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Education seen as key to unlocking potential of Philippines’ Generation Alpha

Children pose for a photo at Rizal Park, Manila, Nov. 4, 2024. Fitch Solutions unit BMI said that Gen Alpha, or those born between 2010 and 2024, will constitute 27% of the Philippine population in 2030. — PHILIPPINE STAR/EDD GUMBAN

By Katherine K. Chan

THE PHILIPPINE government should further invest in education to ensure that the economy will benefit from the projected boom of the Generation Alpha population in a few years, analysts said.

John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said the expected growth of the young tech-savvy population presents a “huge opportunity and serious responsibility” for the Philippine economy.

“A young, tech-savvy consumer base means rising demand for digital services, education, housing, mobility, and lifestyle products, which can drive long-term domestic growth and make (the Philippines) one of Asia’s most dynamic consumer markets,” he told BusinessWorld in a Viber message.

Fitch Solutions unit BMI said in a report released late in October that Gen Alpha, or those born between 2010 and 2024, will constitute 27% of the Philippine population in 2030, the highest in Asia.

The Philippines’ total population reached 112.73 million as of July 1, 2024, based on the latest Philippine Statistics Authority data.

Gen Alpha, born into an era of advanced technology and exposed to innovations such as artificial intelligence from a young age, is recognized as the “digital native” generation.

By 2026, their ages will range from one to 16 years old.

Cid L. Terosa, a senior economist at the University of Asia and the Pacific (UA&P), said the growing Gen Alpha population will expand the labor force and help stimulate business activity and economic growth.

“That augurs well for the economy since the great number of Generation Alpha can mean more labor resources to drive business and economic activities,” he told BusinessWorld in an e-mail.

Mr. Rivera also said that the demographic being widely “English-speaking and adaptable” could help the Philippines develop its labor-intensive and digital industries.

Meanwhile, Gen Alphas are seen to boost the Philippines’ market as they are poised to become an emerging consumer segment for investors.

“They represent a potential market for both domestic and foreign investors,” Mr. Terosa said. “In short, they represent not only greater potential human capital but also greater market potential for the Philippines and the rest of the world.”

By yearend, BMI said the Gen Alpha global population will reach two billion, making up nearly a quarter or 24.2% of the 8.3 billion global population.

“I’m skeptical that this iteration of the demographic dividend will be more fruitful for the Philippine economy than the last, simply because the country has yet to address a few key problems, namely, underinvestment in human capital (i.e. educational standards) and brain drain,” Miguel Chanco, chief emerging Asia economist at Pantheon  Macroeconomics, told BusinessWorld in an e-mail.

At the same time, Mr. Rivera said the young demographic could only become productive contributors to the economy if the government prioritizes investments in education, skills training, digital infrastructure, and job creation.

“(T)o fully benefit from this demographic dividend, NG (National Government) must invest heavily in education, skills development, digital infrastructure, and job creation to ensure that these young Filipinos are productive participants in the global economy, not just consumers,” he said.

Mr. Terosa also said Gen Alphas must learn about emerging industries and technology to adapt to evolving trends.

“We need to raise the value or quality of the potential labor or human resources supplied by Generation Alpha,” he said. “We can do this through formal and informal education relevant to emerging industries and technology. They need to be agile and nimble in adapting to global economic and business trends.”

The UA&P economist also said that the government should promote domestic and foreign investments to generate more employment opportunities for the growing youth population.

Earlier this year, Economic Undersecretary Rosemarie G. Edillon said Gen Z, or those born between 1995 and 2012, and Gen Alpha will account for the bulk of the country’s workforce by 2035.

“The key is to turn population growth into human capital strength by improving learning outcomes, upskilling for artificial intelligence and green industries, and expanding opportunities in high-value sectors,” Mr. Rivera said. “If these investments are made early, (the Philippines) can convert its youth advantage into sustained growth, innovation, and regional competitiveness well beyond 2030.”

PLDT Q3 income falls 28% as expenses temper revenue gains

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PANGILINAN-LED PLDT Inc. posted a third-quarter attributable net income of P6.93 billion, down 28.26% from P9.66 billion in the same period last year, as higher expenses offset revenue growth.

“PLDT remains guided by discipline and long-term value creation — principles that have seen us through every cycle,” PLDT Chairman and Chief Executive Officer Manuel V. Pangilinan said in a disclosure on Tuesday.

“As we continue working to maintain our level of profitability in 2025, our task moving forward would be to convert steadiness into progress — to act with greater speed, imagination, and accountability,” he added.

