Gov’t securities offer via GCash seen ready within first half

April 7, 2025 | 12:07 am

THE Bureau of the Treasury (BTr) said the launch of government securities through the GBonds feature on the GCash mobile wallet platform is expected within the first half of this year.

“Hopefully, we can launch it (GBonds) in the first half of this year. GCash is still testing,” National Treasurer Sharon P. Almanza told reporters on the sidelines of the 20^thPhilippine Dealing System Holdings Corp. (PDS) Annual Awards Night in Makati City on Friday last week.

“GCash provides the wallet, and the bond trading platform is through Philippine Digital Asset Exchange, Inc. (PDAX). They are testing the connectivity,” she added.

The Finance department previously said that the GBonds feature was primed for launch in December last year to help boost financial inclusion among Filipinos.

GBonds will allow retail investors to buy and sell government securities through the GCash platform.

Retail Treasury bonds are usually sold at a minimum denomination of P5,000. These are available through over-the-counter placements at bank branches and digital platforms such as the Bonds.PH app and mobile banking apps of the Overseas Filipino Bank and Land Bank of the Philippines.

GCash has over 94 million registered users. G-Xchange, Inc., which operates GCash, is a wholly owned subsidiary of Globe Fintech Innovations, Inc. (Mynt).

In January, GCash partnered with Ria Money Transfer for international remittance services.

Customers using the Ria Money Transfer platform in the US, Australia, Europe, and Singapore can directly send funds to GCash digital wallets even without a GCash overseas account.

GCash services are currently available in 16 markets, including the US, the United Kingdom, the United Arab Emirates, Australia, Canada, Germany, Hong Kong, Italy, Japan, Saudi Arabia, Kuwait, Qatar, Singapore, South Korea, Spain, and Taiwan. — Revin Mikhael D. Ochave

Strong AI policies, investment to speed up Philippines’ AI adoption — expert

April 7, 2025 | 12:06 am

By Ashley Erika O. Jose, Reporter

THE PHILIPPINES can expedite its artificial intelligence (AI) adoption through firm policy commitment and sufficient capital allocation, according to data and technology expert David R. Hardoon.

“[The Philippines] need conviction and the second is money, you will be surprised at how fast the Philippines can turn around [and fully adopt AI],” Mr. Hardoon said in an interview with BusinessWorld.

“Many times, the reason we’re limited in our adoption is because of the technical dent that exists. Meaning, we want to use it, we’re ready to use it, we’ve accepted the risk, but we just simply can’t because the highway has not been built.”

Mr. Hardoon, who previously served as chief executive officer of Aboitiz Data Innovation Pte. Ltd. for more than three years, is assuming a new role as global head of AI at the international banking group Standard Chartered, beginning Monday.

“It is all about how to adopt the possibilities that come from data, the applications of AI, but naturally in a slightly different context of global international operations, with a focus on a similar but slightly different business line,” Mr. Hardoon said.

For countries like the Philippines, adopting and maintaining strong conviction in AI policy and utilization is critical — especially as the country has set its digitalization goals.

“I think there needs to be, not necessarily a contextualization, but a bit of an angle. One point is that the Philippine market is highly digital and highly adaptable. That is actually a very important point,” he said.

“You obviously are not disconnected from the advancements, technology, and the various applications. In fact, to me, these things are phenomenal opportunities because you already have a population who is willing to try.”

Investments and education are the way forward for businesses in the country to leverage AI, Mr. Hardoon said, adding that it is crucial for people to be skilled and competitive in harnessing this emerging technology.

Retail, healthcare, financial institutions, and utility companies are the sectors projected to benefit most from AI, he said, adding that these industries will leverage AI to enhance operational efficiency.

“The ones which would probably benefit the fastest, or perhaps would be more evident that they benefit, is retail,” he said, noting that consumer-driven sectors are transforming their operations by using data and technologies to streamline processes.

For instance, retail industries are using cloud-based or AI-powered applications for inventory and inventory management, as well as to identify challenges in the supply chain; while power companies are integrating AI into their operations to optimize energy production and grid management through AI-based technologies.

The Philippine digital economy is expected to maintain its growth trajectory, driven by e-commerce and the continued development of digital infrastructure, according to the e-Conomy SEA report by Google, Temasek Holdings, and Bain & Co.

The Philippine digital economy is projected to grow by 20% to $31 billion in gross merchandise value (GMV), making it the fastest-growing digital economy in Southeast Asia.

Further, the growing interest in AI adoption is also expected to drive growth for countries leveraging its benefits, Mr. Hardoon said, noting that countries experiencing revenue losses due to cyberattacks may deploy AI to help combat these emerging threats.

“So, just like tools can be used for, unfortunately, bad things, we can use the exact same tools to identify when David is not David,” Mr. Hardoon said.

In the Philippines, the government, through the Department of Information and Communications Technology (DICT), is currently drafting guidelines regulating deepfakes — artificially generated images, videos, or audio intended to deceive consumers of media.

