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Crypto trading booms in India’s interiors as job growth and incomes disappoint

REUTERS

NAGPUR, India, Feb 25 (Reuters) – Like thousands of his countrymen in far-flung places, flower-shop owner Ashish Nagose has been learning about trading cryptocurrencies by attending classes every weekday for the past two months in his home city of Nagpur in western India.

Nagose has bought and sold stock options earlier but is now venturing into cryptocurrencies as regulators have made it harder to trade equity derivatives in India. The 28-year-old believes the red-hot crypto asset class can help shield his family-owned flower shop during downturns.

“I want to run my family shop, and hope that trading can provide a steady income when business slows down, like in the month after (the Hindu festival of) Diwali,” he said, seated at the storefront surrounded by bunches of red roses and orange marigolds.

Newfound crypto enthusiasts in India such as Nagose have helped grow cumulative trading volumes of bitcoin, ethereum, dogecoin and other cryptocurrencies on four of its largest exchanges more than two-fold quarter-on-quarter to $1.9 billion in the October-December quarter, according to data from aggregator CoinGecko.

Many young Indians are dabbling in crypto trading to supplement their regular income in the world’s most populous country where jobs and pay increases have laggedworld-beating economic growth. Nearly two-thirds of its 1.4 billion people are below the age of 35, according to a government report.

From stocks and derivatives, they are now gravitating towards crypto assets whose prices have soared after U.S. President Donald Trump’s election victory in November promised a looser regulatory regime for the asset.

“There is a lot of curiosity at the ground level … especially with Trump becoming the U.S. president and the entire flavour of crypto changing world over,” said Edul Patel, co-founder of Mudrex, an Indian crypto exchange.

Overall, India’s crypto market is expected to grow to more than $15 billion in 2035 from $2.5 billion last year at a compound annual growth rate of 18.5%, said Kush Wadhwa, partner at consulting firm Grant Thornton Bharat.

Retail traders have driven the bulk of the interest in the asset, according to exchange executives, even as ETFs and institutions have pushed up crypto prices globally.

Out of the top 10 centres that propelled crypto activity in India in 2024, seven were lower-tiered cities, such as Jaipur, Lucknow and Pune, according to CoinSwitch, one of India’s largest crypto platforms.

“Growth is now being driven by non-metro cities. That’s true for the stock world and it’s true for crypto,” said Balaji Srihari, vice president at CoinSwitch which has 20 million users.

The surging interest may challenge Indian authorities who have discouraged trading in cryptocurrencies by levying steep taxes and have warned against their risks and volatility.

But that has not stopped 25-year-old Sagar Neware, a Nagpur-based mechanical engineer, from spending his nights trading them.

“My father had to shut down his plastic packaging business a few years back so my first dream is to restart it with the money I can earn from trading,” said Neware, who earns 25,000 rupees ($288) a month from working at the local transport office.

To hone their crypto trading skills, Neware and about two dozen others gather at the Thoughts Magic Trading Academy in Nagpur each weekday.

Yash Jaiswal, an equity options trader who runs the classes in a shop room, says he has tutored about 1,500 people over the last two years.

“You’re just one trade away from your dream life,” says a poster on the wall of the classroom.

MACROECONOMIC RISK
Who has regulatory oversight of cryptocurrencies in India is unclear.

While the 30% tax it levies on crypto trading gains is among the most stringent globally, the country, unlike most G-20 nations, has neither introduced new norms to govern crypto, nor folded it under existing securities rules. It has also not imposed an outright ban on it.

Reuters reported last year that India’s market regulator has signaled it is open to oversight of crypto trade, but the government is still to take a view.

The central bank, though, has continued to warn against it.

“Widespread usage of crypto assets and stablecoins has consequences for macroeconomic and financial stability,” it said in its Financial Stability Report in December 2024.

India’s federal finance ministry, the central bank and the market regulator did not respond to emails seeking comment. — Reuters

Women now make up 43% of Britain’s top boardrooms, report says

STOCK PHOTO | Image from Freepik

LONDON – Women make up about 43% of the boards of directors of Britain’s 350 biggest public companies, according to a government-backed report published on Tuesday that also said more work was needed to boost women’s representation in leadership roles.