For the third quarter, PLDT reported revenues of P53.71 billion, slightly up from P53.36 billion a year ago, while expenses rose to P42.36 billion from P39.62 billion.

For the nine-month period ending September, total revenues climbed 1.45% to P163.28 billion from P160.94 billion, while expenses increased 3.61% to P123.39 billion from P119.09 billion.

Service revenues accounted for the bulk of the topline at P145.9 billion, up from P144.9 billion a year earlier.

PLDT’s nine-month attributable net income declined 10.69% to P25.07 billion from P28.07 billion, while telco core income — which excludes asset sales and Maya-related gains or losses — fell 4.97% to P25.26 billion from P26.58 billion.

Segment contributions remained steady, with wireless revenue at P63.2 billion, home at P45.7 billion, and enterprise at P35.6 billion.

Capital expenditures for the nine-month period totaled P43 billion, down from P52.3 billion a year earlier, reflecting continued discipline in spending.

Mr. Pangilinan said the company intends to maintain its capital spending at the current level for next year.

PLDT’s digital bank, Maya, sustained profitability, with deposit balances reaching P57 billion as of end-September and total loan disbursements since launch hitting P187 billion.

At the local bourse on Tuesday, PLDT shares gained by P52, or 4.65%, to close at P1,170 apiece.

Hastings Holdings Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings Inc., holds a majority stake in BusinessWorld through the Philippine Star Group. — Ashley Erika O. Jose

Hydropower lifts First Gen’s nine-month profit by 4% despite weaker gas, geothermal earnings

FIRSTGEN.COM.PH

POWER PRODUCER First Gen Corp. posted a nine-month attributable net income of $215.4 million, up 4% from the same period last year, as higher contributions from its hydropower portfolio offset declines in natural gas and geothermal earnings.

Total revenues for the January-to-September period fell 3.3% to $1.79 billion from $1.85 billion a year ago, mainly due to lower output from its natural gas and geothermal units, the company said in a statement on Tuesday.

First Gen’s hydropower segment, which accounts for 4% of the company’s total income, jumped 65% to $23 million, driven by higher energy sales from the 132-megawatt (MW) Pantabangan-Masiway power plants, which generated $13 million compared with $3 million previously.

The company attributed the hydropower gains to a higher starting elevation at the Pantabangan-Masiway plant, resulting in increased energy production.

The newly acquired 165-MW Casecnan hydropower plant, which First Gen took over in 2024, contributed $628 million during the nine-month period, according to the company.

Meanwhile, the natural gas business, representing 65% of total earnings, declined 8% to $138 million, largely due to losses at the 420-MW San Gabriel natural gas-fired power plant.

Other conventional plants including the 1,000-MW Santa Rita Power Plant, 500-MW San Lorenzo Power Plant, and 97-MW Avion Power Plant recorded higher recurring earnings, helped by interest savings from lower outstanding debt.

FGEN LNG Corp., operator of the Batangas offshore liquefied natural gas terminal, earned a recurring net income of $31 million.

Energy Development Corp. (EDC), First Gen’s geothermal subsidiary, posted a 36% drop in earnings to $38 million amid lower spot prices and higher interest expenses following drilling programs and project expansions, contributing 31% to total revenues.

EDC is completing 83 MW of geothermal capacity and 40 megawatt-hours of battery and energy storage projects.

“As a whole, we were happy to see First Gen’s net income steadily increase this year despite industry dynamics of lower electricity prices and softer demand,” First Gen President and Chief Operating Officer Francis Giles B. Puno said.

He added that the company is continuing negotiations with Manila Electric Co. for the extension of the power supply agreement for the Santa Rita gas plant.

First Gen is an independent power producer with a total installed capacity of 3,696 MW across natural gas, geothermal, hydroelectric, wind, and solar technologies. — Sheldeen Joy Talavera

MPIC eyes exit from LRT-1 amid continued losses

PHILIPPINE STAR/MIGUEL DE GUZMAN

METRO PACIFIC Investments Corp. (MPIC) is considering divesting its 35.8% stake in Light Rail Manila Corp. (LRMC), the operator of Light Rail Transit Line 1 (LRT-1), as losses persist and ridership has yet to recover from the pandemic impact.

“We are still losing on LRT-1, in part because of COVID. Ridership went down, obviously. We continue to lose money from LRT-1, and I think we are considering selling it and getting out of the light rail,” MPIC Chairman, President, and Chief Executive Officer Manuel V. Pangilinan told reporters on the sidelines of PLDT’s financial briefing on Tuesday.

“We are just talking about it, and people are complaining that we are losing money so that is why we need to do this,” he added.

