YUNLIN, Taiwan — A group of Taiwanese puppeteers are looking to use non-fungible tokens, or NFTs, to help bring their traditional art form into the modern era and keep it relevant for a new audience.
NFTs are crypto assets representing a digital item such as an image, video, or even land in virtual worlds, with prices of some rising so fast last year that speculators around the world sometimes “flipped” them within days for a profit.
Pili International Multimedia, which makes Taiwan’s longest-running television show featuring the puppets at its studio in central Taiwan’s Yunlin County, says it wants to use NFTs as another source of revenue.
“The sort of imagination everyone nowadays has for the online world is developing so fast that we are almost unable to grasp it,” said Seika Huang, Pili’s brand director.
“Instead of sitting on the sidelines, the best approach is to go ahead and understand fully what’s going on. This is the fastest way to catch up.”
Pili has thousands of glove puppet characters, a traditional part of Taiwanese street entertainment culture spinning colorful and highly stylized stories of heroic courage and romance, often with martial arts.
The puppets are painstakingly created, and expertly maneuvered during the filming of the shows, with costumes that are sewn on and strands of hair meticulously put in place.
Pili said four of their puppet characters were made into digital versions and 30,000 sets have been sold as NFTs.
The company declined to reveal the profit-sharing with the market platform, but said prices for each set started at $40, translating to generated revenue of at least $1.2 million, since their listing in early February.
Marketing technology company VeVe, which is in charge of selling the NFTs, said the stories of the puppet heroes resonates with a younger crowd and could draw in foreign fans of superhero films, such as those based on characters from Marvel Comics.
“Westerners actually really like our martial arts heroes and kung-fu,” said VeVe’s brand manager Raymond Chou.
Huang, who said their initial listings had sold out seconds after launching on VeVe, is now working on transforming up to 50 other puppet characters into NFTs, potentially adding another million-dollar revenue stream for the studio. — Ann Wang/Reuters
WASHINGTON — Excluding Russia from the Group of 20 (G20) major economies and other international institutions could slow efforts to address a worsening global food crisis exacerbated by the war in Ukraine, the head of German aid group Welthungerhilfe (WHH) told Reuters.
Mathias Mogge, chief executive of the group, which serves 14.3 million people with projects in 35 countries, said it was critical to maintain communication with Russia, one of the world’s largest producers of wheat, in tackling the crisis.
“Of course, Russia is the aggressor here, and there needs to be sanctions and everything. But in a humanitarian situation as we have it today, there must be open lines of communication,” Mr. Mogge said in an interview this week.
Mr. Mogge’s comments come days after US President Joseph R. Biden, Jr., said he thinks Russia should be removed from the G20, although experts say that is unlikely to happen given lack of support from India, China and several other G20 members.
Russia’s invasion of Ukraine in February is driving food prices sharply higher across the world and triggering shortages of staple crops in parts of central Asia, the Middle East and north Africa, according to United Nations officials.
The war, which Russia calls a “special military operation,” has slashed shipments from the two countries, which together account for 25% of world wheat exports and 16% of corn exports, driving prices sharply higher on international markets.
Mr. Mogge said he expected Group of Seven leaders to address the issue during their upcoming meetings.
Russia was still part of what was then the Group of Eight during the last food crisis of 2007 and 2008, and played a constructive role in reducing hunger worldwide, Mr. Mogge said. — Andrea Shalal/Reuters
LONDON/TOKYO — Global factory activity slowed in March as Russia’s invasion of Ukraine tightened supply chain bottlenecks, dampened demand and whacked confidence, while soaring energy costs drove a broader surge in prices, surveys showed on Friday.
Uncertainty caused by the invasion, combined with an intensifying cost-of-living crisis, suggests the euro zone’s manufacturing industry could slide into a recession this quarter.
“Today’s figures show the worsening supply chain situation is having a major impact on the industry, with rates of both input costs and selling price inflation currently far above anything previously seen,” said Thomas Rinn, global industrial lead at Accenture.
