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Topline says growth strategy in full swing ahead of P900-M IPO

TOPLINE PRESIDENT and Chief Executive Officer Eugene Erik C. Lim — BW FILE PHOTO

CEBU-BASED fuel retailer Top Line Business Development Corp. (Topline) expects to sustain growth ahead of its planned P900-million initial public offering (IPO).

“With our upcoming IPO, we are committed to driving sustained growth and supporting our operational expansion plans,” Topline Chairman, President, and Chief Executive Officer Eugene Erik C. Lim said in an e-mailed statement on Wednesday.

Mr. Lim said this as Topline grew its net income by 157% to P90.5 million in the first nine months of 2024 from P35.2 million in 2023. The company also breached its full-year 2023 net income of P78.2 million.

Nine-month gross revenue climbed by 12% to P2.44 billion from P2.17 billion in 2023.

The company sold about 50.8 million liters of liquid fuels in the first nine months of 2024, up by 19% from the estimated 42.7 million liters of liquid fuels sold in 2023.

“This has been driven by higher volume turnover, demonstrating the effectiveness of our strategic initiatives and our ability to adapt to market demands in the high-growth region of Central Visayas,” Topline First Vice-President and Chief Financial Officer Constance Marie C. Lim said.

He said the company has benefited from its focus on catering to the underserved markets in Central Visayas.

“In view of the competitive market environment with fluctuating fuel prices, Topline has established a carefully calibrated pricing strategy balancing both affordability and value to maintain and further expand our customer base,” Mr. Lim said.

“Our appetite for growth and expansion will continue as we seek to sustain this momentum to further generate value for our customers, employees, and stakeholders,” he added.

On Jan. 22, Topline lowered the size of its planned IPO to around P900 million from the previous P3.16 billion following talks with potential institutional investors.

The company added that it is aiming to be listed on the local bourse by the second quarter of this year after the changes to the IPO.

Topline’s IPO now consists of up to 2.15 billion primary common shares with an overallotment option of up to 214.84 million secondary shares, priced at up to 38 centavos. Its public float will be around 22% assuming the full exercise of the overallotment option.

Topline has business interests in commercial fuel trading, depot operations, and retail fuel in the Visayas region.

The company has two subsidiaries, namely Topline Logistics and Development Corp., envisioned to engage in the importation, trading, distribution, and marketing of petroleum-based products, and Light Fuels Corp., involved in the fuel retail business. — Revin Mikhael D. Ochave

EastWest Bank credit card billings hit P116.6B in 2024

EAST WEST Banking Corp. (EastWest Bank) saw its credit card billings hit P116.6 billion last year as its cardholders reached 1.5 million.

“With over 1.5 million cardholders and P116.6 billion in billings as of end-2024, the Gotianun family-owned bank is poised to enhance its digital platform and product offerings to strengthen its position as the trusted financial partner for its customers,” the listed bank said in a statement on Wednesday.

The bank expects its credit card billings to increase by double digits this year as it plans to launch new features and promos catering to the mass, affluent, and high-end markets, including in provinces outside the National Capital Region.

“We value our customers so we aim to provide a robust and seamless experience to meet their evolving needs. By making our products more accessible and personalized, we empower Filipinos to better manage their financial journeys,” EastWest Bank Senior Vice-President and Credit Cards Business Head Aylwin Herminia P. Tamayo said.

It will soon allow credit card applications via its EasyWay digital platform and mobile app, it said.

The bank will also enhance its installment, insta-cash, balance transfer, and balance conversion services to help customers better manage their finances.

EastWest Bank is also looking to offer more travel-related promos through its partnership with Singapore Airlines, as well as dining promos at its partner merchants.

“These initiatives reaffirm our dedication to delivering accessible and personalized financial solutions. EastWest is here to support Filipinos in their journey toward financial empowerment, offering innovative tools and rewarding experiences,” Ms. Tamayo said.

EastWest Bank’s attributable net income jumped by 49.1% to P2.32 billion in the third quarter of 2024, bringing its nine-month profit to P5.81 billion, up by 19.57% year on year. — AMCS

Public health vs public finance

AMAN UPADHYAY-UNSPLASH

Congress is introducing new measures that will affect how cigarettes, other tobacco products and electronic cigarettes (vaping products) will be taxed in the coming years. One bill proposes a new system to track whether a tobacco product has been taxed, while another seeks to lower the annual increase in tax rates.