MPIC holds a 35.8% stake in LRMC through its unit Metro Pacific Light Rail Corp., while Sumitomo Corp. owns 19.2% and Macquarie Investments Holdings (Philippines) Pte. Ltd. holds 10%.

LRMC is a joint-venture company of MPIC, AC Infrastructure Holdings Corp. (a unit of Ayala Corp.), Sumitomo Corp., and Macquarie Investments Holdings, and assumed operations and maintenance of LRT-1 in September 2015 under a P65-billion, 32-year concession agreement with the Light Rail Transit Authority and the Department of Transportation.

Incorporated on July 22, 2014, LRMC develops, constructs, operates, maintains, and invests in railways and other public-transport systems.

The company previously said it was reconsidering plans to acquire Ayala Corp.’s stake in LRT-1 following unresolved valuation issues, and last year explored acquiring Ayala’s shares after the latter announced its divestment plan.

Meanwhile, MPIC has no intention of bidding for the operations and maintenance of Metro Rail Transit Line 3 (MRT-3), Mr. Pangilinan said, noting the company has not submitted any recent unsolicited proposals.

The Transportation department aims to start bidding for MRT-3’s operations and maintenance within the first half of 2026, and in September hinted at receiving an unsolicited proposal for the project.

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

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority share in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

Ballet Philippines reimagines Alice in Wonderland

AHEAD of Christmas this year, Ballet Philippines (BP) is revisiting a well-loved childhood story, Alice in Wonderland. Helmed by artistic director Mikhail Martynyuk, the ballet company will follow a little girl’s journey down the rabbit hole.

Their new take on Lewis Carroll’s timeless tale will combine classical skill with lively pantomime, to make up a full-length ballet that Filipino children will love, according to Mr. Martynyuk.

“In the duration of one hour and 45 minutes, with music by Claude Debussy, our goal is to introduce you to Alice and her friends,” he said at a press launch on Nov. 7. The event included a preview, where dancers performed spirited excerpts in colorful costumes.

The Russian choreographer also said that he hopes audiences’ curiosity will, like with Alice, lead them into a world that sparks their imagination.

Because the story is so beloved, it will remain unchanged, from the otherworldly flora and fauna encountered along the way to the surreal scenes that provide both humor and emotional depth.

Some scenes to look forward to in this ballet are the Mad Hatter’s tea party and the Queen of Hearts’ courtroom.

For Mr. Martynyuk, the world must come alive with “movement that tells the story beyond words.”

“Through choreography, mime, and expression, we invite audiences to feel the humor, absurdity, and heart that make Wonderland so unforgettable,” he said.

With a unique theatrical energy, BP aims to offer “a visually rich, family-friendly experience designed to enchant audiences of all ages.”

“As we continue to evolve Ballet Philippines’ artistic journey, Alice in Wonderland represents our ongoing mission to celebrate imagination, courage, and the joy of discovery,” said Kathleen Liechtenstein, BP president, in a statement.

“It also reflects our deeper purpose to bring Filipino talent and artistry to the forefront of the global stage, showcasing how collaboration between world-class artists like Mikhail Martynyuk and our homegrown dancers creates a uniquely inspiring expression of creativity and excellence,” she added.

Alice in Wonderland will run from Dec. 5 to 7, across five performances, at The Theatre at Solaire in Parañaque City. Tickets are now available via TicketWorld. — Brontë H. Lacsamana

PAL Q3 income nearly doubles on higher passenger revenues

PHILIPPINE STAR/EDD GUMBAN

PAL HOLDINGS, INC., the operator of Philippine Airlines (PAL), saw its third-quarter (Q3) attributable net income nearly double to P1.37 billion on higher passenger revenues.

For the three months ending September, PAL Holdings logged a revenue of P42.67 billion, up 2.74% from P41.53 billion a year ago, while gross expenses rose slightly to P40.19 billion from P39.79 billion.

“As we move forward with our strategic and long-term initiatives, we remain focused on delivering value to stakeholders, strengthening our financial position, elevating the passenger experience, and ensuring the highest standards of safety in all our operations,” PAL President Richard Nuttall said in a media release on Tuesday.

For the January-to-September period, PAL Holdings’ attributable net income climbed 33.58% to P9.03 billion from P6.76 billion a year ago, supported by higher passenger revenues of P116.56 billion, up from P115.66 billion.

Cargo and ancillary revenues contributed P6.71 billion and P12.67 billion, respectively.

Total revenues for the nine-month period increased 2.68% to P136.01 billion from P132.45 billion, while gross expenses rose 3.96% to P124.85 billion from P120.09 billion.

