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Biden to order studies on regulating, issuing cryptocurrency -source

REUTERS

WASHINGTON – U.S. President Joe Biden is expected to sign a long-awaited executive order this week directing the Justice Department, Treasury and other agencies to study the legal and economic ramifications of creating a U.S. central bank digital currency, a source familiar with the matter said on Monday.

The White House last year said it was considering a wide-ranging oversight of the cryptocurrency market – including an executive order – to deal with growing threat of ransomware and other cyber crime.

Biden‘s order sets an 180-day deadline for a series of reports on “the future of money” and the role that cryptocurrencies will play in the evolving landscape.

“We could see a significant shift in policy in 180 days. This is a likely step toward creation of a central bank digital currency,” the source said, citing significant momentum behind such a move within the Biden administration.

However the reports being ordered could still raise concerns about such a move, or conclude that it would require congressional approval, the source cautioned.

The Biden order, likely to come on Wednesday, comes amid heightened concern about the use of cryptocurrencies by Russian elites to circumvent Western sanctions that have cut Russia off from large portions of the global economy, and moves by China and other economies to create their own cryptocurrencies.

The timing of the order was first reported by Bloomberg.

The Financial Crimes Enforcement Network (FinCEN) on Monday warned financial institutions to watch out for potential attempts by Russian entities to evade sanctions imposed by Washington over Moscow’s invasion of Ukraine. Read full story

Biden‘s order will ask the Justice Department to look at whether a new law is needed to create a new currency, with the the Federal Trade Commission, the Consumer Financial Protection Commission and other agencies to study the impact on consumers.

Other studies will be ordered on the impact of a cryptocurrency on competitiveness, the market and technical infrastructure needed, and the environmental impact of bitcoin mining, the source said.

U.S. Treasury Secretary Janet Yellen last year warned about an “explosion of risk” from digital markets, including the misuse of cryptocurrencies, but said new financial technologies could also help fight crime and reduce inequality. – Reuters

International Women’s Month: Globe fetes women leaders, employees as pillars of strength

Globe celebrates women leaders and employees this International Women’s Month. (First row, L-R) Rizza Maniego-Eala, Chief Finance Officer and Chief Risk Officer; Issa Guevarra-Cabreira, Chief Commercial Officer; Rebecca Eclipse, Chief Transformation & Operations Officer and Chief Customer Experience Officer; Yoly Crisanto, Chief Sustainability Officer and SVP for Corporate Communications; Atty. Irish Salandanan-Almeida, Chief Privacy Officer (Second row, L-R) Atty. Marisalve Ciocson-Co, Chief Compliance Officer; Rosalin Palacol, Chief Audit Executive; Saw Phaik Hwa, Independent Director and Chair of Board Risk Oversight Committee; Martha Sazon, President and Chief Executive Officer of GCash; Minette Navarrete, Vice-Chairman and President of Kickstart Ventures, Inc. (Third row, L-R) Mharicar Castillo-Reyes, President and CEO of Asticom; Cindy Toh, Chief Executive Officer of Purego; Gretchen Largoza, Chief Executive Officer of AdSpark; Denise Seva, Director of Events and Production, LIVE MNL; Joan Penaflorida, President of Yondu, Inc.; and Jasmin Montelibano, Chief Executive Officer of ECPay.

The world may have come a long way in gender equality, yet women’s dominance in top business leadership is still rare. But in Globe, the Philippines’ leading digital solutions group, this is precisely the case.

As the world celebrates International Women’s Day on March 8, Globe acknowledges the undeniable impact its female leaders have had on the business and the lives of its customers.

“At Globe, we value talent because we believe it is our people that will keep our Circle of Happiness going. We are fortunate to have many female leaders and employees who possess the qualities necessary to carry out Globe’s mission and vision to keep us moving forward,” said Globe President and CEO Ernest Cu.

Globe currently has seven top women leaders taking on crucial roles, serving as strong and sturdy pillars of the organization.

They are Rizza Maniego-Eala, Chief Finance Officer and Chief Risk Officer; Issa Guevarra-Cabreira, Chief Commercial Officer; Rebecca Eclipse, Chief Transformation & Operations Officer and Chief Customer Experience Officer; Yoly Crisanto, Chief Sustainability Officer and Corporate Communications SVP; Atty. Irish Salandanan-Almeida, Chief Privacy Officer; Atty. Marisalve Ciocson-Co, Chief Compliance Officer; and Rosalin Palacol, Chief Audit Executive.

Since 2017, Globe has also implemented a Board Diversity Policy, which promotes and observes diverse membership among its directors. In 2021, Saw Phaik Hwa held the role of Independent Director and chair of the Board Risk Oversight Committee in Globe.

Eight of the Globe Group Leaders are also women, all of whom have contributed significantly to Globe’s business beyond telco and the company’s pivot into a digital solutions platform.

First on the list is Martha Sazon, who was instrumental in making GCash the country’s leading e-wallet platform, with 55 million registered users. Mynt, the financial technology firm behind GCash, is the only double unicorn in the Philippines.

Kickstart Ventures’ Minette Navarrete is a well-respected figure in the startup scene. Through her strong leadership, Kickstart is now the largest venture capital asset management company in the Philippines, managing $255M in assets, and funding 55 investments across 7 countries, with two unicorns in its portfolio.

Mharicar Castillo-Reyes, on the other hand, has led shared services company Asticom to a significant revenue growth at a CAGR of 33% since 2015. Asticom launched four subsidiaries last year alone. Cindy Toh, who leads e-commerce platform PureGo, also steered the company’s growth in the retail services industry with its convenient e-grocery services, with over 75% growth in sales since January 2021.

