Category: Philippine Star

Union Bank of the Philippines is moving to absorb the businesses of its digital banking and financial technology subsidiaries into its parent operations, as the Aboitiz-led lender seeks to streamline its operations and strengthen its digital banking services.

In a disclosure to the Philippine Stock Exchange, UnionBank said its board of directors approved the planned integration of UnionDigital Bank and fintech subsidiary UBX into the parent bank, subject to regulatory approvals from the Bangko Sentral ng Pilipinas (BSP) and other authorities.

The move is part of the bank’s broader strategy to focus on its core businesses, improve operational efficiency and consolidate its digital capabilities under a single banking platform.

UnionDigital operates as the group’s digital banking arm, while UBX focuses on fintech solutions aimed at expanding access to financial services beyond traditional bank branches.

UnionBank president and CEO Ana Delgado said the integration would allow the bank to serve more customers while maximizing the capabilities developed by its subsidiaries.

‘By integrating UnionDigital and UBX with UnionBank, we are strengthening our digital proposition, creating greater efficiencies and accelerating our ability to serve more Filipinos at scale,’ Delgado said.

She said the planned consolidation would also give customers access to a broader range of banking products and financial solutions through UnionBank’s existing digital platforms.

The bank assured customers that services would remain available while the proposed integration undergoes regulatory review.

‘During the transition process, we are committed to ensure the least amount of disruption for our customers,’ Delgado said. ‘We will carefully guide their transition into UnionBank at the appropriate time.’

The bank has not disclosed a timetable for completing the integration, which remains subject to the necessary regulatory clearances.

The consolidation plan comes as UnionBank reported a 53-percent increase in net income to P9.9 billion in the first nine months, supported by stronger interest earnings, higher fee income and improved operating efficiency.

Net revenues increased by eight percent to P65.5 billion, reflecting wider lending margins and higher transaction income from its expanding retail customer base, which exceeded 19.5 million.

Net interest income rose by nine percent to P51.9 billion. The bank’s net interest margin improved by 34 basis points to 6.9 percent.

UnionBank attributed the improvement partly to a five-percent increase in current account and savings account deposits, a relatively low-cost source of funding for banks.

Consumer loans accounted for 62 percent of its total loan portfolio, nearly three times the industry average, reflecting the bank’s strong concentration in retail lending.

Meanwhile, non-interest income grew by five percent to P13.6 billion, with fees and commissions climbing by the same rate to P11.9 billion.

Income from wealth management and bancassurance surged by 52 percent and accounted for 18 percent of total fee income.

The Bangko Sentral ng Pilipinas (BSP) Monetary Board raised its benchmark interest rate by 50 basis points to 5.50%.

In a statement on Thursday, October 22, the Monetary Board announced that the target Reverse Repurchase rate would increase to 5.50%.

This marks the BSP’s first 50-basis-point rate hike since February 2023, bringing cumulative rate increases to 125 basis points since the BSP began its tightening cycle in April.

This move also brings interest rates on the overnight deposit and lending facilities to 5.00% and 6.00%, respectively.

The central bank cited persistent inflation risks as the primary reason for the rate hike.

Average headline inflation is projected to accelerate in the coming months and remain elevated through 2027 before gradually moving toward the BSP’s 3% target in 2028.

Core inflation is also expected to continue rising, signaling broader cost pressures across the economy.

The Monetary Board said elevated global oil prices amid tensions in the Middle East, higher transport fares and lingering El Niño risks to agriculture have heightened inflation pressures.

While fiscal measures are expected to support domestic economic recovery, the Board stressed the need for a decisive and restrictive monetary policy stance was necessary to contain second-round effects and anchor inflation expectations.

While fiscal measures are expected to support domestic economic recovery, the Board emphasized the need for a decisive and restrictive monetary policy stance to contain second-round effects and keep inflation expectations anchored.

‘This will contain second-round effects and firmly anchor inflation expectations,’ the BSP said.

‘The BSP stands ready to take further monetary policy action as necessary to ensure the timely return of inflation to the target, in keeping with our price stability mandate,’ it added.

Various sectors welcomed the wish of Moro National Liberation Front (MNLF) founder Nur Misuari for Abdulraof Macacua to remain as chief minister of the Bangsamoro regional government.