Expenses from flying operations totaled P64.01 billion; maintenance, P17.48 billion; aircraft and traffic servicing, P16.58 billion; and passenger service, P10.74 billion.

PAL has strengthened its regional position, ranking first in on-time performance among Asia-Pacific carriers for three consecutive months from August to October this year.

“These accolades enhance PAL’s position as the nation’s flag carrier, affirming its reputation for reliability, customer service, and operational excellence,” Mr. Nuttall said.

Capital expenditure for the first nine months rose to $308 million from $265 million a year earlier.

In September, PAL began deploying its first refurbished aircraft as part of a retrofitting program that will see 18 Airbus A321ceo planes operating across Asia by 2027, including routes to Tokyo, Osaka, Jakarta, Bali, and Guam. — Ashley Erika O. Jose

Christmas lights the stage at Proscenium Theater

9 Works Theatrical presents A Christmas Carol

THOSE excited for the holiday season have a treat coming this November — theater company 9 Works Theatrical is staging A Christmas Carol the Musical starting Nov. 29.

The musical boasts of an ensemble of over 30 actors and closely follows Charles Dickens’ classic novella of the same name. It tells the story of the bitter miser Ebenezer Scrooge who is visited by three ghosts that lead him on a journey through his past, present, and future.

Originally shown in 1994, this version of A Christmas Carol is brought to life with music by Alan Menken, lyrics by Lynn Ahrens, and book by Mike Ockrent and Ahrens.

“We’re hoping there’s a Christmas show every year. It doesn’t always have to be this one. I think Rockwell would like that as well,” said director Robbie Guevara at the press launch on Nov. 7.

Starring as Scrooge is Arnel Carrion, who been a theater performer since the 1990s. On what to expect from his portrayal, Mr. Carrion mentioned his deep respect for the late actor Miguel Faustmann, who played Scrooge in many past productions in the Philippines.

“I was deeply honored when they entrusted me with such an iconic and beloved character. Ebenezer Scrooge is a role that carries so much history, weight, and meaning, especially for audiences who have grown up with this story,” he explained.

He added that he had previously performed in the musical but played different characters — Bob Cratchit and then Scrooge’s nephew Fred.

“It’s a full-circle moment for me,” said Mr. Carrion. “What strikes me about Scrooge is his emotional journey from bitterness to redemption. That transformation is universal and timeless.”

Child stars Enzo Dognidon and Jethro Ting share the role of Tiny Tim, the symbolic figure of hope in the musical. Meanwhile, the three ghosts will be played by performing arts luminaries: Franco Laurel will be the Ghost of Christmas Past, Lorenz Martinez will be the Ghost of Christmas Present, and Carmelle Ros will play the Ghost of Christmas Yet To Be.

Rounding up the iconic “ghosts” is Boo Gabunada, who plays the role of Scrooge’s late business partner Jacob Marley. CJ Navato will be playing Young Ebenezer, while John Joven Uy has the role of Scrooge’s employee Bob Cratchit, with Anna Santamaria making her theater comeback as Mrs. Cratchit.

As for the artistic team, joining director Mr. Guevara are Raul Montesa as assistant director, Daniel Bartolome as musical director, Mio Infante as scenographer, and PJ Rebullida as choreographer.

Santi Santamaria, 9 Works Theatrical’s managing director, explained that the musical’s staging at Rockwell has been years in the making.

“When Rockwell was still conceiving the plan of having its own theater, we were already imagining and envisioning to stage A Christmas Carol here,” he said. “Finally, since Proscenium is here, I think it’s just fit for its first Christmas musical to be A Christmas Carol, because it is, in our minds, the best Christmas musical out there.”

On how different it will be from other stagings, Mr. Santamaria explained that it will be “more dreamy.”

“It’s more like he’s dreaming. He’s transported, but it’s more like he’s in a dream state. That’s what we’re doing with this version,” he said.

A Christmas Carol will have performances at 7:30 p.m. on Fridays and Saturdays and 3 p.m. on Saturdays and Sundays, from Nov. 29 to Dec. 21 at the Proscenium Theater, Rockwell Center in Makati City. Tickets are now available via TicketWorld. — Brontë H. Lacsamana

PCC clears Robinsons Retail acquisition of Premiumbikes

PREMIUMBIKES.PH

ROBINSONS Retail Holdings, Inc. (RRHI) has received approval from the Philippine Competition Commission (PCC) to acquire Premiumbikes Corp., marking the company’s entry into the motorcycle market.