Similarly, digital and mobile marketing solutions provider AdSpark continued its success by hitting the P1.2-billion in revenues under the leadership of Gretchen Largoza. At the same time, Denise Seva led LIVE MNL, previously Globe’s production and events management arm Globe Live, to become the partner of choice for on-ground and digital events, especially during the pandemic shift.

Meanwhile, Joan Penaflorida led Yondu’s growth into one of the country’s top IT Managed Services providers. Jasmin Montelibano did the same to ECPay, now directly managing over 89,000 general trade retail base as of end-2021.

Globe’s dedication to diversity and gender equality extends to the rest of its employees. Forty-six percent of its over 8,000-strong workforce are women.

As a signatory to the United Nations Global Compact (UNGC), the company ensures that no employee is discriminated against, based on age, gender, marital status, personal beliefs, religion and spiritual practices, political affiliation, and sexual orientation.

Globe is committed to 10 of the 17 United Nations Sustainable Development Goals, supporting UN SDG No. 5, giving equal opportunities to women for leadership.

To learn more about Globe, visit www.globe.com.ph.

 

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Surging oil a key risk to PHL — Diokno

PHILIPPINE STAR/ MICHAEL VARCAS

By Luz Wendy T. Noble, Reporter

RUSSIA’S INVASION of Ukraine may continue to drive oil prices even higher, which could push inflation beyond the target range for a second straight year, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said.

“The main channel through which the Russia-Ukraine war could affect the Philippines is higher oil prices,” Mr. Diokno said in a Viber message to reporters late Sunday evening.

“Based on the BSP’s oil price simulation, inflation could settle above the target range of 2% to 4%, only if crude oil prices average higher than $95.00 per barrel in 2022 and 2023,” he added.

Last month, the central bank said the assumed average Dubai crude oil price for 2022 is now at $83 per barrel, higher by $10 than the previous assumption in December. Mr. Diokno noted that Dubai crude reached a record high of $141.33 per barrel in July 2008.

“Should the worst-case scenario of oil prices reaching $120-140 per barrel occur this year, inflation would be 0.7-1 percentage point above baseline in 2022. In brief, inflation would average between 4.4% and 4.7% under the worst-case scenario,” the BSP chief said.

In 2021, inflation reached 4.5% which exceeded the 2-4% target range. The BSP attributed this to the low supply of meat and high oil prices which caused faster price increases.

The BSP raised its inflation forecast for the year to 3.7% from 3.4% previously as it cited the impact of higher global oil and nonoil prices. The forecast priced in a threshold of $95 per barrel for Dubai crude, with the governor stressing only a sustained increase of beyond $95 a barrel will warrant an adjustment to their forecast.

“Below $95 per barrel, inflation would settle within the target range. But the oil price scenarios considered only the direct effects and do not incorporate any potential second-round effects on transport fares, food prices, and wages among others,” Mr. Diokno said.

Inflation was steady at 3% for the second straight month in February as food prices eased. However, headline inflation could surpass the BSP’s target by April or May given the continued fuel price hikes and rising consumption demand, Security Bank Corp. Chief Economist Robert Dan J. Roces said.

“Significant upside risks [to inflation] are to be expected in the next couple of months with oil assumed to remain at the $110-12 per barrel level given the current situation. Demand-driven inflation is also materializing with looser curbs nationwide which will also cause upward movements in core inflation as well,” Mr. Roces said in a Viber message.

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. also believes global oil prices will continue to edge higher as the conflict between Ukraine and Russia remains far from resolved. Higher fuel prices could hit the local transport sector, he said.

“With mobility at pre-pandemic level, transportation groups have more bargaining power to request for fare adjustments,” Mr. Neri said in a note on Friday.

By the end of 2022, Mr. Neri expects the BSP will already have raised the key policy rate by 75 basis points to 2.75%, with factors like inflation risks and the Federal Reserve’s monetary policy tightening taken into consideration.

The BSP in February kept rates steady as it continued to focus on supporting growth, but officials said they will be ready in case there is need to respond to second-round effects of inflation.

Mr. Diokno has previously said they would rather wait for four to six quarters of consecutive economic expansion to ensure the recovery has become sustainable.

The gross domestic product (GDP) rose by 7.7% year on year in the three months to December, the third straight quarter of growth. It brought full-year GDP expansion to 5.6%, a turnaround from the record 9.6% slump in 2020.

The continued increase in oil prices is making the situation “somewhat difficult” for the accommodative policy settings of the central bank, Security Bank’s Mr. Roces said. He expects the first policy rate hike to take place either towards the end of the second quarter or early part of the second half of 2022.

“[The] current situation and projections make it somewhat difficult for the BSP to maintain a ‘no hike’ scenario in the first half of 2022. [The situation] could force its hand if oil prices lead to untenable inflation expectations,” Mr. Roces said.

“It will be very important to get solid forward guidance from the monetary authorities starting in the next Monetary Board meeting,” he added.

The central bank has two more remaining policy reviews within the first half of 2022 — on March 24 and May 19. Meanwhile, the first meeting for the second semester is on June 16.

Mr. Diokno also said the Russia-Ukraine war has also caused a “slight depreciation” in the peso.

The peso’s close of P52.18 on Monday is its weakest finish in more than two years or since its P52.211 finish on Sept. 25, 2019.

“The BSP views such development as a result of the impact of the geopolitical tensions on oil prices, which likewise affected the peso. But this is in line with the behavior of other currencies in the region which also depreciated against the dollar,” he said.