ALI shares rise after merger approval

April 7, 2025 | 12:05 am

Park Central Towers, Makati City — AYALALAND.COM

INVESTORS snapped up Ayala Land, Inc. (ALI) shares last week after the real estate company received regulatory approval to consolidate and absorb 29 companies as part of its restructuring program.

ALI was the sixth most traded share on the stock exchange last week, with value turnover hitting P1.01 billion and 43.51 million shares traded from March 31 to April 4, data from the Philippine Stock Exchange (PSE) showed.

ALI shares rose 6.3% week-on-week to P23.70 on Friday, surpassing the 1.6% growth of the property index. It even outperformed the PSE index, which saw a week-on-week decline of 1%.

However, ALI shares were down by 9.5% year-to-date.

Analysts said the week-on-week jump in ALI stock was due to the consolidation of its subsidiaries under its name.

“It shows that Ayala Land is improving efficiency and simplifying its structure by combining the 29 companies, which makes it attractive for investors,” Juan Alfonso G. Teodoro, an equity analyst at Timson Securities, Inc., said in a Viber message.

“Additionally, it demonstrates that the business is on course with its long-term goals, which builds investor confidence,” he added.

“If the merger results in actual operational synergies and enhanced efficiency, ALI could see higher profitability in the upcoming months,” Alexandra Margaux Denise G. Yatco, an equity analyst at Regina Capital Development Corp., said in an e-mail interview.

ALI’s restructuring efforts have had positive sentiments on the stock, as this should improve valuation, Aniceto K. Pangan, a trader at Diversified Securities, Inc., said in a Viber message.

In a disclosure to the local bourse, the Securities and Exchange Commission approved ALI’s articles and plan of merger on March 31, which took effect on April 1. The plan to merge was approved during ALI’s 2024 annual stockholders’ meeting.

The entities are either directly owned by ALI or by its subsidiaries, AyalaLand Estates, Inc. and AyalaLand Hotels and Resorts Corp.

“The stock [Ayala Land] continues to perform well as their premium property segment remains resilient with regard to demand, as shown by their full-year performance with double-digit percentage growth in the mid-20s,” Mr. Pangan said.

Latest audited financial statements showed ALI’s consolidated revenue climbed by 21.4% to P180.74 billion in 2024, boosted by real estate sales, which rose by 21.3% to P176.53 billion. Attributable net income reached P28.23 billion last year, 15.2% higher than P24.51 billion in 2023.

For this week, Ms. Yatco placed ALI’s support levels at P21.60, while its resistance levels are at P24.30.

“The outlook remains positive for Ayala Land, with inflation trending downwards. This will likely prompt the [Bangko Sentral ng Pilipinas] to lower lending rates, which will further boost the property market, especially Ayala Land, as it continues to grow despite headwinds,” Mr. Pangan said.

He placed his immediate support and resistance levels for ALI at P22.80 and P23.90, respectively. His next support level is at P22, while the next resistance level is at P24.80 per share.

“With the stock being at a discounted price, it makes it more interesting for investors to buy,” Mr. Teodoro said.

“Overall, both the fundamentals and technicals are aligned to support the stock’s upward movement,” he added.

Mr. Teodoro placed support levels around P22.60-P21.80 and resistance levels at P24.80-P25 for the stock. — J.P.G. Villanueva

Yields on Treasury bills, bonds may end mixed

April 7, 2025 | 12:05 am

RATES of the Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week may end mixed to mirror secondary market movements following the slower-than-expected March Philippine inflation print and market caution due to the Trump administration’s tariff announcement.

The Bureau of the Treasury (BTr) will auction off P22 billion in T-bills on Monday, or P7 billion each in 90- and 181-day papers and P8 billion in 363-day papers. The T-bill tenors were adjusted as the issue date was pushed back by a day due to a holiday.

On Tuesday, the government will offer P35 billion in reissued 20-year T-bonds with a remaining life of six years and three months.

Rates for T-bills and bonds to be offered this week may track the mixed movements at the secondary market, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

A trader said the reissued T-bonds to be auctioned off on Tuesday could fetch rates ranging from 5.875% to 5.925%, with demand expected to be good.

At the secondary market on Friday, the 91- and 182-day T-bills rose by 4.76 basis points (bps) and 6.56 bps week on week to end at 5.3454%, and 5.6819%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data as of March 28 published on the Philippine Dealing System’s website. Meanwhile, the 364-day paper’s yield went down by 2.8 bps to 5.7735%

On the other hand, the 20-year bond went down by 0.15 bp week on week to fetch 6.3165%, while the seven-year debt, the tenor closest to the remaining life of the bond issue to be offered on Tuesday, declined by 8.64 bps to 5.9489%.

Secondary market yields were affected by the latest domestic inflation data as well as concerns over the Trump administration’s latest tariff announcement.

Inflation eased to its lowest annual rate in nearly five years in March as food and transport costs rose at a slower pace, the government reported on Friday.