“The ever-surging cost of power, freight delays and diversions, topped by new COVID-19 lockdowns in China, have all contributed to increased costs and raw material shortages — leaving European manufacturers faced with unprecedented disruption.”
S&P Global’s final manufacturing Purchasing Managers’ Index (PMI) for the euro zone fell to a 14-month low of 56.5 in March from February’s 58.2, below an initial “flash” estimate of 57.0 but still well above the 50 mark that separates growth from contraction. E
German manufacturers reported slower growth and far more pessimistic expectations for factory activity, and French manufacturing growth eased a bit more than forecast.
Confidence indicators in the region have plummeted and the euro zone future output PMI plunged to its lowest reading since May 2020.
In Britain, outside the common currency area, industry expanded at the weakest pace in 13 months and price pressures, which had previously shown some signs of moderating, worsened.
ASIA STRAIN
Asian factories saw activity slow as slumping Chinese demand and rising raw material costs strained firms, and although Japan benefited from easing coronavirus disease 2019 (COVID-19) infections the spike in fuel and grain costs clouded the outlook for economies reliant on energy imports.
China’s factory activity slumped at the fastest pace in two years in March, a private sector PMI showed, as the fallout from the Ukraine crisis and resurgence in domestic coronavirus cases hit external and domestic demand.
The outcome was in line with Thursday’s official data showing activity in Chinese manufacturing and services simultaneously contracted for the first time since the height of the country’s COVID-19 outbreak in 2020.
The slowdown in China bodes ill for Asia, which is host to big manufacturers dependent on consumption in the world’s second-largest economy, analysts say.
South Korea’s factory activity slowed with new export orders posting the sharpest reduction since July 2020, as companies took a hit from rising input prices for goods ranging from oil and metals to semiconductors.
Factory activity also slowed in Taiwan and Vietnam, and contracted in Malaysia, as the region felt the pain from rising raw material prices, other PMIs released on Friday showed.
“The main channel for transmission is going to be from commodity prices, so energy, oil, gas, as well as foodstuff,” said Tai Hui, chief Asia market strategist at J.P. Morgan Asset Management.
“What’s going to happen is that the manufacturers, especially some of the more downstream ones, they’re going to face a bit more cost pressure,” he said.
By contrast, Japan saw manufacturing activity grow at a faster pace than the prior month, as domestic demand got a lift from the waning impact of the pandemic.
But Japan’s export orders slumped as external demand suffered from pandemic curbs in China and supply chain disruptions caused by Russia’s war in Ukraine.
South Korea’s PMI fell to 51.2 in March from 53.8, the lowest in four months, and Japan’s final au Jibun Bank PMI rose to 54.1, up from 52.7. — Reuters
The US government began privately warning some American companies the day after Russia invaded Ukraine that Moscow could manipulate software designed by Russian cybersecurity company Kaspersky to cause harm, according to a senior US official and two people familiar with the matter.
The classified briefings are part of Washington’s broader strategy to prepare providers of critical infrastructure such as water, telecoms and energy for potential Russian intrusions.
President Joseph R. Biden, Jr., said last week that sanctions imposed on Russia for its Feb. 24 attack on Ukraine could result in a backlash, including cyber disruptions, but the White House did not offer specifics.
“The risk calculation has changed with the Ukraine conflict,” said the senior US official about Kaspersky’s software. “It has increased.”
Kaspersky, one of the cybersecurity industry’s most popular antivirus software makers, is headquartered in Moscow and was founded by Eugene Kaspersky, who US officials describe as a former Russian intelligence officer.
A Kaspersky spokeswoman said in a statement that the briefings about purported risks of Kaspersky software would be “further damaging” to Kaspersky’s reputation “without giving the company the opportunity to respond directly to such concerns” and that it “is not appropriate or just.”
The senior US official said Kaspersky’s Russia-based staff could be coerced into providing or helping establish remote access into their customers’ computers by Russian law enforcement or intelligence agencies.
