’s thinking.

On Friday, citing sources, Reuters reported Michael Bloomberg had expressed a desire to own a big-name newspaper over the years but had not reached out to Mr. Murdoch to discuss a possible purchase of Dow Jones and its flagship paper the Journal.

A spokesperson for the Washington Post, which Mr. Bezos bought in 2013 for $250 million, said on Friday it was not for sale.

Antitrust experts agreed the merger of Bloomberg and Dow Jones business news divisions would draw the scrutiny of US regulators, especially as the Biden administration has taken a more muscular approach to enforcing antitrust laws.

Reuters, part of Thomson Reuters Corp, competes with Dow Jones and Bloomberg News, a unit of Bloomberg L.P., a provider of financial news. — Reuters

Maldives former president Yameen gets 11-year jail term

Former Maldives President Abdulla Yameen. — WIKIMEDIA COMMONS

MALE — The Maldives criminal court on Sunday sentenced former president Abdulla Yameen to 11 years in prison and fined him $5 million after finding him guilty of corruption and money laundering charges related to receiving kickbacks from a private company.

Mr. Yameen has denied any wrongdoing.

He lost power in 2018 but has been declared presidential candidate for the Progressive Party of the Maldives for an election due in 2023.

Already in 2019 he was sentenced to five years in jail and fined $5 million in 2019 for embezzling $1 million in state funds, which the prosecution said was acquired through the lease of resort development rights.

After his sentencing, Mr. Yameen was shifted to house arrest in 2020 and was freed months later.

Since his release, Mr. Yameen, the half-brother of former dictator Maumoon Abdul Gayoom, has returned to active politics with a campaign against Indian influence in Maldives, raising concerns in New Delhi.

Situated close to strategic shipping lanes in the Indian Ocean, Maldives is a focal point for competition between India
and China over influence in the region. — Reuters

King Charles invokes late Queen and faith in humanity in Christmas message

King Charles.

LONDON — Britain’s King Charles invoked his late mother, Queen Elizabeth, in his first Christmas message to the nation as monarch and spoke of his faith in humanity at a time of “great anxiety and hardship.”

Charles said he shares with his “whole heart” his mother’s faith in God and people. He was speaking from St. George’s Chapel, the final resting place of the late Queen and from where Elizabeth delivered a Christmas message in 1999.

“It is a belief in the extraordinary ability of each person to touch, with goodness and compassion, the lives of others and to shine a light in the world around them,” Charles said.

“And at this time of great anxiety and hardship — be it for those around the world facing conflict, famine or natural disaster, or for those at home finding ways to pay their bills and keep their families fed and warm — we see it in the humanity of people.”

The King’s speech capped another chaotic year for Britain after years dominated by coronavirus and Brexit.

In 2022 the nation had three prime ministers within two months and now faces an economic recession and cost-of-living crisis that has forced many to turn to food banks and charities for support.

Charles III, who acceded to the throne when his mother’s death ended her record 70-year reign in September, paid tribute to such charities in his broadcast, which included footage of staff at food banks, as well as hospital staff and rescue and care workers.

The 74-year-old monarch, who also holds the title of “Defender of the Faith” in his role as the Supreme Governor of the Church of England, spoke of how “our churches, synagogues, mosques, temples and gurdwaras” had united to feed the hungry.

The king, who often courted controversy as a prince for voicing strong views on a variety of issues including the environment, has previously said that, as monarch, he would scale back such public campaigning.

His message on Sunday, delivered standing with a Christmas tree in the background, is the latest in a tradition of royal seasonal messages dating back to 1932, when George V gave a speech over radio.

‘COMMUNITY SPIRIT’
Charles noted in his speech how his son, William, the heir to the throne, and William’s wife, Kate, had visited Wales recently, “shining a light” on examples of community spirit.

But he made no mention of William’s brother, Harry, or his wife, Meghan, who took part in a documentary this month in which the couple portrayed the royal family as a tone-deaf institution unconcerned about their mental well-being. Harry and Meghan also recounted how they had stepped back from their royal roles in 2020 after a slew of negative press coverage.

Charles, William and other royals on Sunday visited a church in Sandringam in eastern England, where the family traditionally spends the festive period.

Also present was the King’s disgraced brother, Prince Andrew, who was stripped of most of his royal titles over his friendship with convicted sex offender Jeffrey Epstein and a related sexual assault allegation and resulting lawsuit.

He settled the lawsuit in February without admitting any liability. The settlement included an undisclosed payment.

