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‘Nowhere to hide’ if war comes to Taiwan’s front-line islands

A lighthouse in Dongyin island, the northernmost territory Taiwan controls. — Ying-lung Lu/CC BY-SA 3.0/Wikimedia Commons

NANGAN/DONGYIN, Taiwan — On Taiwan’s windswept Matsu islands, close to China’s coast, one topic has been driving conversations in recent days: prospects of an invasion by China since it began military exercises in response to visits to Taiwan by US lawmakers. 

Held by Taiwan since the defeated Republic of China government fled to Taipei in 1949 after losing a Chinese civil war, the archipelago of small islands, less than 10 kilometers from China’s coast at the closest point, would probably be an early target for Beijing in the event of conflict. 

China, which claims Taiwan as its territory, has carried out extensive military exercises this month after a visit by US House of Representatives Speaker Nancy Pelosi, who was followed by five U.S. lawmakers on Sunday and Monday. 

Taiwanese forces have closely monitored China’s moves, scrambling fighter jets and deploying warships to keep guard against the Chinese navy. 

While there has been no heightened sense of alarm among the people of Taiwan, the tension has highlighted the Matsu islands’ vulnerability. 

“I don’t feel particularly safe — after all this island, Dongyin, would be the front line of the battlefield,” said Dora Liu, 27, from Dongyin island, the northernmost territory Taiwan controls and home to a major military base. 

“A small island like ours could be taken down in a moment,” she said. “If there is a war, there would be no place to hide. No matter how many tunnels we have, if they really occupied us, there would be no use in having tunnels.” 

The rocky Matsu islands, like the rest of Taiwan, have lived with the threat of Chinese invasion since 1949. 

The islands were regularly bombarded by China at the height of the Cold War. 

Today, they are a fashionable tourist destination, with hip coffee shops and boutique hotels, visitors being drawn by the islets’ stark natural beauty and wartime past. 

HOPE FOR COMMUNICATION
Though the military presence is much more low-key than it was at its height in the 1950s and 1960s, signs of conflict are all around, from old bomb shelters to propaganda signs hewn out of the rock with messages like “save our mainland compatriots”. 

Chien Chun-te, 40, who runs a breakfast stall outside a market on the main island of Nangan, said the new crisis was more worrying than previous tension. 

“I think a war is possible,” Chien said. “But I hope people in the two countries, and also both the governments, can communicate more. Having no communication would only lead to hatred.” 

Despite the recent tension, the islands are brimming with tourists from Taiwan’s cities, an important plank for the local economy, and flights are hard to book. 

Huang Tzu-chuan, 30, who works in communications in Taiwan’s Taoyuan city, opted to spend a month this summer working at a guesthouse in a village on Nangan overlooking a scenic bay. 

Like most Taiwanese, Mr. Huang has followed the Chinese military drills closely and considered what his response would be in the event of war. 

“If one day it really happens, I will of course fight for my country,” said Mr. Huang. 

He drew a parallel between Taiwan’s challenges and the war in Ukraine after Russia invaded. 

“We feel our relationship between Taiwan and China is just the same as theirs.” — Reuters

Smart awarded as Philippines’ Fastest and Best Mobile Network by Ookla

With its commitment to deliver the best overall experience to Filipino mobile users, the wireless arm of PLDT has hit a new milestone as Ookla, the global leader in mobile and broadband network intelligence, has declared Smart Communications, Inc. (Smart) as Philippines’ Fastest and Best Mobile Network in its latest report.

A rare distinction, the Best Mobile Network citation has only been given by Ookla to approximately 20 mobile operators in the world, with Smart being the first and only Philippine mobile operator to clinch the award since Speedtest started in 2017. To earn this citation, a mobile operator must lead in two crucial Ookla Speedtest Awards categories, namely Fastest Mobile Network and Best Mobile Coverage, within the same test period.

Fastest Speeds and Widest Coverage

In the latest Ookla’s Speedtest Awards covering Q1-Q2 2022*, Smart emerged as the ‘Fastest Mobile Network’ with a Speed Score of 62.22, while its closest competitor posted a Speed Score of 32.48.

To bag this category, Smart posted a median download speed of 24.26 Mbps and a median upload speed of 6.59 Mbps, while its closest competitor posted a median download speed of 17.47 Mbps and a median upload speed of 6.43 Mbps. 

Smart also dominated the ‘Best Mobile Coverage’ category with a Coverage 794, surpassing its closest competitor’s Coverage Score of 732. The Coverage Score captures both the number of locations in which an operator offers service (its footprint) and the quality of service in each location, explained Ookla in its report.

The best position to empower the lives of Filipinos

In fulfilling its primary goal to empower the lives of Filipinos, Smart customers now enjoy a much better experience especially when it comes to browsing apps and websites, uploading and downloading files, streaming videos, and playing mobile games, among others. Smart’s latest string of recognitions from independent analytics firms is a testament to this improved customer experience.

“Speedtest Awards, presented by Ookla, are an elite designation reserved for the fastest and top-performing fixed broadband and mobile operators around the world. It is our pleasure to present Smart with the award for Best Mobile Network in the Philippines. This recognition is testament to their exceptional performance in H1 2022 based on Ookla’s rigorous analysis of consumer-initiated tests taken with Speedtest,” said Doug Suttles, CEO at Ookla.

