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Rates on hold amid recovery risks

PHILIPPINE STAR/ MICHAEL VARCAS
The central bank said inflation expectations have risen slightly, amid soaring global oil prices. — PHILIPPINE STAR/ MICHAEL VARCAS

By Luz Wendy T. Noble, Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) on Thursday kept its key rate unchanged for a 10th straight meeting, but hinted at an “eventual normalization” of policy once recovery is sustained or inflation risks rise. 

The BSP maintained its overnight reverse repurchase rate at a historic low of 2%, as expected by all 16 analysts polled by BusinessWorld last week. The overnight deposit and lending rates were likewise left at all-time lows of 1.5% and 2.5%, respectively.

“The Monetary Board deems it prudent to maintain the BSP’s accommodative policy stance given a manageable inflation environment and emerging uncertainty surrounding domestic and global growth prospects,” BSP Governor Benjamin E. Diokno said at an online briefing on Thursday.

“Looking ahead, given the stronger signs of recovery in output growth and labor market conditions and improvements in domestic financial markets, the BSP will continue to carefully develop its plans for the eventual normalization of its extraordinary liquidity measures when conditions warrant, in keeping with our price and financial stability mandates,” he added. 

In 2020, the BSP slashed rates by 200 basis points to support the economy during the pandemic. The last rate cut was in November 2020.

Economic recovery is gaining traction, Mr. Diokno said.

Gross domestic product (GDP) grew by 7.7% in the October to December period, the third straight quarter of expansion. In 2021, GDP expanded by 5.6%, a reversal of the 9.6% contraction in 2020.

“The economy is seen to reach pre-pandemic GDP levels by the third quarter of 2022. At the same time, given the sustained recovery, the output gap is projected to close and turn positive by the second half of this year,” BSP Department of Economic Research Managing Director Zeno Ronald R. Abenoja said.

However, Mr. Diokno said elevated commodity prices, geopolitical tensions and uneven pace of vaccination across economies still cloud the outlook for recovery.

The BSP noted inflation expectations have risen slightly, but still within the target this year and 2023.

“The risks to the inflation outlook continue to lean slightly towards the upside for 2022 but remain broadly balanced for 2023. Upside risks are linked mainly to the continued shortage in domestic pork and fish supply and the possible impact of higher oil prices on transport fares,” Mr. Diokno said.

He said the “increased volatility” in global oil prices would need close monitoring and “appropriate interventions when necessary in order to arrest potential second-round effects.”

The BSP raised its average inflation forecast for this year to 3.7% from its previous 3.4% estimate, still within the 2-4% target but slower than the 4.5% in 2021. It also hiked the 2023 inflation outlook to 3.3% from 3.2%.

“The higher inflation path in 2022 is attributed primarily to higher world nonoil prices, as well as global crude oil prices, that could affect domestic inflation,” Mr. Abenoja said.

“The assumed average Dubai crude oil price is at $83 per barrel this year, which is over $10 per barrel more than the assumption that we had during the December 2021 policy meeting,” he added.

However, Mr. Abenoja said global oil prices are likely to ease with the anticipated increase in supply.   

“Inflation is seen to decelerate in early 2022, but to accelerate towards the upper end of the [target] band in the second quarter, before moving back to within the target range in the second half of 2022 until 2023,” Mr. Abenoja said. 

He said inflation may initially slow in the early part of the year, mainly due to base effect. Inflation could accelerate slightly above the target in the second quarter due to elevated oil and nonoil prices, he added.

Under the rebased 2018 consumer price index, inflation slowed to 3% in January from 3.2% in December.

Last year, inflation went beyond target due to the elevated oil and food prices. Despite this, the BSP kept interest rates steady, saying monetary policy could not do much to quell supply-side pressures.

“The implementation of non-monetary measures to ensure adequate supply of key food commodities must be sustained in order to mitigate supply-side pressures on inflation,” Mr. Diokno said.

Thursday’s policy review was the first time that Mr. Diokno mentioned an exit strategy, which indicates that an interest rate hike is already being considered within the next few months, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said.