Under House Bill No. 11286, regular and electronic cigarettes, as well as other tobacco and vaping products, must bear a government stamp with “physical or digital features” indicating that they have been properly taxed. Additionally, manufacturers must register all the equipment used in producing all types of cigarettes, tobacco and vaping products.

I don’t think this is anything new. “Stamps” are already affixed on all cigarette packs, as well as liquor and other alcoholic products, to indicate that they are tax-paid. It seems this bill is simply updating the existing system by incorporating new technology. The real money-maker here is the government contract for the tracking system.

I have no objection to this. However, I highly doubt that a new track-and-trace system will eliminate smuggling and illicit trade. Tax evasion will persist, and the market will continue to have access to untaxed or smuggled cigarettes, electronic cigarette pods, and similar products. Smuggling is inevitable — it always has been, and it always will be.

What concerns me more, however, is the plan to effectively lower the tax on regular and electronic cigarettes and similar products. Under existing laws, tobacco taxes are set to increase by 5% annually from 2024 onwards. Now, Congress wants to amend this, proposing instead a 2% increase every even-numbered year starting Jan. 1, 2026, and a 4% increase every odd-numbered year starting Jan. 1, 2027 until the end of 2035.

After this 10-year period of alternating tax hikes, taxes will be reviewed based on their impact on revenue collections, healthcare costs and smoking prevalence. The justification for this lower tax trajectory is to minimize tax losses from smuggling. Congress even cites Bureau of Internal Revenue (BIR) data, claiming that successive tax increases have not necessarily led to higher collections.

Over the years, the government has raised the excise tax on cigarettes to reduce cigarette consumption and generate more revenue. Theoretically, tobacco taxes address “negative externalities” — the costs of smoking-related health problems such as lung cancer, heart disease and respiratory illnesses, which burden the healthcare system and lower labor productivity.

While some argue that high tobacco taxes disproportionately affect the poor and that cigarettes may now be overtaxed (with tax revenue exceeding related public healthcare costs), the policy has been effective in reducing cigarette consumption. One study found that smoking prevalence in the Philippines fell from 34% in 2000 to 24.5% in 2015 and is projected to drop to 20% by 2025. However, vaping consumption is rising.

I have always believed that public health, not public finance, should be the primary consideration in taxing cigarettes, tobacco and vaping products. The goal is to curb consumption due to its harmful effects on public health, while tax collection remains incidental. Given the gains we have made in reducing cigarette consumption, why lower tax rates now, especially if the objective is merely to curb smuggling and improve revenue collection?

The decline in cigarette consumption, however, does not account for alternative nicotine products, such as e-cigarettes (vapes), which use electronic atomizers and flavored liquid; snus, a smokeless tobacco product similar to dry snuff; and heated tobacco products, which heat tobacco instead of burning it.

A greater concern is that nontax initiatives aimed at reducing smoking, including alternatives like vaping, appear to be lagging. While tobacco taxes have played their part, lowering them over the next 10 years — rather than following the current trajectory — could have the opposite effect. While smoking bans in public places have helped, other regulatory measures to reduce smoking prevalence require greater attention.

We are already failing to curb tobacco use among the youth due to weak enforcement of nontax measures, such as restrictions on advertising and sales to minors. Now, Congress wants to slow tax increases, citing the need to protect legitimate sales and curb illicit trade. But the indirect consequence of this measure will be to make legal products more affordable, particularly for young consumers.

The problem is compounded by regulatory lapses. A study by the Institute for Global Tobacco Control (IGTC) found that tobacco and nicotine product sales and advertising persist near schools in the Philippines, despite regulations prohibiting sales, displays and promotions of tobacco products within 100 meters of schools.

Another IGTC study noted that countries like the Philippines and Vietnam lack regulations on the use of flavors in cigarettes and tobacco products. This is particularly concerning because flavored products make nicotine consumption more appealing to young people.

From December 2022 to January 2023, IGTC monitored the local sale and marketing of cigarettes, e-cigarettes and heated tobacco products at more than 6,000 retailers within 200 meters of 353 schools across nine cities and regions. Their findings were alarming: 2,070 cigarette retailers, 43 e-cigarette retailers and 33 heated tobacco product retailers were found within 100 meters of most schools — a direct violation of the law.

In another study published in Nicotine and Tobacco Research (August 2023), IGTC experts noted that tobacco companies continue to offer a wide range of flavored cigarette products in the Philippines and Vietnam to maximize sales. Given this, stricter regulation of flavor chemicals should be considered.