Eugene Kaspersky, according to his company website, graduated from the Institute of Cryptography, Telecommunications and Computer Science, which the Soviet KGB previously administered. The company spokeswoman said that Kaspersky worked as a “software engineer” during military service.
The Russian cybersecurity firm, which has an office in the United States, lists partnerships with Microsoft, Intel, and IBM on its website. Microsoft declined to comment. Intel and IBM did not respond to requests for comment.
On March 25, the Federal Communications Commission added Kaspersky to its list of communications equipment and service providers deemed threats to US national security.
It is not the first time Washington has said Kaspersky could be influenced by the Kremlin.
The Trump administration spent months banning Kaspersky from government systems and warning numerous companies to not use the software in 2017 and 2018.
US security agencies conducted a series of similar cybersecurity briefings surrounding the Trump ban. The content of those meetings four years ago was comparable to the new briefings, said one of the people familiar with the matter.
Over the years, Kaspersky has consistently denied wrongdoing or any secret partnership with Russian intelligence.
It is unclear whether a specific incident or piece of new intelligence led to the security briefings. The senior official declined to comment on classified information.
Until now no US or allied intelligence agency has ever offered direct, public proof of a backdoor in Kaspersky software.
Following the Trump decision, Kaspersky opened a series of transparency centers, where it says partners can review its code to check for malicious activity. A company blog post at the time explained the goal was to build trust with customers after the US accusations.
But the US official said the transparency centers are not “even a fig leaf” because they do not address the US government’s concern.
“Moscow software engineers handle the updates, that’s where the risk comes,” they said. “They can send malicious commands through the updaters and that comes from Russia.”
Cybersecurity experts say that because of how antivirus software normally functions on computers where it is installed, it requires a deep level of control to discover malware. This makes antivirus software an inherently advantageous channel to conduct espionage.
In addition, Kaspersky’s products are also sometimes sold under white label sales agreements. This means the software can be packaged and renamed in commercial deals by information technology contractors, making their origin difficult to immediately determine.
While not referring to Kaspersky by name, Britain’s cybersecurity center on Tuesday said organizations providing services related to Ukraine or critical infrastructure should reconsider the risk associated with using Russian computer technology in their supply chains.
“We have no evidence that the Russian state intends to suborn Russian commercial products and services to cause damage to UK interests, but the absence of evidence is not evidence of absence,” the National Cyber Security Centre said in a blog post. — Christopher Bing/Reuters
WASHINGTON — Scientists on Thursday published the first complete human genome, filling in gaps remaining after previous efforts while offering new promise in the search for clues regarding disease-causing mutations and genetic variation among the world’s 7.9 billion people.
Researchers in 2003 unveiled what was then billed as the complete sequence of the human genome. But about 8% of it had not been fully deciphered, mainly because it consisted of highly repetitive chunks of DNA that were difficult to mesh with the rest.
A consortium of scientists resolved that in research published in the journal Science. The work was initially made public last year before its formal peer review process.
“Generating a truly complete human genome sequence represents an incredible scientific achievement, providing the first comprehensive view of our DNA blueprint,” Eric Green, director of the National Human Genome Research Institute (NHGRI), part of the US National Institutes of Health, said in a statement.
“This foundational information will strengthen the many ongoing efforts to understand all the functional nuances of the human genome, which in turn will empower genetic studies of human disease,” Mr. Green added.
The consortium’s full version is composed of 3.055 billion base pairs, the units from which chromosomes and our genes are built, and 19,969 genes that encode proteins. Of these genes, the researchers identified about 2,000 new ones. Most of those are disabled, but 115 may still be active. The scientists also spotted about 2 million additional genetic variants, 622 of which were present in medically relevant genes.
The consortium was dubbed Telomere-to-Telomere (T2T), named after the structures found at the ends of all chromosomes, the threadlike structure in the nucleus of most living cells that carries genetic information in the form of genes.