“This acquisition represents Robinsons Retail’s entry into the motorcycle segment. It strengthens our commitment to build a more diversified and future-ready portfolio that caters to the changing lifestyles and needs of Filipino consumers,” RRHI President and Chief Executive Officer (CEO) Stanley C. Co said in a regulatory filing on Tuesday.

“We see long-term potential in Premiumbikes and look forward to its successful integration into the Robinsons Retail ecosystem,” he added.

In July, RRHI, through its subsidiary Robinsons Supermarket Corp., signed a share purchase agreement to acquire 100% of Premiumbikes from Lance Y. Gokongwei, president and CEO of JG Summit Holdings, Inc., for P146.4 million.

The deal involved 20.15 million shares at P7.27 per share, equivalent to 1.0x the audited book value of Premiumbikes for 2024.

Premiumbikes operates 215 stores nationwide, carrying brands such as Honda, Yamaha, Suzuki, Kawasaki, Kymco, and TVS.

In 2024, net sales grew by 15.2% to P4.2 billion, while earnings before interest, taxes, depreciation, and amortization climbed 36.7% to P324 million.

According to the company, the demand for motorcycles, coupled with relatively low ownership rates, indicates long-term growth potential.

“In the Philippines, motorcycle ownership stands at one motorcycle for every eight people (8:1), compared to 4:1 in Indonesia and Vietnam, and 3:1 in Thailand,” RRHI said.

“The integration of Premiumbikes into Robinsons Retail’s portfolio opens opportunities to strengthen our operations. We look forward to leveraging Robinsons Retail’s nationwide presence and retail expertise to deliver better value and service to our customers,” Premiumbikes General Manager Joselito O. Pojol said.

Shares of RRHI rose 0.94%, or 30 centavos, to P32.30 per share on Tuesday. — Alexandria Grace C. Magno

Ensemble dancers take center stage

Theatre Group Asia brings A Chorus Line to the Philippines

THE NEXT production of Theatre Group Asia (TGA) is a landmark Broadway title, A Chorus Line, to be directed and choreographed by New York-based Filipino-American Emmy winner Karla Puno Garcia.

Set to run from March 12 to 29, 2026, at the Samsung Performing Arts Theater in Circuit Makati, this staging coincides with the musical’s 50th anniversary. It remains one of the few musicals to ever win the Pulitzer Prize for Drama, aside from winning the Tony Awards for Best Musical, Best Book of a Musical (James Kirkwood), Best Original Score (Marvin Hamlisch and Edward Kleban), Best Director (Michael Bennett), and Best Choreography (Michael Bennett and Bob Avian) in 1976.

It revolutionized Broadway by spotlighting the lives of ensemble dancers and TGA aims to “bring the story to life with an all-Filipino cast, celebrating the global talent and cultural depth of the Philippines.”

“We have a lot of natural talents who don’t necessarily go to a formal theater or dance school, but they are great talents. Karla was very particular about the dancing because, when the curtain opens, it’s the first thing that you see,” said TGA Executive Director Christopher Mohnani at a press roundtable in Makati on Nov. 6.

Compared to TGA’s previous production, Into the Woods, this one required a rigorous audition process, which Ms. Puno Garcia oversaw initially from New York. She is now in the Philippines for the final rounds.

“We’ve been doing the audition process for about two months now,” Mr. Mohnani said. “Karla has been looking for somebody that is authentic, so that when they step on stage, you know his or her style. Now, we’re working with almost 30 people that we’ve sort of shortlisted.”

Aside from the director-choreographer, TGA has not yet revealed the rest of the creative team of A Chorus Line. The only cast member we know so far is Filipino-American actor Conrad Ricamora who will tackle the leading role of Zach, who is the director and choreographer in the musical’s story and the driving force and emotional mirror of the show.

The production made waves in 1975 for its stripped-down set, iconic choreography, and intensely personal monologues about ambition, sacrifice, and individuality. Popular songs include “One [Singular Sensation],” “What I Did For Love,” “I Can Do That,” “I Hope I Get It,” and “The Music and the Mirror.”

CONTEMPORARY INFLUENCE

Ms. Puno Garcia is an Emmy winner for Outstanding Choreography for Variety or Reality Programming and the first Filipina cast member and dance captain in Hamilton.

When TGA artistic director Clint Ramos called to offer her the chance to direct A Chorus Line in the Philippines, she immediately said yes.

“I spent so many years in the chorus line of numerous Broadway shows,” she told the press. “I vividly recall watching it with my late mother on Broadway, back in 1977. Anne Reinking played Cassie in the show I watched.”

As a fan, she explained that the production will remain faithful to the original material but also reflect her own aesthetic as a dancer and choreographer — and she expects the same of the people they are casting as principals.