In 2024, FTSE 350 companies had women on 43.4% of company boards compared with 40.2% a year earlier, while women held 35.3% of leadership roles versus 33.5% in the previous year, the FTSE Women Leaders Review report said.

For FTSE 100 companies, women’s representation on boards was 44.7% in 2024 while in senior leadership roles it was 36.6%. There was progress from a year ago on both counts.

Board positions can include non-executive positions that lack decision-making functions akin to the role of a CEO.

The report also showed that the number of women CEOs among FTSE 350 companies fell for the second consecutive year – from 21 in 2022 to 20 in 2023, and now to 19 in 2024.

Still, the government said overall progress was positive, given Britain’s voluntary, business-led approach to diversity.

In contrast to countries such as France and Belgium, Britain does not have a mandatory quota system for women on boards at publicly listed companies, but its rules say these firms should have at least 40% of female representation on their boards.

Almost three quarters of the FTSE 350 companies were meeting or exceeding the 40% target, the report said.

“The UK is leading the charge for gender equality in boardrooms, but we cannot rest on our laurels,” British finance minister Rachel Reeves, herself the first ever woman in the role, said in a statement.

“We must break down the barriers that stop many women being represented in decision-making roles, so that top talent reaches the highest levels of leadership in businesses driving economic growth across Britain,” she added.

Among Britain’s 50 biggest private companies, the proportion of women on boards of directors was less than at their public counterparts, at 31%, the report said. — Reuters

Trump says Canada, Mexico tariffs on schedule despite border, fentanyl efforts

REUTERS

WASHINGTON – President Donald Trump said on Monday that tariffs on Canadian and Mexican imports are “on time and on schedule” despite efforts by the countries to beef up border security and halt the flow of fentanyl into the U.S. ahead of a March 4 deadline.

“The tariffs are going forward on time, on schedule,” Mr. Trump told a joint news conference with French President Emmanuel Macron. He had been asked whether Canada and Mexico had done enough to avoid the punishing 25% U.S. duties.

Many had hoped the top two U.S. trading partners could persuade Trump’s administration to further delay tariffs that would apply to over $918 billion worth of U.S. imports from the two countries, from autos to energy. This could wreak havoc on the integrated North American economy, with the automotive sector hit particularly hard.

Mr. Trump did not specifically mention the March 4 deadline. He later referred to his desire for “reciprocal” tariffs to match the duty rates and offset the trade barriers of all countries, including France.

Mr. Trump and Mr. Macron did not publicly discuss another sticking point – digital services taxes imposed by France, Canada and other countries aimed at dominant U.S. tech giants including Google, Facebook and Amazon.

On Friday, Mr. Trump ordered his administration to revive tariff investigations into countries that levy digital service taxes on U.S. firms.

BORDER HOPES DIMMED
Canada and Mexico have taken steps to beef up border security, which bought them about a month’s reprieve from Mr. Trump’s earlier Feb. 1 deadline to impose the tariffs, based on a national emergency declaration.

Any further delay negotiated ahead of the deadline will keep the tariff threat in place at least until clear evidence emerges that Canadian and Mexican measures are working, said Dan Ujczo, a lawyer specializing in U.S.-Canada trade matters.

“There’s progress being made on the security front,” said Mr. Ujczo, senior counsel with Thompson Hine in Columbus, Ohio. “But it’s overly optimistic to think that those tariffs would be fully rescinded.”

The White House, U.S. Trade Representative’s office and Commerce Department did not respond to requests for comment on negotiations expected this week ahead of the March 4 deadline.

MORE TARIFF THREATS
Since Mr. Trump’s initial 25% tariff threat and imposition of a 10% duty on all Chinese imports, he has heaped on more tariff actions that could muddy the waters on border negotiations.

These include substantially raising tariffs on steel and aluminum to a flat 25%, rescinding longstanding exemptions for Canada and Mexico, the largest sources of U.S. imports of the metals. These steep increases, which also extend to hundreds of downstream steel products, are due to take effect a week after the border tariffs, on March 12.

Mr. Trump has also said he wants to impose 25% tariffs on imports of autos, pharmaceuticals and semiconductors, and to match duty rates and trade barriers of other countries.

The threatened tariffs could kick off an early launch of a renegotiation of the U.S.-Mexico-Canada agreement on trade that is due by 2026, Mr. Ujczo added.

