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Philippines to launch dollar bond issue

REUTERS
A U.S. five dollar note is seen in this illustration photo June 1, 2017. — REUTERS/THOMAS WHITE/ILLUSTRATION/FILE PHOTO

THE PHILIPPINES returned to the global bond market for a third time this year with its dual-tranche offering of US dollar-denominated bonds on Monday, a top official said.

National Treasurer Rosalia V. de Leon told reporters the Philippines will be offering dollar bonds with tenors of 10.5 years and 25 years at benchmark sizes, or around $500 million for each tenor.

Documents showed the initial price guidance is set around the level of Treasuries plus 90 basis points and 3.55% for the 10.5-year and 25-year bonds, Reuters reported.

Bank of China, Deutsche Bank, Goldman Sachs, Morgan Stanley, MUFG, Standard Chartered and UBS have been tapped as joint bookrunners.

S&P Global Ratings said it assigned a “BBB+” long-term foreign currency rating to the proposed US dollar senior unsecured notes to be issued by the Philippines.

According to Bloomberg, Fitch Ratings gave a BBB (stable) rating for the issuance, while Moody’s Investors Service assigned it with a Baa2 (stable) rating.

Ms. De Leon said proceeds from the latest global bond sale will fund the national budget.

The 10.5-year notes will mature on Jan. 6, 2032, while the 25-year bonds will mature on July 6, 2046.

The Philippines is planning to raise a total of $7 billion (P340.5 billion) from the international debt market this year, Ms. De Leon said.

The government raised $500 million from a yen-denominated Samurai bond issue in March, and sold $2.5 billion worth of euro-denominated notes in April.

Finance Secretary Carlos G. Dominguez III said in April that the Philippines aims to sell dollar bonds before interest rates rise this year.

Last year, the country tapped the US global bond market twice: raising $2.75 billion in its dual-tranche offering in December and another $2.35 billion in April.

The government wants to borrow P3 trillion from local and foreign sources this year to fund its budget deficit seen to widen to 9.3% of gross domestic product.

The government is ramping up the implementation of infrastructure projects and purchasing more coronavirus vaccines this year.

The economic team set an 85:15 borrowing mix for the year in favor of domestic sources to minimize risks from foreign exchange volatility and other external developments.

The government set a 6-7% growth target for the Philippine economy this year, lower than initially expected but still better than the record 9.6% contraction in 2020. — B.M.Laforga and Reuters

Diokno sees PHL exit from FATF’s ‘gray list’ in less than two years

THE CENTRAL BANK chief is hopeful the Philippines will be removed from the Financial Action Task Force’s (FATF) “gray list” in less than two years, once the government shows it can effectively implement the tighter laws against money laundering and terrorism financing.

“The Philippines will be delisted from ‘gray list’ upon successful completion of all action plans — hopefully on or before January 2023,” Bangko Sentral ng Pilipinas Governor (BSP) and Anti-Money Laundering Council (AMLC) Chairman Benjamin E. Diokno said in a Viber message to reporters on Monday.

The FATF on Friday added the Philippines to its gray list or list of countries with strategic deficiencies in its anti-money laundering/counter-terrorism financing (AML/CTF) framework, which means it will be subjected to increased monitoring.

“This means we as a country made commitments to correct deficiencies within a particular timeframe. Hence, it is under increased monitoring,” Finance Secretary Carlos G. Dominguez III said in a Viber message to reporters.

Mr. Diokno said the Philippines needs time to show the effectiveness of recent laws against money laundering and counter-terrorism financing.

Republic Act 11479 or the controversial Anti-Terror Act of 2020, which laid out tougher measures against terrorism financing, took effect last year.

Republic Act 11521 which further strengthened the Anti-Money Laundering Act of 2001 was signed into law by President Rodrigo R. Duterte on Jan. 29. The FATF had given the Philippines until Feb. 1 to show tangible progress that it has imposed tighter AML/CTF measures.