“Being the first Philippine mobile services provider to be declared as the ‘Best Mobile Network’ is a huge honor for Smart. This inspires us in our mission to provide better connectivity for our customers as we all adapt to a digitally empowered lifestyle,” said Alfredo S. Panlilio, PLDT and Smart president and CEO.

“We aim to enable the life of every Filipino. This aligns with our nation-building efforts as we also support the government’s aspiration to digitalize the country,” Mr. Panlilio added.

“Smart’s laser-sharp focus on providing Filipinos with the best customer experience all these years has led to this groundbreaking recognition. We commit to continuously improving our network so we can empower Filipinos with our fastest speeds and widest coverage that enable them to make every moment count and achieve more in life,” said Francis E. Flores, SVP and head of Consumer Business Group — Individual at Smart. 

With Smart’s fastest speeds, subscribers can do and accomplish more — from connecting with loved ones in crystal-clear calls, sending important work and school files in seconds, sharing content on social media in real time, to watching high-definition videos seamlessly and playing high-bandwidth mobile games without lag.

Smart’s widest coverage means subscribers can stay connected more — whether it’s from the comfort of their home or office, the commute to school or work, or outside the city for a well-deserved break.

Operator to beat in the Philippines

These latest Ookla Speedtest Awards add to Smart’s recent string of citations that reinforce its network leadership. 

Last April, independent firm Opensignal declared Smart as the “operator to beat in the Philippines” as it dominated the Opensignal Mobile Experience Awards**, covering the essential aspects of service, especially speed and experience. These awards include Best Overall Experience for Video, Games, Voice App, and Download Speed across all technologies.

As of end-June 2022, Smart had around 77,100 total base stations nationwide, including around 7,300 5G base stations, to support the growing mobile data needs of 3G, 4G/LTE and 5G customers from Batanes to Tawi-Tawi.

Non-Smart subscribers can experience the power of Smart without changing their number through Mobile Number Portability, a service that can be conveniently booked via https://smart.com.ph/Pages/mobilenumberportability and at Smart Stores nationwide. To know more about the Philippines’ Fastest and Best Network, visit www.smart.com.ph.

*Fastest Mobile Network and Best Mobile Coverage: Based on analysis by Ookla® of Speedtest Intelligence® data for Q1–Q2 2022.

**Opensignal Awards — Philippines: Mobile Network Experience Report April 2022, based on independent analysis of mobile measurements recorded during the period January 1-March 31, 2022 © 2022 Opensignal Limited.

 

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Can Indonesia’s Muslim leaders help combat climate change?

Istiqlal mosque in Jakarta, Indonesia. — Prayudi Hartono/Flickr/CC BY 2.0

KUALA LUMPUR — From packed mosques during Friday prayers to the classrooms of thousands of Islamic boarding schools, Indonesia’s Muslim leaders have been urged to use their sermons and influence to boost conservation efforts and win over climate change sceptics. 

The country’s top Muslim representatives met last month at Southeast Asia’s biggest mosque, the Istiqlal in the capital Jakarta, to discuss ways to raise awareness about global warming and develop climate solutions linked to Islamic teachings. 

The leaders also established a forum — the Muslim Congress for a Sustainable Indonesia — and called for community donations, including alms, to be used to help fund such efforts. 

Green campaigners say Muslim leaders and imams can play a key role in fostering greater understanding and action on climate change — and also work with governments to focus on sustainability, not just economic development, in policy. 

“Imams or religious leaders are really respected and highly listened to in Indonesia — they can have a big impact on both government policy and citizen action,” said Jeri Asmoro, Indonesia digital campaigner at climate activist group 350.org. 

“Imams could affect a lot of social change … seeding awareness of environmentally-friendly life and propelling the climate movement at the grassroots level,” he added. 

Under the 2015 Paris Agreement to tackle global warming, Indonesia — the world’s eighth-biggest carbon polluter — has committed to cut its emissions by 29% by 2030 versus business-as-usual levels and hopes to reach net-zero by 2060 or sooner. 

Almost 85% of electricity in the world’s largest Muslim-majority nation is generated from fossil fuels, and it is the planet’s top thermal coal exporter. 

Also home to a third of the world’s rainforests, Indonesia is the top producer of palm oil and a major source of timber, which green groups blame for forest clearing for plantations. 

Cutting down forests has major implications for global goals to curb climate change, as trees absorb about a third of the planet-warming emissions produced worldwide, but release carbon back into the air when they rot or are burned. 

Indonesia is already suffering the impacts of global warming, with cities and coastal areas hit by regular flooding and rising sea levels, while rural regions often struggle to cope with forest fires and drought. 

Zulfira Warta, a climate project leader at WWF-Indonesia, said there was a need for more leadership from Muslim clerics on environmental change among their congregations and communities. 

About 90% of Indonesia’s 270 million people are Muslim, while the nation has 800,000 mosques, 37,000 Islamic boarding schools, and more than 170 Islamic-led universities — offering a platform for education and action on a huge scale, he said. 

“Imams can contribute a moral and spiritual energy that the climate and environmental movements urgently need,” he told the Thomson Reuters Foundation. 

CLIMATE CHANGE DENIERS 

Yet green groups say there is a long way to go on climate change, especially in the country’s rural and poorest regions. 

A YouGov global poll in 2019 showed Indonesia had the highest proportion of climate change deniers at 18%. 