Mr. Trump signed the USMCA into law in 2020 after renegotiating the 1994 North American Free Trade Agreement, but has increasingly expressed dissatisfaction with imports of autos from Mexico and Canada.

PROGRESS CITED
On Thursday, Mexican Economy Minister Marcelo Ebrard said on Thursday he had a “constructive dialogue” during a meeting with Trump’s top trade officials.

Mr. Ebrard said in a post on X that the “joint work” on U.S. trade matters starts on Monday.

Mexico has begun deploying as many as 10,000 national guard troops to its northern border, as part of the agreement that Mexican President Claudia Sheinbaum said also called on the U.S. to work to stop the flow of firearms into Mexico.

Canada this month created a new fentanyl czar to coordinate the fight against smuggling of the deadly opioid, appointing senior intelligence official Kevin Brosseau to the post.

Ottawa also has reclassified drug cartels as terrorist entities and has deployed drones, helicopters and other surveillance technologies on the vast northern U.S. border.

Canadian Prime Minister Justin Trudeau has kept in close contact with Trump on the border issues in recent days, including in a Saturday call that included discussions of joint efforts to curb fentanyl trade. He has threatened retaliatory tariffs on C$155 billion ($107 billion) of U.S. imports, including American beer, wine and bourbon and Florida orange juice, but said last week that Canada is “going to do the work” to ensure that tariffs are not imposed. — Reuters

German tax revenue rose by 8.9% in January, finance ministry says

REUTERS

BERLIN – Germany’s federal and state government tax revenue rose 8.9% in January from the previous year, the finance ministry said in its monthly report on Tuesday.

Total tax revenue reached 66.7 billion euros ($69.72 billion), according to the report.

Nevertheless, forward-looking economic indicators continue to reflect a difficult economic situation, the report said.

Europe’s ailing largest economy is under pressure after it contracted in 2024 for the second year in a row. Following Sunday’s election, the economy faces months of policy uncertainty until a coalition is formed, prolonging its current stagnation.

Two major economic institutes are already forecasting a third year of economic contraction in 2025, which would be the longest period of weakness in Germany’s post-war history.

For 2025, tax experts see tax revenue increasing to 893.8 billion euros, up 3.8% from the previous year, according to the report.

The opposition conservatives won the election, putting CDU leader Friedrich Merz – who has promised extensive tax cuts – on track to be the next chancellor.

Other parties have criticized the CDU, arguing that the party does not spell out how all its promised tax cuts would be financed.

The full CDU reform program would reduce state revenue by 97 billion euros per year, according to an Ifo study. — Reuters

US lawmakers take aim at China’s trade practices

REUTERS

WASHINGTON – A bipartisan group of lawmakers is introducing legislation on Monday to toughen U.S. trade enforcement laws and address the impact of Chinese-supported companies moving portions of their production to other countries to circumvent American duties.

Republican Senator Todd Young of Indiana and Democratic Senator Tina Smith of Minnesota are leading a group of more than dozen senators introducing the legislation.

The bill seeks to give the U.S. Commerce Department new tools to address concerns about China’s trade practices and its Belt and Road Initiative, a Chinese international infrastructure project aimed at boosting trade and connecting Asia, Europe and Africa.

“China has distorted the free market by dumping undervalued products and subsidizing industries, actions designed to harm American businesses and workers,” Mr. Young said in a statement.

A companion bill is being introduced in the U.S. House of Representatives.

“For too long, foreign competitors like China have engaged in unfair trade practices that have undermined domestic industry and threatened our national security,” Ms. Smith said.

The Chinese Embassy in Washington did not immediately comment.

The American Iron and Steel Institute praised the bill for “addressing the growing problem of cross-border subsidization where foreign governments subsidize industries, like steel, not only in their own countries but in other countries as well.”

The bill authorizes the Commerce Department to apply the countervailing duty law, which allows the government to target specific products from individual countries, to translational subsidies.

The legislation would also toughen antidumping rules, sets specific deadlines for anti-circumvention inquiries, ensures the law can be applied to currency manipulation and aims to address imports of goods like kitchen cabinets from China.

Two weeks ago, President Donald Trump substantially raised tariffs on steel and aluminum imports to a flat 25%. The tariffs are set to take effect on March 4.