“In the future, when someone has their genome sequenced, we will be able to identify all of the variants in their DNA and use that information to better guide their healthcare,” Adam Phillippy, one of the leaders of T2T and a senior investigator at NHGRI, said in a statement.
“Truly finishing the human genome sequence was like putting on a new pair of glasses. Now that we can clearly see everything, we are one step closer to understanding what it all means,” Mr. Phillippy added.
Among other things, the new DNA sequences provided fresh detail about the region around what is called the centromere, where chromosomes are grabbed and pulled apart when cells divide to ensure that each “daughter” cell inherits the proper number of chromosomes.
“Uncovering the complete sequence of these formerly missing regions of the genome told us so much about how they’re organized, which was totally unknown for many chromosomes,” Nicolas Altemose, a postdoctoral fellow at the University of California, Berkeley, said in a statement. — Reuters
Kickstart Ventures, one of the most active venture capital firms in the Philippines, celebrates its 10th anniversary with a renewed commitment to invest in startups across the Philippines, and in major innovation hubs in Southeast Asia and beyond.
The Philippine-based corporate venture capital firm also reveals a new bold look in line with its anniversary. The new Kickstart logo represents the evolved version of the company while maintaining its signature kite logo, which speaks to the aspirations of the company and its portfolio, rooted in an ambitious purpose and dynamic movement, rising against the winds.
Committing to enabling startups
Kickstart Ventures Team
When Kickstart was established in 2012, the Philippine startup ecosystem was at its nascent stage. Ambitious and promising startups abound, but none managed to scale as fast or as large as those in neighboring countries. This inspired its founders Minette Navarrete, Dan Siazon, and Christian Besler to pitch for a pioneering evergreen fund to the Globe board, starting with $2.5M on its first year. Their goal was to make seed investments in local tech startups to fill the funding gap and get better digital solutions across to consumers and enterprises.
Coming from that early start, Kickstart now manages two funds for Globe and advises the $180M Ayala Corporation Technology Innovation Venture (ACTIVE) Fund, the largest fund to come out of the Philippines. The ACTIVE Fund is anchored by Ayala Corporation, and counts the Bank of the Philippine Islands, AC Industrials, AC Energy, and Globe Telecom, as its LPs. Kickstart continues to invest out of its first fund with its mission to support the Philippine startup ecosystem, drive innovation, and enhance Filipino digital life as evidenced by its recent investments in kumu, edamama, and NextPay. Out of the ACTIVE Fund, it has invested in eight startups that represent the areas that the Ayala Group seeks to drive forward: new technology, emerging trends, and innovative business models that the Ayala Group believes in.
From being the single local conglomerate playing the Philippine VC space in 2012, there are now at least nine corporate groups in the scene, proving Kickstart’s founding team’s belief that the VC and tech investments ecosystem is coming of age. Kickstart has happily co-invested with a number of these groups, along with other investors in the country and overseas.
With the growing recognition of its funds and investment track record, Kickstart will continue to support the Philippine startup ecosystem through its investments and community support while also seeking to make an impact on the global tech community.
“Our brand refresh is one of many initiatives to portray our evolution and communicate our mission of breaking barriers and building bridges through the expansive Ayala, Globe, and Singtel networks,” said Carla Samson, Corporate Communications Manager of Kickstart Ventures. “Our refreshed positioning leverages the strengths and values we’ve delivered over the years and displays the depth of our aspirations – be it in the funds we manage, the markets we have a presence in, or the industries we invest in.”
Taking flight in innovation hubs globally
While the COVID-19 pandemic has disrupted many aspects of society, it has in turn accelerated digital adoption across businesses and consumers especially here in the Philippines. According to the 10-year old VC firm, the Philippine startup ecosystem will continue to flourish in the foreseeable future thanks to the arrival of the Filipino digital consumer who is expected to lead the boom of the Philippine internet economy to $40B in value by 2025 according to the e-Conomy SEA 2021 report.