Conservationists say this is largely due to a lack of teaching about climate issues at many schools. 

Stigmatization of climate activists by the government and the fossil fuel industry has also influenced mindsets and pushed the narrative that green advocates are against economic growth, said Eji Anugrah Romadhon, a campaigner at Greenpeace Indonesia. 

David Gaveau, an ecologist who has researched deforestation in Indonesia, said that economic development was a top priority for the government while climate change was not. 

However, there is growing awareness about climate change among Indonesia’s youth and civil society, while the government has made some headway in tackling deforestation in recent years. 

It has also banned new conversion permits for old-growth forest and carbon-rich peatlands, temporarily stopped issuing new permits for palm plantations, created an agency to restore damaged peat, and promoted the electric vehicle industry. 

Meanwhile, young Indonesians have spearheaded a mass tree-planting drive, established conservation groups, and taken part in weekly climate school strikes. 

“Within the youth and the civil society, there is growing awareness and movement on climate,” said Mr. Asmoro of 350.org. “Mostly it emerges at the urban and educated levels of society.” 

ECO-MOSQUES AND FATWAS 

Many Indonesians believe God plays a role in disasters and climate change, according to Mr. Romadhon of Greenpeace Indonesia, while Muslim leaders are also still the main source for most people when making decisions about their way of life. 

Religious leaders should dig “more into Islamic teachings about the earth and repairing it,” he added. 

Some progress has been made already. 

In a world first, Indonesia’s highest Muslim clerical council issued a non-legally binding fatwa against killing endangered animals in 2014, followed by a similar edict to stop the burning of land and forests two years later. 

Five years ago, worshippers in Indonesia launched a new initiative that aimed to establish 1,000 eco-mosques. 

And in 2018, Islamic organizations partnered with the government in a bid to cut plastic waste. 

“Such fatwas can support and bolster government regulations and give more impetus and inspiration for pro-environment behaviors,” said WWF’s Mr. Warta. 

Annisa Rahmawati, head of Indonesian conservation group Satya Bumi, urged civil society, religious leaders and citizens to unite to pressure the government and business to declare a climate and nature emergency — and respond accordingly. 

Many principles about protecting nature are embedded in Islamic practices, she added, urging religious leaders to help people understand how their behavior impacts the environment. 

“We have the solutions — we (just) need all actors to play their part and our Muslim faith can underpin all of this,” Ms. Rahmawati said. — Thomson Reuters Foundation

More Japanese firms are raising wages to combat labor shortage

REUTERS

TOKYO — More large Japanese companies are now raising wages to attract workers and cope with chronic staff shortages, a monthly Reuters poll showed on Thursday, a tentative sign Japan Inc. may be slowly addressing pay that has been flat for decades. 

Still, the Corporate Survey found that higher wages aren’t yet the go-to tactic for companies, with digitalization seen as the most popular among the multiple measures firms say they are using to address the labor crunch. 

Japanese companies have typically avoided boosting wages because decades of deflation made it difficult to pass on higher costs to consumers. That might now be changing, as the double whammy of higher commodities prices and a weaker yen drive up living costs, and highlight the strain on workers. Prime Minister Fumio Kishida has also called on companies to hike wages. 

“Overall we are facing labor shortages and we are struggling to lure part-timers at stores in particular. We are responding by raising wages but there’s a limit,” the manager of a wholesaler wrote in the survey, on condition of anonymity. 

The poll of 495 big non-financial firms, taken Aug. 2–12, highlighted what appeared to be a growing willingness by companies to increase wages. The hiking of wages or starting salaries was picked by 44% of respondents as one of the multiple tactics they were adopting. 

That compared to just 25% of companies that said in a 2017 Corporate Survey that they would increase salaries. 

A full 59% picked going digital and other measures to save manpower as one of their tactics. 

“The tide is changing as labor shortages have prompted more and more companies to raise wages albeit gradually,” said Koya Miyamae, a senior economist at SMBC Nikko Securities. 

“Now is just the beginning, as the population increasingly ages and dwindles, the momentum to hike wages will gather steam,” he said. 

A majority of companies, 54%, said they faced a labor crunch with the shortage most pronounced among non-manufacturers, 59% of which said they were squeezed for staffing. 

“We have not been able to do anything” to secure workers, said another manager at a wholesaler. 

Companies also called for a better working environment, including year-round hiring and delaying retirement to encourage the elderly to work until their later years. 

IMMIGRATION 

The dwindling pool of workers has been a concern for years in the world’s No. 3 economy, and has served as a cautionary tale for other advanced economies including in Europe. Policymakers, meanwhile, have stopped short of allowing widespread immigration. 

A total of 19% of firms said they were securing foreign workers, compared to 13% in the 2017 survey. 

Separately, three-fourths of companies said they wanted Kishida’s government to deploy another round of big stimulus to help the economy cope with rising living costs. 

A total of 44% of firms said they wanted to see fresh fiscal stimulus, the most popular choice. Only one in five said they wanted to see further monetary stimulus, highlighting the dwindling support for the Bank of Japan’s massive easing program. 

The survey results came as gross domestic product (GDP) to June saw a third straight quarter of expansion, but analysts say the resurgence of the coronavirus and a slowdown in the U.S. and Chinese economies cloud the outlook. 