Despite such an impact, Mr. Diokno said the country’s ample dollar reserves and inflows from remittances, business process outsourcing receipts, as well as foreign direct investments will temper volatility and the foreign exchange market.

“In addition, the BSP has various liquidity-enhancing tools that can be deployed in case the domestic liquidity situation becomes unexpectedly tight or disorderly including actions adopted during previous crises episodes,” he added.

NEDA weighs impact of fare hike on inflation

PHILIPPINE STAR/ MICHAEL VARCAS

A PESO increase in transport fares could add 0.3 percentage point (ppt) to inflation, National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon told the hearing.

“For sure there will be an impact on inflation,” she said in mixed English and Filipino, adding that economic managers are studying other potential inflation triggers.

“We are looking at other triggers on inflation coming from — God forbid — interest rate hike, that sort of thing,” Ms. Edillon said.

Party-list Rep. Sharon S. Garin was asking her how big an impact the 0.3-ppt increase in inflation would have on the Philippine economy.

“What are the risks of all these prices going up — pork and other basic needs — will those highly impact our economy, if we increase it by P1?” she asked, referring to transport fares.

She also asked the NEDA official why the government did not seem willing to grant the petition for a fare increase.

“What is the effect of the fare hike on our economy?” Ms. Garin, who heads the Committee on Economic Affairs, asked. “We won’t push it if that would lead to an economic crash.”

“If the fare increase snowballs into wage hikes, that will have a huge impact,” Ms. Edillon said. “We are also looking how big its impact is for the rest of the economy.”

She added that ideally, the government could grant a “reasonable fare increase” as long as it is accompanied by state subsidies.

The central bank last month raised its inflation forecast for the year to 3.7% from 3.4% previously as it cited the impact of higher global oil and nonoil prices.

Spiraling global oil prices could slash Philippine economic growth by as much as 0.9 ppt or about P300 billion, according to estimates by the NEDA.

“The initial estimate is somewhere between 0.3 and 0.9 (percentage point) from various (sectors). But these are initial estimates because these are subject to discussions later,” NEDA Director Reynaldo R. Cancho said during the same hearing.

Economic managers set a 7-9% growth target for this year. The Philippine economy grew by 5.6% in 2021.

Meanwhile, lawmakers discussed various policy options to ease the burden of soaring oil prices on businesses and consumers.

The Department of Energy (DoE) renewed its call for amendments to the oil deregulation law that will give the government the power to intervene and act in times of sustained oil increase.

The DoE wants the measure to include an automatic suspension of excise tax on fuel if the crude oil hits $80 per barrel for three consecutive months, as well as the unbundling of cost of retail petroleum products.

Committee on Ways and Means Chairperson and Albay Rep. Jose Maria Clemente S. Salceda said in his presentation that a six-month suspension of the excise tax on oil would lead to a P55.04 billion loss in government revenue.

He noted that the estimated revenue from the oil excise tax worth P75.2 billion can be used for fuel subsidies instead.

Meanwhile, economists urged the government to carefully consider proposed suspension of excise tax on oil, especially its impact on revenue collection.

UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said the move may ease pump prices and help the public transport sector but there are some trade-offs that have to be considered.

“This has direct impact on revenue collections of the government, and this may mean an eventual bigger budget deficit that would require more deficit financing in medium term. Furthermore, it may add to debt pressures that we have already been dealing with due to the COVID pandemic,” he said in a Viber message.

The budget deficit reached P1.7 trillion as of end-2021, up by 21.87% from the previous year, driven by better-than-expected revenues. Tax collections jumped by 9.4% to P2.74 trillion in 2021.

University of Asia and the Pacific Senior Economist Cid L. Terosa expressed support for the DoE’s proposal to automatically suspend excise tax if crude oil reaches $80 per barrel for three consecutive months.

“It will lay the foundation for a more equitable approach to the imposition of the excise tax on gasoline and petroleum products,” Mr. Terosa said in an e-mail response.

“At present, it would appear that the risks will outweigh the benefits since the government cannot sacrifice a reliable source of revenues,” he said.

The conflict between Russia and Ukraine continues to push fuel prices upwards. Fuel prices will increase for the 10th consecutive week on Tuesday: P3.60 per liter for gasoline, P5.85 for diesel, and P4.10 for kerosene.

Since the start of the year gasoline, diesel, and kerosene prices per liter have risen by P13.25, P17.50, and P14.40, respectively.

If excise taxes on oil are suspended, pump prices will be reduced by P6 per liter for diesel, P10 per liter for gasoline, and P4 per liter for kerosene.

The Department of Budget and Management has yet to release the P500-million budget for the fuel discount of farmers and fishermen, as well as the P2.5-billion subsidy for public utility vehicles under the Pantawid Pasada program. — Marielle C. Lucenio with JEGT

Shipping costs may rise by as much as 25%, industry group warns

TAWATCHAI07-FREEPIK

By Arjay L. Balinbin, Senior Reporter

SHIPPING COSTS may rise as much as 25% as global oil prices continue to skyrocket amid the Ukraine-Russia conflict, according to an industry group.

Philippine Liner Shipping Association (PLSA) President Mark Matthew F. Parco said that fuel is usually 40% to 50% of vessel cost.

With Brent crude now at $130 per barrel, up from $80 per barrel at the start of the year, the PLSA expects that other operating expenses, aside from the vessel cost, will also be affected. 

“Higher energy prices will affect other costs such as drydocking, spare parts, trucking, etc.,” Mr. Parco said during a House committee hearing on the fuel crisis on Monday.

“We expect approximately 15%-25% increase in shipping cost,” he added.