At this point, the Philippines already struggles to enforce existing laws on tobacco product advertising, promotion and sales. Rather than lowering tobacco taxes, Congress should focus on strengthening youth protection, including stricter regulation of flavored nicotine products.

One approach is to work with local governments, which issue business permits and enforce zoning restrictions. If tobacco products are not supposed to be sold near schools, then local officials should be held jointly liable for violations by licensed retailers. Alternatively, if erring retailers are fined, local governments should collect the penalties, creating a direct incentive for enforcement.

By empowering local governments, the National Government stands a better chance of effectively curbing underage smoking. Additional policies and regulations are meaningless without strict enforcement at the community level. Otherwise, young people will always find ways to bypass restrictions, and lower taxes will only make tobacco and vaping products even more accessible to them.

Congress should not lose sight of the original intent behind taxing tobacco and nicotine products. The primary goal has never been revenue collection, but rather public health protection. If policymakers are truly concerned about smuggling, they should focus on stricter enforcement rather than tax reductions that risk undoing years of progress in reducing smoking prevalence.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com

Falling consumption threatens Australia’s wine export rebound, industry body says — Reuters News

JESSE BELLEQUE-UNSPLASH

THE LIFTING of trade tariffs by China triggered a surge in Australian wine exports last year, but it is unclear whether Chinese demand will remain strong after buyers have restocked, an industry body said on Wednesday.

Meanwhile, exports to the rest of the world continued to decline as high inflation and worries about the health impacts of alcohol reduced global wine consumption, industry body Wine Australia said.

Australia is one of the world’s biggest shippers of wine. Its industry was hammered when China, its most valuable export market, used tariffs to block imports of bottled wine in 2020.

The Chinese embargo worsened problems of massive oversupply and low grape prices that have caused farmers to pull up millions of vines. Major producers such as Treasury Wines and Pernod Ricard last year announced sales of assets in Australia.

Beijing lifted its tariffs on March 29 last year after a warming of political relations with Canberra.

Between then and yearend, Australia shipped 83 million liters of wine worth A$902 million ($562 million) to mainland China, Wine Australia said, a monthly pace of exports similar to that before the tariffs.

The surge in shipments to China — which buys much more expensive bottles than Australia’s other main markets, the United States and Britain — was positive but continued growth is not assured, said Wine Australia research manager Peter Bailey.

“Chinese wine consumption is much lower than it was before the import tariffs were imposed,” he said. “It will take more time before it becomes clear what the ‘new normal’ level of exports to mainland China will be after this initial re-stocking period.”

Shipments to the rest of the world meanwhile declined by 13% in value to A$1.64 billion and 7% in volume to 565 million liters during 2024.

Global wine consumption fell in 2023 to its lowest level since 1996, according to the International Organization for Vine and Wine (OIV). Consumption in China is falling much faster than in many other countries. — Reuters

X seals payments deal with Visa in push toward Musk’s ‘everything app’ goal, source says

STOCK PHOTO | Image by Julian Christ from Unsplash

PAYMENTS giant Visa and Elon Musk’s X are partnering to offer direct payment solutions to customers of the social media app, a person familiar with the matter told Reuters on Tuesday.

The deal comes as the billionaire continues his efforts to transform the X platform into an “everything app,” aiming to offer a wide range of services, including messaging, social networking and payments.

Visa will be the first partner of the X Money account, under which customers can instantly fund their X wallet and connect their debit cards for peer-to-peer payments, the source said. Customers will also get the option to instantly transfer funds to their bank account from X Money.

The digital payments ecosystem in the US has grown rapidly since 2020, driven by the pandemic, which pushed people online and increased the demand for convenient peer-to-peer payments, typically via smartphones.

Traditional card networks Visa and rival Mastercard have ramped up investments in the digital payments space and are now competing with tech firms such as PayPal, Block’s Cash App, Apple Pay, and Google Pay for a slice of the lucrative market.

Mr. Musk, who in April 2022 clinched a $44-billion deal to buy Twitter and later rebranded it as X, has signaled plans to model it as a “super app,” similar to China’s WeChat.

The concept, often described as the Swiss army knife of mobile apps, is popular in Asia, and tech companies across the world have tried to replicate it.