“We’ll see my vocabulary, which is more influenced by contemporary movement and influences of hip-hop, modern dance, and a fusion of different things, but subtly infused in a way that still honors the original,” Ms. Puno Garcia said.

She added that there have been “thoughts about intentionally including Filipino culture in the piece.”

Though TGA’s A Chorus Line still takes place in New York in 1975, the actors will be bringing their own personalities into the roles.

“There’s a lot of versatility, which is really exciting, because this version is going to showcase a lot of different types of dancers,” she said. “The entire line are all principals and there is no real ensemble because that is the whole point — they are stars in their own right. That is the beauty of this piece, that the chorus are the stars.”

A Chorus Line will run from March 12 to 29, 2026, at the Samsung Performing Arts Theater in Circuit Makati. Tickets are available now through TicketWorld, with prices ranging from P900 to P5,500. — Brontë H. Lacsamana

T-bill rates drop across all tenors amid bets on further BSP easing

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THE GOVERNMENT made a full award of the Treasury bills (T-bills) it offered on Tuesday as yields went down across all tenors on expectations of more rate cuts from the Bangko Sentral ng Pilipinas (BSP) as economic growth hit an over four-year low in the third quarter.

The Bureau of the Treasury (BTr) raised P22 billion as planned from the T-bills it auctioned off as the offer was over four times oversubscribed, with total bids reaching P98.311 billion. However, this was slightly lower than the P99.095 billion in tenders recorded at last week’s auction.

The Auction Committee made a full award of the T-bills as all tenors fetched average rates that were lower than those quoted during the previous week’s offering and at the secondary market, the BTr said in a statement.

Broken down, the Treasury borrowed P7 billion as planned via the 91-day T-bills as total tenders for the tenor reached P32.93 billion. The three-month paper was quoted at an average rate of 4.821%, down by 5.3 basis points (bps) from 4.874% in the previous auction. Yields accepted were from 4.813% to 4.843%.

The government also sold the programmed P7.5 billion in 182-day securities as tenders for the tenor were at P33.06 billion. The average rate of the six-month T-bill declined by 4.5 bps to 4.981% from 5.026% previously. Bids awarded carried yields from 4.963% to 5.022%.

Lastly, the government raised P7.5 billion as planned via the 364-day debt as the tenor drew demand amounting to P32.321 billion. The average rate of the one-year T-bill was at 5.054%, decreased by 4.5 bps from the 5.099% fetched last week. Accepted rates ranged from 5.043% to 5.063%.

At the secondary market before Monday’s auction, the 91-, 182-, and 364-day T-bills were quoted at 4.9493%, 5.0727%, and 5.1782%, respectively, based on PHP Bloomberg Valuation Service Reference Rates data provided by the Treasury.

“Results were as expected. Rates were 4-5 bps lower from last auction amid bullish sentiment on an expected 25-bp cut by the BSP in December,” a trader said in a phone interview.

“Treasury bill average auction yields were slightly lower… after worse-than-expected third-quarter GDP (gross domestic product) growth [and] amid still relatively benign inflation [that] could still support possible future BSP rate cuts and other monetary easing measures that prioritize policies that help spur greater economic growth and development that is more inclusive,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Philippine GDP growth slowed to a more than four-year low of 4% in the third quarter from 5.5% in the second quarter and the 5.2% clip in the same period in 2024, the government reported on Friday. This was well below the 5.3% median estimate in a BusinessWorld poll of 18 analysts and economists.

Officials attributed the weakness to more cautious public spending amid a corruption scandal involving state infrastructure projects, which they said also affected consumer and investor confidence.

In the first nine months, economic growth averaged 5%, lower than the government’s 5.5%-6.5% full-year target.

Meanwhile, headline inflation was at 1.7% in October, unchanged from September’s print but easing from 2.3% a year ago. In the first 10 months, the consumer price index averaged 1.7%, matching the central bank’s full-year forecast and still below its 2-4% annual target.

Analysts said weak economic prospects and manageable inflation could give the BSP a reason to extend its rate cut cycle, with a 25-bp reduction at the Monetary Board’s Dec. 11 meeting almost certain.

Last month, the BSP lowered benchmark interest rates by 25 bps for fourth straight meeting to bring the policy rate to 4.75%. It has now trimmed borrowing costs by 175 bps since its rate cut cycle began in August 2024.

BSP Governor Eli M. Remolona, Jr. has left the door open to further reductions, possibly until next year, as they want to help provide stimulus amid softer economic prospects due to the graft scandal.