The consumer price index slowed to 1.8% in March from the 2.1% in February and 3.7% in the same month a year ago, preliminary data from the Philippine Statistics Authority showed.

This was within the Bangko Sentral ng Pilipinas’ (BSP) 1.7%-2.5% forecast for the month and below the 2% median estimate in a BusinessWorld poll of 18 analysts.

The March print was also the lowest in 58 months or since the 1.6% logged in May 2020 at the height of the coronavirus pandemic.

For the first quarter, inflation averaged 2.2%, within the central bank’s 2-4% annual target.

Analysts said the slower March inflation print could give the Monetary Board a reason to resume its easing cycle when it meets on Thursday.

Meanwhile, US President Donald J. Trump unveiled sweeping tariffs on Wednesday, causing investors to flee to the safety of government bonds, Reuters reported.

Mr. Trump slapped a 10% tariff on most US imports and much higher levies on dozens of countries, erecting the steepest trade barriers in more than 100 years.

US Federal Reserve Chair Jerome H. Powell said in remarks at a business journalists’ conference in Arlington, Virginia, that Trump’s new tariffs are “larger than expected” and the economic fallout, including higher inflation and slower growth, likely will be as well.

After years of huge flows into US stocks and a booming American economy, investors are grappling with where to put their cash.

That helped drive a powerful rush towards government bond markets. The yield on the benchmark US 10-year Treasury note fell 12.2 basis points to 3.933% after falling to a six-month low of 3.86%. Yields move inversely to prices.

Last week, the BTr raised P24.15 billion from its offering of T-bills, short of the P25-billion plan, even as total bids reached P45.667 billion, almost twice the amount on offer.

Broken down, the Treasury borrowed only P7.15 billion via the 91-day T-bills, lower than the P8-billion program, even as tenders for the tenor reached P12.335 billion. The three-month paper was quoted at an average rate of 5.307%, rising by 15 bps from the previous auction. Tenders accepted by the BTr carried yields of 5.148% to 5.379%.

Meanwhile, the government made a full P8-billion award of the 182-day securities as bids for the paper amounted to P17 billion. The average rate of the six-month T-bill was at 5.646%, 9.2 bps higher, with accepted rates ranging from 5.5% to 5.749%.

The Treasury also raised P9 billion as planned via the 364-day debt papers as demand for the tenor totaled P16.332 billion. The average rate of the one-year debt rose by 6.7 bps to 5.748%, with bids accepted having yields of 5.64% to 5.788%.

Meanwhile, the T-bonds to be auctioned off on Tuesday were last offered on Aug. 13, 2024, where the government raised P30 billion as planned at an average rate of 6.128%.

The Treasury is looking to raise P245 billion from the domestic market this month or P125 billion via T-bills and P120 billion through T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.54 trillion this year. — A.M.C. Sy with Reuters

Fed’s Powell says tariffs likely to boost inflation, slow growth

April 7, 2025 | 12:04 am

US Federal Reserve Chair Jerome H. Powell — REUTERS

WASHINGTON — President Donald J. Trump’s new tariffs are “larger than expected,” and the economic fallout including higher inflation and slower growth likely will be as well, Federal Reserve Chair Jerome H. Powell said on Friday, while cautioning it was still too soon to know what the right response from the central bank ought to be.

“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” undermining both of the Fed’s mandates of 2% inflation and maximum employment, Mr. Powell told a business journalists’ conference in Arlington, Virginia, in remarks that pointed to difficult decisions ahead for the US central bank and did nothing to staunch a global bloodletting in stock markets.

Mr. Powell spoke as equity markets from Tokyo to London to New York continued a swoon that has wiped some 10% off major US stock indexes since Trump announced a raft of new tariffs on trading partners around the world on Wednesday.

Investors had looked to Mr. Powell’s speech for reassurance that perhaps the Fed was poised to take supportive actions as it has in previous moments of extreme market duress, and Trump himself took to his social media platform to say now would be the “perfect time” for the Fed to cut interest rates.

But Mr. Powell did not address the sell-off directly, instead acknowledging that the Fed faced the same uncertainty engulfing investors and company executives.

The S&P 500 Index was down another nearly 6%, with the Dow Jones Industrial Average 5.5% lower and the Nasdaq off 5%, ending a two-day decline that is the worst since the onset of the coronavirus pandemic in March 2020.

“Powell’s comments support our view that the Fed is not poised to rush in and cut interest rates anytime soon, despite President Trump’s call right ahead of Chair Powell’s comments to do so,” Nationwide Chief Economist Kathy Bostjancic said. “As such, we maintain our view the Fed waits until (the fourth quarter) to cut interest rates as the acceleration in inflation in the coming months makes them hesitant to lower rates to support the slowing economy.”

Mr. Powell said the Fed has time to wait for more data to decide how monetary policy should respond, but the Fed’s focus will be on ensuring that inflation expectations remain anchored, particularly if Mr. Trump’s import taxes touch off a more persistent jump in price pressures.

“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Mr. Powell said.

“Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” he said.