The industry is seeking fuel subsidies, the removal of excise tax on oil, and reduction in charges imposed by regulating agencies to soften the impact of the rising fuel prices on shipping costs.

“We join the other transport sectors for a fuel subsidy, probably, or the suspension of the excise tax,” Philippine Interisland Shipping Association Executive Director Pedro G. Aguilar said during the same House committee hearing on fuel crisis on Monday.

Mr. Aguilar said that removing the excise tax on fuel will be a relief for the industry. “The impact of the excise tax on cargo ships is an increase of P400 to P500 per 20-foot container depending on the fuel consumption of the vessel and the port of destination of the cargo,” he said.

“For passenger ships, while we don’t have data right now, I’m pretty sure ship owners and operators of RORO (roll-on, roll-off vessels) have made their own increase just to recover the cost of the excise tax,” he added.

As relief for the shipping industry suffering from high fuel prices, Mr. Aguilar said they are seeking a “substantial” reduction in the fees and charges imposed by the regulatory agencies such as the Philippine Ports Authority (PPA).

“We have been subjected to so many increases in port charges by the PPA,” he added.

Sought for comment, Chelsea Logistics and Infrastructure Holdings Corp. President and Chief Executive Officer Chryss Alfonsus V. Damuy said that “increasing prices will also mean increase in costs to operate ships and even on our logistics business.”

“The industry intends to pass these costs to shippers as these are too huge to absorb. The passing (of costs) to shippers may not be outright as it entails notices and effectivity, a certain period, ship operators absorb the costs for a certain period of time,” he said via WhatsApp messenger.

PPA General Manager Jay Daniel R. Santiago has yet to respond to a request for comment as of press time.

At the same time, Chelsea Logistics’ Mr. Damuy said there are concerns over the stability of oil supply considering the recent developments in the Ukraine-Russia war.

“It is very tough that it will not be passed on as the industry is yet to recover from the pandemic. To soften the impact, I am not sure if a subsidy to shipping is feasible being one of the prime movers of the economy considering the Philippines being an archipelago,” Mr. Damuy added.

In a phone interview, Philippine Exporters Confederation, Inc. President Sergio R. Ortiz-Luis, Jr. said the possible increase in shipping cost will negatively affect exporters’ competitiveness.

“There are already so many charges. There are also so many problems, including the shortage of vessels and all the charges that may increase, so they are already beginning to feel that they are losing their competitiveness,” he noted. 

“You can pass it on to consumers, but there is a certain point where you cannot pass it on because our consumers have various options where they can buy goods.”

Tighter BOT guidelines eyed

AGENCIES proposing public-private partnership (PPP) projects could be required to submit complete financial documents and limit variations to contracts, a draft of the revised rules implementing the Build-Operate-Transfer (BOT) Law showed.

In a March 2 document, the National Economic and Development Authority (NEDA) and the PPP Center detailed the proposed changes to the implementing rules and regulations of Republic Act No. 6957 or the BOT Law. This law authorizes the private sector to finance, build, operate, and maintain infrastructure projects.

Under the draft rules, projects to be considered will need a complete feasibility study, along with economic and financial models based on recent data.

The agency or local government unit (LGU) could need to submit to the relevant approving body a set of at least 18 parameters covering the scope of the project, the contract, performance indicators, revenue share, proposed fees, and liabilities.

It could also include a condition banning one-sided provisions in the contracts.

“A contract is onerous if the cost of the project outweighs the advantages the government and the public will receive from the project,” the draft rules stated.

The head of the government agency or LGU is in charge of making sure that the draft contract seen during the bidding is consistent with the parameters. This official cannot make changes that will alter the approved risk allocation, change the definition of contingent liabilities, or worsen the fiscal impact on the government.

The proposed revisions aim to protect both the government and the public from excessive payments, undue guarantees, unnecessary fiscal risks, and onerous contractual provisions, the draft said.

Other than improving agencies and local government units’ ability to assess the projects, the new rules aim to “reflect appropriate sharing of risks between the government and the project proponent.”

Contract variations may be allowed by the head of the agency or LGU if such changes do not impact the set parameters. The changes should not increase fees and charges or cut down the government’s profit share — unless approved by the regulator.

Variations will also be allowed if they do not reduce the scope of construction works or performance standards, and if they do not extend the contract term.

Lastly, contract variations can be permitted if “there is no additional government undertaking, or increase in the financial exposure of the government under the project.”

New or additional works or services, including the expansion of the existing project, beyond the approved scope, will not be treated as a contract variation.

“It shall be considered as an entirely new project that requires approval by the appropriate approving body and bidding,” the document said.

Any changes to toll, fees, rentals, and other charges must be approved by the concerned regulator, basing their decision on economic conditions and the financial performance of the project.

The proposed changes to the implementing rules also added project types that are covered by the law, which means more projects could be financed and operated by the private sector.

Projects building and expanding aerial and space infrastructure, trading posts, disaster risk reduction infrastructure, and agri-fishery facilities could be covered if the proposal is approved.

Socioeconomic Planning Secretary Karl Kendrick T. Chua, the chairman of an interagency committee that would amend the implementing rules and regulations, had said that PPP projects could help bring back jobs. But the government must make sure that “private sector interests are aligned to the public’s interests,” he added.

The committee includes NEDA, the PPP Center, and the departments of Finance, Agriculture, Energy, Environment and Natural Resources, Information and Communications, Interior and Local Government, Public Works and Highways, Trade and Industry, and Transportation.

Byunghoon Nam, an ASEAN+3 Macroeconomic Research Office (AMRO) senior economist on the Philippines, had previously said that tighter controls could cut infrastructure investments funded by PPPs in the near term.