‘That is something so touching for us,’ lawyer Naguib Sinarimbo, spokesperson of the Bangsamoro Federalist party, who was elected to represent a parliamentary district in Cotabato City during the September 14 elections in the autonomous region, said.

The 80 elected members of the Bangsamoro Autonomous Region in Muslim Mindanao will convene for the inaugural session on October 30, following the region’s first-ever parliamentary elections on September 14.

Macacua was also elected to represent a parliamentary district covering neighboring barangays in Cotabato City and parts of the nearby province Maguindanao del Norte during last month’s polls.

Up to 46 newly elected members of the BARMM parliament, including Macacua, formed a bloc during a dialogue in Davao City last week to promote inclusive regional governance that involves Muslim, Christian and indigenous non-Moro communities in the autonomous region.

Macacua, whose tenure as interim chief minister is set to end when the elected regional lawmakers convene for their first session on October 30, visited Misuari at his residence in Davao City on Thursday, October 22, along with BARMM’s local government minister Jordan Bayam. They discussed various issues, including governance in autonomous region.

During their conversation, Misuari first congratulated Macacua on his election to the BARMM parliament in the September 14 regional polls. Their meeting, which was also attended by Bayam, was captured on video. Copies of the footage circulated among members of BARMM’s media community on Friday, October 23.

‘You have my support, my full support,’ Misuari told Macacua, after saying that he wants him to stay as BARMM’s chief minister.

Macacua would need at least 41 votes from the 80 newly elected BARMM lawmakers to become chief minister if nominated for the post during their first session on October 30.

Misuari served as governor of the now-defunct Autonomous Region in Muslim Mindanao after the MNLF and the national government signed a peace agreement on September 2, 1996. The agreement was brokered by the Organization of Islamic Cooperation (OIC), a bloc of more than 50 Muslim-majority countries, including oil-exporting nations in the Middle East and North Africa.

‘We need good people like you at the helm,’ Misuari told Macacua while he and Bayam were in his residence in Davao City.

All five BARMM governors, Ali Midtimbang of Maguindanao del Sur, Tucao Mastura of Maguindanao del Norte, Mamintal Adiong Jr. of Lanao del Sur, Mujiv Hataman of Basilan and Ysmael Sali of Tawi-Tawi, had assured, pledged their support for the 46-member bloc of newly elected lawmakers during a meeting in Davao City last week.

The bloc members are expected to support Macacua if he is nominated for chief minister during the parliament’s first session on October 30.

‘Carry on, I hope you will stay long in your administration, In Shaa Allah,’ Misuari told Macacua as they ended their talk with a handshake.

Officials of the Bangsamoro Initiative for Peace, Progress and Solidarity (BIPPS), a multisectoral peace advocacy entity with members across BARMM’s provinces and cities, separately told reporters on Sunday that they appreciated Misuari’s vote of confidence in Macacua.

Traders in BARMM, including members of the influential Bangsamoro Business Council, which has groups across the region’s five provinces and three cities, said they did not oppose efforts by various sectors to keep Macacua as chief minister of the autonomous region.

‘We don’t have a problem with Chief Minister Macacua remaining as chief minister in the Bangsamoro region,” Adiong, the now second term governor of Lanao del Sur, said.

Adiong said officials and members of their regional party, the Serbisyong Inklusibo, Alyansang Progresibo, are thankful to Misuari for his desire for Macacua to remain as BARMM chief minister.

Over five years ago, on a Friday morning in the early fall in New York City, Philippine Airlines (PAL) filed for reorganization under Chapter 11 of the US Bankruptcy Code in the Federal Court for the Southern District of New York. After more than a year of grinding negotiations and paperwork with creditors while trying to survive the COVID-19 pandemic, PAL was finally getting its day in court.

Today, after almost 20 quarters that have likely been the most profitable in its history, PAL has just placed a confident bet on its future, having issued $350 million in bonds and confirmed orders for 15 new Boeing 787 Dreamliners and nine Airbus A350-1000s, in addition to the 10 already being delivered.

This is the human story of how Asia’s oldest airline, now 85 years old, not only survived but thrived when the world almost shut down air travel during the pandemic.