“2025 X will connect you in ways never thought possible. X TV, X Money, Grok and more,” X Chief Executive Officer Linda Yaccarino wrote in a post last month. Reuters

PSE, BAP sign share purchase deal for PDS shares

BW FILE PHOTO

THE Philippine Stock Exchange, Inc. (PSE) is moving closer to its planned merger with the Philippine Dealing System Holdings Corp. (PDS) after it signed share purchase agreements with some of the latter’s shareholders.

On Jan. 28, the market operator signed a share purchase agreement with the Bankers Association of the Philippines (BAP), which also represented stakes held by BAP Data Exchange, Inc. and certain member-banks, to acquire 1.16 million PDS common shares, equivalent to an 18.62% stake, the PSE said in a regulatory filing on Wednesday.

The entities signed term sheets in December last year as part of the PSE’s P2.32-billion deal with various shareholders to purchase their PDS shares as part of merging the local capital markets.

The deal comprised 3.87 million PDS shares at P600 apiece, equivalent to a 61.92% stake.

The PSE signed term sheets with BAP for its shares and those owned by BAP Data Exchange and certain member-banks for a 28.83% stake, and with Mizuho Bank Ltd. for its 0.08% stake.

The bourse operator also signed share purchase agreements to acquire Singapore Exchange Ltd.’s 20% stake, Whistler Technologies, Inc.’s 8% stake, San Miguel Corp.’s 4% stake, the Investment House Association of the Philippines’ 0.65% stake, and Golden Astra Capital, Inc.’s 0.36% stake.

The PSE recently announced it would increase its stake in PDS to 88.44% by acquiring 250,000 PDS common shares from AIA Philippines Life and General Insurance Co., Inc., representing a 4% stake, under a share purchase agreement.

The PDS is the holding company that owns fixed income exchange operator Philippine Dealing and Exchange Corp., and the equities and fixed income securities depository Philippine Depository & Trust Corp.

The acquisition of PDS will provide investors with a facility to trade fixed income, equities, and other products in a unified marketplace, the PSE said. — Revin Mikhael D. Ochave

Attacks using deepfakes, artificial intelligence to target Philippine banks

VECSTOCK-FREEPIK

ARTIFICIAL INTELLIGENCE (AI)- and deepfake-based fraud could target financial institutions and consumers in the Philippines, biometric solutions company iProov said.

“There is a massive increase at the moment in terms of identity fraud against systems using generative AI in particular and deepfakes… What we actually see for our customers is a massive rise in the use of deepfakes to try to spoof the identity of customers, both at account opening time, so when the identity is created, but also later to try to overtake those well-established accounts where the trust in the customer is high,” iProov Chief Technology Officer Dominic Forrest said in an online interview.

Bad actors have already started using AI and deepfake for fraud attacks in other Asian countries, Mr. Forrest said, citing a case in Hong Kong where an employee was scammed by fraudsters who used deepfake technology to recreate the voices and faces of their company’s top officials and staff in a video call.

To protect against these types of attacks, Mr. Forrest said Philippine regulators could mandate the use of national identity cards for financial accounts, similar to Singapore.

He said Philippine banks are well-equipped against potential cyberattacks as the Bangko Sentral ng Pilipinas (BSP) has already implemented several cybersecurity-related regulations to ensure consumer protection.

“The Philippines is fortunate enough to have a regulator who is very forward-thinking in the terms of the rules they’re putting in place to protect the banks and the customers, or indeed, for the banks to do this in advance of the regulator. And we’ve seen that in some other geographies around the world,” Mr. Forrest said.

“I think the Philippine banks will have every right to be proud of being ahead of many countries in the region in terms of their general security posture,” he added.

Still, banks need to continuously invest in protecting themselves against new types of fraud as these could cost them consumer trust, Mr. Forrest said.

Firms like iProov can help lenders mitigate cyber threats through solutions that can detect deepfake attacks, he added. — A.M.C. Sy

Who dares wins: The risks and rewards of entrepreneurship

FREEPIK

Live selling is a phenomenon that has driven online retailers forward in today’s business landscape. Pioneered in China, popularized by platforms like TikTok, Instagram and Facebook, and empowered by online markets like Lazada and Shopee, live selling has become both a form of entertainment and a powerful new shopping experience for countless Filipinos. For brands, it has become an essential part of both marketing and sales. For entrepreneurs who have embraced live selling, the rewards are clear and abundant.

I recently spoke to an entrepreneur who built his business around live selling, Michael Cordoviz of M-Commerce Corp. His startup helps brands in their digital marketing efforts, similar to a digital agency but with a focus on live selling.