Data showed U.S. aluminum smelters produced just 670,000 metric tons of the metal last year, down from 3.7 million in 2000. Steel imports accounted for about 23% of American steel consumption in 2023.

While China exports only tiny volumes of steel to the U.S., it is responsible for much of the world’s excess steel capacity, according to the U.S.

American steel companies say subsidized production in China forces other countries to export more and leads to Chinese steel being shipped through other countries into the U.S. to avoid tariffs and other trade restrictions. — Reuters

Be visible and work hard

Raygin Lights and Sounds, a provider of professional audio and lighting equipment based in Raon, Manila (formally known as Gonzalo Puyat Street), capitalizes on its online presence to grow its market.

Interview by Edg Adrian Eva
Video editing by Jayson Mariñas

Turning up the volume on market competition

Raygin Lights and Sounds was able to grow its business amid the stiff competition in Raon, Manila, by rethinking its brand strategy, according to its owner Raymond Go.

Interview by Edg Adrian Eva
Video editing by Jayson Mariñas

CAMPI bullish on EV sales this year

A Tesla electric vehicle is plugged to a charger in this file photo. — REUTERS

By Justine Irish D. Tabile, Reporter

THE CHAMBER of Automotive Manufacturers of the Philippines, Inc. (CAMPI) is expecting electrified vehicle (EV) sales to track the growth of total industry sales this year.

“The growth of EV sales is expected to track overall industry sales growth driven by increasing consumer adoption, supportive government policies, and entry of more players,” CAMPI President Rommel R. Gutierrez told reporters on Monday.

CAMPI projects total industry sales to reach 500,000 this year. If realized, this would represent a 7% year-on-year increase from the 467,252 units sold in 2024.

According to Mr. Gutierrez, EV sales reached 18,690 units, accounting for around 4% of the total sales last year.

Electrified vehicles refer to those that use electricity including battery electric vehicles, hybrid electric vehicles, and plug-in hybrid electric vehicles.

“EVs (will be) about 4% of the total industry sales by the end of the year,” he said.

If the industry sells 500,000 units this year, a 4% market share would mean sales of 20,000 EVs. If realized, this will be a 7% increase from the estimated 18,690 EV units sold in 2024.

A joint report by CAMPI and the Truck Manufacturers Association (TMA) showed that January car sales grew 10.4% to 37,604 from 34,060 in the same month last year.

In January, EV sales reached 1,600 units, consisting of 146 battery EVs, 1,445 hybrid EVs, and nine plug-in hybrid EVs.

Nissan Philippines, Inc. sold the most battery EVs in January, accounting for 92 units or 63% market share.

It was followed by Toyota Motor Philippines Corp. (TMP), which sold 19 units of battery EVs, and Jetour Auto. Phil., Inc., which sold 12 units.

For the hybrid EV category, TMP had the highest sales last month, accounting for 1,256 units or 86.92% market share.

It was followed by Honda Cars Philippines, Inc., which sold 97 hybrid EVs, and Hyundai Motor Philippines, Inc., which sold 33 units.

In the plug-in hybrid EV category, Coventry Motors Corp. (Jaguar and Land Rover) had the most sales in January, selling five units or 55.56% market share.

This was followed by United Asia Automotive Group, Inc. (Chery), which sold three plug-in hybrid EVs, and SMC Asia Cars Distributors Corp. (BMW), which sold a unit.

Mr. Gutierrez said the lower tariffs on EVs have helped bring down prices and increased sales.

Last year, President Ferdinand R. Marcos, Jr. signed Executive Order (EO) No. 62, which exempted battery EVs, hybrid EVs, plug-in hybrid EVs and other types of EVs from import duties. The zero tariff rate for EVs will be imposed until 2028.

This prompted TMP to reduce the suggested retail prices for the Toyota RAV4, Alphard, and Lexus hybrid EVs in the Philippines.

CAMPI currently has 24 members, but this is expected to increase as the applications of other car brands, including BYD, Subaru, Tesla, and Hongqi, are now pending.

Meanwhile, the Electric Vehicle Association of the Philippines (EVAP) said that it is closely monitoring developments in the Electric Vehicle Industry Development Act (EVIDA), particularly on the Electric Vehicle Incentives Scheme (EVIS).