Mr. Diokno said the National Anti-Money Laundering/Combating the Financing of Terrorism Committee will be actively working to ensure the Philippines will exit the FATF’s gray list by addressing the remaining action plans.

“We remain strongly committed to swiftly resolve the remaining strategic deficiencies (18 from the original 70) within agreed timeframes. In any case, there is no sanction for being a ‘jurisdiction under increased monitoring,’” Mr. Diokno said.

The Philippines is expected to work on 18 remaining action plans that were flagged out of 70 in the 2018 Mutual Evaluation Report, which identified gaps in its AML/CTF regime. — Luz Wendy T. Noble

Aquino could still be kingmaker even after death

People leave flowers near the residence of the late former President Benigno S.C. Aquino III in West Triangle, Quezon City, a day after his funeral, June 27. — PHILIPPINE STAR/ MICHAEL VARCAS

By Kyle Aristophere T. Atienza, Reporter

LUDIVINA LECETIVO, 43, was one of the many Filipinos who were disgruntled by the Aquino government’s slow response to the destruction brought by Typhoon Haiyan (Yolanda) in 2013.

“But I realized that there’s no such thing as a perfect leader,” she said in a Facebook Messenger chat. “He proved his worth through his economic legacies,” she said of the late President Benigno S.C. Aquino III.

The former Philippine leader ran after tax evaders and unscrupulous officials, giving him more revenue to build roads and schools and boost cash aid to the poor while cutting debt.

These efforts led to investment-grade credit ratings for the Philippines and economic growth exceeding 6% from 2012 to 2014.

Ms. Lecetivo said she had hoped that President Rodrigo R. Duterte would continue the reforms started by his predecessor to improve government service. “I was wrong. I can’t tolerate foul mouth, indecency and misogyny.”

“I am now an ex-Duterte supporter.”

Political analysts think the opposition could attract voters like Ms. Lecetivo, with Mr. Aquino’s death likely winning public sympathy and galvanizing support for Mr. Duterte’s opponents at next year’s elections.

“Popular presidents’ deaths usually become a rallying cry for their supporters,” Jean Encinas-Franco, a political science professor from the University of the Philippines, said in a Facebook Messenger chat. “It becomes a unifying force to revive their legacy.”

The grief expressed by Filipinos on social media shows that some of them long for change, she pointed out.

Mr. Aquino, who sent his predecessor Gloria Macapagal-Arroyo and at least three senators to jail as part of his anti-corruption drive, died on June 24 at 61 due to renal disease secondary to diabetes. His cremated body was buried on Saturday alongside his parents at a cemetery in the Philippine capital.

“It remains to be seen to what extent his death will affect the 2022 elections, but I am sure the opposition is already looking for ways to make it work in their favor,” Ms. Franco said.

Members of the opposition should by now strategize, reorganize and prepare for the election battle next year, when Filipinos will vote for their next President, among other officials, campaign strategist Gerardo V. Eusebio said in a Facebook Messenger chat.

The death of the graft-busting former leader, who defied China by suing it before a United Nations-backed international tribunal for its island-building activities in the South China Sea, could be translated into popular support for a relative at next year’s elections.

In the absence of a political heir, popular support could be transferred to the political party that best identifies with him, said Mr. Eusebio, who teaches political science at De La Salle University.

“A direct beneficiary could be former Senator Paolo Benigno A. Aquino as a nephew of the late President, but I feel he might be a little wet behind the ears for the presidency,” he added.

Critical mass also might still be lacking.

“We can’t compare the outpouring of support that Ninoy, Cory, FPJ and Jesse Robredo that catapulted Mr. Aquino, Senator Grace Poe and Vice-President Maria Leonor G. Robredo to power,” Mr. Eusebio said. “It is now up to the campaign consultants and strategists to do their jobs.”

The son of ex-President and “People Power” icon Corazon C. Aquino was thrust into the political limelight on a massive outpouring of grief following her death in August 2009. He beat his rivals in the presidential race despite a rather undistinguished legislative career.