Mr. Powell said it was not the Fed’s role to comment on Mr. Trump’s policies but rather to react to how they might affect an economy that he and his colleagues regarded just a few weeks ago as being in a “sweet spot” of falling inflation and low unemployment.

“Uncertainty is high,” Mr. Powell said in response to a question from the event moderators. “What we’ve learned is that the tariffs are higher than anticipated, higher than almost all forecasters predicted.”

While it is unclear how it will play out, he said, “the same is likely to be true of the economic effects, which will include higher inflation and slower growth.”

Powell’s comments highlighted the tension the Fed is seeing emerge between “hard data” that remains solid — the economy added 228,000 jobs in March with a 4.2% unemployment rate — and “soft data” like surveys and interviews with business contacts that point to a coming slowdown.

“We are closely watching this tension between the hard and soft data. As the new policies and their likely economic effects become clearer, we will have a better sense of their implications for the economy and for monetary policy,” Mr. Powell said.

“We are well positioned to wait for greater clarity before considering any adjustments to our policy stance. It is too soon to say what will be the appropriate path for monetary policy.”

PUSH AND PULL
The confounding set of risks, with prices rising even as the economy appears set to weaken, has become increasingly central to Fed commentary as the scope of Mr. Trump’s tariff plans become clear and other countries respond.

China has announced retaliatory tariffs of 34% on all US goods, restrictions on the export of minerals critical to the tech industry, and other measures including limits on imports of US-raised chickens — a nod to Mr. Trump’s support in rural, agricultural parts of the country.

Administration officials have so far downplayed the market sell-off, the worst since the onset of the COVID-19 pandemic, as necessary for US economic gains in the future.

Retaliation by other countries like China, one of the largest US trading partners and the wellspring of many trade grievances among US politicians of both political parties, is one of the channels Fed officials have said could cause Trump’s import taxes to lead to more persistent price pressures.

The push and pull expected between slower growth and rising prices could well keep the Fed on hold until it is clear which trend takes hold more forcefully.

Investors in contracts tied to the central bank’s policy rate appear to be expecting the risks to growth will dominate.

Markets now expect four quarter-percentage-point interest rate cuts from the Fed this year versus three before Mr. Trump’s announcement of tariffs that could tax imports an average of as much as 27% by some estimates, versus about 2.5% at the end of the Biden administration. — Reuters

The new Newfolk

April 7, 2025 | 12:04 am

MONO Vessel — MONO VESSEL is a series of textured vessels made of concrete by Krete Manila. — INSTAGRAM.COM/KRETEMANILA

In the time between its founding in 2015 and today, the design collective has changed both members and viewpoints

WHILE NEWFOLK held a preview on March 27 of their new exhibit of furniture and decor — the exhibit, No Boundaries, will run from April 5 to 12 at Comuna — it mostly served as a peek at the uniqueness of the next generation of Filipino industrial designers.

The exhibit was themed around a kitchen, then a café: Newfolk’s producer and creator Gabriel Lichauco said, “You don’t just cook there. It’s a place where we socialize… work. There’s always something new in the kitchen.”

Newfolk is a collective that first showed its work in Singapore Design Week in 2015. Back then, it was made up of Mr. Lichauco and his friends and colleagues: think Stanley Ruiz, Olivia d’Aboville, Rita Nazareno, and Wataru Sakuma (among others). Now, 10 years later, the collective consists of new designers, ranging in age from 25-30, some of whom Mr. Lichauco has nurtured while teaching at the De La Salle-College of St. Benilde.

At the preview, we saw a chair by Chini Lichangco, blossoming with magnolias. Selena Placino made a pegboard with batirol (chocolate whisks) pegs, as well as a lamp made of a rice funnel welded to a rice cooker. Razel Mari made a nest where one can store eggs, while we saw other goodies like mother-of-pearl salt and pepper dispensers and a knife block made of concrete and bamboo sticks (that hold the knives in place) by Krete Manila (Daniel Ubas and Viktoria Laguyo).

“I didn’t stop looking into how younger designers would progress,” said Mr. Lichauco.

He recalled that when he and his friends formed Newfolk, they were a little bit older than these new designers — they were then in their mid-30s and above, and had already made names in the industry. Project editor Anna Magsaysay-Rosete added that the OGs “all had some ties with places abroad,” pointing out, for example, that Mr. Lichauco had been working in Milan. These new ones, on the other hand, were mostly educated locally. “There are so many references that are local,” she said of the items in the exhibit.

Of the differences between the collective’s first designers and the new ones, Mr. Lichauco said, “We would be referencing what we saw abroad — what we were exposed to. These guys, they’re using very local references.”

The differences between old and new were also shaped by the COVID-19 pandemic’s influence on their early working years. “It’s really something that informed the generation,” Ms. Magsaysay-Rosete said. “During the pandemic, there was so much emphasis on the home, but also, they were all able to create.”

“The rigor is amplified, and then translated into different media,” she said. She pointed out the pedestals where pastries for the event were displayed: Bianca Carague made these from a digital world she created, then made forms out of them. In turn, the pastries were also designed digitally.