“EVAP remains committed to working closely with the government and stakeholders to ensure that the law’s provisions are properly implemented to create a robust and sustainable EV ecosystem in the Philippines,” the group said in a statement on Monday.

EVAP said that the EVIS is expected to drive investments and local manufacturing while making EVs more accessible to consumers.

“The EVIDA law has laid the foundation for the growth of the electric vehicle industry in the Philippines,” said EVAP President Edmund A. Araga.

“The proper implementation of EVIS will be a game changer, making EVs more affordable and incentivizing businesses to invest in charging infrastructure and local assembly,” he added.

These incentives include tax breaks, reduced import duties, and other nonfiscal incentives such as priority registration and dedicated parking spaces.

“These measures are expected to stimulate demand and encourage private sector participation in building the necessary infrastructure,” the group added.

PHL urged to monitor dirty money risks from online gambling, crypto

Representations of virtual currency Bitcoin are placed on US dollar banknotes in this illustration taken on May 26, 2020. — REUTERS/DADO RUVIC/ILLUSTRATION

THE PHILIPPINES must keep an eye on money laundering risks arising from online gaming and cryptocurrency, even after it has exited the dirty money watchdog’s “gray list,” an analyst said.

Choon Hong Chua, Moody’s head of financial crime practice group, Asia-Pacific and Middle East, said the Philippines’ removal from the Financial Action Task Force’s (FATF) gray list “reflects its commitment to strengthening its anti-money laundering (AML) and counter-terrorism financing (CTF) frameworks.”

“Exiting the gray list will boost investor confidence and financial stability. The Philippines has enhanced inter-agency coordination and has implemented comprehensive reforms,” he said.

“However, money laundering risks are not easy to sweep out entirely. Businesses such as online gaming and cryptocurrency would be areas beyond the financial sector that would require continuous oversight to mitigate potential risks,” he added.

Online gaming has gained popularity in the Philippines in recent years. Data from the Philippine Amusement and Gaming Corp. (PAGCOR) showed revenues reached a record-high P112 billion in 2024, with the electronic games sector accounting for half or P48.79 billion.

The FATF finally removed the Philippines from its gray list of jurisdictions under increased monitoring for dirty money following a successful on-site visit that showed the country completed its action plan.

The Philippine government is confident the removal from the gray list will help raise investments and expand trade partnerships that will drive economic growth.

However, a Citi economist said the exit from the gray list alone is not enough to spur investments in key sectors like manufacturing.

“Obviously, it’s great to be out of the gray list, but I don’t think this is necessarily going to translate to meaningful diversion opportunities in manufacturing because clearly it takes a lot more than that,” Citi Head of Emerging Markets Economics Research Johanna Chua said in an interview on Money Talks with Cathy Yang on One News on Monday.

The Philippines was on the FATF’s gray list for over three years or since June 2021.

“It’s great to get out of the gray list, but we need more than that to have a kind of ecosystem for manufacturing, including having a better-established infrastructure and supply-chain ecosystem,” Ms. Chua said.

“That’s obviously not a competitive advantage for the Philippines. The Philippines is really more for services,” she added.

The Philippines logged $37.4 billion worth of services exports in the first nine months of 2024, up 6.25% from a year earlier, central bank data showed.

In 2024, exports of services jumped by 8.3%, data from the local statistics authority showed. It also accounted for 13% of gross domestic product (GDP).

Ms. Chua cited India as an example, where there have been significant public capital expenditures for infrastructure seen in the last few years.

The government has committed to spending 5-6% of GDP on infrastructure annually.

Meanwhile, former Finance and Socioeconomic Planning Secretary Jesus P. Estanislao said the Philippines’ exit from the gray list is a “very positive development.”

“It has been a great embarrassment for the Philippines to be on that list for so many years. And now what we’re saying to the rest of the world is we want to be part of you, and we do not want to be part of the money laundering, financing or criminal activities.”

“We would like to clean up our system, and I’m glad that we have succeeded in convincing them in our efforts to clean up our system. This is great news,” he said.

This also shows that the Philippines is becoming a “much more transparent economy.”

“We’re telling the world we would like to be part of the global financial system, which fights against financing for terrorism, which fights against money laundering, and all of the shenanigans that have been going on using the international financial system,” Mr. Estanislao added.