Mr. Ricafort added that the ongoing stock market rout has also benefited safer assets like government securities. The Philippine Stock Exchange index closed at a new over five-year low of 5,629.07 on Tuesday and has finished below the 6,000 mark for more than two weeks amid weak market sentiment.

The BTr is looking to raise P158 billion from the domestic market this month, or P88 billion via T-bills and P70 billion through Treasury bonds.

The government borrows from local and foreign sources to finance its budget deficit, capped at P1.56 trillion or 5.5% of GDP this year. — A.M.C. Sy with Reuters

Shell Pilipinas returns to profit with P343-M Q3 earnings

PILIPINAS.SHELL.COM.PH

SHELL PILIPINAS CORP. posted a third-quarter (Q3) net income of P343 million, reversing a P762.04 million loss in the same period last year, as higher sales volumes and lower non-operating costs offset a slight decline in net sales.

Net sales for the quarter fell 3.7% to P57.58 billion from P59.80 billion, while cost of sales decreased 6.3% to P51.75 billion.

“We continue to maintain growth across key segments through September,” Shell Pilipinas President and Chief Executive Officer Lorelie Quiambao Osial said.

“Our stronger cash generation, higher earnings, and sustained improvement in gearing versus the prior year reflect a business that continues to deliver quality results even in a hypercompetitive environment.”

For the nine months ending September, net income rose 33% to P1.31 billion from P983.70 million, while core earnings increased 9.6% to P2.45 billion from P2.24 billion.

“This was due to high premium product penetration across sectors, volume growth in commercial fuels, aviation and lubricants, and lower non-operating costs offset with the decline in marketing margins,” the company said.

For the nine-month period, net sales declined 7.3% to P171.72 billion from P185.16 billion, mainly due to lower pump prices from the general drop in global oil prices, while cost of sales fell 8% to P154.98 billion from P168.50 billion.

“Our priorities remain unchanged: cash discipline, stronger returns on capital, and profitable growth. We enter the fourth quarter on the front foot and intend to finish the year stronger, setting a solid base for 2026,” Ms. Osial said.

Shell has earmarked a capital expenditure budget of up to P4 billion from 2027 to 2030 to expand its asset portfolio in line with its medium-term growth strategy.

At the local bourse on Tuesday, shares in the company closed unchanged at P6.10 each. — Sheldeen Joy Talavera

Industrial policy for the Philippines: Rich countries adopting industrial strategies

STOCK PHOTO | Image by Usertrmk from Freepik

(Part 4)

The Philippines is no longer the “Sick Man of Asia.”

Since 2011, its GDP has been one of the fastest growing in the Indo-Pacific region, together with India and Vietnam. Over the last 40 years, after the end of Martial Law in 1986, slowly and painfully, a series of competent economic managers, appointed even by some rather undesirable political leaders, have been addressing the major economic policy errors described in previous articles.

To refresh our memory, the Philippines failed to become a tiger economy because it followed the wrong economic strategy (prolonged import substitution industrialization combined with an utter neglect of agricultural development) combined with weak institutions, crony capitalism, debt dependence and political instability. Unlike the East Asian Tigers, it was unable to fully implement export-led industrialization, long-term infrastructure investment, technical skills development and good governance.

Although — as the flood control scandal has demonstrated this year — corruption continues unabated, significant economic policy reforms and institution building have occurred. The Central Bank of the Philippines is ranked as one of the best in the ASEAN. Some of the best and the brightest economic and financial managers have been appointed to head key positions in the Cabinet under successive Administrations. Import substitution has given way to export orientation through lower tariff rates, market-determined interest and foreign exchange rates, and the promotion of many more export processing zones. The limit to 100% foreign equity imposed on FDIs has been removed, except in public utility distribution, education, and media. There is greater political will to limit the debt to GDP ratio to the 60% level. There are serious efforts to keep the spending on infrastructures at 5% to 6% of GDP. Major educational reforms are geared towards giving greater importance to technical and vocational education and enterprise-based training programs. Most important of all, the Marcos Jr. Administration has given the highest priority to food security and agricultural development. This year has seen agriculture grow at hefty rates of 7% in the second quarter and 2.3% during the third quarter compared to negative rates in the past.