Asia’s oldest airline

PAL was founded in late February 1941, after Andres Soriano and other wealthy businessmen purchased the franchise of the defunct Philippine Island Aerial Taxi Company and incorporated PAL.

The Iloilo-Negros Air Express Co. (INAEC) founded in 1935 by wealthy sugar barons, already flew to more destinations and had a larger fleet. From its infancy as an air-taxi company serving wealthy Spanish and American businessmen in Manila, PAL was never inevitable.

Within months of its founding, PAL was at war, flying supply and evacuation missions to and from the front lines as the US Armed Forces in the Far East retreated to Bataan. Its Beechcraft 18s and pilots continued these missions until Japanese aircraft finally caught up with them in late February 1942. INAEC’s entire fleet was caught on the ground in Iloilo three days after the war began.

After the war, PAL was reconstituted by Andres Soriano with surplus US military aircraft and veteran pilots.

By mid-1946, it was flying American G.I.s home, becoming the first non-US airline to fly across the Pacific.

From the beginning, PAL had been sheltered, but languishing, in the shadow of politics.

The 1970s brought Martial Law, and PAL again fell under direct government control. Its domestic operations entered the jet age with the BAC-111, while its international routes began filling with a new type of traveler: the overseas Filipino worker.

Kapitan

Corazon Aquino became the president of the Philippines in 1986, and in 1992, her administration sold 67 percent of PAL to PR Holdings, enabling Dr. Lucio ‘Kapitan’ Tan, a self-made billionaire with interests in tobacco, liquor and banking, to take control.

He became chairman and CEO of PAL in 1995 and led a multibillion-dollar fleet renewal.

Just in time for the Asian Financial Crisis of 1997.

Following the catastrophic effects of the Asian Financial Crisis and labor disputes that led to a complete 14-day shutdown, PAL submitted a ‘standalone’ rehabilitation plan to the Philippine Securities and Exchange Commission in late 1998.

The plan required receivership or external oversight of the company’s assets and operations, which lasted nine years.

PAL was released from receivership in October 2007, but further challenges – including domestic competition from Cebu Pacific, the downgrade of the Philippines’ aviation safety rating by the FAA and EASA, another labor strike in 2011 and continuing financial difficulties – meant continued instability.

In 2012, Kapitan sold 49 percent of PAL to San Miguel Corp. and let it manage the airline. He took back control two years later.

By 2019, PAL had experienced two consecutive years of losses, faced an increasingly tenuous debt position and further losses, and had sold 9.5 percent of its holding company to All Nippon Airways to raise capital.

Kapitan had sunk billions of dollars into PAL and would put in even more to keep it aloft.

I learned later that, despite the scale and breadth of his commercial empire, he carried only one business card.

It read: Chairman and CEO of Philippine Airlines.

The challenge

In the spring of 2019, Kapitan asked me to lead the turnaround of a perennially troubled enterprise. In late July, the Board confirmed me as its president and COO.

So I left my home and family in Los Angeles and returned to the Philippines to lead PAL.

I had no idea what I was getting into.

I discovered both daunting challenges and great potential.

PAL was an inefficient enterprise with a long history of losses; massive debt; obsolete business processes; four-star service standards operating out of one of the world’s worst airports; capable flight and cabin crews administered by a sclerotic bureaucracy; a proud but demoralized workforce with a history of difficult labor relations; opaque and erratic governance and large, agile and tough competitors.

But in 2019, PAL was a then-79-year-old airline whose legacy and history remained inseparable from the Filipino experience after World War II.

It was the flag carrier of a fast-growing Southeast Asian nation; a bridge across the Philippine archipelago to the world and the link between millions of overseas Filipinos and their homes and families.

PAL carried the Philippine flag.

And in its planes flew the hopes and dreams of millions of Filipinos on their journeys to meet the future.

2020

As 2019 ended, PAL had assembled a new team and made progress tackling its challenges. Kapitan had invested another $225 million in the company while committing a further $375 million.

Then, in January 2020, just south of Manila, Taal Volcano erupted.

Volcanic ash from the massive eruption shut down Ninoy Aquino International Airport for more than 14 hours, cancelling hundreds of flights and essentially dismantling PAL’s biggest hub and base. We had to thread it all back together, flight

by flight, while caring for more than 30,000 displaced passengers.