“We believe that the trigger point for a potential rate reversal would have to be linked to a solid economic recovery coupled with depreciation pressure on the peso. We retain our expectation for a late second-quarter policy rate hike given a likely strong first-quarter GDP report,” Mr. Mapa said.

The first-quarter GDP data will be released on May 12. The Monetary Board will have its policy review meetings on May 19 and June 23.

On the other hand, Gareth Leather, senior Asia economist at Capital Economics, expects the BSP to keep rates steady for the rest of the year amid a “slow economic recovery.”

He said slowing inflation will buy time for the BSP to keep rates at record lows.

“We estimate that output is still 14% below its pre-crisis trend. Given the weakness of the recovery, we think the central bank will want to keep policy supportive,” Mr. Diokno said.

The Monetary Board will have its next policy review on Mar. 24.

Philippine export performance continues to lag global rebound

ICTSI

THE PHILIPPINES’ EXPORT performance remained lower compared with other Asia-Pacific economies leading the global trade recovery, a United Nations (UN) report said.

The UN Conference on Trade and Development (UNCTAD) global trade update released on Thursday showed global trade in goods and services will likely slow this year, after the strong growth seen in 2021.

Overall, the value of global trade reached a record $28.5 trillion in 2021, 25% higher than the previous year and a 13% increase from the pre-pandemic level in 2019.

“The positive trend for international trade in 2021 was largely the result of increases in commodity prices, subsiding pandemic restrictions and a strong recovery in demand due to economic stimulus packages. As these trends are likely to abate, international trade trends are expected to normalize during 2022,” the UNCTAD said.

The UNCTAD report showed the Philippines posted a score of 0.56 in export performance in the fourth quarter of 2021, based on an index in which a higher score indicates above average performance.

The Philippines’ export performance score lagged behind Indonesia (0.78), China (0.66), Malaysia (0.63) and Singapore (0.60), but ahead of Thailand (0.55) and Japan (0.45).

UNCTAD defined export performance as an indicator which includes growth rates, performance against other countries, and competitiveness in major and dynamic markets.

During the fourth quarter, Philippine export volatility was at 0.08, while Chinese and Indonesian exports were less vulnerable at 0.02 and 0.04, respectively. Singapore’s export volatility was at 0.03, while Thailand’s stood at 0.02.

However, Vietnamese and Malaysian exports were more vulnerable with scores of 0.12, and 0.17, respectively.

Preliminary data from the Philippine Statistics Authority (PSA) showed that the country’s exports rose by 14.5% to $74.64 billion in 2021, while imports climbed by 31.1% to $117.8 billion. 

“Trade growth rates in the fourth quarter of 2021 remained very strong across all geographic regions, although lower in Europe, North America and East Asia. Export growth has been generally stronger in commodity-exporting regions, as commodity prices have increased,” UNCTAD said in the report.

However, global trade this year is expected to be affected by the slower-than-expected world economic growth due to concerns over the China’s property sector and “persistent inflation” in the United States.

UNCTAD also cited ongoing challenges for global supply chains and worries over debt sustainability.

“Given record levels of global debt, concerns of debt sustainability are likely to intensify in the incoming quarters due to mounting inflationary pressures,” it said.

“A significant tightening of financial conditions would heighten pressure on the most highly indebted governments, amplifying vulnerabilities and negatively affecting investments and international trade flows.” — Revin Mikhael D. Ochave

DoF in talks with banks on maiden green bond offer

COLIN WATTS-UNSPLASH

THE DEPARTMENT of Finance (DoF) is in talks with banks on its $500-million green bond offering this year as it assesses the appropriate tenor, the Finance chief said on Thursday.

“We are discussing with various banks the appropriate structure for our maiden ESG (environmental, social, and governance) offering, including size and tenor as well as looking at window of opportunity in different currency markets,” Finance Secretary Carlos G. Dominguez III told reporters in a Viber message.

He said the department will release more details when the Philippines is ready to move forward with the transaction.

Funds raised from green bonds are used for climate mitigation and environmental projects.

