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The present and future of insurance brokerage

It only makes sense that as an economy grows, the need for insurance also increases. For instance, consider non-life insurance. As the average household income grows, the more high-value possessions they will own. The more they have to protect, the more likely people will turn to insurance brokers to try to protect them.

The same thing can be seen in the Philippines. In terms of growth, the insurance brokerage in the country is showing remarkable growth. According to the Insurance Commission, for 2017, premium income generated by brokerage activities rose on the back of mediated profit in the non-life segment. From P52.07 billion in 2016, the tally recorded for 2017 grew to P57.92 billion as reported by 63 insurance brokerage firms, 11.23% higher.

Brokerage activities accounted for 20.56% or P57.08 billion of the P227.58 billion total premium generated by life and non-life firms.

Broken down, more than four-fifths or 83.54% of the mediated premium generated last year came from the non-life insurance industry, totaling P48.38 billion. The mediated premium from life insurance, meanwhile, amounted to P8.7 billion, representing 15.02% of the total.

The Insurance Commission also reported that the industry posted a total of P7.32 billion in terms of brokerage revenue or commissions earned as of end-2017, 12.1% higher than the P6.53 billion a year ago. Most of such commissions came from the non-life segment, totalling P6.17 billion and representing 84.21% of total earners

Insurance brokerage encompasses insurance brokerage firms, insurance brokers or agents, and brokerage fees. A brokerage fee is paid to a broker or an agent for executing a transaction for a client on behalf of an insurer or an insurance brokerage firm.

The positive results in the local insurance brokerage industry bodes well with the projections for the rest of the world. According to London-based market research firm Technavio, the global market is expected to grow at a compound annual growth rate (CAGR) of 4.69% from 2018 to 2022.

However, perhaps more so than other industries, insurance brokerage would need to adapt to a changing landscape brought by innovations and emerging digital technologies. The digital economy poses a significant threat to the industry, encroaching on the responsibilities of brokers and disintermediating them. To remain relevant, there is a pressing need to adapt to, and embrace, digital transformation.

Fintech, for instance, is changing how people interact with insurance brokers. As customers seek out faster, more personalized services through technological means, the broker’s role is being displaced. For even experienced brokers, it simply would not be feasible to compete with the more accurate, more convenient services fintech can offer.

Global professional services firm Accenture, which provides a range of solutions in strategy, consulting, digital, technology, and insurance, believes that brokers all over the world are facing rising customer expectations; the growing disintermediation as carriers and insurance newcomers woo purchasers; changing risk mitigation requirements; increasing competition from rivals using sophisticated data analytics; and a surge in alliances between insurers and smart tech firms that could shut them out of new business. Digital improvements and automation are also saving customers money in the form of lower intermediary commissions and fees.

“Brokers must be looking for ways to combat this decrease through innovation and service changes,” Accenture wrote in its blog.

“We also estimate that brokers’ revenues from mid-sized and large customers could shrink by up to 20%, driven by two complementary factors. On the one hand, increasing automation and improved risk prediction by customers are likely to reduce their need for insurance. And on the other, automation of the risk placement process in the more commoditized sectors of the market is likely to increase transparency and drive down prices, with commissions and fees following in tandem.”

Equipped with such technology, new entrants and start-ups are competing with brokers in their core business, poaching large accounts and small-to-medium enterprises by offering attractive and customized direct-to-customer services, like analytics-driven aggregation.

In Accenture’s report, ‘The broker of the future: Winning in a disruptive environment’, 84% of surveyed insurance executives agree that traditional organizations must hurry to become the first mover, evolving their business before they’re disrupted. Brokers taking the lead in digital transformation are reaping significant rewards.

Part of this transformation, the firm said, should look into platform business models.

“Insurance executives expect platform business models to become a big part of their growth strategies. As brokers look for ways to provide more value to customers, platforms are becoming more vital by increasing efficiencies, risk prevention and scalability,” Accenture wrote.

“Insurance brokering will not become obsolete. Customers will continue to seek out brokers’ independent advice. But, if brokers want to remain competitive in a time of stagnating growth, they must respond and adapt to increasing trends caused by digital disruption.” — Bjorn Biel M. Beltran

Insurance broking basics

Finding the right insurance cover can be confusing and time-consuming due to the increasing number of insurers, policies, offers and options to choose from. But with the help of insurance brokers, this struggle can be avoided.