In just a few years, M-Commerce has become TikTok Shop’s number one partner. The company has about 35 brands in its stable — big brands like Nestle, Realme and Procter & Gamble. These brands have more than 200 livestreams produced by M-Commerce that run every day.

‘SOMETIMES YOU LOSE, SOMETIMES YOU WIN’
Going all-in on live selling makes clear business sense today, but when live selling took off, during and shortly after the pandemic, it was, like all new technologies, a risk.

Michael tells the story of M-Commerce’s beginnings. “In 2022, someone reached out to us and said: ‘Why not try to become an agency?’ So, we thought, ‘Why don’t we try?’ So, my business partner and I decided to take risks on TikTok Live. It was a roller coaster ride, but all of the doubt and hard work paid off.”

I am reminded of the saying that fortune favors the bold, or as the British special forces unit, the SAS, says: “Who dares wins.” Western entrepreneurs often talk about ruthlessly spotting business opportunities. But for Michael Cordoviz, entering a risky business was always about helping other people.

“We always think about the money, right?” Michael says. “But then, for entrepreneurs, it’s really how to help the community and the people around us.”

This goal of providing solutions and helping the community is what drives entrepreneurs like Michael Cordoviz. “It’s not always about money. How can you impact the world and how can you impact the community? So that’s my mindset, that it’s not just for myself or what I can gain. But it’s for other people too. What will they gain from the business that you’re doing?”

By putting problem-solving for communities and consumers first, Michael found the guiding principles for his business. And while he recognizes the risks involved in entrepreneurship, he emphasizes constant learning and continuous improvement to adapt to the changing needs of the business.

“Entrepreneurship is never a straight path,” Michael says. “Sometimes you lose, sometimes you win. But as long as you keep learning and improving, you’ll eventually get there.”

ADOPTING NEW TECHNOLOGY
Michael first spotted the opportunity for M-Commerce and his logistics company Supcart in his travels to China. Seeing how China adopted new technologies like cashless transactions and fast deliveries inspired him to bring these services to the Philippines.

“Technology is so fast,” Michael says about his learnings from China. “I was like, what if they also have this technology in the Philippines? So I thought that maybe after one to two years, I can bring it [to the Philippines]. Because technology can make our lives easier. That’s what I learned there.”

EVOLVING BUSINESS
Like many entrepreneurs, Michael didn’t start with the company that made him famous. He began with other businesses. Each of these businesses would inform Michael as an entrepreneur, and it’s fascinating to trace this evolution and how it led to M-Commerce.

Michael began with a small business selling cameras. Seeing that there were no protective cases for these cameras available locally, he decided to import them. And by learning how to import from China, he spotted another opportunity: helping importers.

“Why don’t we help other Filipinos?” Michael asks. “Give them an opportunity to sell as well in the Philippines. We can help them import.”

From there, Supcart, Michael’s e-commerce distribution and logistics company, was born.

Supcart, in turn, would give birth to another business. From importing, Michael put up another company to help importers in warehousing and fulfillment, Mango Cloud Fulfillment Service.

“That’s the time when a Chinese client approached us and said: ‘We have a product, we have a brand, how do we sell it on TikTok?’” Michael recounts.

From there, Michael decided to try entering this new business. Learning along the way, M-Commerce discovered how to produce videos, what elements made live selling successful, letting it expand its network of live sellers and affiliate marketers.

‘NEVER STOP LEARNING’
Michael Cordoviz’s entrepreneurial journey is exceptional because he quickly adopted new tech. What’s his advice to entrepreneurs? “Adopt changes and adopt the technology.”

“Let’s learn what’s new,” he adds. “Because there are uncles who don’t know what TikTok is. They don’t know that TikTok is the future of selling, the future of entertainment and the future of social media platforms.”

By adopting new technologies, you’ll never stop learning, Michael says. Returning to his guiding principles of helping Filipinos, he says: “Even in our business now, we never stop learning. What else can we offer to our clients? What else can we offer to Filipinos?”

Are there entrepreneurs you want me to interview? Let me know at ledesma.rj@gmail.com. Follow RJ Ledesma on Facebook, Instagram and LinkedIn.