British newspapers reported this week that Andrew, who has not been charged with any criminal offense and has denied any wrongdoing, was removed from Buckingham Palace and will no longer be permitted to have an office there. — Reuters

World is starving for peace, Pope Francis says in Christmas message

Pope Francis. — Pope Francis (@franciscus)/Instagram

VATICAN CITY — Pope Francis called for an end to the war in Ukraine and other conflicts in his Christmas message on Sunday, saying the world was suffering from a “famine of peace.”

Delivering the 10th Christmas “Urbi et Orbi” (to the city and the world) blessing and message of his pontificate, he also urged people to look beyond the “shallow holiday glitter” and help the homeless, immigrants, refugees and the poor in their midst seeking comfort, warmth and food.

“Let us see the faces of all those children who, everywhere in the world, long for peace,” he said, speaking from the central balcony of St. Peter Basilica, the same spot from which he first emerged as pope when he was elected on March 13, 2013.

“Let us also see the faces of our Ukrainian brothers and sisters who are experiencing this Christmas in the dark and cold, far from their homes due to the devastation caused by ten months of war,” he said, speaking to tens of thousands of people in the square below.

He spoke just hours after air raid sirens wailed across Ukraine and a day after Kyiv said a Russian strike on the recently-liberated city of Kherson killed at least five people and wounded another 35 on Saturday in what President Volodymyr Zelenskyy condemned as wanton killing for pleasure.

“May the Lord inspire us to offer concrete gestures of solidarity to assist all those who are suffering, and may he enlighten the minds of those who have the power to silence the thunder of weapons and put an immediate end to this senseless war!” Francis said.

The Ukraine conflict, he said, should not diminish concern for people whose lives have been devastated by other conflicts or humanitarian crises, naming among others, Syria, Myanmar, Iran, Haiti and the Sahel region of Africa.

“Our time is experiencing a grave famine of peace…” he said.

Francis called for a resumption of dialogue between Israelis and Palestinians in the Holy Land, the place of Jesus’ birth.
This year has seen the worst levels of violence in the Israeli-occupied West Bank in more than a decade, with at least 150 Palestinians and more than 20 Israelis killed.

As many sat around “a well-spread table”, huge amounts of food daily go to waste and resources are spent on weapons, he said.
He again condemned the use of food as a weapon of war, saying the war in Ukraine had put millions at risk of famine, mentioning Afghanistan and countries in the Horn of Africa. — Reuters

Philippines tops full-year revenue goal

STOCK PHOTO | Image by RJ Joquico from Unsplash

THE PHILIPPINE government has surpassed the collection target for its main revenue collection agencies this year, the Presidential Palace said on Sunday.

Emerging collections from the Bureau of Internal Revenue (BIR) and Bureau of Customs (BoC) had reached P3.2 trillion, 2.2% over the full-year goal, Acting Press Secretary Cheloy Velicaria-Garafil said in a statement, citing the Finance department’s year-end report.

Latest data from the BIR showed collections as of end-October had reached P1.919 trillion, up by 12.6% from a year earlier. The agency must collect about 70% of government revenues.

As of end-November, the Customs bureau had exceeded its full-year collection goal by 9.5% to P790.3 billion, based on preliminary data.

For 2023, the BIR and BoC must collect a combined P3.436 trillion in taxes and duties. This will make up 99.19% of the projected P3.464-trillion total tax revenues next year, according to the Budget of Expenditures and Sources of Financing report.

The Internal Revenue bureau is expected to collect P2.67 trillion in revenues next year, 11.6% higher than its P2.39-trillion collection goal this year. Collections will include taxes on net income and profits (P1.295 trillion), taxes on domestic goods and services (P1.073 trillion) and taxes on property (P15.218 billion).

The Customs bureau is expected to generate P765.59 billion in revenue next year, up by 6.11% from its P721.52-billion target this year. This includes P485.67 billion in value-added taxes (VAT) on imports, P196.6 billion in excise taxes, P63.67 billion in import duties and taxes and P19.64 billion in other fees.

The Corporate Recovery and Tax Incentives for Enterprises Act, Tax Reform for Acceleration and Inclusion Act and Financial Institutions Strategic Transfer law are also expected to bring in P67.07 billion for the BIR and Customs bureau next year.

“Tax administration reforms will be implemented to enhance tax efforts, maximize the government’s revenue potential, simplify taxpayer compliance and automate the BIR and BoC processes,” according to the Palace statement.