Earlier this month, Mr. Dominguez announced that the Philippines is eyeing a $500-million green bond offer “in the immediate future” while the government awaits favorable market conditions.

He has said that the country’s sustainable finance framework seeks to harness public and private investments to support the transition to a clean, sustainable and climate-resilient economy.

On Wednesday, fixed-income news provider IFR reported the Philippines had mandated Bank of China, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, Mizuho Bank, Morgan Stanley, Standard Chartered and UBS for a potential US dollar bond offering in the ESG format.

Citing a source aware of the development, IFR said the Philippines was looking to raise $1 billion to $2 billion from medium- to long-term bonds.

A Reuters source with knowledge of Philippine plan, however, said the Philippines’ first sovereign green bond offer may not just involve a dollar-denominated issue, but declined to elaborate.

Kalpana Seethepalli, director of ESG Asia-Pacific at Deutsche Bank, has said that the Philippine government’s first green bond could set the tone for sustainable finance in the private sector.

Similarly, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the issuance would help make green bonds become more mainstream in the Philippines.

He said that investors globally have become more particular in choosing investments that are compliant with ESG standards.

“The issuance of more green/sustainable bonds and securities would also be consistent with increased commitments by both governments and companies to reduce, if not completely eliminate, carbon emissions,” Mr. Ricafort added. — Jenina P. Ibañez with Reuters

Lending firm’s staff arrested for misusing devices

THE Securities and Exchange Commission (SEC) said 46 employees of Cashtrees Lending Corp. were arrested for violating the Cybercrime Prevention Act and the Lending Company Regulation Act (LCRA).

In a statement on Thursday, the SEC said its Enforcement and Investor Protection Department (EIPD) along with the Philippine National Police Anti-Cybercrime Group (PNP-ACG) “successfully implemented a warrant to search, seize, and examine computer data” in Cashtrees Lending’s office in Pasig City last week, Feb. 12.

The Manila Regional Trial Court Branch 46 issued a search warrant against Cashtrees Lending. The SEC said the warrant was provided for “misuse of device” when operating unregistered online lending applications.

Cashtrees Lending is registered with the commission as a corporation and it also has a certificate to operate as a lending company. It operates Happylend, Creditcash, and Cashmore, all of which are registered online lending platforms.

However, the SEC said the majority of Cashtrees Lending’s online applications are unregistered.

“The onsite digital forensic examination on the seized devices showed that the employees of Cashtrees Lending operated online lending applications such as Happylend, Rush Loan, Easy Money, Good Pocket, Dummy Loan, Lucky Star, Swipe Cash, 365 Cash, Home Peso, Mega Loan, Treecash and Goldpeso,” the commission said.

Goodpocket, Easymoney, 365 Cash, and Rush Loan have also been the subject of recent cease and desist orders issued by the commission.

“On Feb. 13, the SEC-EIPD and PNP-ACG filed with the Department of Justice an inquest complaint against the arrested employees of Cashtrees Lending for violating Section 4(a)(5)(i)(ii) of the Cybercrime Prevention Act of 2012 and the LCRA in relation to Section 6 of the Cybercrime Prevention Act of 2012,” the SEC said.

The SEC said it created a task force, which will focus on handling complaints against online lending operators and abusive activities against debtors. The task force works with other agencies such as the PNP-ACG and the National Bureau of Investigation.

The commission said it “has been receiving numerous complaints” against online lending applications for violating various parts of the LCRA.

Meanwhile, some would also complain about abusive debt collection practices, which violate the commission’s Memorandum Circular No. 18, Series of 2019 or the Prohibition on Unfair Debt Collection Practices of Financing Companies and Lending Companies.

So far, the SEC has canceled licenses of 36 financing/lending companies, revoked the registration of 2,081 lending companies for not securing the required certificate of authority, and 72 online lending applications have been ordered to stop operating for their lack of authority to operate as a lending/financing firm.

The commission has also secured the conviction of 74 individuals for violating the LCRA. — Keren Concepcion G. Valmonte

Raslag Corp. plans P805-million initial public offer

RASLAG Corp. is planning to list on the stock market next month with an P805-million initial public offering (IPO) to fund its solar power projects.