In the survey, a vast majority of Japanese firms saw the virus’s resurgence posing a downside risk to the economy in the latter half of this fiscal year to March 2023. 

The poll, conducted for Reuters by Nikkei Research, canvased 495 large nonfinancial Japanese firms, half of which replied during the Aug. 2–12 period. Managers usually reply on condition of anonymity, allowing them to express opinions more freely. ($1 = 133.3900 yen) — REUTERS

Hacker tournament brings together world’s best in Las Vegas

IMAGE VIA DEFCON HACKING CONFERENCE/FACEBOOK

LAS VEGAS — A team of hackers from two US universities won the “Capture the Flag” championship, a contest seen as the “Olympics of hacking,” which draws together some of the world’s best in the field. 

In the carpeted ballroom of one of the largest casinos in Las Vegas, the few dozen hackers competing in the challenge sat hunched over laptops from Friday through Sunday during the DEF CON security conference that hosts the event. 

The winning team included participants from Carnegie Mellon University, its alumni, and the University of British Columbia. 

The contest involves breaking into custom-built software designed by the tournament organizers. Participants must not only find bugs in the program but also defend themselves from hacks coming from other competitors. 

The hackers, mostly young men and women, included visitors from China, India, Taiwan, Japan, and South Korea. Some worked for their respective governments, some for private firms and others were college students. 

While their countries may be engaged in cyber espionage against one another, the DEF CON CTF contest allows elite hackers to come together in the spirit of sport. 

The reward is not money, but prestige. “No other competition has the clout of this one,” said Giovanni Vigna, a participant who teaches at the University of California in Santa Barbara. “And everybody leaves politics at home.” 

“You will easily find a participant here going to another who may be from a so-called enemy nation to say ‘you did an amazing job, an incredible hack.’” 

The game has taken on new meaning in recent years as cybersecurity has been elevated as a key national security priority by the United States, its allies and rivals. Over the last 10 years, the cybersecurity industry has boomed in value as hacking technology has evolved. 

Winning the title is a lifelong badge of honor, said Aaditya Purani, a participant who works as an engineer at electric car maker Tesla Inc. 

This year’s contest was broadcast for the first time on YouTube, with accompanying live commentary in the style of televised sports. 

DEF CON itself, which began as a meetup of a few hundred hackers in the late 1990s, was organized across four casinos this year and drew a crowd of more than 30,000, according to organizing staff. 

On Saturday afternoon, participants at the “Capture the Flag” contest sat typing into their laptops as conference attendees streamed in and out of the room to watch. Some participants took their meals at the tables, munching on hamburgers and fries with their eyes fixed on the screens. 

Seungbeom Han, a systems engineer at Samsung Electronics, who was part of a South Korean team, said it was his first time at the contest and it had been an honor to qualify. 

The competition was intense and sitting for eight hours a day at the chairs was not easy. They did take bathroom breaks, he said with a laugh, “but they are a waste of time.” — Reuters

Russia forecasts export gas price will more than double in 2022 

Gazprom headquarters in Moscow, Russia. — WIKIMEDIA COMMONS

MOSCOW — Russia forecasts its average export gas price will more than double this year to $730 per 1,000 cubic meters before gradually falling until the end of 2025, as pipeline gas exports decrease, an economy ministry forecast seen by Reuters showed. 

Gas flows from Russia, Europe’s top supplier, are running at reduced levels this year after one route was shut when Moscow sent troops into Ukraine in February, some European countries were cut off for refusing to pay for gas in rubles, and a dispute broke out over repairs to a turbine for the Nord Stream 1 pipeline from Russia to Germany. Gas prices have surged as a result. 

Russia’s economy ministry forecasts that pipeline gas exports by Gazprom will fall to 170.4 billion cubic meters (bcm) this year, compared to its forecast published in May of 185 bcm and versus 205.6 bcm exported — in 2021. 

It anticipates the gas volumes will continue to fall beyond this year but did not give any explanation. 

As a result of already tight supplies, Gazprom’s average gas price was forecast to be $730 per 1,000 cubic meters (cm) in 2022, more than double the $304.6 per 1,000 cm charged last year, and representing a 40% increase compared to the previous forecast of $523.3 per 1,000 cm. 

RISING OIL OUTPUT 

Russia has started to gradually increase its oil production after sanctions-related curbs and as Asian buyers have increased purchases, leading Moscow to increase its forecasts for output and exports until the end of 2025, the document showed. 

Gazprom has also said gas supplies are increasing to China, but has not provided detail and Europe remains by far the bigger market for Russian gas. 

Higher oil export volumes, coupled with rising gas prices, would help Russia to earn $337.5 billion and $255.8 billion from energy exports this year and next, respectively. The economy ministry did not reply to request for a comment. 

Last year, Russia earned $244.2 billion from energy exports, the ministry said. Overall, economy ministry forecasts seen by Reuters earlier this week suggest Russia’s economy is dealing with sanctions better than Moscow initially feared and will contract less than expected. — Reuters

Marcos OK’s review of BOT Law rules

PHILIPPINE STAR/ MICHAEL VARCAS

By Diego Gabriel C. Robles

THE NATIONAL Economic and Development Authority (NEDA) has been directed by President Ferdinand R. Marcos, Jr. to review certain provisions of the revised rules of the Build-Operate-Transfer (BOT) Law.