They also noted the differences between how their generation and the new Newfolk work. Mr. Lichauco said of the young ’uns, “They’re open to sharing ideas.” Ms. Magsaysay-Rosete said that before, design was a much more solitary experience. Now, after a pandemic that disconnected people, “They’re very much more aware and wanting to collaborate,” she said.

“Plus also the idea that something has to be sustainable.” She pointed out a collection of drawer pulls and knobs by Eldry John Infante and Martin Quiambao under Mese Studio in collaboration with Lamana: shaped like asterisks, they are made from wood off-cuts.

Furthermore, the Filipino identity in them is stronger, Ms. Magsaysay-Rosete says. “We were still really trying to define what is Filipino [back then]. But for them, they’re coming into it with a stronger identity than I would say, myself.”

No Boundaries can be seen at Comuna in 238 Pablo Ocampo Sr. Ext. in Makati from April 5 to 12. — Joseph L. Garcia

PSE eyes more deals for higher stake in PDS

April 7, 2025 | 12:04 am

THE Philippine Stock Exchange, Inc. (PSE) is expected to finalize additional deals this week to increase its stake in the Philippine Dealing System Holdings Corp. (PDS) as part of its ongoing effort to consolidate the local capital market infrastructure.

“I think we’ll be closing Citicorp (Capital Philippines, Inc.) by next week, together with Tata (Consultancy Services Asia Pacific Pte. Ltd.) maybe,” PSE President and Chief Executive Officer Ramon S. Monzon told reporters last week.

A PSE regulatory filing dated April 3 showed that financial advisory company Citicorp holds a 3.1% stake in PDS, equivalent to 193,824 shares, while information technology and consulting company Tata Consultancy has an 8% ownership, corresponding to 500,000 shares.

Meanwhile, Mr. Monzon said the PSE is facing challenges in closing the deals for the stakes in PDS held by foreign banks.

“We’re having problems with the foreign banks. I don’t think we’ve closed JP Morgan and another one,” he said.

JP Morgan Chase Bank holds a 0.08% stake in PDS, corresponding to 5,000 shares.

On April 3, the PSE increased its stake in PDS to 79.94% after closing the acquisitions of stakes held by state-led pension fund Social Security System (SSS) and Insular Investment Corp.

SSS held a 1.54% stake in PDS, equivalent to 96,388 shares, while Insular Investment also finalized the sale of its 0.0645% ownership, or 4,030 shares.

The PDS operates the Philippine Dealing and Exchange Corp., Philippine Depository and Trust Corp., and Philippine Securities Settlement Corp.

In December last year, the PSE announced that it was purchasing a 61.92% stake in PDS for P2.32 billion. The market operator is acquiring 3.87 million PDS shares at P600 apiece.

Prior to the acquisition, the market operator had a 20.98% stake in PDS.

For 2024, the PSE recorded a 57.5% jump in its net income to P1.21 billion from P766.31 million in 2023 after its takeover of PDS. — Revin Mikhael D. Ochave

Liberation tariffs and the Philippines

April 7, 2025 | 12:04 am

container van-port — PAT WHELEN-UNSPLASH

What does US President Donald Trump’s “Liberation Tariffs” mean for the Philippines? Consider the semi-conductor industry — a crucial economic pillar, responsible for around 60% of the country’s total exports, generating over $45 billion annually, and providing employment for more than 400,000 skilled Filipino workers. The industry’s continued growth is essential for the nation’s economic prosperity.

Recent geopolitical shifts, particularly Trump’s “Liberation Tariffs,” have created substantial disruptions in global semiconductor supply chains. These tariffs significantly raised duties on Chinese semiconductor imports to 60%, while setting lower rates — approximately 20% or less — for products originating from ASEAN countries, including the Philippines. Initially, this difference suggests a promising 17% tariff advantage for the Philippines. Yet, this apparent advantage alone will not meaningfully attract semiconductor investments unless other fundamental challenges impeding foreign direct investments (FDIs) are swiftly addressed.

Despite the initial tariff edge, the Philippines faces intense competition from neighboring countries like Vietnam and Malaysia. Vietnam has already leveraged a strategic bilateral agreement with the United States to reduce its trade deficit, enhancing its competitiveness significantly. Similarly, Malaysia remains highly proactive, continuously refining its attractive incentives, advanced infrastructure, and government-backed industry support. Consequently, semiconductor companies entrenched in these nations are unlikely to relocate to the Philippines solely because of marginally lower tariffs if the Philippines fails to resolve its structural and economic impediments.

The Philippines faces significant competitive disadvantages compared to Vietnam and Malaysia. Both competitors offer robust financial incentives and substantial subsidies, providing generous tax breaks, funding for research and development, and dedicated support for infrastructure and workforce training. In contrast, Philippine incentives are modest and insufficiently competitive.