Meanwhile, grants and technical assistance this year reached about $85.5 million.

“For next year, the Department of Finance’s major activities include rightsizing (its) bureaucracy, as it works toward streamlining its organization and processes to maximize efficiency and use of public funds,” Ms. Garafil said.

The government is expected next year to get about $19.1 billion worth of official development assistance, $9.2 billion worth of loans from multilateral development partners and $9.8 billion in loans from bilateral lenders.

“Other DoF accomplishments for this year include the resolution on tax incentives for business activities outside zone limits, commitment to Extractive Industries Transparency Initiatives and the revision of the implementing rules and regulations for the Build-Operate-Transfer Law,” the Palace said.

The Finance department has also been pushing key tax measures, such as the excise tax on single-use plastics and the value-added tax on digital service providers, among other measures.

The agency will also target private sector fund mobilization through public-private partnership projects and will launch pioneering projects with Project Management Office-led assets. — Luisa Maria Jacinta C. Jocson

Local telecommunications, renewable energy are hot sectors for M&A — PwC

SNOWING-FREEPIK

THE PHILIPPINES can expect higher investor confidence in emerging industries next year particularly in telecommunications, renewable energy, insurance, logistics and agriculture, according to PwC Philippines.

“The government and businesses are having a positive outlook for the upcoming year,” the accounting firm said in its year-end report on mergers and acquisitions (M&A). “With the current changes in regulations, deals with foreign investors are expected to increase.”

“More businesses will be leaning towards sustainability practices as more consumers are now aware of the importance and benefits of being sustainable,” it said. “As the situation in the Philippines slowly goes back to normal, businesses will continue to normalize their operations and pursue their expansion plans.”

Major companies will continue commercializing their assets to fund network expansion plans especially with expanding 5G connectivity.

The Philippines is estimated to require as many as 4,000 new telecommunication towers yearly, while renewable energy companies are expected to increase their investments in alternative energy because of the moratorium on coal plants and declining sources of coal.

Foreign investors are also expected to keep an eye on the insurance industry amid recent discussions between the Philippine Insurers and Reinsurers Association and companies representing capital firms in South Korea, Thailand and Japan.

The incoming increase in the minimum capital requirement to P1.3 billion from P900 million would make M&A a major option for some insurers that will be unable to comply.

As the government expands the country’s logistics capacity, the market for the logistics sector is expected to reach P1 trillion by 2024, PwC Philippines said in its report.

The expansion plan includes a national strategy for logistics, for which it has mapped out 455 priority infrastructure projects in the private sector.

“Dealmakers will also seek investment in agriculture following the emergence of agribusinesses and agricultural innovations, such as data-driven farming and automation,” the accounting firm said.

Next year, the Philippine economy is expected to grow amid rising prices, food security issues and continuing geopolitical concerns.

Government efforts to attract foreign investors, support the public and private sectors and improve businesses’ framework so these are aligned with international standards would probably drive growth, PwC Philippines said.

It cited changes to several laws such as the Retail Trade Liberalization Act, Foreign Investment Act and Public Service Act, which all seek to open up the economy to foreign investments.

“To remain relevant and stay ahead of the competition, businesses need to consider how they can reinvent their operations, products and services,” it said. “M&A activities will be a crucial factor in this transformation as they enable businesses to innovate and achieve exponential growth.”

As of Dec. 15, M&A deals in the country had reached $8.1 billion covering 33 deals. The Philippines ranked 83rd in the 2022 Global Opportunity Index, which measures a country’s investment landscape.

Most inbound M&A deals came from China, Japan and other Southeast Asian countries, and the high number was attributed to the economic recovery of the country’s service sector.

“The reduction of mobility restrictions helped increase investor confidence as work and recreation activities gradually returned to pre-pandemic levels,” PwC Philippines said.

PwC Philippines cited 10 major deals in the country for 2022, including San Miguel Corp.’s acquisition of Eagle Cement Corp. for $1.87 billion; the sale by Globe Telecom, Inc. of its towers to Frontier Tower Associates Philippines, Inc. for $812 million; and the sale by Smart Communications of its telecommunication towers to Axiata Group Berhad worth $800 million.

This year, economies continued to recover from the coronavirus pandemic as countries started to fully open schools, businesses and institutions with little to no restrictions PwC said. “However, the global economy faced new headwinds that disrupted the M&A space across all regions.”

Dealmakers faced several challenges as the cost of doing business was affected by geopolitical pressures and global supply chain issues that resulted from Russia’s invasion of Ukraine, it said.