“We have already received the President’s directive to review the implementing rules and regulations (IRR) of the BOT Law. We are presently awaiting the convening of the committee to review the rules,” Socioeconomic Planning Secretary Arsenio M. Balisacan said during the Economic Journalists Association of the Philippines (EJAP) forum on Wednesday.

The previous administration came out with the revised guidelines for the Republic Act (RA) No. 7718 in April.

“We have received several private sector stakeholders’ comments expressing their concerns over specific provisions of the IRR. Of course, careful review of the rules requires that we perform a balancing act: encouraging private investment to promote job creation, technological innovation, and product competition while protecting the public interest,” Mr. Balisacan said.

He said the President is aware of the issues raised by the private sector on the revised rules.

Business groups and some economists have raised concern over the rules, saying it compels private proponents to shoulder more risk while relieving the government of responsibility for delayed deliverables.

However, the NEDA chief declined to give details on changes to the IRR, but said discussions might revolve around the Material Adverse Government Action (MAGA) clause and arbitration issues.

“There are many other things but some of the revisions, I believe, are useful [and] are very good, and they should be kept. But I would like to see how that will move forward,” Mr. Balisacan added.

According to Section 12.22 of the BOT Law’s revised IRR, the government cannot be taken to court for arbitration.

Additionally, it defines MAGA as “any act of the Executive branch, which the project proponent had no knowledge of, or could not reasonably be expected to have had knowledge of, prior to the effectivity of the contract; and that occurs after the effectivity of the contract, that: specifically discriminates against the project proponent; and has a material adverse effect on the ability of the project proponent to comply with any of its obligations under the contract.”

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that “the risk and income sharing should be fair for both the government and the private sector participants so that the costs, as well as the financing required, would be predictable.” 

He also noted the importance of the sanctity of contracts and clear settlement procedures in case of disputes.

Makati Business Club Executive Director Francisco Alcuaz, Jr. earlier said there is a need to cancel or defer the implementation of the revised IRR.

“The new IRR takes the ‘partnership’ out of public-private partnership by putting all the risk with (the private sector) and taking away provisions that would allow (for) a fair, predictable return,” he said.

INFRASTRUCTURE PUSH
The NEDA is still waiting for Mr. Marcos to sign the executive order (EO) before starting the review of the BOT rules.

“We have to have the presidential authority to review it,” Mr. Balisacan said, adding the review may take place as early as next week.

The NEDA, along with the Public-Private Partnership Center, is already conducting its own consultation with private sector stakeholders.

“We have to look at economics; all the angles to make sure that, in the end, it is socially beneficial, it is economically beneficial, [and] it’s financially viable… In the end, it’s all about viability and it’s the government’s objective. In the end, we don’t want projects that [are] quite risky for government,” Mr. Balisacan told reporters on the sidelines of the forum. 

The Marcos administration is looking to attract more investments in infrastructure through public-private partnership.

“In light of the fiscal bind we find ourselves in, the use of public-private partnerships (PPPs), has emerged as an essential mode of financing the infrastructure that the economy needs. We expect the infrastructure push to support present and future growth drivers such as the manufacturing, tourism, IT-BPOs, and creative sectors,” Mr. Balisacan said.

SRA faces overhaul after import mess

GRANULATED WHITE SUGAR and sugar cubes are seen in this picture illustration taken on Dec. 16, 2018. — REUTERS

By Kyle Aristophere T. Atienza and Luisa Maria Jacinta C. Jocson, Reporters

PRESIDENT Ferdinand R. Marcos, Jr. on Wednesday said the Sugar Regulatory Administration (SRA) will be reorganized, following the resignation of key officials who signed a sugar importation order without his approval.

“We’ll reorganize the SRA and then we will come to an arrangement with the industrial consumers, the planters, the millers, suppliers of sugar so that whatever available supply would be released to the market,” Mr. Marcos, who chairs the agency’s board as Agriculture secretary, said in a mix of Filipino and English.

Mr. Marcos expects the sugar agency to be reorganized “before the end of this week.”

Three members of the SRA board, including an Agriculture undersecretary who served as Mr. Marcos’ representative, quit after Mr. Marcos said he did not approve the order allowing the importation of up to 300,000 metric tons (MT) of sugar. 

The President said he is leaving it up to legislators to investigate the matter, so he can focus on resolving the sugar shortage. 

Mr. Marcos said if the remaining supply will still not be enough, “we will be forced to make an importation.” He earlier said the Philippines might only need to import 150,000 MT of sugar, half of the 300,000 MT earlier proposed by the SRA.

“It’s the same situation in all the agricultural commodities in the Philippines. We don’t want to import as much as possible. But the problem is that our production is not enough,” he said. “The price has been increasing.”

Mr. Marcos said he has been negotiating with traders to lower the price of sugar.

“They first offered P80 per kilo. But I asked them to bring it down to P70. We’re getting there,” he said.

Based on the latest data from the SRA, the average price of refined sugar in wet markets in early August rose by 79.5% to P95 per kilogram from P52.93 in the similar period a year ago. The average price of raw sugar in wet markets also climbed by 57.7% to P71.43 from P45.29.

Socioeconomic Planning Secretary Arsenio M. Balisacan expressed concern over the rising prices of sugar and their impact on local food manufacturers and small businesses.