Mr. Aquino, like his parents, came from pedigreed stock — landed, aristocratic families that have long been part of the ruling elite. His 2010 campaign was based on a legacy far greater than his own.

Aside from having the first female Philippine president for a mother, his father Benigno Jr. was the country’s greatest democracy champion before he was assassinated in 1983 presumably by agents of the dictator Ferdinand Marcos. Corazon ended Marcos’s two-decade rule in the popular uprising of 1986.

Like Mr. Aquino, Ms. Poe received popular support when she ran for senator in 2013, years after her adoptive father and movie icon Fernando Poe, Jr. died. Before his death, he ran for President in May 2004 and lost, allegedly amid cheating.

Meanwhile, Ms. Robredo won a congressional seat also in 2013, less than a year after the death of her husband Jesse Robredo, famous for transforming Naga City in central Philippines into one of Asia’s most improved cities when he was its mayor.

President Rodrigo R. Duterte’s handling of the coronavirus pandemic would be key to either negating the effect of Mr. Aquino’s passing or fueling a clamor for change, said media research expert Jay Bautista.

“Will the cash aid, gradual opening of the economy and vaccine rollout be enough to keep the population from replacing the status quo?” he asked.

“A lot of variables are at play now, unlike in 1986 and 2010 when the passing of an Aquino was succeeded by another Aquino,” he said. “Right now, the opposition is not led by an Aquino unless Kris his sister, or Bam comes into the picture.”

The opposition could bank on Mr. Aquino’s strong anti-corruption drive, which gained popular support during his time, Victor Andres Manhit, president of a local policy think tank, said by telephone.

The opposition or any alternative candidates “should question the actions taken in the past five years, including the Duterte administration’s pandemic response,” he pointed out.

The opposition should also elevate efforts to counter misinformation that demonize the past administration’s good governance reforms and other legacies, Mr. Manhit said.

‘OLD POLITICS’
Granted, while the politics of Mr. Aquino represented the promise of the post-EDSA democracy, it also betrayed its limits.

Mr. Aquino initiated key government reforms during his presidency, but they were not enough, said Cleve Kevin Robert V. Arguelles, a political science lecturer at De La Salle.

Despite his crusade against corruption, Mr. Aquino failed to dismantle patronage politics that weakens the delivery of public service, he said in a Facebook Messenger chat.

“The most important lesson of his six years in power is that a President cannot lead a reform coalition while keeping the masters of old politics happy,” he said.

Mr. Aquino “attempted to use his cross-class popular appeal to mobilize public support for anti- corruption and good governance reforms,” Mr. Arguelles said. “But his reformist agenda was frustrated by his ties to old politics.”

“Aquino’s success was in his reformist policies, but his failure was in insisting that reform could be done without changing our elite-dominated political system.”

Political analyst Antonio Gabriel M. La Viña said the bereaved president “did not go far enough and ultimately the reform agenda faltered.”

Mr. La Viña, former dean of the Ateneo De Manila School of Government, said Mr. Aquino failed to institutionalize key political reforms because his political party, like other political groups at that time, was dominated by traditional politicians. “Our politics is much worse now than in 2016.”

Mr. Aquino tried to fulfill the promises of the 1986 street uprising led by his mother by enforcing transparency and accountability in government, but he was overwhelmed by the oligarchy, bureaucratic inefficiency, and disasters beyond the control of humans, Mr. Eusebio said.

“He meant well but probably lacked the resolve and political acumen in some sensitive issues,” he said. “Elitist politics and oligarchic strangleholds were largely the culprits.”

Ana Patricia C. Paje, 29, was not a fan of Mr. Aquino’s deregulation and privatization policies, as well as his handling of the hostage crisis involving Hong Kong tourists in 2010 and the massacre of 44 police commandos by Muslim rebels in 2015.

“I would not say that I hated him, but I was very much against the policies he enforced,” she said in a Facebook Messenger chat.

Neither did she vote for Mr. Duterte. She thinks that while Mr. Aquino had his faults, the country under his administration was better.