As specialists of insurance protection, insurance brokers have an in-depth working knowledge of the insurance market. They have access to a variety of insurance products and have the ability to deal with a range of insurance companies directly.

By applying their knowledge and expertise in the field, insurance brokers can help clients identify the types of risks and exposures they face, and determine what needs insuring and what can be managed in other ways.

According to InsuranceHotline.com, a public company based in Canada that offers free online insurance rate comparison service, having an insurance broker means that you have a professional on your side who will help you choose the best policy.

“They offer professional and unbiased advice, ethical conduct, and full disclosure of all the information you need to make an informed decision,” InsuranceHotline.com said in its Web site.

The firm also noted that insurance brokers are experienced and skilled professionals in dealing with the claims process from many different insurance companies.

“They can talk you through each stage while giving you personalized advice and excellent customer service. Brokers will help protect your privacy and advocate to the insurance companies on your behalf,” InsuranceHotline.com said.

Moreover, brokers are committed to lifelong learning. Insurance brokers ensure that they are informed on the latest changes and adjustments to insurance policies and legislation to give their clients the best options available when purchasing any insurance policy.

There are two types of brokers that specialize in different covers and policies: retail and commercial.

Professional brokers who act on behalf of companies and individuals are called retail insurance brokers. They offer policies such as health, travel, home, and auto insurance, along with private and public liability and employer’s liability plans.

On the other hand, commercial insurance brokers specialize in industries such as gas, oil, marine, and aviation, and offer complex and high-value policies.

Aside from helping clients make a well-informed decision and finding the best deal, insurance brokers can help in many ways. Here are a few worth noting:

Using an insurance broker saves time and money. With their established relationship with many insurance carriers, insurance brokers can easily compare rates based on the personal information of the client in a very short period of time. There is also an assurance that you will get the most appropriate level of cover for the price, so you won’t end up with cheap insurance that doesn’t adequately protect you. In addition, some brokers have access to exclusive deals or aspects of cover that insurance companies might not give to you if you approach them directly.

Having an insurance broker gives you peace of mind. Since brokers are not tied to a specific company or a specific company’s products, you have the assurance that you will get the right insurance coverage that meets your needs. Insurance brokers can educate you about existing insurance that you may not know but perfectly suit your requirements. 

Insurance brokers can make complex things simple. The field of insurance is a jargon-filled industry; it has legal terminologies and acronyms that can be difficult to understand. Brokers can explain things clearly and make the complex simple. They are responsible for ensuring you have a clear understanding of the coverage you are going to avail.

Your privacy is protected. Insurance brokers collect your personal information to determine the best insurance for you, your family, assets or business. This is not a problem since brokers are required by the Code of Ethics to maintain your privacy and keep all client discussions and information completely confidential.

Insurance brokers can guide you through the claims process. They can make the whole experience less stressful, especially if you’re also dealing with other knock-on effects of the incident that brought about the claim.

Insurance brokers work with their clients on a long-term basis. Unlike dealing directly with insurers, having an insurance broker would prevent you from talking to one person to the next. Through the years, insurance brokers will know your history and will understand your every need to find the best policies. — Mark Louis F. Ferrolino

Banks’ bad debts grow further

BAD DEBTS held by big banks kept growing in August but at a slower pace compared to the pickup in total lending, latest central bank data showed.
Universal and commercial banks saw cumulative non-performing loans (NPLs) reach P112.936 billion that month, inching up from July’s P112.297 billion and rising 8.4% from P104.213 billion in August 2017.
NPLs refer to loans left unpaid at least 30 days past due date. These are considered risky assets given a slim chance that borrowers would pay their outstanding balances, in turn spelling losses for lenders.
The increase in bad loans is slightly faster than the eight percent logged in July but slower than the 9.5% climb in June, according to latest available data from the Bangko Sentral ng Pilipinas (BSP).
Still, NPLs grew slower than the 17.9% increase in loans by the big lenders, with the total rising to P8.406 trillion from P7.131 trillion in August last year.
As a result, the share of soured debts to total loans dropped to 1.34% from 1.46% a year ago, which is a more manageable level for the lenders.
Past due loans, referring to loans that missed the payment deadline, grew by a faster 29.8% to P159.744 billion in August.
On the other hand, restructured debts — loans given a longer repayment period — slipped by a tenth to P31.729 billion, data showed.
Mounting problem loans prompted lenders to raise provisions they set for possible credit losses. Reserves went up 13.1% year-on-year to P161.301 billion, enough to cover nearly 1.5 times the total stash of bad debts.
Non-performing assets held by big lenders steadied from last year at P69.896 billion.
This represents the value of real property and other items seized from clients who failed to pay their obligations.
Strong loan growth came alongside a steadily increasing deposit base. Total deposits held by big banks went up by 9.7% to P11.144 trillion in August from P10.158 trillion a year ago. These funded bank loans, with outstanding credit equivalent to 75.43% of the deposit base.
The BSP monitors NPL ratios of banks and financial firms in order to check asset quality and maintain the soundness of the financial system.
Bad loans amounted to P177.388 billion across the entire Philippine banking system, up 11.4% from a year ago.
Their share to total debts declined to 1.88% from 1.97% previously, sustaining a trend observed over the past few years. — Melissa Luz T. Lopez