 

RJ Ledesma (www.rjledesma.com) is a Hall of Fame Awardee for Best Male Host at the Aliw Awards, a multi-awarded serial entrepreneur, motivational speaker and business mentor, podcaster, an Honorary Consul and editor-in-chief of The Business Manual. Connect with Mr. Ledesma on LinkedIn, Facebook and Instagram. The RJ Ledesma Podcast is available on Facebook, Spotify, Google and Apple Podcasts.

Nutrition programs unaffected by Trump funding freeze, White House says

RAWPIXEL

NUTRITION programs that deliver food assistance to millions of US families will not be affected by a White House pause on federal grants and loans, a senior official said on Tuesday.

The White House’s Office of Management and Budget said in a memo on Monday that federal grants and loans would be put on hold for review to ensure the programs were aligned with President Donald Trump’s priorities, such as ending diversity and inclusion efforts. The pause, which could disrupt housing assistance, disaster relief, health care, and scores of other programs that rely on federal dollars, is set to go into effect on Tuesday evening.

Payments to individuals, including the Supplementary Nutrition Assistance program (SNAP) and the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) would not be affected, the senior administration official said.

About 42 million Americans receive SNAP benefits, which provides cash assistance for food to low-income households, and about six million receive WIC benefits, which provides food and nutrition education to low-income pregnant and postpartum women and their infants and young children, according to the US Department of Agriculture.

However, Ali Hard, policy director at the National WIC Association, said agencies that implement WIC, which is a federal grant program administered by state and local entities, had not yet been given guidance on implementation of the memo.

“For now, WIC remains open and families should continue to come in for appointments and redeem their benefits as usual,” Ms. Hard said.

“Any policy that would put this program at risk would be catastrophic,” Ms. Hard said. —  Reuters

American AI firms try to poke holes in disruptive DeepSeek

STOCK PHOTO | Image by Gerd Altmann from Pixabay

SAN FRANCISCO — Developers at leading US artificial intelligence (AI) firms are praising the DeepSeek AI models that have leapt into prominence while also trying to poke holes in the notion that their multi-billion-dollar technology has been bested by a Chinese newcomer’s low-cost alternative.

Chinese start-up DeepSeek on Monday sparked a stock sell-off and its free AI assistant overtook OpenAI’s ChatGPT atop Apple’s App Store in the US, harnessing a model it said it trained on Nvidia’s lower-capability H800 processor chips using under $6 million.

As worries about competition reverberated across the US stock market, some AI experts applauded DeepSeek’s strong team and up-to-date research but remained unfazed by the development, said people familiar with the thinking at four of the leading AI labs, who declined to be identified as they were not authorized to speak on the record.

OpenAI CEO Sam Altman wrote on X that R1, one of several models DeepSeek released in recent weeks, “is an impressive model, particularly around what they’re able to deliver for the price.” Nvidia said in a statement DeepSeek’s achievement proved the need for more of its chips.

Software maker Snowflake decided Monday to add DeepSeek models to its AI model marketplace after receiving a flurry of customer inquiries.

With employees also calling DeepSeek’s models “amazing,” the US software seller weighed the potential risks of hosting AI technology developed in China before ultimately deciding to offer it to clients, said Christian Kleinerman, Snowflake’s executive vice president of product.

“We decided that as long as we are clear to customers, we see no issues supporting it,” he said.

Meanwhile, US AI developers are hurrying to analyze DeepSeek’s V3 model. DeepSeek in December published a research paper accompanying the model, the basis of its popular app, but many questions such as total development costs are not answered in the document.

China has now leapfrogged from 18 months to six months behind state-of-the-art AI models developed in the US, one person said. Yet with DeepSeek’s free release strategy drumming up such excitement, the firm may soon find itself without enough chips to meet demand, this person predicted.

DeepSeek’s strides did not flow solely from a $6- million shoestring budget, a tiny sum compared to $250 billion analysts estimate big US cloud companies will spend this year on AI infrastructure. The research paper noted that this cost referred specifically to chip usage on its final training run, not the entire cost of development.

The training run is the tip of the iceberg in terms of total cost, executives at two top labs told Reuters. The cost to determine how to design that training run can cost magnitudes more money, they said.

The paper stated that the training run for V3 was conducted using 2,048 of Nvidia’s H800 chips, which were designed to comply with US export controls released in 2022, rules that experts told Reuters would barely slow China’s AI progress.

Sources at two AI labs said they expected earlier stages of development to have relied on a much larger quantity of chips. One of the people said such an investment could have cost north of $1 billion.

Some American AI leaders lauded DeepSeek’s decision to launch its models as open source, which means other companies or individuals are free to use or change them.