According to the Securities and Exchange Commission (SEC), the company filed a registration statement last year, Dec. 24, 2021.

The company is planning to sell 350 million primary common shares for as much as P2 apiece, along with an overallotment option of 52.5 million secondary common shares owned by J Ten Equities, Inc.

“The Company will not receive any proceeds from the sale of secondary common shares by the Selling Shareholder,” Raslag said in its preliminary prospectus dated Dec. 20.

The company may raise up to P700 million from the sale of its primary shares.

Net proceeds will be used to fund the balance of its Pampanga Solar Power Project Phase IV (RASLAG-4) land installment payments covering April to October this year, to finance the equity portion of the project’s development and construction, for the funding of the pre-development work of the company’s pipeline solar projects, and for general corporate purposes.

Raslag plans to conduct its offer period from March 7 to 18, while its listing at the main board of the Philippine Stock Exchange (PSE) is tentatively set to March 28. The company will list under ticker symbol “ASLAG.”

The company tapped China Bank Capital Corp. to be the sole issue manager, sole underwriter, and sole bookrunner of the offer. — Keren Concepcion G. Valmonte

After a fire and a pandemic kept it closed for 2 years, Star City reopening on Feb. 24

TWO years after a fire forced it to close and a pandemic kept its doors shut, the popular amusement park Star City will open to the public on Feb. 24.

It was after the birth of his daughter Thalassa that Star City founder Fred J. Elizalde pitched the concept of converting the Philippine Center for Trade Exhibitions (Philcite) which housed events such as car shows, book fairs, and heavy machinery exhibitions into a theme park targetting families.

The area was converted into a venue for toys and gifts fairs, and carnival rides and attractions. Housed within the CCP Complex, Star City opened in 1991. Generations of children remember their visits to the park, which was especially popular during the Christmas holidays.

On Oct. 2, 2019, just a few minutes after midnight, the amusement park caught fire 90% of the complex was damaged. It closed for reconstruction. Two years later, the rebuilt Star City was scheduled to open on Jan. 14, but this was postponed for a month due to the surge of COVID-19 cases brought about by the Omicron variety of the virus.

Occupying two floors on its original 3.4 hectare footprint, Star City returns with a more spacious and minimalist layout.  Guests can expect to see rides such as the  Grand Carousel, the Star Wheel, Telekombat, Wacky Worm, and the Egyptian Spinning Coaster. Other extreme rides that the amusement park houses include the Star Frisbee, Jungle Splash, Surf Dance, the Seahorse Viking, and the inverted roller coaster called the Star Flyer.

Visitors will be welcomed from Thursday to Sunday, noon to 8 p.m. A P400 Star Pass will entitle the visitor to ride-all-you-can access. Entrance to Snow World is separate and costs P160. To promote contactless transactions under the new normal, the public is encouraged to buy tickets online, with QR codes sent to the guest via e-mail this can be printed or saved on a cell phone, and then scanned at the gate to gain entry. Ticket purchases at the gate will also be available.

In compliance with IAFT guidelines under Alert Level 2, temperatures will be checked at the gate, social distancing will be enforced at the queues, there will be alcohol dispensers set up throughout the park, and all rides will be sanitized in between cycles. Park personnel and guests will be required to wear masks. Vaccination cards have to be presented prior to entry; unvaccinated guests under 18 years old are welcome. Under Alert Level 2, which will be in force until the end of the month, the capacity of the indoor venue is limited to 50%, while outdoor capacity will be kept at 70%.

ALIW THEATER
According to park management, the Star City building, including the Aliw Theater, was rebuilt to be structurally sound and compliant with fire detection and prevention rules and regulations. Park officials will also be monitoring capacity.

Meanwhile, the Aliw Theater, which is the home theater of the ballet company Ballet Manila, has not yet announced its official opening.

Ballerina Lisa Macuja-Elizalde, who is the wife of Star City founder, told BusinessWorld in an e-mail in December that the theater “will take a while longer to be open.”