She said she started to appreciate the late President’s legacies after his death. “If back then I was on the far end of the political spectrum, I am less radical now.”

Voyager raises $167 million as it plans to expand PayMaya services, open digital bank

COMPANY HANDOUT

By Arjay L. Balinbin, Senior Reporter

VOYAGER INNOVATIONS raised $167 million (P8.15 billion) in funding for the expansion of its financial technology unit PayMaya Philippines, including the establishment of a digital bank.

Voyager’s main shareholder PLDT, Inc. told the stock exchange that it participated in the latest funding round for the technology company, alongside existing shareholders, private equity firm KKR & Co. and China’s Tencent Holdings.

IFC Financial Institutions Growth Fund, a member of the World Bank Group, also invested in Voyager.

“This investment includes $121 million in fresh funding and $46 million from previously committed funds,” Voyager said in a statement.

The company also announced it has applied for a digital bank license with the Bangko Sentral ng Pilipinas (BSP).

Voyager said PayMaya plans to offer new products such as credit, insurance, savings, and investments through its planned digital bank.

“We have seen a quantum leap for digital payments adoption in the Philippines over the past year, and PayMaya has served as the nexus connecting consumers and enterprises with enriching digital finance experiences. This investment supports the unique value we bring and gives us a natural head start with the target market for the digital banking service,” Orlando B. Vea, Voyager and PayMaya chief executive officer and founder, said in a statement.

The digital payments company had processed P700 billion worth of transactions in 2020, and is on track to “more than double” its gross transaction value this year, Mr. Vea said at a briefing in May.

With the fresh funds, Voyager might be “on par or ahead” of the competition, Astro C. del Castillo, managing director at First Grade Finance, Inc., said in a phone interview.

The Philippines is an appealing market for foreign investors because of the low penetration rate for digital banking, he added, noting there is still “a lot of space” for growth.

Only 29% of Filipino adults had accounts with formal financial institutions in 2019, leaving about 70% or 51.2 million unbanked, based on a BSP survey.

The BSP wants to bring the country’s banked population to 70% of Filipino adults by 2023.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.

PLDT shares closed 0.23% lower at P1,285 apiece on Monday.

Jollibee’s twin moves to cut debt set by yearend

JOLLIBEE Foods Corp. (JFC) said it is aiming to execute its preferred shares issuance and the buyback of its US-dollar perpetual bonds by the end of the year to cut debt.

“Once all are executed by December 2021, JFC would have fewer debt obligations, more distributed financial maturities over the next few years, lower foreign exchange risks, and better leverage and debt servicing ratios,” the company said in a statement on Monday.

The company is planning to issue P8-billion to P12-billion perpetual preferred shares by September this year, subject to the approval of the Securities and Exchange Commission (SEC) and the Philippine Stock Exchange (PSE).

With a portion of net proceeds from the preferred shares offer, JFC is looking to buy back around $250 million out of its $600-million perpetual securities issued in January last year.

“These transactions will support JFC in maintaining its capability to finance its profitable growth, which is forecasted to accelerate in the next months and years,” the company said in a statement on Monday.

Meanwhile, the company said it would apply with the SEC for the shelf registration of up to 20 million peso-denominated, cumulative, non-voting, non-participating, non-convertible, redeemable perpetual preferred shares priced at P1,000 each to total P20 billion.

JFC said these will come from the reclassification of existing authorized and unissued common shares.

The 20 billion shelf-registered perpetual preferred shares will be issued within the shelf period of up to three years from the effectivity of its registration statement. It will also apply for the listing of the perpetual preferred shares with the PSE.

JFC said its initial issuance, which is eyed for this year, will have a base offer of P8 billion with eight million preferred shares, with an oversubscription option of up to P4 billion with four million preferred shares. It may be issued in one or two series and may have step-up dividend rates if these are not redeemed on the third or fifth year anniversary of the issue date.

The restaurant giant is operating 17 brands in 33 countries through 5,815 stores worldwide.