But with proper implementation, the revised rules could lead to more financially viable PPP projects and prevent unnecessary fiscal payments and guarantees, he said in November.

Comments from stakeholders on the proposed changes can be sent to the PPP Center until March 15. — Jenina P. Ibañez

Philex profit reaches P2.4B as metal prices surge

PHILEX Mining Corp. earned P2.43 billion last year, or nearly double the earlier year’s P1.23 billion net income attributable to parent firm equity holders, largely due to higher metal prices.

“No doubt, 2021 was a blessing for us considering the high metal prices for copper and gold that even with the marginal grades of ore that we are mining, we continue working on our business continuity plans,” Philex President and Chief Executive Officer Eulalio B. Austin, Jr. said in a press release on Monday.

He added that the company was able to “successfully deal” with the deadly coronavirus of “strict and constant adherence” to health protocols and its mass vaccination program.

“Consequently, we have had no disruption in our operation for the year,” Mr. Austin said.

The listed gold and copper producer reported that its full-year core net income rose 118.1% to P2.53 billion from P1.16 billion in 2020. Of last year’s income, P668 million was booked in the fourth quarter.

“Favorable and sustained higher levels of realized prices for gold and copper resulted in higher operating revenues in 2021, registering a healthy 25% increase over the year 2020,” Philex said in the press release.

Operating revenues rose 25.2% to P9.8 billion in 2021 from P7.83 billion in 2020, while operating costs rose by 4.8% to P6.6 billion from P6.3 billion in 2020.

The higher costs came after an increase in the cost of materials and supplies, logistics expenses, higher royalties, and higher excise taxes, though this was partly offset by lower power costs and noncash charges, as a result of the extension of the mine’s life.

In the fourth quarter of 2021, realized gold prices were at its highest, reaching $1,783 per ounce and copper at $4.44 per pound in October 2021, the listed mining firm said.

As for production, tonnage milled in the fourth quarter slowed down to 1.97 million tons from 2.006 million tons in the third quarter. In 2021, tonnage milled hit 7.946 million tons or 1.4% up from 2020.

“Ore grades continue to hold at the same level as in 2020, leading to minimal impact on gold and copper output in 2021 compared with 2020,” Philex said.

Philex said that due to healthy earnings before interest, taxes, depreciation, and amortization (EBITDA) at P4.3 billion, it was able to continue its debt reduction program.

“The board declared a cash dividend of P0.05 centavos per common share, aggregating to P247 million, to shareholders on record as of March 21, which will be paid on April 3, as Philex preserves cash surplus as part of the initial capital for the development of Silangan,” the company said.

For 2022, Philex said the sustained prices of gold and copper in the global market will allow it to optimize mineable reserves and metal output.

“The year 2021 also brought hope to the mining industry with significant regulatory changes on the horizon, such as the suspension of the ban on new mining agreements and lifting of the ban on open pit mining method,” Mr. Austin said.

“Profitability and liquidity since 2020 have been on a positive trend and has materially enhanced the company’s profitability and financial condition, allowing the company to expedite the launching of the development of the Silangan project under its in-phase mine plan,” Philex added.

The Silangan copper-gold project in Surigao del Norte is expected to start commercial operations by 2025.

The project needs an initial capital of $224 million or about P11.2 billion, to be funded by a combination of proceeds from a stock rights offering, the cash reserves of Philex, and possibly some incremental debt at the Silangan level.

Philex has appointed BDO Capital and Investment Corp. as its issue manager and lead underwriter for the fund raising.

Philex also said that studies are underway to explore and determine the feasibility of the mineable resources and reserves surrounding the Padcal mine in Benguet.

“We will continue our relentless drive to improve our operations, and are now looking at new investment opportunities, whilst prolonging the life of our Padcal mine. The job security and welfare of our employees and their dependents are still our primordial concern,” said Philex Chairman Manuel V. Pangilinan.

“Silangan will be an exciting project for us in 2022. It could ensure that our business continues for a long time to come. We look forward to this year with a fair degree of optimism, given the buoyant prices of commodities in general, and of metal prices in particular, driven by global geopolitical and supply factors,” he added.

Philex shares went up 4.73% or 30 centavos to finish at P6.64 each at the stock exchange on Monday.

Philex is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Metro Pacific Investments Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls. — Luisa Maria Jacinta C. Jocson

AEV net income jumps, cites digital move and agility

ABOITIZ Equity Ventures, Inc. (AEV) on Monday reported a 3% rise in core net income to P7.3 billion in the fourth quarter of 2021, bringing its full-year core profit to P26.8 billion, up 68%.

“Our investments in digital transformation and innovation, matched by a strong culture of agility and resilience have paid off handsomely as we powered through the pandemic with strong performance indicators,” AEV President and Chief Executive Officer Sabin M. Aboitiz said in a disclosure to the stock exchange.

Including one-off gains, the company’s fourth-quarter consolidated net income increased by 9% to P7.8 billion as it recognized nonrecurring gains of P444 million due to foreign exchange gains from the revaluation of dollar-denominated assets.

For full-year 2021, consolidated income rose 77% to P27.3 billion, with the recognition of P527 million in nonrecurring gains after the asset revaluation, compared with P477 million a year earlier.

The company’s recorded EBITDA (earnings before interest, tax, depreciation and amortization) totaled to P17.6 billion for the year, or 7% lower.

Mr. Aboitiz said at the end of last year, the group’s performance trajectory substantially improved, “posting steadily rising figures.”