“You need to have a balancing act. While we protect our farmers from headwinds, we also have to ensure that the tools that we employ to protect our farmers do not harm the rest of the economy, especially that we are trying to get poverty reduced and the economy moving at high-growth trajectory,” he said during the Economic Journalists Association of the Philippines forum on Wednesday.

Mr. Balisacan said they need to talk to the sugar planters to ensure there is sufficient supply.

“The supply has to grow. The local production has to grow. Imports should be allowed, otherwise prices will continue to skyrocket,” he said.

‘MONOPOLY OF THE STATE’
Leonardo A. Lanzona, who teaches economics at the Ateneo de Manila University, called for the abolition of the SRA, saying the private sector should be allowed to import freely without regulation.

“The SRA had functioned much like the National Food Authority (NFA) which regulated the supply of rice mainly through its control of imports in order to stabilize prices,” Mr. Lanzona said, recalling that the NFA was riddled with “corruption and inefficiency” and was unable to fulfill its mandate.

“We are seeing the same situation in the SRA. In this case, we should simply allow the private sector to determine the imports it needs. We should close the SRA and end the import monopoly of the state,” he added.

The government should allow foreign investors to own and operate sugar mills “to enhance competition, efficiency and innovation,” Mr. Lanzona said.

“Protection of the local sugar industry needs to be dismantled,” he said, noting that regulation has prevented sugarcane farmers from selling their products “closer to the competitive price.”

Terry L. Ridon, a former lawmaker, said without the SRA, the local sugar industry will lose government protection.

“While lowering sugar prices is certainly the concern of all, a balancing act needs to be made to ensure the survival of the local sugar industry, including poor farm workers dependent on sugar production,” Mr. Ridon said in a Messenger chat.

Industry stakeholders should disclose the actual status of local sugar supply and “answer inconvenient questions as to why sugar workers remain the poorest in the nation, despite decades of sugar plantation operations,” he added.

The SRA fiasco should prompt Mr. Marcos to designate a new Agriculture secretary, said policy analyst Michael Henry Ll. Yusingco.

“The President is primarily responsible for the entire Executive branch. For this reason, each department must have a designated secretary because the President cannot realistically give his 100% attention to every department in the Executive branch,” he said in a Messenger chat.

“A qualified person has to take care of the day-to-day operational details for him, hence the alter-ego principle.”

Mr. Yusingco said the new Agriculture secretary should be an expert in the field, not a political appointee. He noted the SRA fiasco “reflects badly on his leadership, especially if authorities find that corruption was involved.”

“The embarrassment is exacerbated by the fact that the President was actually the designated (Agriculture) secretary. Obviously, the presumption as well as the public expectation will always be that he was fully aware of the SRA’s actions and decisions.”

NO NEED FOR IMPORTS
Meanwhile, sugar producers warned the government against allowing imports at the start of harvest season.

“Our mills are starting to harvest… If this harvest is lacking, then we agree with the President’s plan to import by October. But let’s wait and see if this harvest can augment supply,” Philippine Chamber of Agriculture and Food, Inc. President Danilo V. Fausto said in an interview on DZMM Teleradyo on Wednesday.

Mr. Fausto said the combined production of sugar farmers is 8,000 MT per day. He noted there is still an unused inventory of 171,769 MT available, 75% of which is for industrial use.

“We need to visit the warehouses to verify. That’s why I am wondering if they are saying there’s a shortage. Only when we are in a shortage do we turn to importation. You will kill the sugar industry and its workers… as long as we harvest, there should be no importation,” he added.

The SRA earlier estimated that raw sugar production in the crop year ending Aug. 31 will be 1.8 million MT, down 16% from the previous season.

United Sugar Producers Federation President Manuel R. Lamata said that prices will likely stabilize soon as the milling season begins.

“We have imported sugar also arriving as earlier ordered by SRA. We hope they will also locate where the imported sugar that came in is, so that it goes to the markets to help stabilize the price,” he said in a Viber message.

Samahang Industriya ng Agrikultura President Rosendo O. So said the SRA should consult with producers, importers, distributors, and traders to determine the appropriate import volume if the need arises.

“The volume will depend, that is why we need to speak to manufacturers. Whatever the remaining balance is, it should be the only import volume cleared. We are looking at around 100,000 MT, depending on production from October to December,” Mr. So told BusinessWorld Live on Wednesday.

The Foundation for Economic Freedom (FEF) said that the sugar crisis will likely impact the income of businesses and food processors, particularly small food vendors.

“We have been informed that a number of our bottling and fruit juice companies have cut down on the number of workers they hire because of inadequate sugar supply and the soaring prices of sugar in the country,” the group said in a statement.

The FEF said that the government should shift toward more “market-based solutions” while modernizing the industry to make it globally competitive.

IMPACT ON CONSUMERS
Meanwhile, Eric Teng, president of the Restaurant Owners of the Philippines (RestoPH), said in a Viber message to BusinessWorld that restaurants serving food with high sugar content may need to raise prices.

“We all need sugar. Not just in restaurants but practically in every household. For our coffee, desserts, cakes, etc. We hope the government, the Sugar Regulatory Administration, and sugar planters can recover normal supply as soon as possible and lessen the worsening food inflation and supply problem,” Mr. Teng said.

He said restaurants may likely adjust prices “minimally” to not “scare away customers.”

“For sugar, I do not know if we have alternatives and I do not know if substitutes are acceptable. If a restaurant is serving high sugar content products, I suppose their prices need to go up,” he said.