JFC said it is eyeing to open 450 new stores in 2021. As of the end of May, the company has opened 130 new stores so far — with 107 set up abroad, while 23 were launched in the Philippines.

JFC shares at the stock exchange went down by 0.19% or 40 centavos on Monday, closing at P215.60 apiece. — Keren Concepcion G. Valmonte

AC Energy lends P1B to Solar Philippines affiliate for project sites

PIXABAY
AC Energy targets to reach a net attributable capacity of 5,000 MW by 2025. — PIXABAY

AYALA-LED AC Energy Corp. is lending up to P1 billion to an affiliate of Solar Philippines Power Project Holdings, Inc. to fund the acquisition of sites for solar power projects.

The listed energy platform told the stock exchange on Monday that it had signed on June 25 an omnibus loan and security agreement with borrower Provincia Investments Corp. and Solar Philippines, which acts as sponsor.

Under the agreement, the term loan facility will be secured by a real estate mortgage over Provincia Investments’ and third-party mortgagors’ title to, or rights and interests over, real assets in favor of AC Energy.

It also covers a mortgage and pledge over the shareholding of Solar Philippines in one of its fully owned subsidiaries.

The agreement comes after AC Energy disclosed on Jan. 25 that it had signed preliminary binding agreements with Solar Philippines and Provincia Investments for potential joint ventures in developing solar power projects in the Philippines.

Also in January, AC Energy said that it had forged a deal to acquire 99% of the primary and secondary shares of Solar Philippines’ subsidiary Solar Philippines Central Luzon Corp. (SPCLC) for P619,000.

The transaction will allow AC Energy to earn “a stable dividend income” from the operations of the solar power project under SPCLC, a special purpose vehicle under the holding firm founded by Leandro L. Leviste.

AC Energy hopes to become the largest listed renewable energy platform in Southeast Asia as it targets to reach a net attributable capacity of 5,000 MW by 2025. The company firm has around 1,200 of attributable capacity in the Philippines, with renewables making up more than half.

Shares of AC Energy climbed by 24 centavos or 2.93% to finish at P8.42 apiece on Tuesday. — Angelica Y. Yang

SBS invests in more warehouses after sale of shares in subsidiary

SBS Philippines Corp. will invest in more warehouses after it sold its shares in subsidiary Lence Holdings Corp., the company disclosed to the exchange on Monday.

It earned P588.77 million in gross revenue from the share sale, a portion of which will be used to develop more warehouses for its product line.

SBS Philippines is now expanding facilities to cater to food ingredient raw materials.

The new facilities will be housed at its Quezon City headquarters to improve operational efficiency. It will also be utilizing technology.

The first warehouse will feature a multi-level racking system with a capacity of up to 1,800 pallet location. It will also have semi-automated shuttle carts.

These new facilities also target the increased demand for Halal certified logistic and distribution facilities, the company said.

SBS Philippines is a chemical trader and distributor of clients in several industries such as food ingredients, industrial, feed and veterinary care, pharmaceutical, and personal care and cosmetics.

Its logistics infrastructure currently has a network of 15 warehouse facilities in five sites across the greater Manila area.

On Monday, shares of SBS Philippines at the stock exchange went up by 3.53% or 15 centavos to close at P4.40 each. — Keren Concepcion G. Valmonte

Cirtek finalizes pricing of stock rights offer, bonus detachable warrants

CIRTEK Holdings Philippines Corp. has finalized the offer price and the terms for its stock rights offering and bonus detachable warrants with underlying common shares.

In a disclosure to the exchange on Monday, the company said it will be offering 249,442,472 entitlement rights for the price of P5.50 each. Cirtek Holdings placed the ratio at one entitlement right for every 1.68 common shares.

The offer is now sized at P1,371,933,596.

It comes with 249,442,472 bonus detachable warrants and 249,442,472 common shares, “which are being offered free of charge to all subscribers of the entitlement rights.” It comes at an exercise price of P5.50 each.