Employers’ group presses for pay increases based on productivity

EMPLOYERS again pressed for a shift to “productivity-based” daily minimum wage raise during a public hearing on proposals to hike the floor pay of Metro Manila’s private sector workers on Friday last week.
That hearing — conducted after separate consultations with labor groups on Monday and with representatives of employers on Wednesday — did not yield any agreement on a wage hike and Ana C. Dione, chairperson of the National Capital Region’s Regional Tripartite Wage and Productivity Board, told reporters after Friday’s hearing that she expected the board to encounter difficulty in arriving at an agreement on an increase in daily minimum wage given wide differences in positions among its members.
The board is scheduled to meet tomorrow.
“It’s about time for the board to innovate by conducting a productivity-based minimum wage policy,” said Employers Confederation of the Philippines Governor Antonio H. Abad, Jr. during the hearing on Friday, explaining that this type of adjustment would be more reasonable than a fixed increase because it would take into consideration the financial capacity of individual businesses.
He noted that the Cavite-Laguna-Batangas-Rizal-Quezon region that has a large concentration of industrial zones already implements a two-tiered wage system consisting of a daily minimum wage and performance incentive.
The implementing rules of that region’s 2017 wage order provide that “labor and management… are encouraged to adopt productivity improvement schemes such as time-and-motion studies, good housekeeping, quality circles, labor and management cooperation and implement gain-sharing and other performance incentive schemes in order to improve the quality of life of workers and, in turn, enable them to perform better and contribute to enterprise growth.”
“We must give way to holistic approaches rather than stop-gap measures such as periodic wage adjustment,” Mr. Abad said on Friday.
In the same meeting, the Trade Union Congress of the Philippines (TUCP) reiterated the need to add up to P334 to Metro Manila’s daily minimum wage of P475-512, while the Association of Minimum Wage Earners and Advocates has asked for an even bigger P688 increase.
Latest available Philippine Statistics Authority data show labor productivity — computed as gross domestic product per employed person — growing 8.4% last year, the biggest improvement in at least eight years.
For TUCP Assistant General Secretary Vicente C. Camillon, Jr., however, minimum wage earners have not been adequately rewarded for improved productivity. “Nagi-increase — productivity pero zero po ang increase sa real wages (Productivity may be increasing, but there is zero increase in wages adjusted to inflation),” he said in last Friday’s hearing. — Gillian M. Cortez