Globally renowned VC firms like Andreesen Horowitz, Warburg Pincus, Insight Partners, General Atlantic, and SIG, have all made notable investments in Philippine startups in the past year and Kickstart anticipates that these investors and more will continue to take an interest in the Philippine market given the sustained adoption of Filipino consumers, the second largest consumer market in SEA, who see themselves purchasing goods and services digitally even post-pandemic.
As more investors take an interest in Philippine startups, Kickstart sees an opportunity to continue championing innovation for the Filipino consumer and business by expanding its search for tech startups in innovation hubs around the world particularly in the US, Europe, and across Asia. Kickstart Portfolio Operations Director, Bit Santos, explains, “We have a robust network that delivers data, alongside financial, industrial, and social capital, we see many opportunities for growth and expansion. We have a dedicated team to support our portfolio companies for business development, media relations, and community engagement. We aim to become the investment partner of choice for investors and startups looking to invest or expand in the Philippines as their entry point to the larger Southeast Asian region.”
“We will double down on our investments in industries where we believe we add the most value. These investments will be made in industries of interest in the near-term, like in the areas of digitalization and the creation of a more frictionless future; decarbonization through technologies that catalyze behavior change; and decentralization through the emergence of blockchain-powered ecosystems and use cases,” says Minette Navarrete, Kickstart’s President. “As we grow the size and capacity of our investment team, we will also increase our accessibility to startups through our various innovation and community partners in the Philippines and around the globe.”
Risks that reap rewards
At a time when Southeast Asia had no known digital companies or massive startup success, Kickstart envisioned a Philippines & SEA region where the founders’ greatest ambitions could take off, and where startups could achieve massive success within a community that is justifiably proud of its achievements. The last decade saw this vision coming to reality with 25 new unicorns emerging at a record pace in 2021 compared to only 21 unicorns prior to 2021. In the Philippines, deal volume and aggregate value have been on an upswing with the average quarterly deal value growing 37x in 2021 compared to 2019, and more local startups progressing into later stage rounds.
Kickstart also saw its own portfolio take off through successful value-creating exits which include Coins.ph, a mobile wallet acquired by Indonesian superapp Gojek in 2019, followed by Naver’s 2021 acquisition of Wattpad, an online social reading platform, and the most recent investment of Thailand’s True Digital Group in ZAP, the top rewards program provider in the Philippines and one of Kickstart’s inaugural batch of investments.
In the last two years, it has also seen two of its portfolio companies successfully reach unicorn status starting with San Francisco based Dialpad, an AI-powered cloud communication platform, and Xendit, a Southeast Asian leading payment gateway – riding on the back of megatrends on the future of work and the future of payments.
Like many Asian conglomerates, Kickstart’s LPs have begun adopting innovative solutions across a wide range of industrial processes, whether in telecoms, banking, real estate, energy, or manufacturing. The firm is optimistic about the future, one that is powered by technology to be more intelligent, efficient, sustainable, and equitable. It looks forward to creating more value for its LPs, partners, customers, and most especially for the startup community that continuously drives innovations for a better world.
As a part of the Globe Group, Kickstart supports the United Nations Sustainable Development Goals, particularly UN SDG No. 9, highlighting the roles of infrastructure and innovation as crucial drivers of economic growth and development. It is committed to upholding the UN Global Compact principles and contributing to 10 UN SDGs.
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A worker assembles a pole at a construction site in Quezon City, May 23, 2018. — REUTERS
THE NATIONAL Government’s budget deficit narrowed to P105.8 billion in February, as spending and revenue collections slumped, the Bureau of the Treasury (BTr) reported.
The BTr’s cash operations report showed the fiscal gap declined by 8.77% in February, from P116 billion in the same month in 2021.
Month on month, the fiscal gap widened from the P23.4-billion deficit in January.
In February, government expenditures stood at P318.2 billion, falling by 5.16% from P335.5 billion in the same month in 2021 when the P45-billion equity infusion to government financial institutions (GFIs) was completed.