The company said in its preliminary prospectus that it will use proceeds from the offer to pay for the existing debt or to pay out short-term obligations of Cirtek Electronics Corp. (CEC) and fund the working capital of Quintel Cayman Ltd., CEC, and Cirtek Advanced Technologies and Solutions, Inc.

Proceeds from the exercise of the bonus detachable warrants will also be used to finance the working capital of the said companies.

Shares of Cirtek Holdings at the stock exchange went up by 0.30% to close at P6.62 apiece on Monday. — Keren Concepcion G. Valmonte

LRMC partners with Angkas for ride-hailing services

LIGHT Rail Manila Corp. (LRMC), the private operator of Light Rail Transit Line 1 (LRT-1), said on Monday it partnered with Angkas (DBDOYC, Inc.) for ride-hailing services.

“LRMC has partnered with the leading app-based motorcycle taxi ride-sharing service Angkas,” LRMC said in an advisory on Monday.

The partnership deal includes an “exclusive fare discount” for LRT-1 passengers, according to the company.

At an online forum organized by the Joint Foreign Chambers of the Philippines last week, LRMC President and Chief Executive Officer Juan F. Alfonso said the ride-hailing services, through the company’s partnership with Angkas, “will be available at certain stations at peak hours.”

Passengers will be able to hire Angkas to and from LRT-1.

LRMC also announced on Monday that it reached another milestone of 15 million safe man-hours without a lost time injury (LTI) among its workers.

The company said LTI is an injury suffered by an employee on the job which results in fatality, permanent disability, or time lost from work.

“Safety is a way of life and a fundamental value in LRMC. We, at LRMC, believe that all accidents can be prevented. And this is the mind-set across the organization — from top management to the staff, maintenance, technicians, and utility team. We look out for one another. If someone comes to you and points out an unsafe act, unsafe condition, or even a near-miss, it is never taken as an offense, but as an opportunity to do things better,” Mr. Alfonso said.

LRMC is the joint venture of Ayala Corp., Metro Pacific Light Rail Corp. and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd. It holds the P65-billion, 32-year PPP contract to operate LRT-1 and build its extension to Cavite.

Metro Pacific Investments Corp. is one of three Philippine subsidiaries of Hong Kong’s First Pacific Co. Ltd., the others being PLDT, Inc. and Philex Mining Corp. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., maintains interest in BusinessWorld through the Philippine Star Group which it controls. — Arjay L. Balinbin

Innovative ways of marketing properties emerge

By Keren Concepcion G. Valmonte

CREATIVE WAYS of promoting property listings, such as virtual tours, have emerged amid the pandemic.

Carousell Philippines Country Manager Raffy Montemayor said virtual property tours, video calls and other online tools are expected to drive real estate sales.

“We will look at even more ways to help buyers make the decision purely online. We see that as something that is a permanent trend, we really want to make more efforts there,” he said in a video call with BusinessWorld.

Majority of their clients on the platform have been using video calls and conducting virtual tours of properties up for sale during the lockdown.

Developers are also becoming more aggressive, providing photos and videos to help brokers and agents effectively market residential projects.   

Carousell said that these services used to be limited to overseas Filipino workers, which make up for 40% of its online traffic. 

“In 2021, we’re seeing that developers are spending more online,” Mr. Montemayor said.

“They are spending more online on our platform than they ever did pre-pandemic and we believe that is going to stay because we believe we’re a more cost-effective way for them to reach home buyers because everybody’s at home and online,” he added.

Carousell Philippines will be holding its first online property expo from July 14-18 to help developers, brokers, and agents upgrade their skills and to provide property buyers with current market information.

The company said it saw a significant increase in listings of apartments and condominiums located in central business districts like Bonifacio Global City, Makati, and the Manila Bay Area.

“But the interest of property buyers right now is on house and lots in Metro Manila and that one was surprising to us. The growth in house and lot inquiries was 24% year on year and then lots only was 42% year on year,” Mr. Montemayor said.

Before the pandemic, people were searching for properties outside Metro Manila for their second homes. But as the health crisis forced everyone to stay indoors, it became more important to have fast internet connection, healthcare infrastructure, and access to delivery and food solutions.