IMF ups Argentina financing deal to $56.3 billion

WASHINGTON/BUENOS AIRES — The International Monetary Fund (IMF) on Friday increased the size of a standby financing agreement for Argentina to $56.3 billion in a deal that toughens previously agreed fiscal measures.
Argentina’s President Mauricio Macri agreed to a $50-billion IMF deal in June, hoping it would stop a run on the country’s peso currency. But the peso kept falling, forcing him to renegotiate the agreement.
The new deal will require the government to make deeper spending cuts and increase taxes to bring the South American nation’s primary fiscal deficit, projected at 2.7% of gross domestic product (GDP) in 2018, to zero next year. Mr. Macri is preparing to run for a second term in late 2019.
Argentina’s economy, which has been racked by high inflation, slid into recession after a drought in early 2018 sapped grain exports.
In a letter to the IMF, Argentina said it expected inflation to peak at more than 40% in January then fall quickly in 2019.
The letter also said Argentina expects an economic contraction of 2-3% of GDP in 2018. The government had previously expected a 2.4% contraction this year.
“We expect the recession to continue for the rest of 2018 and into the first quarter of 2019, with a recovery to begin in the second quarter of next year,” an IMF official said.
IMF Director Christine Lagarde said a 2019 federal budget proposal approved by Argentina’s lower house of congress would help the government meet its targets. “Its passage into law will be key to restoring confidence,” she said in a statement.
Foreign exchange and global macro strategist for Standard Chartered bank Ilya Gofshteyn said Argentina’s September trade surplus was key in raising hopes over an economic rebound in 2019. “Argentine policy makers have reason to feel a bit more optimistic about the adjustment process after the trade balance posted a surplus for the first time in close to two years,” Ms. Gofshteyn said.
Cutting the deficit during a presidential election year is almost unheard of in Argentina. Wide swaths of the population have come to rely on welfare programs and subsidies that helped the country recover from a 2002 economic crisis that tossed millions of middle-class Argentines into poverty.
Mr. Macri’s popularity has fallen as he has cut pension benefits and public utility subsidies. Riot police fired rubber bullets at anti-austerity protesters in front of Congress on Wednesday last week as lower house lawmakers debated and then approved the government’s 2019 budget bill, which codifies fiscal targets agreed with the IMF.
The peso sell-off started in April, driven by doubts about the central bank’s ability to roll over its burgeoning stock of short-term debt. The run on the currency was sparked by jittery foreign investors who dumped Argentine paper in favor of safe-haven US dollar assets. The Argentine economy has since slipped into recession, with inflation at more than 40%.
Argentina’s peso, which remained steady following the announcement of the deal, has strengthened this month, but remains about 50% weaker than where it started the year. — Reuters

ACR in talks with Mindanao cooperatives

ALSONS Consolidated Resources, Inc. (ACR) is in talks with electric cooperatives in Mindanao in its bid to forge a power supply agreement early next year for the output of its 15.1 megawatt (MW) run-of-river hydroelectric power plant in Sarangani province.
“We want to get it done in Q1 (first quarter) of 2019. We’re looking for a single off-taker for that capacity,” said Antonio Miguel B. Alcantara, ACR corporate planning officer, in an interview after the listing of the company’s commercial papers last week.
He said the discussions were mainly with cooperatives in Mindanao, which he said are preparing for regulations that require them to source power from renewable energy resources.
“There’s green [energy] option that’s coming, renewable portfolio standards, so coops are mandated to secure a percentage from renewable energy,” he said.
The Siguil hydropower plant is a P4.25 billion project at the Siguil River basin in Maasin, Sarangani that is expected to start commercial operations in 2021. It is planned to provide power to Sarangani, General Santos City and municipalities of South Cotabato.
Mr. Alcantara, who oversees the company’s renewable energy projects, said ACR would next work on the engineering, procurement and construction (EPC) agreement for its next project — another run-of-river hydro facility — in Negros Occidental. He said the company targets to award the EPC contract by the end of 2019.
“We hope to proceed with NTP (notice to proceed) by end of 2019 or beginning of 2020. [There’s a] lot of work needed,” he said.
The projects are ACR’s initial venture in renewable energy for which it has lined up more run-of-river projects in Negros Occidental, Sarangani, Davao Oriental, Zamboanga del Norte, the two Agusan provinces, and Surigao del Sur. The projects have a potential hydro capacity of more than 145 MW.
On Friday, ACR listed an initial P100 million of the company’s P2.5 billion commercial papers with the Philippine Dealing and Exchange Corp. to provide interim funding for the Siguil project.
Asked whether the company was joining the race to the unsubscribed portion of the feed-in tariff (FiT) for run-of-river hydro projects, Mr. Alcantara said: “FiT is an option for us but then the problem, we don’t want to put up a project based on FiT because you can only get the allocation if you [are], I believe, 80% completed. So the risk of someone else getting that allocation is there.”
He said the 80% completion for Siguil would take place only in 2020.
Under the previous administration, the Energy department set an installation target of 250 MW for run-of-river hydro projects, but the scheme ended with a few projects completing their facilities.
The large unsubscribed portion prompted the department to extend the scheme until end-2019. The FiT system aims to encourage the development of renewable energy in the country by paying first-mover developers a fixed amount for the power they produce for 20 years. — Victor V. Saulon