High inflation and interest rates also created financial concerns for dealmakers as companies reported lower profit margins due to high costs. “These factors heightened the persisting uncertainties from the pandemic in global markets. The new conditions drove the business leaders to adapt and develop new strategies to win in the market.”

While deals slowed in major markets such as North America, Europe and China, multinational companies sought new market opportunities and refocused their investments in the emerging regions, such as the developing countries in the Asia-Pacific region. — Justine Irish D. Tabile

Farm imports likely to stay amid spiraling prices

TIM MOSSHOLDER-UNSPLASH

THE PHILIPPINES under President Ferdinand R. Marcos, Jr. is likely to rely on conventional ways of dealing with food security, including the bias for imports, amid spiraling global prices, political analysts said.

“It will be a huge challenge to reverse our food import dependence given the decades-old neglect of the agriculture sector and continued conversion of agricultural lands,” Joseph M. Purugganan, program coordinator at policy think tank Focus on the Global South, said in Facebook Messenger chat.

He also cited land grabbing, incomplete agrarian reform implementation and attacks against land rights defenders.

“The economic policies that are being put in place, the managers tasked to lead the implementation and the bias for private sector partnerships underscore the reliance on conventional ways to address agriculture problems,” he added.

Mr. Marcos at the start of his six-year presidency in June took the helm of the Agriculture department, vowing to fix decades-old problems that constrain farm output growth. He vowed to boost food security efforts, which experts said should be prioritized amid Russia’s invasion of Ukraine that worsened supply chain disruptions and pushed inflation higher.

The president had promised to boost his government’s food self-sufficiency campaign after the war pushed the prices of some farm inputs such as oil and fertilizer to record high.

“Those bearing no blame for provoking it, [yet they] face the biggest risk of starvation,” Mr. Marcos said in his inaugural address. “If financial aid is poured into them, though it never is, there is nothing to buy,” he said of the poor, adding that the agriculture sector “cries for the urgent attention that its neglect and misdirection now demands.”

Observers initially described Mr. Marcos’ agriculture policy as protectionist after he vowed to limit imports “as much as possible.” He had shown willingness to veer away from the food policy of former Philippine presidents, including his predecessor Rodrigo R. Duterte, who extended until the end of 2022 an executive order that slashed the most favored nation tariff rates on pork, corn, rice and coal.

But Mr. Marcos’ promise to cut if not minimize food imports has yet to materialize amid record inflation and tight supply.

“Unlimited importation across agriculture commodities and smuggling have remained unabated,” Jayson H. Cainglet, executive director of the Samahang Industriya ng Agrikultura, said via Viber. “It might worsen.”

“Equally regrettable is the continuing mindset of the economic team of this government to rely on imports as the only measure to fight inflation,” he said. “These actors, together with the importers, are the main drivers to further lower the tariffs on rice, corn, pork and mechanically deboned chicken.”

Mr. Cainglet, whose group has been lobbying against plans to import more, said local agriculture players seem to have lost the battle to “groups that try to maintain the status quo.”

The Philippines imports much of its food and farm inputs, making the Southeast Asian nation vulnerable to imported inflation. The government expects inflation to somehow start easing in 2023.

“We will continue to work for a permanent shift in the agriculture and food strategy of the country, where food self-sufficiency, much localized and diversified agriculture production and significant rural livelihood opportunities are the explicit starting points,” Mr. Cainglet said.

“No country has ever developed, without first developing its agriculture sector to produce staples and the necessary raw materials beyond what the country needs,” he added. “Importation should only be a last resort and not a governmental policy.”

Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, said the Marcos government should take the opportunity next year to boost local food production and exports.

“For many years, we have been aiming for self-sufficiency, and we have realized how costly it is,” he said in a Messenger chat. “Food security without self-sufficiency should be our goal. We should ensure that food imports are available when we need them We need to generate exports to sustain this food security process.”

The Philippine peso plunged to a record P59 level against the dollar in September, which naturally favors exports and local consumption, though it has eased to the P55 level amid dollar inflows from migrant Filipinos and the central bank’s hawkish view on future interest rate increases.

The government should push the “mechanization” of the agriculture sector to boost export revenue,  Mr. Lanzona said. “By this day and age, our agriculture sector should by now be mechanized. Workers have moved out of agriculture into mainly services and the land devoted to agriculture has been reduced.”

But this should be complemented with efforts to increase farmers’ productivity, he said. “To increase productivity, investments in innovation and training are necessary.”