“In the long-term, as those things develop outside Metro Manila, I think that will continue to increase but I think there’s this temporary pause [in demand for properties] outside Metro Manila at least in terms of growth,” Mr. Montemayor said.

While it is difficult to say how much sales Carousell helped in generating, around 85% of its top property sellers renewed their subscription to list properties on the platform.

It is now working to give all sellers, not just those listing properties, the opportunity to build their own brand through the website to help them establish themselves and reach more prospective buyers.

Compared with other property selling portals, Carousell takes pride that it is a “one-stop marketplace” for consumers.

“We have a wider audience base and we’re part of the journey of a home buyer even before they’re thinking about buying a home,” Mr. Montemayor said, adding that it is working to improve a personalized experience for buyers.   

Post-pandemic, Mr. Montemayor said he expects experienced property buyers to return to doing things offline.

With more digital native Gen Zs entering the workforce, he thinks that the investments on digital infrastructures will pay off.

“As these people go into first-time home buying, their default is going to be online so actually, we really believe that this is going to be the norm and this is going to get more and more even post-pandemic,” he said.

Play to earn: The rise of NFT gaming in the Philippines

IMAGE COURTESY OF YIELD GUILD GAMES

By Brontë H. Lacsamana

WITH the rise of the play-to-earn phenomenon, NFT (non-fungible token) gaming guilds and associations have cropped up around the world to educate people and help them join in.

One of these is Yield Guild Games (YGG), founded by Gabriel “Gabby” Dizon; Beryl C. Li; and a third individual, who goes by the pseudonym Owl of Moistness. The guild invests in NFTs in games and organizes a player community that can earn income from playing. In mid-June, they reported 1,000 scholars around the world playing a Pokemon-inspired game called Axie Infinity, who have earned more than 14 million in-game tokens known as Small Love Potions (SLPs) — equivalent to about $1.9 million.

YGG’s $4-million Series A investment, completed this June, will expand this network by purchasing and lending out even more NFT assets.

The investment is led by BITKRAFT Ventures, a venture capital firm focused on gaming, e-sports, and interactive media. In a statement, one of its founding partners, Jens Hilgers, lauded YGG’s efforts as a catalyst for the transition towards player-owned economies.

Aside from investing in Axie Infinity, YGG has also partnered with Splinterlands, a blockchain-based trading card game, with which guild members have been granted early, priority access. The game is one of many who see great potential in the play-to-earn model.

“At its core, YGG is a community of play-to-earn gamers,” said Mr. Dizon in a statement on their recently completed investment. “Think of it as a massively multiplayer online (MMO) guild, for example, but operating across several games, investing in yield-generating NFTs within those games, and lending those in-game assets and inventory out to our player base.”

“Games and virtual worlds are increasingly becoming hosts of real economic activity, enabled and accelerated at scale through blockchain technology,” he said.

WHAT IS NFT GAMING?
The “play-to-earn” movement is an emerging phenomenon in gaming, wherein players NFT games collect rewards within the game that can later be converted to real cash. Though this form of cryptocurrency has been around for a few years, it reached new heights during the coronavirus disease 2019 (COVID-19) pandemic, with ensuing lockdowns rendering millions jobless and open to earning money through gaming.

In the Philippines, where the unemployment rate continues to fluctuate, the NFT game Axie Infinity has enjoyed massive popularity. Its Vietnamese developer, Sky Mavis, reported that 29,000 of the 70,000 downloads of the game in April this year came from the Philippines.

“At first, I wasn’t convinced that this game (can let you) earn by playing, but I tried it. Out of my curiosity, I bought three Axies for about $4 to $5,” said Arthur “Art Art” C. Lapina, one of the first players of the game in Cabanatuan City, Nueva Ecija, where an active community now copes with joblessness by getting income from the game.

In the documentary Play-to-Earn: NFT Gaming in the Philippines, which came out in May, produced by YGG, Mr. Lapina explained that with the cute, in-game pets he bought, called Axies, he could battle other players to earn SLPs, which he would then swap for cryptocurrencies like Ethereum and convert them to pesos via Coins.ph.