AEV’s power segment, Aboitiz Power Corp., accounted for 57% of the holding firm’s strategic business units’ total income last year. The unit contributed a P16-billion income share to the parent company, 66% more than its share in 2020.

Meanwhile, AboitizPower recorded a net income of P20.8 billion last year, 66% higher than the P12.6 billion in 2020 on the back of its commissioning revenue from GNPower Dinginin Ltd. Co. (GNPD) Unit 1, higher water inflow for its hydro plants, higher availability of the Therma Luzon, Inc., Therma South, Inc. and Therma Visayas, Inc. facilities, and higher dispatch at the wholesale electricity spot market in compliance with the must-offer rule.

The company said it recognized P228 million in nonrecurring losses for the full year. Without these one-off items, its core net income for 2021 would be up by 68% to P21.1 billion from the P12.5 billion recorded in 2020.

“AboitizPower was also able to claim liquidated damages for the delay in the construction of GNPD Units 1 and 2, and also received the final payment for business interruption claims resulting from GNPower Mariveles Energy Center Ltd. Co. and AP Renewables Inc. outages in previous years,” it said in a separate disclosure to the exchange.

AboitizPower’s generation and retail supply business recorded P43.4 billion in EBITDA last year, 15% higher than the P37.7 billion logged in 2020.

Capacity sold last year also climbed 10% to 3,753 megawatts (MW) from 2020’s 3,417 MW, while energy sales advanced 14% to 26,031 gigawatt-hours (GWh) from 22,754 GWh previously.

Higher energy consumption resulting from recoveries in demand drove energy sales up by 4% to 5,584 GWh last year from 5,368 GWh in 2020.

“Energy sales from the residential, commercial, and industrial customer segments increased due to less stringent community quarantines during 2021 and the resumption of operations of commercial and industrial customers,” the company said.

For the fourth quarter alone, AboitizPower reported a consolidated net income of P5.2 billion, 8% lower than the P5.6 billion recorded in the same period 2020.

“The new capacity from GNPD Unit 1 not only contributed to AboitizPower’s better financial performance but also delivered the much-needed energy supply as economic activities gradually increased in 2021. We are optimistic that with the target synchronization of Unit 2 in the second quarter of 2022, GNPD will help address the country’s thin reserves and meet critical market needs,” AboitizPower President and Chief Executive Officer Emmanuel V. Rubio said.

Meanwhile, AEV banking unit UnionBank of the Philippines contributed a total of P6.4 billion to the parent company or 9% higher than its share in 2020.

The bank and its subsidiaries posted a net income of P12.6 billion for 2021, advancing by 9% from 2020.

AEV’s non-listed food subsidiaries: Pilmico Foods Corp.; Pilmico Animal Nutrition Corp.; and Pilmico International Pte. Ltd., including Gold Coin Management Holdings Pte. Ltd. had a P2-billion share to the parent company’s income. This is 10% lower than its P2.2-billion share in 2020.

Its agribusiness segment’s net income last year declined 44% to P1.3 billion from the P2.3 billion in 2020 due to the increase in raw material costs. Its food and nutrition segment’s income soared 365% to P934 million as pork prices increased.

AEV real estate business Aboitiz Land, Inc. and its subsidiaries logged a consolidated net income of P2.6 billion last year, 658% higher than the P338 million recorded in 2020.

“AboitizLand contributed P5.3 billion in revenues for 2021, 47% higher than revenue contributions in 2020. This increase was primarily due to increased construction activities across most of its projects and increased sales performance, with spot payments in its high value properties,” the company said.

For the Infrastructure group, Republic Cement & Building Materials, Inc.’s income share to the parent company in 2021 reached P1.6 billion, 164% higher than the P590 million recorded in 2020, mainly due to stronger market demand from the residential and infrastructure segments last year.

On Monday, AEV shares at the local bourse went up by 30 centavos or 0.49% to close at P61.80 apiece. — Marielle C. Lucenio

FDCP showcases women-centric stories in Cine Filipina

ARTWORK FROM FACEBOOK.COM/FDCP.PH

THE FILM Development Council of the Philippines (FDCP) celebrates women in film at the Cine Filipina film festival which runs from March 7 to 27 on the FDCP Channel online streaming platform (www.fdcpchannel.ph).

The second edition of the film festival carries the theme, “Juana Tunggo sa Kaunalaran” and will focus on films and activities on the journey of women and their contributions to society.

Cine Filipina is an initiative to celebrate National Women’s Month through online film screenings and limited onsite screenings at Cinematheque Centers, panel discussions, and other initiatives throughout March.

“We need to watch and believe how women do it, how they triumph, conquer, and how their strength has saved people and situation,” FDCP Chairperson and CEO Mary Liza Bautista Diño-Seguerra said at the film festival’s online opening program on March 6.

“These films will show that strength,” she said, “In the words of [Australian feminist and writer] G.D. Anderson, ‘Feminism isn’t about making women strong. Women are already strong. It is about changing the way the world perceives that strength.’”

THE FILMS
Beginning March 7, 11 short films under Cine Marya will be streaming for free and will be accessible via the channel’s “Basic” tab. The short films are: J.I. Hamid’s Adira; Gary Tabanera’s Binakol sa Dahon; Julius Lumiqued’s Dad-aan Na; Nigel Santos’ Dalaginding na si Isang; Mel Aguilar-Maestro’s Hakab; Mariel Ong’s Night Shift; Kim Timan and Sam Villareal’s Noontime Drama; Jochelle Casilad’s She’s Perfect; Arjanmar Rebeta’s Super-able; Angela Andres’ Super Woman; and Aimee Apostol-Escasa’s Winged Dreams to the Blue Heavens.