Furthermore, electricity costs in the Philippines present a significant hurdle, averaging $0.20 per kWh, making it one of the highest rates in the ASEAN region. Vietnam’s rate, around $0.08 per kWh, and Malaysia’s rate of about $0.10 per kWh, clearly highlight the Philippines’ disadvantage in this critical area. High electricity expenses significantly reduce competitiveness and dissuade potential investors.

In addition, despite having a large labor pool, the Philippines faces a considerable skills gap in advanced semiconductor manufacturing compared to Malaysia, which has heavily invested in specialized technical education and workforce development. This skills mismatch severely limits the nation’s capacity to attract high-value semiconductor production.

Moreover, infrastructure development remains a substantial weakness. Vietnam and Malaysia have strategically developed specialized infrastructure, integrated industrial zones, and efficient logistics networks tailored explicitly for semiconductor industries. In contrast, the Philippines struggles with outdated infrastructure, underdeveloped supply chains, and logistical bottlenecks, which substantially deter new investments.

Corporate taxes further exacerbate the competitiveness gap. The Philippines’ corporate tax rate remains relatively high at about 25%, even after recent reductions, compared to Vietnam’s rate of roughly 20% and Malaysia’s approximately 24%, both of which offer substantial additional incentives to investors.

Regulatory inefficiencies and institutional bottlenecks present additional obstacles. Malaysia and Vietnam have streamlined administrative processes and effective regulatory frameworks, creating investor-friendly environments. The Philippines, conversely, is hampered by bureaucratic delays, inconsistent policy applications, and slow administrative approvals, significantly limiting investor confidence.

Innovation and technological advancement are areas where the Philippines trails significantly behind regional leaders. Malaysia dedicates considerable resources to research and development, establishing technology hubs and innovation clusters, while Vietnam is swiftly enhancing its technological capacities. The Philippines must urgently enhance its investment in innovation to remain competitive.

Lastly, despite its strategic alignment with the United States, the Philippines lacks a structured framework to manage economic security proactively, one similar to Malaysia’s Geo-Economic Command Center. Such an institution could significantly bolster the nation’s capacity to respond to global semiconductor industry shifts effectively.

For the Philippines to meaningfully capitalize on the lower tariffs afforded by Trump’s trade policies, addressing these critical competitive issues must become an urgent national priority. Comprehensive financial and regulatory incentives must be rapidly expanded to match or exceed those of regional competitors. Electricity rates should be drastically reduced through infrastructure upgrades and targeted subsidies, creating specialized semiconductor industrial zones to foster growth.

To bridge the workforce skills gap, the Philippines needs substantial investment in specialized training programs and industry-specific educational initiatives, closely coordinated with industry leaders and educational institutions. Concurrently, deepening strategic geopolitical partnerships with nations such as the US, Japan, South Korea, and Europe will enhance the country’s attractiveness to semiconductor investments.

The Philippines must also prioritize advancing to higher-value semiconductor production, notably wafer fabrication, through targeted incentives and strategic investments. Regulatory reform should create transparent, efficient processes tailored explicitly for semiconductor operations, reflecting the successful models of regional competitors. Increased investment in innovation and research and development is critical, mirroring the proactive innovation-driven approaches of Malaysia.

Finally, establishing an Economic Security Council, akin to Malaysia’s Geo-Economic Command Center, is essential. Such an institution would proactively coordinate economic strategy, manage geopolitical risks, and streamline policy responses, significantly enhancing the nation’s strategic capabilities.

Ultimately, while the Philippines stands to gain theoretically from the favorable tariff differential, tangible benefits will remain elusive unless substantial action is taken to address these deeper systemic and structural challenges. The Philippines should seize this fleeting advantage into a lasting competitive edge in the global semiconductor industry.

Eduardo Araral, PhD is an associate professor at the Lee Kuan Yew School of Public Policy, National University of Singapore. This op-ed is written in his personal capacity.

Speed is in session

April 7, 2025 | 12:03 am

VELO_PAGE1_image1 — Toyota Motor Philippines (TMP) President Masando Hashimoto’s #4 Vios speeds past flag bearers to take its position on the grid. — PHOTO BY KAP MACEDA AGUILA

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Toyota Gazoo Racing PHL Cup 2025 takes off; new GR Yaris unveiled

THE 2025 EDITION of the Toyota Gazoo Racing Philippine Cup was off to a rousing start as several grids of track-ready Toyotas took the green flag last March 21 to 22 at the Clark International Speedway in Angeles, Pampanga.

As the checkered flag waved, racing veteran Maila Alivia found himself leading the Super Sporting Class, while Jesse Garcia heads the Sporting Class. Sim racer and Vios Cup Autocross Challenge graduate Luis Moreno, meanwhile, leads the standings in the Novice Class.

In the Legacy Class Sprint Race, former Vios Cup racers battled it out, with notable participants Senator JV Ejercito, who won his first Vios Cup race in 2017, and Paolo Ang, who was the 2021 and 2023 Sporting Class runner-up, seeing action on the track.