UNDERSTANDING THE NFT GAMING MOVEMENT
NFTs are digital properties that can take many forms, from memes and animated GIFs to in-game assets. Using blockchain, an NFT’s record of ownership is stored in a digital ledger, so that players — and not game developers — own their in-game collectibles. This means NFT items in blockchain-based games can be moved off the platform and sold or traded in any open market, which is what Mr. Lapina does to turn his SLP into cash.

When Mr. Lapina first tried his hand at Axie Infinity in April 2020, his first cash-out after 15 days of playing amounted to just P1,000, according to his interview with BitPinas. When the value of SLPs increased in July 2020, the pay reached the ballpark of P14,000 and beyond, after which the movement rapidly spread via word-of-mouth in Cabanatuan City.

However, because of Axie Infinity’s popularity, starting out in the game has now become difficult and expensive. A team of three Axies, which cost just $5 almost a year ago, now fetches steep prices of about $1,000.

“Our main focus at the moment is to provide scholarships, (where) we offer players Axie teams (so they can) play and actually earn for themselves,” said John Emmanuel “Pot” Dela Peña in the documentary. He is one of the three entrepreneurs who came up with the Axie University (AxU) program to address the problem of cost.

The scholarship system involves managers who rent out Axies to those that can’t invest money upfront. To earn their income, these “scholars” train and use the NFTs to win tokens. Earnings are split among the scholar, the NFT owner, and the community manager.

One scholar who takes the game very seriously is 22-year-old Howard A. Garancho, a college graduate unable to find work. The Play-to-Earn documentary showed a glimpse of his computer set-up, with sticky notes on the wall containing game-related reminders. “I treat it as work because if you want to earn in that game, you have to commit in that game. You have to play it daily, to play hard,” said Mr. Garancho.

DFNN subsidiary adds new gaming partner

SPADEGAMING will initially launch 71 games including 168 Fortunes, Da Fu Xiao Fu, FaFaFa, Lucky Cai Shen, and Shanghai 008. — SPADEGAMING.COM

DFNN, Inc. said on Monday that a gaming platform of its subsidiary Inter-Active Entertainment Solutions Technologies, Inc. (IEST) had added a new gaming partner.

The listed gaming and technology company said in a stock exchange disclosure that Inplay.ph, a gaming platform under IEST, recently added Spadegaming as a gaming partner.

DFNN said Spadegaming, based in Asia, creates Asian-themed games that fit the mobile and desktop platforms.

Spadegaming will initially launch 71 games including 168 Fortunes, Da Fu Xiao Fu, FaFaFa, Lucky Cai Shen, and Shanghai 008, which are seen to increase revenues for Inplay.ph.

The listed gaming firm also announced that IEST’s electronic casino platform Instawin gained approval from the Philippine Amusement and Gaming Corp. for the inclusion and launch of nine new games from Real Time Gaming.

“The games include popular titles such as Five Wishes, Achilles Deluxe, Epic Holiday Party, Frog Fortune, Vegas Luxe, Wild Hog Luau and Witchy Wins,” DFNN said.

“This is in addition to the also approved fourteen games from Triple Profit Games comprised of 88 Fortunes, 777 Dragons, 8 Dragons, DJ Rock, Fruity Fruit Farm, King of Fruits, Lucky Leprechaun, Sea World, Space Galaxy, TPG777, Vampire’s Feast, Fortune Hotpot and Tarot Deck,” it added.

DFNN posted a net loss of P32.91 million during the first quarter of 2021, a 48.9% increase year on year, caused by the closure of gaming operations due to the coronavirus disease 2019 (COVID-19) pandemic.

Revenues for the quarter dropped 42% year on year to P156.47 million from P269.81 million in 2020.

On Monday, shares of DFNN at the stock exchange rose 4.82% or 20 centavos to P4.35 apiece. — Revin Mikhael D. Ochave