Excluding the equity infusion, the BTr said spending rose by 9.64% year on year “largely attributed to the national tax allotment (NTA) of the local government units (LGUs), spending for the different programs of the Department of Education (DepEd), Commission on Elections (Comelec), and COVID-19 (coronavirus disease 2019) vaccine financing under the Department of Health (DoH).”
Starting this year, LGUs are given a bigger share in tax collections through the NTA, alongside the transfer of basic services.
Interest payments also fell by 9.42% to P28.2 billion. Primary expenditures or spending net of interest payments dropped by 4.73% to P290 billion.
Meanwhile, revenue collection contracted by 3.26% year on year to P212.40 billion in February, as tax revenues slipped by 2.69% to P197.8 billion and nontax revenues fell by 10.37% to P14.6 billion.
Collections of the Bureau of Internal Revenue (BIR) dropped by 11.38% to P136.6 billion during the month, while Bureau of Customs (BoC) saw a 25.96% increase in collections to P59.4 billion.
The BTr attributed the BoC’s February performance to “improved valuation and continued intensified collection efforts.”
The Treasury posted a P4.22-billion income, down by 7.37% year on year, due to the lower dividend remittances from state firms, guarantee fees and income from National Government deposits.
TWO-MONTH PERFORMANCE For the first two months of 2022, the budget deficit narrowed slightly to P129.2 billion from P130 billion a year ago.
Total revenues jumped by 2.12% to P490.5 billion, slightly outpacing the 1.53% growth in expenditures.
As of end-February, tax collections increased by 4.32% to P453.1 billion, thanks to a 24.69% rise in BoC collections to P117.8 billion. BIR collections dipped by 1.16% to P332.4 billion.
Nontax revenues fell by 18.71% to P37.4 billion, as income from the BTr plunged by 35% to P15.1 billion due to lower dividends on shares held by the government.
Year-to-date expenditures went down by 1.53% to P619.7 billion, while interest payments increased by 19.94% to P93.8 billion.
“Unless revenue collection can pick up considerably, we may have to expect further deterioration for both the nation’s deficit and overall debt levels.” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in a Viber message.
Mr. Mapa said a spending slowdown will likely be seen ahead of the May elections, “given the ban on hiring and capital expenditure during the campaign season.”
“This is on top of the reluctance from officials to spend to limit the hit on the deficit and overall debt levels. However, the need to support the economy by way of subsidies will force fiscal managers to cough up additional expenses to help Filipinos through such challenging times,” he said.
The election ban on public works started on March 25 and will run until May 8. The law, which also prohibits social welfare dole-outs, seeks to prevent politicians from using state resources for their election campaign.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said tax collection may improve in the next few months due to looser mobility restrictions, reduced spending on the pandemic response, and increased business activity.
“Thus, these measures would help narrow the country’s budget deficit and also help temper the growth in the government’s debt stock,” he said via Viber.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the decline in spending may have come from the “continuing ‘normalization’ of spending from the unusual kind of spending due to the pandemic response by the government, and this will be observed as the country comes out of the pandemic crisis.”
The government has set a budget deficit ceiling of P1.65 trillion for 2022, which is equivalent to 7.7% of gross domestic product.
The government runs on a budget deficit when it spends more than it makes to fund programs that support economic growth. It borrows from foreign and local sources to plug the gap. — T.J.Tomas
Passengers wait for a jeepney in Quezon City, July 3, 2020. — REUTERS
HEADLINE INFLATION could accelerate beyond the central bank’s target in March, driven mainly by successive oil price hikes and the depreciation of the peso, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in a Viber message to reporters.
Based on the BSP projection, the consumer price index likely quickened by 3.3-4.1% in March, he said.
The central bank’s point inflation forecast is at 3.7%.
If realized, this would be faster than the 3% in February but still slower than the 4.5% a year earlier. Inflation could also be beyond the 2-4% target if it reaches the upper end of the BSP’s projection.
The Philippine Statistics Authority will release March inflation data on April 5, Tuesday.