The year had started with a ‘bang.’

Taal turned out to be just the opening act.

Editor’s note: In this special series, former Philippine Airlines president and COO Gilbert Santa Maria takes us inside the flag carrier’s fight for survival during the COVID-19 pandemic, a time when nearly every airline across the globe grappled with the worst turbulence. This is the story of PAL’s remarkable turnaround, told by one who was at the helm when the airline faced one of the toughest periods in its 85-year history. A similar version appeared on Yale Insights.

Protecting its turf, Ateneo eked out a 75-72 squeaker over Far Eastern U to snap a three-game skid in the UAAP Season 89 men’s basketball yesterday at the Blue Eagle Gym.

Kieffer Alas sank the dagger charities in the last two seconds to rescue the Blue Eagles from a near collapse after leading by as many as 18 points, including 11 inside the last two minutes.

Alas finished with 21 points, four rebounds and two steals as the Blue Eagles drew inspiration from home fans and improved to 4-4 to rejoin a crowded middle pack of the standings.

The super rookie drew solid coverage from Jared Bahay with 15 points while reinforcement Sultan Baruwa collared a 13-point, 12-rebound double-double laced by two assists. Ian Espinosa and Travis Roberts chipped in eight points each.

Later, National U joined UP atop the leaderboard at 6-2 after smothering Adamson, 79-43, in the most lopsided game of the season so far.

The Falcons slid to 4-4.

After years of waiting for housing security, 160 beneficiaries of the GMA Ville Lot 110 Housing Project in Barangay Carreta, Cebu City, moved a step closer to land ownership after receiving Certificates of Entitlement during a ceremony at Cebu City Hall last Thursday, October 22.

The certificates formally recognize the beneficiaries’ rights under the government’s housing program and identify them as qualified occupants who may eventually obtain ownership of the lot they occupy, subject to compliance with housing program requirements.

The awarding ceremony was led by Department of Human Settlements and Urban Development (DHSUD) Secretary Jose Ramon Aliling and attended by Cebu City Mayor Nestor Archival.

“Salamat kaayo and hinaot pa unta we could have more documents of titles to come in the near future,” Archival said.

Also present were DHSUD Region-7 Director Mark Anthony Lindugan, National Housing Authority (NHA) Region-7 Officer-in-Charge Regional Manager Dante Estrobo, Department of Welfare for the Urban Poor (DWUP) Head Marie Joan Loreto, and Cebu City Local Housing Board Chairman Atty. Irish Dwight Remedio.

The initiative was undertaken through the DHSUD, NHA and Cebu City Government, with the DWUP facilitating local coordination for the housing beneficiaries.

Officials described the distribution of certificates as a significant milestone for the families, many of whom have long sought security of tenure over the properties they occupy.

Archival congratulated the beneficiaries and reminded them that the documents carry both opportunities and responsibilities as they work toward securing ownership of their lots.

For beneficiary Daisy Tañajura, the awarding represented more than a document.

“Ang kalampusan nagdala og dakong kalipay ug paglaum sa mga benepisyaryo tungod kay kini usa ka importanteng lakang padulong sa mas sigurado nga mga pamuyo ug mas maayong kaugmaon alang sa tagsa-tagsa ka pamilya,” she said via the city’s PIO.

A Certificate of Entitlement is not yet a land title. Rather, it serves as proof that a family has been recognized as a qualified beneficiary of a government housing program and is entitled to pursue eventual ownership under the terms and conditions of the project, as additional requirements must still be met before titles can be issued, housing officials described the award as a step toward, rather than the completion of, the ownership process.

The awarding forms part of the government’s continuing efforts to provide secure tenure to low-income families and informal settler households through socialized housing programs.

The Benedicto College (BC) Cheetahs will not only seek to extend their lead but also exact revenge on the University of San Jose-Recoletos (USJ-R) Jaguars when they clash anew in the Cebu Schools Athletic Foundation, Inc. (CESAFI) Season 26 basketball tournament today (Saturday, October 24) at the Cebu Coliseum.

The Cheetahs, who are currently on top of the college division standings with an 8-1 record, suffered their first and only loss of the season at the hands of the Jaguars, 62-60, in overtime during their first-round encounter exactly a month ago.