The weekend also saw GR car club members competing in sprint races for the first time in the racing series’ history. Dubbed the Club Race, the event highlighted Toyota’s philosophy of bringing thrill and joy to customers through one-of-a-kind fan experiences.

GR performance and Lexus car owners also took to the track their vehicles for the Track Day. Fans of the Toyota GR lineup (particularly the GR Yaris, whose latest iteration was just launched) and Lexus F Sport series also got to see the vehicles up close at the display area.

In the activity area, eventgoers enjoyed freebies and prizes from the sponsors’ booths and got to try their hand at remote control and sim racing. There were also diecast collectibles for sale.

The highlight of the race weekend remained the circuit races, with Sprint Race 2 applying a reverse grid rule for added excitement. The starting grid was based on the results of Sprint Race 1. For the Novice Class, only P1 to P4 were reversed, putting John Rey San Diego in pole position for Sprint Race 2.

The Legacy, Sporting, and Super Sporting classes reversed the full grid, putting Oliver Estrella in pole position for the Legacy Class, Mike Santos for the Sporting Class, and Iñigo Anton for the Super Sporting Class.

Car damage relegated Oliver Estrella to the back of the grid, allowing Paolo Ang to take the lead in the Legacy Class. In the Sporting Class, Novice Class graduate Russel Reyes made his way to the front of the pack to take his second sprint win of the fledgling season.

Maila Alivia underscored her position as a championship contender in the Super Sporting Class by winning both sprint races of the weekend, as well as a top-five finish in the endurance race.

Meanwhile, in the Novice Class, TMP President Masando Hashimoto managed to secure third place after taking advantage of a runoff by Pablo Salapantan, earning him his second podium finish of the weekend.

Intense wheel-to-wheel action also took place in the Super Sporting Class endurance race as Mikey Jordan and Alain Gabriel Alzona faced off for third place. Jordan’s strong defense proved to be a challenge for Alzona, but Alzona would pull through after relentless overtaking attempts.

“At TGR Philippines, we stay committed to our goal of growing an inclusive and exciting motorsports hub where we can all come together and celebrate our love for cars and motorsports. This year, we are celebrating 11 years of the TGR Philippine Cup, and it is our pride and honor to continue bringing you the thrill and joy that only TGR can bring,” shared Mr. Hashimoto.

Race Weekend 2 of the Toyota GR Philippine Cup happens in May, presented by official fuel and lubricants partner Petron and official tire partner GT Radial. The event is also supported by Toyota Financial Services Philippines, myToyota Wallet, Denso, AVT, 3M, Rota, Tuason Racing, OMP, and Kinto One.

For more information on the TGR Philippine Cup and other TGR events, visit https://toyota.com.ph/tgrphilippines. TMP official pages are ToyotaMotorPH on Facebook, Instagram, and X; and TMP is on Viber through Toyota PH.

Analysts’ Expectations on Policy Rates (April 2025)

April 7, 2025 | 12:03 am

THE BANGKO SENTRAL ng Pilipinas (BSP) is expected to cut rates this week as low inflation and the US’ tariff policy will give it more than enough room to resume its rate-cutting cycle, analysts said. Read the full story.

Splash! New London exhibition dives into a century of swimming

April 7, 2025 | 12:03 am

Splash!-A-Century-of-Swimming-and-Style---designmuseum.org — PAMELA ANDERSON’S iconic red swimsuit from the 1990s TV show Baywatch (R) is one of the items in the exhibit which looks into a century of swimwear. — DESIGNMUSEUM.ORG

LONDON — From an Olympic gold medal to Pamela Anderson’s Baywatch red bathing suit, a new exhibition dedicated to all things swimming has opened at London’s Design Museum.

Splash! A Century of Swimming and Style features more than 200 items that look at our love of water since the 1920s, be it at the lido, the pool, or in nature.

“The show explores the last century of swimming through the lens of design,” Amber Butchart, guest curator of the exhibition, told Reuters at a press preview last Wednesday.

“We begin in the pool, we move into lido, and then we end in nature and each of those sections allows us to explore different themes, whether it’s materials and making, whether it is the… evolution of swimwear as a fashion object, or whether it is swimming in outdoor spaces and the architecture that allows access for that.”

A variety of colorful swimwear from various decades takes center stage, including a 1950s bikini and a selection of 1980s Speedo briefs alongside an edition of the famed red suit Anderson wore to play lifeguard CJ Parker in Baywatch in the 1990s.

Items date from a 1920s example of rental swimwear to more contemporary and adaptive designs.

Also on show are various items belonging to Olympians — including the first Olympic solo swimming gold medal won by a British woman as well as diver Tom Daley’s Team GB trunks.

Splash! A Century of Swimming and Style runs until Aug. 17. — Reuters

Farm producers could target PHL after US tariffs

April 7, 2025 | 12:03 am

By Kyle Aristophere T. Atienza, Reporter

US FARM exporters locked out of markets by retaliatory tariffs could target the Philippines, crowding out domestic producers, industry officials said.