TARIFFS
Meanwhile, Ms. Chua said the Philippines is among the economies most insulated by the United States’ tariff plans.

“In Asia, you know, I think the Philippines is kind of second to India in being relatively the most insulated from the tariff noise. One of the benefits India has is there’s been a lot of interest in diversion of investments in manufacturing,” she said.

Markets are bracing for the potential impact of US President Donald J. Trump’s trade policies, such as reciprocal tariffs on all countries that tax US imports.

Since taking office in January, Mr. Trump has already slapped a 10% tariff on Chinese goods as well as duties on all steel and aluminum imports beginning March.

“A lot of the tariff noise, aside from China, seems a lot more sectoral and targeted and is really being seen as a pretext for negotiation,” she added.

Meanwhile, Ms. Chua said it is “not far-fetched” for the Philippines to grow close to 6% this year.

“We are projecting Philippine growth will be just a tad shy of 6%, which is 5.9%, which, you know, by and large, is still a very solid growth rate that we’ve seen compared to a lot of emerging market countries,” she added.

Economic managers are targeting 6-8% GDP growth this year.

The Philippine economy grew by 5.6% in 2024, short of the government’s 6-6.5% target. — Luisa Maria Jacinta C. Jocson

Filipino BPO workers at risk of being displaced by AI — report

JOBSEEKERS file application forms at a job fair at a mall in Manila. — PHILIPPINE STAR/EDD GUMBAN

By Luisa Maria Jacinta C. Jocson, Reporter

SOME SECTORS in the Philippine labor market, such as the business process outsourcing (BPO) industry, could be at risk of being displaced by artificial intelligence (AI), the International Monetary Fund (IMF) said.

“As AI systems become more capable and readily available, they are likely to replace or significantly alter many job roles, particularly those involving routine and repetitive tasks,” it said in a working paper.

“The Philippines, with its large BPO sector, faces unique challenges and opportunities. The BPO industry, a significant contributor to the country’s economy, might experience shifts as AI-driven chatbots and virtual assistants handle more customer service tasks.”

The paper said that around one-third of jobs in the Philippines are highly exposed to AI, which means that AI can perform many of the tasks in these occupations.

The IMF found that 61% of the highly exposed jobs are also considered highly complementary.

This means AI technologies are “likely to support rather than replace the worker, potentially increasing their productivity.”

“The remainder (14% of the total workforce) hold jobs with low complementarity, making them susceptible to displacement by AI,” it added.

Jobs with high exposure to AI and high complementarity include general and operations managers, first-line supervisors, teachers and teaching assistants, lawyers, civil engineers and counselors.

Meanwhile, those jobs with high exposure but low complementarity includes customer service representatives, telemarketers, accountants, auditors, secretaries and administrative clerks.

Though it accounts for just about 3% of the workforce, the IMF said BPO workers are considered highly exposed with low complementarity.

The IMF noted the Philippines’ BPO sector is a key growth engine for the country.

“The BPO industry, which predominantly focuses on routine-centric tasks and low-skilled roles such as answering phone calls and dealing with inquiries, may be adversely affected by AI,” it said.

The IMF cited data showing the Philippines’ share of the global outsourcing market is at 15%.

“The BPO sector’s significant contribution to the economy — accounting for 7.4% of GDP in 2023, similar in magnitude to remittances — means that changes within this industry are macro-critical and may have spillover effects on the broader economy.”

Data from the International Labor Organization showed 89% of the BPO workforce face a high risk of automation.

“Before, the threat of automation was contained to low-skilled, blue-collar jobs,” the IMF said.

“However, generative AI’s capabilities now pose a threat to white-collar jobs, especially for information technology and business process management (IT-BPM) workers as customer services agents, tech support, and non-university educated employees.”

Meanwhile, it also found that the most exposed workers to AI are “college-educated, young, urban, female, and well-paid workers in the service sector.”

“It will be critical for young workers to have the skills that allow them to employ AI to increase their productivity for the Philippines to capitalize on the impending demographic dividend,” it added.

The IMF said that AI preparedness will also impact the adoption of these emerging technologies.