The Philippine Chamber of Food Manufacturers, Inc. (PCFMI) Chairman and President Rita Imelda B. Palabyab said the group informed Mr. Marcos of a shortage of premium refined sugar that companies need for food and beverage products, “which is affecting their capability to produce goods.”

She said PCFMI is confident that “the solution to the sugar supply shortage, specifically premium refined sugar, will arrive very soon.”

Mondelez Philippines, Inc. said that they are “not as affected” by the sugar shortage, since their products such as chocolates, Oreo biscuits, and Tang powder juice are manufactured in other Southeast Asian countries.

“The products that require sugar are manufactured outside of the Philippines. The sugar shortage does not necessarily impact us because we have the supply for our products based in other plants in other countries. We get our products as finished goods already,” Mondelez Philippines Vice-President and Managing Director Aleli H. Arcilla said during a media briefing in Quezon City on Wednesday. — with Revin Mikhael D. Ochave and Diego Gabriel C. Robles

BSP to keep hawkish stance for rest of 2022

Customers are seen at an outdoor restaurant in Antipolo, with the Ortigas skyline in the background, May 27, 2021. — PHILIPPINE STAR/ MICHAEL VARCAS

By Keisha B. Ta-asan

BANGKO SENTRAL ng Pilipinas (BSP) Governor Felipe M. Medalla did not rule out further interest rate hikes this year, after the widely expected tightening at its meeting today (Aug. 18).

“As to whether there will be more rate hikes in the remaining meetings (this year), we will not rule them out,” he said at the Economic Journalists Association of the Philippines forum on Wednesday.

“Now exactly how many rate hikes that would require, it’s hard to forecast because a lot of the things that drive inflation may subside.”

The BSP is widely expected to raise the benchmark rate today, with most analysts forecasting a 50-basis-point (bp) increase. If realized, this would bring the benchmark rate to 3.75% from the current 3.25%

A BusinessWorld poll last week showed 13 out of 18 analysts expect the Monetary Board will raise its benchmark interest rate by 50 bps, and three seeing a 25-bp increase. Only two analysts expect the BSP to keep rates unchanged. 

The BSP is maintaining a hawkish stance as it seeks to tame inflation, which quickened to a near four-year high of 6.4% in July.

Inflation averaged 4.7% in the January to July period, above the BSP’s 2-4% target band for the year, mainly due to soaring food prices and higher transport costs.

The central bank in June raised its average inflation forecast for this year to 5%, from 4.6% previously.

For 2023, the BSP’s inflation forecast was revised upward to 4.2% from 3.9% previously. Average inflation is expected to decline to 3.3% in 2024.

“We should aim for a point lower than 4% next year and a point close to 3% in the following year. Of course, the rest of the term of the current president, (inflation) should be between 2-4%,” Mr. Medalla said. 

Socioeconomic Planning Secretary Arsenio M. Balisacan said inflation, particularly in food, may dampen the economy’s recovery as well as poverty reduction efforts.

“As Governor Medalla has already pointed out, inflation remains a challenge, especially for the poor. I want to add that food inflation, especially, is a primary determinant of poverty simply because food constitutes a more significant proportion of the expenditure of poorer households,” Mr. Balisacan said. 

“For the poorest 10% of the population, food and beverages constitute nearly 60% of food expenditures. Rapid increases in food prices could very well dampen the effect of economic growth on poverty reduction,” he added. 

Asked what measures the government could implement to bring down food inflation, Mr. Balisacan said he favors targeted subsidies for the most vulnerable sectors.

“We should not use price controls to control inflation or temper food prices, because that does more harm than good, especially for the medium and longer term now,” he said.

“What we can do instead is to use the, no matter how small, resources to target the very vulnerable, particularly the poor groups through the 4Ps or cash transfers,” he added, referring to the Pantawid Pamilyang Pilipino Program (4Ps).

Mr. Balisacan said the government is ramping up the issuance of national IDs to ensure those who are deserving of subsidies will receive them.

“Moving forward, we just need to make markets more competitive, more efficient, reducing barriers to entry particularly in sectors that are highly protected so that you don’t get into a situation where the demand is rising,” he added.

Meanwhile, Mr. Medalla reiterated the BSP’s policy settings remain supportive of economic growth despite the current tightening cycle.

Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said the economy can absorb more rate hikes this year as the key policy rate is still below the pre-pandemic level.

“There are criticisms to not hike so much because the second-quarter numbers were weak. But if you think about it what was the weakness of the second quarter, it was inflation right?” Mr. Neri said in an interview on the sidelines during the forum.

“So you have to continue the fight against inflation to provide a better environment for growth. That’s why they have to continue rate hikes,” he added.

The Philippine economy expanded by 7.4% in the second quarter.

The government is targeting a 6.5-7.5% gross domestic product for this year.

D&L Industries set to export 50% of its products

D&L Industries, Inc. will target to export 50% of its products upon the rolling out of its First Industrial Township expansion next year in an economic zone in Batangas.

“We are hopeful that by the beginning of next year, the domestic economy will be in a much more stable position when things are really back to normal. And hopefully, other economies all over the world will also be back to normal and that should bode well for our export,” D&L Industries President and Chief Executive Officer Alvin D. Lao said in the Philippine Stock Exchange’s Star Investor Day on Wednesday.