“DeepSeek R1 is one of the most amazing and impressive breakthroughs I’ve ever seen — and as open source, a profound gift to the world,” venture capitalist Marc Andreessen said in a post on X on Sunday.

The acclaim garnered by DeepSeek’s models underscores the viability of open-source AI technology as an alternative to costly and tightly controlled technology such as OpenAI’s ChatGPT, industry watchers said.

Wall Street’s most valuable companies have surged in recent years on expectations that only they had access to the vast capital and computing power necessary to develop and scale emerging AI technology. Those assumptions will come under further scrutiny this week and the next, when many American tech giants will report quarterly earnings. Reuters

Isuzu PHL says new trucks to focus on evolving business needs

BW FILE PHOTO

ISUZU Philippines Corp. said it is working to maintain its market leadership in the truck sector by offering solutions designed to better serve businesses.

“With a clear vision for the future, Isuzu is committed to maintaining its market leadership by introducing more innovative, fuel-efficient, and eco-friendly truck solutions that cater to the evolving needs of Philippine businesses,” the company said in a press release late Tuesday.

In 2024, Isuzu sold 4,591 truck units, which accounted for 41% of the total industry truck sales of 11,252, while dominating all major truck categories.

Isuzu is the country’s sixth-top car manufacturer in terms of total vehicle sales in 2024, according to a joint report by the Chamber of Automotive Manufacturers of the Philippines, Inc. and the Truck Manufacturers Association.

The company sold 17,641 vehicles last year, representing a 3.78% market share and a 0.2% increase from 2023.

It was the top-selling brand for light-duty trucks and buses, with 2,812 units sold, representing a 42.96% market share in 2024. However, this was a 7.3% decline from the 3,034 units sold in 2023.

According to the company, the Isuzu N-Series was the best-selling light-duty truck model in the country for the last 26 years.

“The Isuzu N-Series continues to be the top choice for Filipino businesses due to its unmatched combination of durability, fuel efficiency, and adaptability to various business applications,” said Isuzu President Tetsuya Fujita.

“We are proud that our light-duty trucks have remained a staple in the industry, providing dependable solutions that help businesses grow and thrive,” he added.

Isuzu was also the market leader for medium-duty trucks and buses last year with 1,534 units sold, representing a 38.64% market share and a 9% increase from the 1,407 units sold in 2023.

“Medium-duty trucks, such as the popular Isuzu F-Series, cater to logistics, cold chain, and industrial hauling needs, which have seen significant growth in recent years,” said the company.

For heavy-duty trucks and buses, Isuzu is also the top brand, with sales of 245 units at a 33.24% market share. However, this showed a 38.3% drop from the 397 heavy trucks sold in 2023.

To date, Isuzu has 48 dealerships nationwide and a 6,000-square-meter parts warehouse to ensure the availability and fast delivery of replacement parts to all dealerships. — Justine Irish D. Tabile

Foreign currency deposit accounts exempt from estate tax, SC says

REUTERS

THE SUPREME COURT has ruled that foreign currency deposit accounts are exempt from estate tax under Republic Act (RA) No. 6426, or the Foreign Currency Deposit Act of the Philippines.

In a decision written by Associate Justice Ramon Paul L. Hernando, the Court’s First Division upheld the estate of Charles Marvin Romig’s claim for an estate tax refund.

Mr. Romig, an American national residing in the Philippines, passed away in 2011, leaving behind his sole heir, Maricel Narciso Romig.

She transferred ownership of his assets, including a dollar deposit account with HSBC, through an Affidavit of Self-Adjudication.

Initially, Ms. Romig excluded the dollar deposit account from the estate tax computation but later paid an additional P4.56 million. She sought a refund, arguing that foreign currency deposits should be exempt from estate tax under RA 6426.

The Commission on Internal Revenue (CIR) rejected her claim, asserting that the 1997 National Internal Revenue Code (NIRC) had removed the tax exemption for foreign currency deposits.

However, the Court of Tax Appeals ruled in favor of Ms. Romig.

The High Court affirmed the lower court’s decision, saying that the NIRC, as a general tax law, did not explicitly repeal the specific tax exemption provided by RA 6426. The Court clarified that a general law cannot override a special law without a clear and express repeal provision.

RA 6426, enacted in 1974, was specifically designed to encourage foreign investments and deposits by exempting foreign currency accounts from all taxes. — Chloe Mari A. Hufana