“Despite these efforts, challenges persist, including regulatory gaps, inadequate infrastructure, workforce reskilling needs, and limited AI adoption due to cost concerns… Addressing these issues is crucial for the Philippines to fully leverage AI’s economic and societal benefits,” the IMF said.

In 2024, the Philippines ranked 56th out of 188 countries on the Government AI Readiness Index.

When harnessed correctly, the IMF said that AI can be used to “create new opportunities, fostering growth in tech-driven industries and necessitating a workforce with advanced digital skills.”

The National Economic and Development Authority (NEDA) earlier said the economy could gain P2.6 trillion annually if domestic businesses adopt AI solutions.

The government must strategize how to minimize job displacement and maximize benefits such as increased productivity and job creation, the IMF said.

“Investments in education and training programs focused on AI and digital skills are essential to prepare the workforce for the future.”

“Furthermore, developing a regulatory framework that ensures the ethical use of AI and addresses issues related to labor market transitions is imperative, drawing on lessons from global best practices,” it added.

Analysts said the government must be proactive in the AI transition.

University of the Philippines Diliman School of Labor and Industrial Relations Assistant Professor Benjamin B. Velasco said that AI can be used to generate more jobs.

“AI will replace some forms of work, but it can also create other kinds of jobs. Upskilling is one way to deal with the ‘creative destruction’ effect of AI,” he said.

“Understandably, the government and businesses are trying to find some niche in which there are upskilled jobs that complement AI and take advantage of AI. For example, if you do not want to be replaced by AI, learn to program AI or train AI.”

Federation of Free Workers President Jose Sonny G. Matula said AI training must be aligned with development objectives.

“AI should be developed to help realize agro-industrial development, to mechanize and digitalize farms for greater productivity and contribute to national food security,” he said.

Mr. Matula also expressed concern over the widening skills and wage gap.

“Promote fair wages and equitable distribution of productivity gains from AI. This will happen if there is free, independent collective bargaining between employers and workers, through their unions,” he said.

Mr. Matula also called for expanding vocational training and lifelong learning programs focused on AI-adjacent skills.

“While AI is unlikely to replace all human jobs, its impact on the workforce must be managed carefully. The key is to ensure that AI serves as a tool to enhance human labor, not as a means to displace workers without recourse,” he added.

NGCP wins arbitration case vs PSALM, TransCo

By Sheldeen Joy Talavera, Reporter

THE NATIONAL Grid Corp. of the Philippines (NGCP) claimed victory on its arbitration case against state-run Power Sector Assets & Liabilities Management Corp. (PSALM) and the National Transmission Corp. (TransCo) over its obligations under a concession agreement.

In a stock exchange disclosure on Monday, Synergy Grid & Development Phils., Inc. (SGP), which holds a 40.2% effective ownership interest in NGCP, said that the Arbitral Tribunal of the Singapore International Arbitration Centre ruled in favor of NGCP in its final decision dated Feb. 19.

The Arbitral Tribunal declared that the NGCP did not violate the nationality restrictions in the Philippine Constitution and the Anti-Dummy Law — which restricted foreign ownership in public services.

It also rejected the defense made by PSALM and TransCo that this rendered NGCP’s claim to the validity of the prepayment or its other claims “inadmissible or unenforceable.”

“The Arbitral Tribunal likewise declared that NGCP did not breach its obligations under the Concession Agreement in relation to permitted indebtedness or insurance,” SGP said.

In 2018, NGCP filed an arbitration case against PSALM and TransCo in relation to the implementation and interpretation of the parties’ concession agreement.

In 2007, the NGCP secured the 25-year concession to operate the country’s power transmission network after an open, public and competitive bidding process. It officially started operations as a power transmission service provider in 2009.

In the arbitration case, the grid operator sought, among other things, a declaration that the payment made on July 15, 2013 amounting to P57.88 billion was valid, as well as the payment of other monetary claims of approximately P4 billion “which should have been borne by TransCo under concession agreement, but were advanced by NGCP.”

On the other hand, PSALM and TransCo argued that NGCP was in “concession default” for having allegedly violated the national restrictions for public utilities under Philippine law and the concession agreement.

The state-run firms also disputed NGCP’s monetary claims and sought counterclaims of P2.7 billion as part of TransCo’s excluded receivables, plus interest.