She added that the theater’s seating capacity has been reduced from 2,300 to 1,200. Its improvements include the addition of two multi-purpose halls and rehearsal studios.

“I am very, very optimistic that Aliw Theater will be a more diverse, and harder working events venue still with the largest orchestra pit in the Philippines and still in the same arena like stage but with many improvements in acoustics and sight lines and PWD facilities, as well as proper loading docks, first class lights and technical equipment,” Ms. Macuja-Elizalde said.

Updates on parking space availability will be posted on Star City’s website. To purchase tickets, visit https://starcity.com.ph/. For more information, visit https://www.facebook.com/StarCityPH. — Michelle Anne P. Soliman

Kia Philippines aims to sell 6,000 vehicles in 2022

KIA.COM/PH/

KIA PHILIPPINES is eyeing to sell 6,000 automotive units in 2022 as the country continues its economic recovery.

Emmanuel A. Aligada, Kia Philippines president, said during the virtual launch of the all-new Kia Carnival on Thursday that 2022 will be a better year overall for the company after it sold 3,748 units in 2021.

“We are confident that 2022 will be much better. Therefore, we are looking at about 6,000 brand-new units sold this year,” he said.

Mr. Aligada disclosed that Kia Philippines is seeking to improve its market share to 1.7% in 2022 from 1.3% last year.

He expects the main volume drivers for Kia Philippines to be Stonic, Soluto, and K2500. Other models seen to drive sales this year are Seltos and Carnival.

“2021 was an encouraging period for us as we delivered a 76% growth rate,” Mr. Aligada said. “We move to improve, this time, on our market share to 1.7%.”

“As things normalize, we see that happening very soon and continuing beyond 2022,” he added.

Mr. Aligada said Kia Philippines is also expanding its network with seven new dealerships in 2022, which will bring its overall count in the country to 46 branches. The company also plans to improve its existing facilities this year.

He added that the company is planning to have 50 operating dealerships by 2023.

“That is the number that we think is significant for us to have presence in key areas all over the country,” Mr. Aligada said.

Mr. Aligada also disclosed that the pending free trade agreement (FTA) between the Philippines and South Korea will allow Kia to be competitive.

“We are waiting for that to be finalized and formalized probably in the next few weeks, within the quarter likely. The tariff benefit that it provides us is that it benefits our offers for the vehicles that we carry. It will make us very competitive while keeping the same level of quality for the vehicles that we source from Korea,” Mr. Aligada said.

“That’s a good sign for us to be more active in the market because of that 5% that we would be able to save on tax. A good number of our vehicles are sourced from Korea and together with other goods that would benefit from this treaty agreement, yes, we look forward to being more competitive,” he added.

In October last year, the Trade department announced that it had concluded talks for the FTA involving the Philippines and South Korea.

Trade Secretary Ramon M. Lopez said the FTA would help in the economic recovery of the Philippines.

“This will stimulate trade and hopefully allow for more investments from Korea providing avenues for Korean companies and industries to diversify and expand their economic interests in other Association of Southeast Asian Nations (ASEAN) countries, which is in line with the promotion of Korea’s New Southern Policy,” Mr. Lopez said.

Kia Philippines also announced during the virtual launch that the SX variant of its all-new Carnival is already available in dealerships while the EX variant will be available next month.

The EX variant is priced at P2.54 million for the Astra Blue color and P2.55 million for pearl colors, while the SX variant is priced at P2.988 million for the Astra Blue color and P2.998 million for pearl colors. — Revin Mikhael D. Ochave

Spanish tale of threatened family farm wins Berlinale’s Golden Bear

BERLIN — Spanish director Carla Simon’s film Alcarras, which explores the divisions ripped into a close-knit family of Catalan farmers when they face eviction from their ancestral plot, won the Berlin Film Festival’s top prize on Wednesday.

Ms. Simon herself grew up on a peach farm in the village of Alcarras, and her film was made using amateur actors from that area whom she recruited at village fairs and coached into playing several generations of a family of smallholders.