“If US producers face retaliatory tariffs, they might seek alternative markets, including smaller countries like the Philippines,” former Agriculture Secretary William D. Dar said via Viber.

“This could lead to an influx of cheap US agricultural products, undercutting domestic producers and harming local farmers’ livelihoods,” he added.

Former Agriculture Secretary Leonardo Q. Montemayor said the Philippines could also be targeted by producers that can no longer export to the US because the tariffs make their products less competitive, causing them to “dump” their excess produce here.

There is also a risk that US producers “will try to look for alternative markets and could end up selling their excess supply to us at very low prices,” he added.

“In the end, it might be our own farmers who will bear the brunt of the Trump tariffs.”

The US will charge Philippine exports a 17% tariff, which officials have noted will give the country an advantage over economies in the region that make similar products.

In Southeast Asia, Cambodia faces the steepest tariff at 49%, followed by Laos (48%), Vietnam (46%), Myanmar (45%), Thailand (37%), Indonesia (32%), Malaysia (24%) and Brunei (24%). Singapore, deemed by the US to be an open economy, is being charged a baseline tariff of 10%.

The Philippines had a trade surplus with the US of $4.9 billion in 2024.

Mr. Dar said focusing solely on tariff differentials is “insuﬃcient,” as other countries are likely to double support for their agriculture industries to offset the tariff regime’s impacts and maintain their competitive advantage.

“The Philippines must consider broader competitive factors,” he said.

“If competing countries provide subsidies or other support to their exporters, they can offset the tariff impact, maintaining their price advantage,” he added.

“In our case, farmers and exporters are basically left to fend for themselves,” Mr. Montemayor said.

Mr. Dar noted that the level of agriculture resilience varies across Southeast Asian, with some having more diversified export markets and stronger agricultural infrastructure.

“Increasing the eﬃciency of the Philippines’ agricultural practices is essential in maintaining its market share in global trade,” he said.

“Any method that contributes to lowering the price of goods to consumers in foreign markets will be heavily favored in the consideration of being chosen for admission to US markets,” he added.

Mr. Montemayor said among those highly vulnerable to the tariff regime are the Philippines’ 3.4 million coconut farmers, who may see a downturn in copra prices if foreign demand slows down.

In 2023, the Philippines exported nearly P22 billion worth of coconut products to the US.

Processed fruits and seafood are also among the Philippine products affected by the new tariffs, Mr. Dar said.

Samahang Industriya ng Agrikultura (SINAG) spokesman Jayson H. Cainglet said the Philippine products that will be most affected by the new tariff rate are semi-processed goods like coconut oil, desiccated coconut, canned pineapple, and coconut water.

Philippine agricultural exports in January rose to $715.25 million from $538.68 million a year earlier, according to the Philippine Statistics Authority (PSA).

Agricultural exports accounted for only 29.4% of two-way agricultural trade, which was valued at $2.43 billion for the month. Exports of farm goods accounted for 11.2% of total exports.

The PSA said exports of animal, vegetable, or microbial fats and oils and their cleavage products, prepared edible fats, and animal or vegetable waxes accounted for 36.9% or $263.87 million of all agricultural exports.

In 2024, the Philippines imported about two and a half times more agricultural products than it exported both to the US and the world, according to the Federation of Free Farmers.

The US market accounted for around 17% of total Philippine agricultural trade.

Ateneo de Manila economics professor Leonardo A. Lanzona said the Philippines should see the tariff regime as an “opportunity to develop its manufacturing.”

“Whatever export earnings we have gotten from microchips are now going to diminish. So, if food prices rise globally, agriculture products are the best option we have in terms of replacing microchips as our top export,” he said in an e-mail.

Top Philippine exports to the US are integrated circuits, office machine parts, and semiconductors.

Retired agriculture professor Roy S. Kempis, who now heads a business center at the Angeles University Foundation, said in discussing trade differentials, the Philippines should also see how the new tariff rates will increase the prices of supplies and materials that go into the production and sale of exportable goods.

He said the Department of Trade and Industry and the Department of Science and Technology will play key roles in boosting the competitiveness of Philippine agriculture products.

He cited the need for improvements in the areas of phytosanitary compliance, vacuum-packing, and labeling.

Mr. Cainglet of SINAG said tariffs should not be used to kill competition but level the playing field, noting that a proposed agreement on agriculture at the World Trade Organization has been facing a 24-year-old impasse “because countries are choosing to protect local agriculture and domestic markets against the influx of heavily subsidized agriculture imports.”

“Tariffs protect local industries maintain market share and protect jobs in key sectors,” he said via Viber.

The Philippines has lowered tariffs for key Philippine imports including rice, the duty for which is set at 15% from 35% previously.

“In general, increasing tariffs mean additional subsidies for local agriculture and local industries, or to fund social programs,” Mr. Cainglet said.

“If we do not do our homework and the US eventually withdraws these tariff hikes, we will be back to zero and lose our position again to other countries,” Mr. Montemayor said.