BC will be out to avenge that defeat when it takes on the 5-3 USJ-R squad at 3:30 p.m.

In the other collegiate showdown, the University of Cebu (UC) Webmasters will aim for a repeat victory over the University of San Carlos (USC) Warriors in the 5 p.m. main game.

The Webmasters routed the Warriors, 81-63, in their previous meeting on September 10.

Both teams enter the rematch with identical 5-4 records.

In high school play, reigning five-peat champions Sacred Heart School-Ateneo de Cebu (SHS-AdC) Magis Eagles and the University of Cebu Lapu-Lapu and Mandaue (UCLM) will try to stretch their unbeaten runs.

The 5-0 Magis Eagles will face the 3-3 Cebu Eastern College (CEC) Dragons in the 10:30 a.m. opener, while the 6-0 UCLM squad will take on the 7-2 UC Junior Webmasters at 12:30 p.m. in an intriguing duel between sister teams.

In the other featured match, the 6-2 Cebu Institute of Technology-University (CIT-U) Junior Wildcats will tangle with the 1-4 University of Southern Philippines Foundation (USPF) Baby Panthers at 2 p.m.

The Monetary Board last Thursday administered the equivalent of shock therapy – the sort given to patients whose hearts stop beating. Our economy is in intensive care.

Policy rates were increased by 50 basis points. That is a lot, considering that this event was preceded by a sequence of rate increases. It is as if our economy has been put into a chokehold.

The large interest rate increase was not expected. In a poll of economists, the expectation is that the rate hike would be 25 basis points – as usual. Our business community is still in shock.

The sharp increase brings policy rates to 5.50 percent. This is the fourth consecutive increase and it is met mainly by dismay.

The objective of the rate hike is two-fold: arrest the depreciation of the peso and calm the galloping inflation rate.

The peso did gain a little after the interest rate decision was announced. But the currency resumed its fall the rest of the trading day Thursday, breaking a new record at about $1:P63.5. It now seems unlikely that interest rate policy alone could break the peso’s fall.

Our inflation rate rose to 7.2 percent in September, up from 6.1 percent in August. Raising interest rates is an effective tool if inflation is driven by economic hyperactivity. Our economy is not heating up. It is sluggish. Higher prices are due to cost spikes, such as oil prices.

It is doubtful if a higher interest rate regime will rein in the cost-driven inflation rate. It will certainly drain the vitality of our equities market as savings go to government bonds instead of private stocks.

Ironically, a higher interest rate regime adds to the cost factors pushing up prices. Every enterprise inputs the cost of financing to the price of its products. Higher interest rates is a higher cost factor.

The Monetary Board decides according to its mandate. Its mandate is to manage inflation. Its control over policy rates is the main weapon. Perhaps the only weapon its has in its hand. Fiscal policy is beyond its reach.

But our fiscal policymakers have been passive while all the problems mount. Our budget deficit is yawning. Our trade balance is tilted against us. Our balance of payments is horrifying.

Over the last four years, our propensity to borrow has been unrestrained. When Marcos Jr. assumed the presidency, our debt was at about P12 trillion. The debt, in peso terms, will likely be double that by the time he exits – making him the most debt-addicted president in our history.

Strangely, he tells us the debt is just a meaningless number in the air. How did he come to see it that way?

Our debt is growing because government needs more cash each day to give away as subsidies. This is the only way it could buy legitimacy for itself.

Then there is the massive looting. The Supreme Court finally stepped in and declared the unprogrammed allocations unconstitutional. Our legislators used this device to remove funding for regular projects and throw money at congressional insertions. They effectively skirted the constitutional ban against enacting a budget larger than what the executive branch proposed.

Under this scheme, hundreds of billions in additional spending was inserted into the budget over the last three years. A lot of that was lost to the syndicate of legislators and executive officials. A lot of that was borrowed money.

The massive looting and the looming debt crisis are not unrelated phenomena. One feeds the other. Both require a treasonous degree of mismanagement.

The Supreme Court proved itself the last bulwark against our democracy being overwhelmed by a perilous combination of incompetence and greed. All the looting that happened involved the criminal connivance of officials from both the executive and legislative branches.