Announcing the best film award, the festival’s first since returning to in-person screenings after last year’s coronavirus-enforced break, jury president M. Night Shyamalan praised her skill in marshalling powerful performances from a cast that ranged from child actors to people in their 80s.

“This is really amazing because it is a small story about farmers and my family of farmers and a small village, and it’s so local so it feels so well that it will travel,” Ms. Simon said afterwards on the red carpet, celebrating the global attention she hopes her film will receive thanks to the prize.

She described her film as a study of intergenerational tensions and how they and other fissures can be deepened by the trauma of seeing the death of a way of life once thought eternal.

During an emotional ceremony in which several winners dedicated awards to friends who had died of coronavirus disease 2019 (COVID-19), the best documentary award went to Myanmar Diaries, a documentary shot by 10 anonymous filmmakers whose footage was smuggled out and stitched into a portrait of life in Myanmar since last year’s coup.

Amid tensions and shuttle diplomacy centering on Russia’s intentions toward Ukraine, some awards did reflect the Berlinale’s traditional role as a political festival, set up in the 1950s in a divided city on the front lines of the Cold War.

The best short film was awarded to recent graduate Anastasia Veber’s Trap, a 20-minute portrait of the lives of young adults in Russia who party the nights away, chasing hedonism and trying to evade police checks.

Rabiye Kurnaz vs. George W. Bush, an account of Ms. Kurnaz’s struggle to get her son returned to Germany from the US prison camp in Guantanamo Bay, won awards for best screenplay and best lead performance, which went to German-Turkish comedian Meltem Kaptan for her portrayal of the mother who bends the world to her will through the sheer power of love. — Reuters

CREIT to list ‘no later than’ Feb. 22

CITICORE Energy REIT Corp. (CREIT) is moving its listing day to next week, “no later than Feb. 22,” as the company’s initial public offering (IPO) shares have yet to be fully lodged into the Philippine Depository and Trust Corp.’s (PDTC) system.

The company announced plans to defer its market debut on Wednesday, citing “voluminous transactions.” It was initially scheduled to make its market debut on Thursday, Feb. 17.

CREIT said it saw an “overwhelming demand” from investors after it conducted its P6.4-billion IPO. The company sold 2.509 billion shares for P2.55 per share.

“We are humbled by the support of almost 20,000 investors — almost double that of recent transactions,” joint global coordinators Unicapital, Inc. and BDO Capital & Investment Corp., along with CREIT President and Chief Executive Officer Oliver Y. Tan, said in a statement late on Wednesday.

They said the situation “has affected the timely completion of the lodgment” of the IPO shares with PDTC, which offers safekeeping and settlement services.

“As a result, the CREIT IPO Listing date shall be moved from Feb. 17, 2022 to no later than Feb. 22, 2022,” they added.

In an earlier statement on Wednesday, the company said all tranches from its institutional, trading participants, and to the local small investors (LSI) tranche were oversubscribed.

The LSI tranche alone logged an oversubscription level of 124.09% with demand reaching 270.745 million shares for the 218.182 million shares allotted.

“We believe that the demand we saw is a testament to the robustness of our local capital markets, our collective commitment towards a more sustainable future, and the increasing awareness and participation of our investing public on various investment products, including REITs,” the company and its joint global coordinators said.

CREIT will be the first real estate investment trust (REIT) with an energy thrust to list at the Philippine Stock Exchange, following five REITs with portfolios featuring office and mixed-use assets. — Keren Concepcion G. Valmonte

PBA issues trade moratorium for Aces until their last game

(LEFT TO RIGHT) JERON TENG (21), ABU TRATTER (2) AND MIKE DIGREGORIO (3) — PBA IMAGES

By Olmin Leyba

WITH Alaska Milk’s announced exit, the Philippine Basketball Association (PBA) is now imposing a trade moratorium for the Aces from hereon until their last game in the ongoing Governors’ Cup.

“Hindi na puwede mag-trade,” (They cannot trade) commissioner Willie Marcial said. “Kapag magdi-disband na ang team, wala nang trade.” (No trading if they disband).

The ban on player swapping for a departing squad followed the template applied during the 2004-05 season with the Shell, which back then was contemplating on leaving the league.