Agriculture contributes about a tenth to Philippine economic output. Farm output value rose by 1.8% in the third quarter after declining by 0.6% a quarter earlier and by 2.6% a year ago, according to data from the local statistics agency.

Mr. Lanzona said the government should help the agriculture sector diversify its crops to increase export revenue and sustain imports. “Moving toward more trade, we can link industry more to agriculture,” he added.

Roy S. Kempis, a retired professor at the Pampanga State Agricultural University, said public and private players should prioritize local demand over foreign markets to counter inflationary pressures. He expects the Marcos government to pursue more government-to-government deals to secure farm inputs such as oil and fertilizer for Filipino farmers.

AGRI INFRASTRUCTURE
The National Government should work closely with local governments, whose share in national taxes has risen, to ensure that a big chunk of their increased budgets are used to boost local agriculture output, said Michael Henry Ll. Yusingco, a policy analyst.

The government should also craft a comprehensive agriculture plan that should involve local governments, he said in a Messenger chat.

“There is no question that local government units with agriculture as their primary economic driver should utilize the increase in the national tax allotment to put more resources in the agriculture sector,” he said.

“But it’s not just about devoting a huge chunk of their budgets for agriculture activities in their respective localities. It’s also about aligning these with the National Government in boosting agriculture for the rest of the country,” he said. “It’s critical that there is a comprehensive and coordinated plan to reform the agriculture sector.”

Mr. Yusingco said Mr. Marcos should appoint an Agriculture secretary who will focus on harnessing the potential of local governments’ bigger tax share for rural productivity and agriculture reforms.

“The cooperation and collaboration between the national and local governments are the only way to ensure the elevation of our agriculture sector,” he said. “The leadership of the Department of Agriculture is absolutely crucial in making sure this cooperation and collaboration happen.”

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch, said the government should “consider agriculture infrastructure as integral to the overall infrastructure push.”

“It should have the same priority and national impact as the need to build more roads, bridges and rails,” he said in a Messenger chat, noting that the agriculture budget for 2023 is insufficient to make farming infrastructure resilient to strong typhoons.

“It is insufficient to undertake game-changing strides in infrastructure-building and self-sufficiency,” he said.

The Philippines lies along the typhoon belt in the Pacific and experiences about 20 storms each year. It also lies in the so-called Pacific Ring of Fire, a belt of volcanoes around the Pacific Ocean where most of the world’s earthquakes strike.

“The main problem relating to agriculture infrastructure damage during typhoons has been the government’s failure to upgrade, retool and retrofit existing infrastructure to deal with a changing climate,” Mr. Ridon said.

“This might require changes in infrastructure priorities at the local and regional levels, with less emphasis on public-facing projects and more on projects that can improve agriculture outcomes in the countryside,” he added. — Kyle Aristophere T. Atienza

SEC warns vs unlicensed cryptocurrency exchanges

JONATHAN BORBA-UNSPLASH

THE Securities and Exchange Commission (SEC) has warned the public not to engage with unregistered and unlicensed cryptocurrency exchanges after the recent collapse of a large international cryptocurrency exchange.

According to the regulator, several unregistered cryptocurrency exchanges have been targeting Filipino investors through online advertisements on social media.

“They offer different products and schemes which are high risk and sometimes fraudulent,” the SEC said.

Previously, the commission had warned the public against such entities through an advisory entitled “Advisory against dealing with non-registered foreign entities, organizations and corporations.”

The SEC said the unregistered cryptocurrency exchanges offer platforms for the sale of unregistered cryptocurrencies, cryptocurrency conversions, issuance of token offerings, and offering of crypto-loans, among others.

Cryptocurrencies are deemed as securities that must be registered according to the law.

Under Philippine laws, an entity is required to register with the SEC if it intends to conduct business in the Philippines as the regulator is the registrar and overseer of the country’s corporate sector.

Securities are not to be sold or offered for sale or distribution within the Philippines without a registration statement duly filed and approved by the SEC.

Only corporations registered in the Philippines are allowed to engage in granting loans from their own capital funds as no lending company is allowed to conduct business unless granted the authority by the SEC.

“Always remember that in case of doubt as to whether or not it is safe to transact with an online platform or entity, always #CheckWithSEC if the corporation or entity is registered or not,” the commission reiterated.

The commission’s website also provides information on company registrations, registration statements, secondary licenses, advisories, investor protection, and investments. — Justine Irish D. Tabile

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