In the wake of the Court’s dramatic ruling, some are now arguing that impeachment proceedings against Marcos Jr. must now be initiated. He should ultimately be held responsible for the widespread and systematic looting that happened. His signature was indispensable for making the flawed budgets law.

But who will impeach him? The mafia of legislators who crafted the deeply flawed budgets?

Remember that all the money that was looted includes borrowed funds. The next generations of Filipinos will bear the burden of repaying the loans that funded ghost projects. The pain will be borne a century hence.

Raising interest rates now will not cure the flawed fiscal policies that brought us to where we are now: a nation with a wilting economy and intolerable inflation. The third quarter GDP numbers will likely deliver yet another shock: our economy is deader than we dared to imagine.

Each day the peso depreciates and prices outstrip wages, ordinary Filipinos suffer increasing misery. The mismanaged economy takes its toll – especially on our young. This is what the debt number means. It not a meaningless thing hanging in the air. It is a noose squeezing out our nation’s life.

The increase in interest rates will raise the costs of doing business. It could finally bring our economy to recession. It certainly will not create new jobs or open more economic opportunities.

Our economy is like a dead horse. Our monetary policy is kicking it even more. That will not return it to life. It will only inflict greater cruelty on a plundered country.

Rep. Leila de Lima (ML Party-list) said Rep. Paolo Duterte’s libel and cyber libel complaints against GMA Network send a “chilling” message to journalists.

De Lima criticized Duterte’s complaints in a social media post Friday, October 23, saying journalists should not face punishment for reporting allegations of corruption.

“Filing a libel case against a media network and its journalists for doing their job of reporting allegations of corruption sends a chilling message to other media practitioners,” De Lima said.

She said attacks against GMA Network and other media outlets following the filing could also be read as a warning to journalists that they “could be the next to be sued.”

“This is clearly an attempt to silence journalists and truth-seekers, depriving them of their freedom of the press,” De Lima said.

She linked the complaints to what she described as the Duterte family’s history of conflict with media organizations, citing actions involving Rappler, the Philippine Daily Inquirer and ABS-CBN during the administration of former President Rodrigo Duterte.

De Lima said journalists merely reported accusations made by witnesses and argued that seeking information about the allegations was part of their responsibility to the public.

The lawmaker, a former human rights commissioner and justice secretary, had led investigations into killings in Davao City. She was later detained on drug-related charges during Rodrigo Duterte’s presidency, before courts determined insufficient evidence against her.

Duterte: Filing a case is a right

Paolo Duterte rejected De Lima’s criticism Saturday, October 24, arguing that seeking legal redress is not an attack on press freedom.

“Filing a case through the legal process is not an attack on press freedom, but a right available to every citizen,” Duterte said in a Cebuano social media post.

Duterte acknowledged the importance of press freedom to democracy but said journalists also have a responsibility to ensure their reports have sufficient basis.

“Reporting an allegation and proving that it is true are two different things,” he said. He added that allegations should be addressed through evidence and due process.

Duterte then turned personal in his response, bringing up past allegations against De Lima involving the New Bilibid Prison and saying an accused person has the right to defend himself.

He ended his post with a swipe at De Lima, telling her to stay in Congress, “just keep acting cute there” and “keep smiling for now.”

Some roads in Manila will be closed from Oct. 30 to Nov. 3 for the commemoration of Undas, the Manila Police District announced yesterday.

The MPD said motorists will not be able to access Blumentritt Road, Dimasalang and Maceda Streets as well as Aurora Boulevard for the activities on All Saints’ and All Souls’ Days.

According to the MPD, the Metro Manila Council has identified those roads as having a high concentration of foot traffic during Undas, especially those visiting the Manila North and South cemeteries.

Maj. Philipp Ines, MPD spokesman, said 1,000 police officers would be sent on a skeletal deployment by Oct. 28. They would be stationed at Manila North and South cemeteries and at La Loma and Manila Chinese cemeteries.

‘Do not bring firearms, alcohol, sound systems or other prohibited items inside,’ Ines said, as he reminded the public to observe protocols and safety guidelines.

Ines advised parents bringing small children to have them wear ID tags for easier identification, in case they get separated.