This was meant to keep the roster intact and possibly make the team more viable for a prospective buyer who wants to be competitive.

Alaska owner Fred Uy said they are open to the possibility of selling the franchise though, he added, there are “no immediate buyers at this point in time.”

Mr. Marcial said the pro league will wait for Alaska’s word on whether a new owner will take over its franchise at the end of Season 46.

The Aces didn’t reveal a price tag for the possible acquisition of its existing franchise. It can be noted that Terrafirma and Blackwater each paid P100 million to purchase a new franchise in 2014.

Mr. Marcial said Alaska’s potential buyer, if ever, will be subject to several processes, including financial checking, and ultimately needs the approval of the board of governors.

If a sale won’t happen, Alaska’s players led by Jeron Teng, Abu Tratter and Mike Digregorio will revert to the PBA and go to a dispersal draft, per league rules.

After 35 years, Alaska will end an era laced with 14 titles, including a rare grand slam in 1996.

“Going forward now without Alaska in the league seems ‘unnatural’ and I believe it will mark a time of great transition for the PBA,” said Ginebra coach Tim Cone, who served Alaska for 23 years.

The new Lord of the Rings prequel, The Rings of Power, is set in the Second Age  of Middle-Earth — here’s what that means

A SCENE from the series The Lord of the Rings: The Rings of Power

AMAZON Studios is due to launch its Lord of the Rings prequel TV series in September this year. Not much is known about it yet, other than the title — Lord of the Rings: the Rings of Power, some first looks, a teaser-trailer, and that it will be set in the Second Age of J.R.R. Tolkien’s Middle Earth timeline.

The Second Age will not be all that familiar to audiences of Peter Jackson’s film adaptations of Tolkien’s novels, which take place in the Third Age, many thousands of years after the events featured in The Rings of Power. But the books, including Lord of the Rings, The Silmarillion, and the lore-heavy Unfinished Tales and The History of Middle-Earth provide us lots of background to the history of the Second Age.

What follows is a quick primer on this setting and what we can expect from the Amazon series.

The Second Age begins after the downfall of Morgoth (a Lucifer figure in Tolkien’s mythology) and ends with the first defeat of Morgoth’s lieutenant Sauron, which film audiences will remember from the opening montage of the Fellowship of the Ring, where an alliance of men and elves defeat the dark lord by cutting the source of his power, the One Ring, from his finger.

None of Tolkien’s books focus specifically on the Second Age, though key events are briefly detailed in the last sections of the Silmarillion and some stories from Unfinished Tales. Tolkien’s lengthy appendices to the Lord of the Rings provide a full timeline of the Second Age. These fragments describe a time when the elves were more prominent and powerful, and human kingdoms were greater and more unified.

The Second Age serves as a lost classical period that falls between the heroic myth-cycle that depicts the events of the First Age in the Silmarillion, and the grittier medievalism of the Third Age that we see in the Lord of the Rings.

Perhaps the most important event is the forging of the rings of power. A disguised Sauron tricks the elven smith Celebrimbor into forging 19 rings to be distributed between elves, dwarves, and humans.

However, the elves quickly realize that this is a ploy by Sauron to control them all through the power of the One Ring and begin a long battle against his influence.

Given its title, the series will probably focus on the consequences of falling prey to the power of the rings. It might well depict the origins of the Nazgûl, or ringwraiths, the undead servants of Sauron in the Lord of the Rings, who first emerge in the Second Age.

Promotional images include a map of the island of Númenor, a land given to humans who fought against Morgoth. In the Second Age it becomes a great naval power, creating colonies and settlements on the main continent.

Eventually Númenor joins the war against Sauron and takes the dark lord captive. However, Sauron corrupts their king, Ar-Pharazôn, and convinces him to invade the western land of Valinor, home to the angelic Valar, in pursuit of immortality. In retribution, the Valar sink the island of Númenor into the ocean.