Spain’s Acciona eyes PHL renewable energy projects

By Victor V. Saulon
Sub-editor
SPANISH FIRM Acciona, S.A. plans to expand its operations in the Philippines and beef up its manpower as it explores opportunities in the renewable energy sector in partnership with a local company, its regional official said.
“What we’re trying to do is to understand the possibilities on the energy side, the green energy side of the country,” said Jorge F. Gayoso Mediero, Acciona head of business development for Southeast Asia and Iran, during an “appreciation” event with its local partners last week.
“We know that there is no feed-in tariff right now in the Philippines, but we’re trying to move forward with different deals,” he told reporters, referring to the government scheme that grants a fixed tariff for 20 years to early investors in renewable energy.
The Acciona official said the company was looking at the potential of signing power purchase agreements with private companies, specifically big industrial consumers, in place of the feed-in tariff. Acciona’s expertise is in designing specific solutions in wind and solar energy.
“We need partners because of regulation,” he said, citing the 40% limitation in the stake of a foreign firm embarking on a local renewable energy project.
“We have conversations with local partners,” he added, but declining to identify the prospective partners because of a confidentiality agreement.
Mr. Mediero said Acciona is open to developing any green technology project, although he said the most competitive at this time are those using wind and solar energy technologies.
“The only problem of the renewable energy is that sometimes we have no wind, or we have no sun. During the night for example we have no protection. So we have to put in the middle of the process a local retailer, a utility, someone that operates in the electricity market,” he said.
Acciona last year won the contract to build the new Cebu-Cordova bridge in the Visayas, marking the company’s second deal in the country.
The contract is worth $400 million, and will be carried out as the Cebu Link Joint Venture in partnership with First Balfour, Inc. and D.M. Consunji, Inc. The customer is the Cebu Cordova Link Expressway Corp., which is owned by Metro Pacific Tollways Corp.
Acciona’s first project in the country was awarded in 2016 for the design and construction of the Putatan 2 drinking water plant, which the company will also operate for its first year in service. The €90-million contract was awarded by Maynilad Water Services, Inc. to a joint venture comprising Acciona and local partners.
Mr. Mediero said Acciona decided to expand into renewable energy in the Philippines “because the price of energy is high, which means that we have a chance to compete and offer better prices with renewable energy.”
He said the company has 20 years of experience in renewable energy, which started in Spain in the mid-90s through wind and solar energy projects. Acciona has installed 10,000 megawatts worldwide, mostly in wind, solar, hydro and biomass projects.
He said the company has a big team of engineers, financial and legal experts that could optimize the design of energy projects, including their construction and operation. This would allow the company to offer competitive electricity prices, he added.
“We have an office here,” he said, referring to a lone staff in the energy business. “We are in the business development stage but very soon we’re going to have more people here because we have pretty good opportunities to grow in the Philippines.”

PHL, Japan to sign ODA deal for MRT rehabilitation in Nov.

THE Department of Transportation (DoTr) on Sunday said it is ready to sign an agreement with the Japanese government for the use of official development assistance (ODA) to fund the rehabilitation of the Metro Rail Transit Line 3 (MRT-3) following the initial roll out of new trains.
In a statement, the DoTr said it deployed on Saturday the first of 48 light rail vehicles (LRVs) procured from Chinese company CRRC Dalian Co. in 2014. It noted the other LRVs are still undergoing assessment and validation before being deployed.
After adding the new trains, next for the MRT-3 is the entry of a new maintenance provider and the P22.061-billion loan from Japan for its rehabilitation.
“Ang problema natin sa MRT-3 ay hindi lang ang kakulangan ng tren, na takdang tugunan ng dagdag na Dalian Trains. May problema rin sa lumang mga tren, sa riles, sa lumang signaling, at sa kung ano ano pa [The problem with the MRT-3 isn’t only about the lack of trains, which will be resolved by the Dalian trains. There is also a problem on old trains, rails, old signaling system, among others],” DoTr Undersecretary for Railways Timothy John R. Batan said in the statement.
The DoTr said the Exchange of Notes and Loan Agreement between the Philippines and Japan is scheduled for signing in early November, before the meeting of the Philippines-Japan High Level Joint Committee on Infrastructure and Economic Development in Manila.
The deal between the Philippines and new MRT-3 maintenance provider Sumitomo Corp. and Mitsubishi Heavy Industries, Ltd. (Sumitomo-MHI) is also targeted to be signed after the exchange of notes and loan agreement.
The DoTr said engineers from Sumitomo-MHI have started advance transition works on the MRT last Oct. 15.
Earlier this month, Transportation Secretary Arthur P. Tugade told reporters issues on the Dalian trains were causing delay in the entry of Sumitomo-MHI as maintenance provider for the MRT-3.
Third party auditor TÜV Rheinland said it found issues on weight, signaling, and compatibility of maintenance equipment with the Dalian trains, hence the delay in its deployment. Manufacturer CRRC Dalian then agreed to make the necessary adjustments free of charge. — Denise A. Valdez