In line with International Women’s Day, Lino Brocka’s classic film Insiang (1976) will be screened on the virtual cinema at 7 p.m.

From ABS-CBN Film Restoration – Sagip Pelikula project, the digitally restored and remastered version of the 1997 classic Hanggang Kailan Kita Mamahalin, starring Lorna Tolentino and Richard Gomez, will be available for rent beginning March 7 at P120. The rented film will be available for one week if unplayed, and for 48 hours to finish viewing once it has started to be played. It is accessible within Philippine territory only.

Meanwhile, Joachim Trier’s Oscar nominated The Worst Person in the World (2021) will have limited on-site screenings at the Cinematheque Centres in Manila, Iloilo, Negros, Davao, and Nabunturan.

The FDCP Talks on Cine Filipina can be viewed on the “Events” tab of the FDCP Channel at 7 p.m. The topics and schedules are as follows: “Changing Times, Evolving Roles” on March 13 will cover a discussion on roles previously only given to men that are now held by women in the film industry; “Women and Art Forms” on March 18, will focus on outstanding and globally recognized women artists; “Women in Action” on March 20 will highlight government officials in women-centric organizations.

A Cinema Filipina edition of the FDCP Channel Game Night will be hosted by DJ Jhai Ho on March 26, 7 p.m. Participation and viewing are free.

RETROSPECTIVE
The film festival concludes on March 27, 7 p.m., with a closing program, and the Martika Ramirez Escobar Retrospective at 8 p.m. via the “Subscription” tab. The retrospective is a video-on-demand showcase of short films by Ms. Ramirez as cinematographer, writer, and director.

The films in the retrospective are 5 Ning Gatpanapun; Ang Maangas, Ang Marikit, at ang Makata; Asan Si Lolo Me?; Dindo; Living Things; and Pusong Bato.

“I make films because I learn many things from people and about life. In the process of making it, I gain more understanding of how people respond,” Ms. Escobar said in English and Filipino during the opening program. “I learn a lot about myself, my family, and many things that I initially have no knowledge about. The world expands and I realize that the world is beautiful because I make films.”

In Jan. 2022, Ms. Escobar’s Leonor will Never Die won the Special Jury Prize for Innovative Spirit at the Sundance Film Festival’s World Cinematic Drama Section — making her the first Filipino feature film director to win at the prestigious film festival.

To subscribe to and watch the festival films, visit www.fdcpchannel.ph for monthly access all films on-demand for P99. For more information, visit https://www.facebook.com/FDCP.ph. — Michelle Anne P. Soliman

URC doubles net income to P24B

UNIVERSAL Robina Corp. (URC) reported its net income was up 109% to P24.3 billion in 2021 as the consumer food manufacturer gained from the sale of its business in Australia and New Zealand.

“The sale provided an opportunity for URC to monetize the efficiencies and synergies it created in Australia and New Zealand, while reinvesting into higher-growth core markets such as the recently acquired Munchy’s business in Malaysia,” the company said in a stock exchange disclosure on Monday.

Excluding sales in Oceania, the company reported growth of 3% to P117 billion for the full year, despite supply chain disruptions and mobility restrictions from the coronavirus disease 2019 (COVID-19) pandemic.

In the second half of the year, URC said it accelerated with fourth quarter sales up 12% from the previous quarter and up 11% from the same period a year earlier.

However, operating income and core net income from continuing operations both declined 8%, due to higher material input costs.

“The impact on operating margins was tempered by price increases and various cost savings initiatives,” URC added.

Sales of the branded consumer foods group, excluding Oceania sales, ended flat at P83.5 billion. On the other hand, domestic revenues were down 2% to P61.4 billion.

“Key food and beverage markets, while slowly recovering, were still below pre-pandemic levels and aggravated by various lockdowns imposed across the region. Positive signs of recovery were seen in the second half of 2021, with sequential quarter on quarter growth, and culminating with a growth of 6% in the fourth quarter from the same period last year,” the company said.

URC’s international division grew 5% to P22.2 billion on a constant currency basis, as momentum in the first half was hampered by the resurgence of COVID-19 in the region.

“Operations were also affected with government restrictions and work force capacity limitations. However, the international division was able to end strong, with fourth quarter sales up 15% quarter-on-quarter and up 2% from the same period last year,” URC said.

Meanwhile, its agro-industrial and commodities division reported 13% growth to P33.4 billion from the same period last year, driven by acquisitions in its sugar and renewables group.

“The acquisition of Central Azucarera de La Carlota sugar mill and Roxol Bionergy in the fourth quarter of 2020 helped grow URC’s sugar business by double digits. Strong growth in Pet Foods also helped offset declines in farms and feeds volumes caused by lower hog populations in the Philippines,” URC said.

URC’s board of directors also approved an increase in dividend to P3.45 per share, up 5% and 10% from the dividends declared in 2021 and 2020, respectively.

“Coming through two years of the COVID-19 pandemic, URC remained strong — maintaining our leading positions in key markets and categories, continuing our innovation pipeline, becoming preferred partner of choice to customers and suppliers, step changing product supply chain transformation, and accelerating a people and planet friendly culture,” URC President and Chief Executive Officer Irwin C. Lee said in a statement.

“While the challenges and uncertainties of hyper cost inflation, global climate and political turbulence persist, our growth momentum and organizational commitment to excellence give us cause for optimism in 2022,” he added.

Mr. Lee said the company would continue to invest in its brands, build channel strength, and make future bets in “attractive white spaces.”