Tolkien first conceived of Númenor in the Lost Road, an abandoned novel about time travelers witnessing the fall of Atlantis, but it really works as an analogue to Rome within the history of Middle Earth: a broken empire that is eventually succeeded by fragmented kingdoms.

The survivors of Númenor later join with the elves to defeat Sauron and found Gondor and Arnor.

Arnor is established towards the end of the Second Age as a sister-kingdom to the more familiar Gondor and is located far to the north.

It is later destroyed by the Witch-King of Angmar, the most powerful of Sauron’s Nazgûl, which is why we don’t hear much about it in the Lord of the Rings. This probably won’t make into the Amazon series, though, unless it runs for quite a few seasons.

The elven queen Galadriel will be a central character, and also Elrond, the lord of Rivendell. They are both important figures of the Second Age and recipients of rings of power, so they will certainly play an active role.

Sauron himself will also play some part. In the Second Age Sauron is not just the purely antagonistic force depicted in the novel and the films, but also a subtle trickster and manipulator. This offers the potential to portray him as a more compelling and multifaceted villain.

Gandalf is never young, exactly. As a wizard (Istari), he is a spirit sent by the Valar to Middle Earth in the form of an old man. The Istari don’t appear until the Third Age, but Amazon might try to work him in anyway, given the focus on the rings of power.

The appendices state Gandalf took possession of Narya, the elven ring of fire, and Tolkien fans have speculated his threat to the Balrog about being “the wielder of the flame of Anor” might refer to this ring. If the series is a success then we might eventually see how it makes its way into Gandalf’s hands.

Amazon seems likely to condense some of the key incidents from the Second Age (the rings of power, the fall of Númenor, the emergence of the Nazgûl), which are separated by centuries in the appendices, to provide a compelling narrative.

But whatever happens, it is all leading to the events we know from the beginning of the Lord of the Rings: the forging of the One Ring, Sauron’s attempt to assert his dominion through it, and the war between the orcs and the elven and human alliance.

While audiences may well be exhausted with prequels to the Lord of the Rings after the Hobbit film trilogy, this exploration of Tolkien’s Second Age of Middle Earth has the potential to add texture and richness to the stories we already know and love.

 

Julian Novitz is a Senior Lecturer, Writing, School of Media and Communication, Swinburne University of Technology.

Beeinfotech PH allots 70% of data center capacity for three ‘major’ global companies

TELCO-NEUTRAL data center operator Bee Information Technology PH, Inc. (Beeinfotech PH) said it is allocating 70% of its data center capacity in Metro Manila for at least three global hyperscalers this year.

Global hyperscalers are massive international companies that dominate the cloud service sector.

“All the world’s biggest hyperscalers are definitely welcome and in Beeinfotech PH’s radar. This year, the company is targeting at least three major ones, for which it is allocating around 70% of its data center capacity to use for its expansion to the country,” the company told BusinessWorld via e-mail when asked for an update.

The company’s facility, called the “The Hive,” is located at the Bridgetowne Destination Estate spanning the border of Pasig City and Quezon City, Metro Manila.

It said at least two global hyperscalers have determined “aggressive growth ventures” with the company.

“But due to binding non-disclosure agreements, the company cannot divulge the names of its clients and prospects for a possible colocation partnership,” Beeinfotech PH noted.

The Hive has three floors capable of housing at least 3,000 server racks of up to 45U rack height.

The company said The Hive’s network interconnect capabilities, disaster recovery seats, and security and network operations centers position it to meet the colocation needs of hyperscalers.

Global hyperscalers may need facilities in the country because “local hosting” is a “key requirement” to address the “strong demand” for cloud services, data analytics and consulting company GlobalData said in a statement.

It noted that many Philippine businesses have expressed intention to migrate workloads to the cloud, propelling the country’s cloud market to $2.8 billion by 2025 from $1.8 billion in 2020.

Singapore-based SpaceDC said recently that it would be investing more than $700 million in its planned 72-megawatt (MW) hyperscale data center serving Greater Manila, which is expected to open this year.

SpaceDC is working with global real estate services firm JLL to build a data center called MNL1, which will be situated in Cainta, Rizal. — Arjay L. Balinbin