“The continued oil price hikes along with high electricity rates in Meralco (Manila Electric Co.) service areas, higher meat prices, and the peso depreciation are the primary sources of inflationary pressures during the month,” Mr. Diokno said.
Gasoline, diesel, and kerosene prices have increased by P18.30, P27.85, and P25.75 per liter since the start of the year.
Crude oil prices became more volatile after Russia invaded Ukraine in late February due to concerns over the impact of the war on global supply. Russia is the world’s second-biggest crude exporter.
Last week, the central bank raised its average Dubai crude price projection for 2022 to $102.23 per barrel from $83.33 at the previous meeting after factoring in the impact of the war.
The surge in global oil prices caused the peso to depreciate, given the country’s position as a net oil importer. There was also greater demand for the US dollar after the Federal Reserve raised interest rates for the first time since 2018 to quell high inflation.
The peso closed March 7 trading at the P52-per-dollar level for the first time in 2022 at P52.18. At its close of P52.01 on Wednesday, the peso has already weakened by 1.98% from its P50.999 finish at the end of 2021.
Meanwhile, Meralco said residential consumers will see higher electricity bills in March due to the increase in generation charge. The overall electricity rate for a typical household in March rose by P0.0625 per kilowatt-hour (/kWh) to P9.6467/kWh from a month earlier.
On the other hand, factors that could have tempered inflation in March are lower water rates for areas serviced by Maynilad Water Services, Inc. and Manila Water Co., Inc., Mr. Diokno said.
The decline in the prices of rice, fish, and vegetables as supply constraints eased may likewise be offsetting factors to faster inflation, he added.
“Looking ahead, the BSP will continue to monitor emerging price developments and possible second-round effects to help achieve its primary mandate of price stability that is conducive to balanced and sustainable economic growth of the economy,” Mr. Diokno said.
The Monetary Board last week kept the policy rates unchanged as widely expected by the market, citing the need to safeguard the momentum of economic recovery.
Mr. Diokno has said they are looking to start increasing interest rates by the second half of the year, noting the key policy rate could reach 2.75% by 2023.
However, it warned that inflation could breach the BSP target this year due to the impact of the war on commodity prices. It now expects 2022 inflation to average 4.3% from its previous 3.7% estimate. — Luz Wendy T. Noble
THE NATIONAL Government’s outstanding debt hit a record P12.09 trillion as of end-February, as domestic and offshore borrowings increased, the Bureau of the Treasury (BTr) said on Thursday.
Preliminary data from the BTr showed outstanding debt rose by 16.2% from P10.4 trillion a year ago.
The BTr said total debt inchedup by 0.5% or P63.83 billion month on month “due to currency fluctuations, and net financing from both local and foreign sources.”
Of the total, 70% of the debt portfolio were from domestic lenders while the rest were from external sources.
Domestic debt stock rose by 14.3% to P8.41 trillion year on year, and by 0.54% month on month. The Treasury attributed this to the net issuances of government securities totaling P44.89 billion.
Of the amount, P8.11 trillion were from government securities, which jumped by 18.9% year on year and 0.6% month on month.
On the other hand, external debt stood at P3.68 trillion as of end-February, increasing by 20.95% from P3.04 trillion a year earlier.
“For February, the increment in external debt was due to the impact of peso depreciation against the (US dollar) amounting to P17.91 billion and the net availment of external obligations amounting to P3.25 billion,” the Treasury said. “These more than offset the P2.74-billion reduction caused by adjustments in other foreign currencies.”
In February, the peso’s weakest closing against the dollar was P51.50 on Feb. 8.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the debt stock will likely go up after the US dollar-denominated bond issuances in March.
“Government debt could still increase in view of the P457.8-billion retail Treasury bond (RTB) issuance and the $2.25 billion, both for the month of March 2022 to finance the budget deficit amid increased infrastructure spending,” he said in a Viber message.
The Treasury raised $2.25 billion from its first triple tranche, US dollar-denominated bond offering last week, which included its first-ever green bonds.