The plant is located in an area under the Philippine Economic Zone Authority (PEZA), Mr. Lao said, adding that it means “we are required to export a minimum of 50% of what we make and that export target is something that we have been planning for quite a while.”

According to the Special Economic Zone Act of 1995, corporations registered with the PEZA to engage in manufacturing in the customs territory or in the non-restricted areas within the ecozone are required to export at least 50% of products produced in the area.

The Batangas expansion is expected to open at the beginning of next year after it has been delayed because of the pandemic.

In the first half, the company’s export contribution stood at 34% at P7.7 billion, a 69% growth versus last year, driven by its plants’ continued operations amid the pandemic and some market share grab.

“For our plants, we have been able to continue to operate even during [the pandemic] and even during the volatile period where raw materials’ prices were continually going up, we are able to lock in a lot of our raw material supplies and make sure that we would not get cut,” Mr. Lao said.

“We had a lot of customers who were having difficulties sourcing from their original [suppliers and] because we are able to continually access supply to our raw materials that meant we can continually service not just our existing customers but some new customers as well,” he added.

China, with its ongoing lockdowns, is expected to remain the biggest export market for D&L Industries next year.

“We’ve been able to maintain exports mostly within Asia-Pacific. We have some markets like China, which are currently experiencing a lot of lockdowns but we heard that there are some improvements announced,” Mr. Lao said.

He said there had been announcements of days of lockdowns being reduced and target dates for the return of face-to-face classes.

“There are some signs that lockdowns are going to end soon so going forward, China definitely will still be a big market for us,” Mr. Lao added.

On Wednesday, shares in D&L Industries rose by 20 centavos or 2.67% to P7.68 apiece. — Justine Irish D. Tabile

Shakey’s to spend P362 million for store expansions in second half

SHAKEY’S Pizza Asia Ventures, Inc. said that it will be fully exhausting the remaining P362 million from its capital expenditure budget this year on store expansions of its five brands in the second half.

“The team will be busy with expanding these brands and that is the priority but we’ll be on the lookout for any ‘wow-ing’ or fantastic opportunity that may come. If it comes, it comes, but what we’ll be focusing on is growing organically with the brands that we have now,” Shakey’s President and Chief Executive Officer Vicente L. Gregorio said during the Philippine Stock Exchange’s Star Investor Day on Wednesday.

In the first half, the company spent P288 million from its largest capital expenditure budget to date — P650 million — for store network expansion.

“We had the highest allocated budget for this year compared to anytime in Shakey’s history,” Mr. Gregorio said.

As of June this year, the company’s existing brands opened 10 new stores from 316 last year: seven company-owned and three franchisee-owned.

The Shakey’s group has five brands to date: Shakey’s Pizza Parlor, Peri-Peri Charcoal Chicken and Sauce Bar, Project Pie, R&B Tea, and Potato Corner.

Potato Corner, which it agreed to acquire late last year, opened 101 new outlets in the first semester, bringing its outlet network count to 1,265 excluding those in Indonesia.

“We are ready to scale up the business even more and we want to strengthen the roster of our brands to fuel growth for 2022,” Mr. Gregorio said.

Despite being present in more than 38 countries, Potato Corner remains to be “under-penetrated” locally. More establishments in the country can be tapped for outlets of the food kiosk chain, Mr. Gregorio noted.

Mr. Gregorio said: “In international, the floodgate has been opened, there have been a lot of inquiries and we just want to fine-tune our international program making sure it’s gonna be ‘wow-ing’ and profitable for all our franchise partners.”

“The brands that we have — Shakey’s, Peri-Peri, and Potato Corner — have the potential to grow domestic and international,” he added.

On the stock exchange on Wednesday, Shakey’s shares rose by 2.46% or 19 centavos to P7.92 apiece. — Justine Irish D. Tabile

Citicore’s REIT plans to grow portfolio to 950MW by 2025 

CITICORE Energy REIT Corp. (CREIT) is targeting to grow the capacity under its portfolio to 950 megawatts (MW) by 2025, its top official said on Wednesday.

In a virtual press briefing, CREIT President and Chief Executive Officer Oliver Y. Tan said that as of 2022, the total installed capacity of its tenants is at 145 megawatts of direct current (MWDc). The 121 megawatts of its sponsor’s project pipeline are yet to be infused into CREIT, he added.

The company invests in income-generating renewable energy properties. Lease income from its asset portfolio generates a steady revenue stream.

According to Mr. Tan, the Clark solar power plant accounted for 21.7% of the 145-MWDc installed capacity, which the company estimated will be able to reduce approximately 231,720 tons of carbon dioxide (CO2) annually.

For the entire design life of the power plants, the capacity translates to an aggregate reduction of 7 million tons of CO2, he added.

Mr. Tan said that CREIT is looking to expand its agro-solar projects, which allow solar plants and vegetable farmers to coexist in the area where solar power plants are being operated. The concept is said to have been pioneered by the Citicore group locally.

“We always welcome new technology, other technology as long as it is renewable and clean energy,” he said.

In the second quarter, CREIT reported a net income of P300.84 million, more than four times higher than the P65.68 million earned in the corresponding period last year.

On Wednesday, CREIT shares slipped by 1.22% or P0.03 to close at P2.42 apiece. — Ashley Erika O. Jose

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