These policy reforms and institution building accomplishments, despite the continuing challenges to good governance, have enabled the economy to grow at close to 6% annually for more than a decade now, under three Administrations (2011 to 2025). This rate of growth, however, is not sufficient to generate enough resources to bring down the poverty incidence from the very high 16% today to a single-digit level, comparable to such ASEAN peers as Singapore, Thailand, Vietnam, and Malaysia. There should be serious efforts to accelerate the GDP growth rate to 8% or more. This can be made possible if specific measures can be implemented to enable certain leading sectors to grow at above-average rates. This would require some form of industrial policy or another. We shall examine in this article what form of industrial strategy is needed in the Philippines today given the opportunities and threats that both the domestic and global economies present. We shall, of course, take into account some of the continuing weaknesses of the country as well the strengths that have been accumulated over the last 30 or so years as a result of economic policy reforms and institution building.

INDUSTRIAL STRATEGY
As a former chief economist of the Bank of England, Andy Haldane, wrote in the Financial Times, industrial strategies are no longer limited today to the Asian tigers. In the highly industrialized economies, such as in the US and the UK, there is a renewed passion for industrial strategies.

The very destabilizing tariff moves under the Trump Administration in the US are based on certain assumptions about what industries should be revived or strengthened in the US, especially in competition with those of China and some of the other largest exporters to the US.

Last June, the UK government announced an industrial strategy whose centerpiece was a set of targeted strategies for the eight industrial sectors which, on various metrics, offered the greatest growth potential. Among them were advanced manufacturing, life sciences, the creative industries, and financial services.

China is even more detailed. In its Made in China 2025 announcement, there are 10 sectors targeted: Advanced Information Technology; Automated machine tools and robotics; Aerospace and aviation equipment; Maritime engineering equipment and high-tech ships; Modern rail transport equipment; New-energy vehicles and associated equipment (e.g., electric vehicles, hybrids); Power equipment (including renewable energy technologies); Agricultural machinery; New materials (advanced materials, specialty materials); and Biopharma and advanced medical devices (as well as medical/healthcare technologies).

Mr. Haldane, however, cautions that a sector-based blueprint is too narrow and partial to lift the UK’s growth prospects in a significant and inclusive way. He points out that the vast majority of British jobs are in the “everyday” not the “superstar” economy, e.g., public services and health, retail and hospitality, distribution and construction. Choosing “superstar sectors” alone would be insufficient to generate strong inclusive growth. There will be no rising tide to lift all boats. There is no evidence that focusing on high-growth industries will have sufficient trickle-down effects to address mass poverty, especially in a country like the Philippines where the majority of the poor are in the neglected rural areas.

The limitations of industrial strategy alone are especially acute in the Philippines where mass poverty is rampant and the majority of workers are in the “everyday” economy in which they are living hand-to-mouth, especially in the countryside.

The first economic sectors that need special attention and funding from the Government are those that are pre-requisites to the development of any industry. As we learned from our failed efforts in the past to become a “tiger economy,” these are infrastructures (e.g., roads, railroads, airports, etc.); public utilities (energy, telecoms, water); education (especially technical skills training); and an efficient and honest government.

In his column for the Financial Times, Mr. Haldane cites the works of one of the leading proponents of industrial strategy, Dani Rodrik of Harvard University. Rodrik’s “industrial policy for good jobs” puts high skills and good jobs at the center of strategy, both as a means of enabling strong, inclusive growth (economically) and an end in itself (socially). This approach to industrial strategy provides workers with practical job and skill progression pathways; businesses with details on the talent pipeline they need nurture to thrive; learning providers with data on the programs needed to meet local needs; and governments to supporting investments in housing, transport, and healthcare.

We should celebrate the recent emphasis being given by both our government and the business sector to Rodrik’s “industrial policy for good jobs.” Ever since President Ferdinand Marcos, Jr. suggested in his second State of the Nation Address that our K to 12 curriculum be geared towards technical education and away from the traditional focus on college diplomas, there have been real efforts to establish more “Enterprise-Based” skills training programs that are providing our youth with practical job and skills progression pathways. It is also providential that this trend is being bolstered by the increasing importance given to the Technical Education and Skills Development Authority or TESDA that fortunately is now led by a most competent educator very familiar with the work-study or dual education system originated by the Germans.

Secretary Francisco “Kiko” Bantug Benitez, Secretary General of TESDA, is the right person at the right time. Under his leadership, there will be greater and more effective efforts to address the mismatch between what our educational system is producing and what the industrial world is demanding. For example, as we continue to focus on the completely indispensable infrastructure building program, despite the temporary reverses caused by the flood control scandals that revealed rampant corruption among government officials in both the legislative and executive branches, the “dualvoc” system will help address the ironic shortage of plumbers, electricians, carpenters, masons, mechanics, and electro-mechanic workers in general. This clearly highlights that any effective industrial strategy must be preceded by an “industrial policy for good jobs.”

(To be continued.)

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

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