The government said it raised $1 billion from the inaugural 25-year green bond offer, as well as $500 million from five-year bonds, and $750 million from 10.5-year bonds.
The next administration would inherit a fiscal handicap, “given the projected deficit and debt levels,” ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said in an e-mail.
“Hopefully, debt levels will not deteriorate further as the Philippines can ill afforda credit rating downgrade in the environment of rising global rates.”
Fitch Ratings last month said it maintained the Philippines’ “BBB” credit rating, but with a “negative” outlook.
A “negative” outlook means Fitch could downgrade the Philippines’ credit rating in the next 12 to 18 months. The outlook was revised to “negative” from “stable” in July 2021 due to the impact of the pandemic on the economy.
Mr. Ricafort said that the next administration should “sustain the country’s economic and fiscal efforts,” to improve tax collections and good governance measures, and to help ease the country’s debt-to-GDP (gross domestic product) ratio from the internationally accepted 60%.
In 2021, the Philippines’ debt-to-GDP ratio hit a 16-year high of 60.5%. This is higher than the 60% threshold considered manageable by multilateral lenders for developing economies. — Tobias Jared Tomas
Bitcoin cryptocurrency representation is pictured on a keyboard in front of binary code in this illustration taken Sept. 24, 2021. — REUTERS
PHILIPPINE CENTRAL BANK officials warned the public to remain cautious when dealing with play-to-earn games involving digital tokens, following the hack of a blockchain project linked to the popular cryptocurrency game Axie Infinity.
“We wish to emphasize that there are risks associated with non-fungible tokens (NFTs) such as price volatility, which may resort to significant financial losses and also other types of risk relating to cyber fraud and scams,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said at a virtual briefing on Thursday.
Reuters reported hackers have stolen cryptocurrency worth almost $615 million from Ronin, a blockchain network that lets Axie Infinity users transfer crypto in and out of the game.
According to Axie Infinity, it has 2.8 million daily active players, with some $3.6 billion previously traded on its marketplace. Players can collect, trade and play with virtual creatures called Axies, which are traded in the form of NFTs and sell for hundreds of thousands of dollars.
Vietnamese startup Sky Mavis, which created the game, has previously said that about 35% of the game’s traffic comes from the Philippines.
Bridget Rose M. Mesina-Romero, deputy director at the BSP’s Payment System Oversight Department, said people should be aware of the risks involved in these play-to-earn games.
“They should only place funds that they are willing to lose because of the risk. Since this is a digital field, it creates borderless area where fraudsters can really enter and perform illicit activity so the public should practice cyber hygiene in order to protect your personal data,” she said.
Mr. Diokno said the central bank is continuously monitoring NFT activities that are used in online games, adding they are still discussing with other regulators the appropriate approach for Axie Infinity and other gaming platforms.
He said that under BSP Circular 1108, the “smooth love potion” tokens which can be earned through the Axie Infinity game could not be considered as a digital unit of exchange.
Meanwhile, Ms. Romero said those who wish to exchange their virtual assets into fiat currency or money should only do so with entities that are registered with the BSP to ensure their safety.
While cognizant of the risks, the BSP earlier also acknowledged that innovations like play-to-earn games can have the potential to boost financial inclusion and payments digitalization when harnessed in a responsible manner.
At the same briefing, Mr. Diokno said the social media platform LYKA/Things I Like Co. Ltd. (TIL) has yet to receive a license from the BSP.
Lyka uses Giftcards in Electronic Mode (GEMS) on its platform, which can be used to purchase, exchange, and pay for goods and services with selected merchants. This makes it function like an operator of payment system (OPS), which are entities that are monitored by the central bank.
Last year, the BSP reiterated that TIL itself should be the one to apply for an OPS license instead of its marketing arm.
As of March 25, Mr. Diokno said there are 200 OPS registered with the BSP — where 39 are banks, 24 are nonbank electronic money issuers (EMIs), while 137 nonbank non-EMI institutions. — Luz Wendy T. Noble