In its final decision, the Arbitral Tribunal directed NGCP to pay TransCo approximately P372.77 million out of the P3.9 billion claimed.

For projects under construction, it said that the agreed difference of P13.12 billion, which, after accounting for escrow funds, is P10.1065 billion, must be converted to US dollars in order to calculate the requisite concession fee adjustment.

Meanwhile, the Arbitral Tribunal directed PSALM and TransCo to indemnify NGCP up to P56.53 million for expenses on right-of-way acquisition, as well interest of 6% per annum until payment is full.

TransCo, on the other hand, was obliged to reimburse NGCP for the former’s retained obligations at P51.84 million, with interest of 6% per year.

“Under the UNCITRAL (United Nations Commission on International Trade Law) Rules, the Tribunal’s award is final and binding on the parties and the parties undertake to carry out the award without delay,” SGP said.

Sought for comment, PSALM President and Chief Executive Officer Dennis Edward A. Dela Serna said that the matter has been referred to the Office of the Government Corporate Counsel (OGCC) as counsel for PSALM and TransCo for appropriate actions.

“We want to assure the public that both PSALM and TransCo are fully committed to protecting the interests of the Filipino people and that we will act in accordance with law,” he said in a Viber message.

TransCo President and CEO Fortunato C. Leynes likewise said that they are waiting for OGCC’s advice on the next course of action.

Following its disclosure of the decision of the Arbitral Tribunal, SGP requested a voluntary halt in trading of its shares at 9:30 a.m. on Monday. It was lifted one hour after.

Shares in SGP closed at P11.70 each, down 4.1% or 50 centavos.

SM Prime eyes P100-B capex for 2025

Of the total capex, P67 billion—the largest portion—will be allocated to SM Residences and integrated property developments. — SM CITY ILOILO FB PAGE/PHILSTAR FILE PHOTO

SM PRIME Holdings, Inc. announced plans to allocate P100 billion in capital expenditures (capex) this year, with the majority directed toward residential projects and integrated property developments. 

“Our growth will be driven by the mall business, while our robust project pipeline will enhance the expansion of strategic initiatives across our diversified portfolio,” SM Prime President Jeffrey C. Lim told the stock exchange on Monday.

This year, capex will mainly be allocated to malls, residences, and integrated property developments, SM Prime said. In 2024, SM Prime also earmarked a P100-billion capex budget.

The listed property developer anticipates continued corporate activity and sustained consumer demand growth in 2025, it said. 

“We expect election-related spending, easing interest rates, and higher tourism spending to fuel our growth in 2025,” Mr. Lim said. 

Of the total capex, P67 billion — the largest portion — will fund SM Residences and integrated property developments (IPDs).

These residential projects include regional, premium, and leisure developments, SM Prime said, noting that IPDs are large, mixed-use, master-planned urban centers across Luzon and Visayas. 

Additionally, P21 billion is allocated for expanding SM malls’ gross floor area, it said.

New developments will add 205,400 square meters of gross floor area, while approximately 124,488 square meters of existing mall space are scheduled for redevelopment.

By yearend, the company expects its mall portfolio’s gross floor area to surpass eight million square meters.

Around P12 billion will be invested in its office, hospitality, and MICE (meetings, incentives, conferences, and exhibitions) businesses to expand and upgrade its facilities.

The planned investment will fund the construction of two new convention facilities, the renovation of hotel rooms, and the addition of food and beverage facilities at existing hotels, SM Prime said. 

SM Prime is also set to develop new office towers and workspaces, including the Six E-Com Center in the Mall of Asia complex.

“These planned investments position us to meet evolving customer needs while driving SM Prime toward its next phase of growth,” Mr. Lim said.

For 2024, Sy-led SM Prime recorded a 14% increase in consolidated net income, reaching a record-high P45.6 billion, up from P40 billion in 2023, driven by strong holiday spending, the opening of two new malls, and higher real estate sales.

Consolidated revenue also grew by 10%, reaching an all-time high of P140.4 billion in 2024, compared to P128.1 billion in 2023, due to increased rental income, real estate sales, and revenues from services and experiential offerings. 

At the local bourse on Monday, shares of the company fell by 30 centavos, or 1.27%, to close at P23.40 apiece. — Ashley Erika O. Jose

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