“URC remains strong today, and will be stronger tomorrow,” he added.

At the stock exchange on Monday, URC shares dropped 4.26% or P5.10 to close at P114.60 apiece. — Luisa Maria Jacinta C. Jocson

The Godfather at 50: set among the American Mafia of the ‘40s, Coppola’s film is unmistakably a film of the disillusioned ‘70s

WHEN it was released 50 years ago, The Godfather won a swag of Oscars and hailed director Francis Ford Coppola as the voice of a new auteur. But timing is, as they say, everything.

The story of an ageing Mafia Don and his family in New York City from 1945 to 1955, The Godfather is a sweeping saga of the trials and tribulations of running a criminal organization.

There are two timelines that need to be looked at when watching The Godfather: when it was set, and when it was made. They are inextricably linked, yet polar opposites of the moral, cultural, and social fabric of the United States.

Coming out of the devastating destruction and loss of life of the second world war, Americans had a newfound sense of optimism that the worst was behind them.

After years of uncertainty and stress, people yearned for a “normality” in the mundane in their suburban houses, family life, and nine-to-five job. People believed in governments and traditional institutions to look after their interests and well-being.

New opportunities and an even distribution of wealth created through low post-war unemployment incentivized growth and created “an advanced consumer economy” which drew both legitimate and illegitimate businesses.

With easy money to be made, Mafia groups flourished. This is the world where we f ind the Corleone family: Italian immigrants who sought a distorted vision of the American Dream through theft, extortion, and violence.

Vito Corleone (Marlon Brando) wants to continue with the old ways. He is suspicious of this new trade in drugs offered by the Tattaglia crime family. His son Michael (Al Pacino) has experienced life outside of the Mafia world and wants to change the whole structure of the organization, vowing to make the family legitimate.

What happens next is as much a statement on the character arc of Michael as it is about a statement of when The Godfather was made.

By 1972, the social and cultural norms had shifted dramatically.

People, especially young people, had grown increasingly suspicious and disenchanted with both government and the institutions that had grown post war. While many saw the second world war as a “moral war,” they did not express the same feelings towards the Vietnam war. Many saw America as the immoral aggressor.

The 1960s had started out as a decade of hope, full of idealism. Young people were not happy with continuing the ways of the past and wanted change. They were leading the charge for the better.

But in the 1970s, it was dawning on the Woodstock generation that the values they had fought for were not coming to fruition. The ongoing Vietnam War, the publishing of the Pentagon papers and the unravelling Watergate all added to the disillusionment.

Despite the cries of revolution, the old institutions kept a strong grasp on the mechanisms of society.

This all becomes a metaphor for The Godfather.

The Godfather argues the principles of a generation are often corrupted by the realities of the times.

As with the lost ideals of the 1960s, Michael is confronted with the pragmatism of running a criminal organization. The Corleones could never be legitimate: the institutions of the past are just too powerful.

Like a big Italian opera, the film sways between personal loyalties, betrayals, and consequent ruthless murders.

At the end of it all, Michael — a man of morals who desperately wants to transform the world into something better — falls back down the rabbit hole of the past. He takes over the family “business” and is forced to be more cunning and ruthless than even his father was.

The one figure who stood for light turns out to be the darkest of them all. There will be no change from the past.

The film’s ending is powerful but pessimistic. Early in the film, Michael tells his then girlfriend Kay (Diane Keating) he is going to change the whole way the organization operated.

Now, Michael tells his wife Kay “don’t ask me about my business.” He closes the door on her as he takes his father’s chair.

In a way, Coppola was predicting the path of the next generation, and perhaps every young generation.

They all start with good intentions but practicalities often change ideals. The 1980s started as the era of anti-apartheid and Live Aid, but soon changed to “greed is good.” The 1990s started with the fall of the Soviet Union and the confirmed belief in Western Democracy, but resulted in disillusioned grunge.

Will the youth movements of this era have any demonstrable impact in 10 years time? Or, like Michael Corleone, will they have been turned by the power and authority of the traditional institutions?

Five decades later, The Godfather still remains an allegorical tale for the passing of power from one generation to the next. But perhaps the greatest lesson from the film is the old adage that unless you learn from the past you are doomed to repeat it. The past often makes an offer you can’t refuse.

 

Daryl Sparkes is a Senior Lecturer (Media Studies and Production) at the University of Southern Queensland.

Shakey’s acquires Potato Corner assets and entity in Singapore

RESTAURANT operator Shakey’s Pizza Asia Ventures, Inc. and its subsidiary Wow Brand Holdings, Inc. announced the acquisition of the assets and intellectual property of Potato Corner, including shares in an entity in Singapore.

“This is an accretive acquisition. Nonetheless, [we] will pursue maximizing synergies and wielding its expertise in business development, franchise management, and supply chain operations to further grow the brand sustainably,” Shakey’s Pizza said in a disclosure on Monday.

The company said it acquired 100% ownership of PC International Pte. Ltd., a Singaporean corporation that owns and operates Potato Corner in Singapore.

The acquisition will also involve owning and operating all company-owned stores, as well as serving as brand-owner and franchisor of stores being operated by franchisees.

“Since its inception in 1992, the brand has built a vast network of over 1,000 outlets domestically and has a growing international footprint in Asia and beyond. Over the years, the business has built a strong brand equity and demonstrated robust performance, attractive margins, and the capability to scale – all aligned with [our] criteria for acquisitions,” the company said.

At the stock exchange on Monday, Shakey’s Pizza shares dropped by P0.05 or 0.60% to P8.35 apiece. — Luisa Maria Jacinta C. Jocson

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