WESM operator wants to impose fixed market fee

THE operator of the country’s wholesale electricity spot market (WESM) is asking regulatory approval for a fixed market fee charge amounting to P0.0135 per kilowatt-hour (/kWh) to be used for its operations as well as those of its governance arm.
In its application with the Energy Regulatory Commission (ERC), the Independent Electricity Market Operator of the Philippines, Inc. (IEMOP) said the fee is to be shared with the Philippine Electricity Market Corp. (PEMC), which will get P0.00414/kWh or 30.67% of the total.
The remaining 69.33% or P0.00936/kWh will be the share of IEMOP. The fixed market fee will cover the entities’ budgetary requirements.
“This will provide better certainty in terms of availability of funds for intended programs and projects, as well as some degree of flexibility, to be better equipped to face the challenges of a highly dynamic electricity market,” the market operator said.
“A fixed market fee charge is likewise beneficial to the stakeholders, as it enables them to consider such charge in their financial planning and promote efficiency in their operations, particularly on the aspect of spending, which will ultimately benefit the consumers,” it added.
IEMOP said the fee was calculated based on the projected generation metered quantities for 2019 for Luzon and Visayas generation companies, and the aggregate projected budgetary requirements of PEMC and IEMOP for next year.
The entities are projecting a budget of P1,116,620,000 for 2019 to cover, among others, personnel services, maintenance and other operating expenses, capital expenditures and project enhancements. Of the amount, IEMOP accounts for P774.17 million while PEMC’s share is P342.45 million.
The fixed market fee charge is to be imposed on all power generation companies registered in the WESM based on their actual generation in kilowatt-hours.
IEMOP, a non-profit, non-stock corporation, said the filing of its application is pursuant to Sec. 30 of Republic Act No. 9136 or the Electric Power Industry Reform Act of 2001 (EPIRA). The provision states that the “cost of administering and operating the wholesale electricity spot market shall be recovered by the market operator through a charge imposed on all members,” provided that such charge is filed and approved by the ERC.
The market operator likened its application to ERC’s approval of rate-based applications, particularly of private utilities and electric cooperatives, where price and rate caps are imposed which consider the recovery of efficient expenditure and appropriate returns, as well as incentives for good performance.
“These are translated to fixed rates that are charged to their respective customers or customer classes for a defined regulatory period,” it said. — Victor V. Saulon

RFM earnings rise in Q3 on strong sales

RFM CORP. grew its attributable profit by 10% during the third quarter of 2018, as the strong sales of its ice cream, pasta, milk, and flour managed to offset the higher prices of raw materials during the period.
In a regulatory filing posted after trading hours on Friday, the listed firm reported a net income attributable to the parent of P232 million from July to September, higher than the P210 million posted in the same period a year ago. The uptick followed a 10% rise in net revenues to P3.49 billion during the quarter.
This pushed RFM’s attributable profit to P757 million for the nine months ending September, 5.43% higher year-on-year, driven by an 11.21% increase in revenues to P9.8 billion for the period. Earnings before interest, taxes, depreciation, and amortization (EBITDA) meanwhile rose by 8.57% to P1.37 billion.
The nine-month performance translates to an earnings per share of 2.17 centavos, higher than last year’s 2.06 centavos.
The Concepcion-led company attributed the higher sales to its flagship brands: Selecta for ice cream and milk, Fiesta and Royal for pasta, and White King for mixes. It noted that the combined sales from the three brands improved by 11% during the nine-month period, while institutional sales of flour and buns went up by eight percent.
RFM’s other products include Sunkist Orange Pulp and Vitwater.
“The strong topline growth was able to offset largely the impact of higher raw material costs and softening prices of flour,” RFM President and Chief Executive Officer Jose Ma. A. Concepcion III said in the filing.
RFM’s flour business has been affected by the weakening peso, as it imports the wheat it uses to make flour from the United States, Canada, and Australia, among others. The company said last July that it is investing P240 million to enhance the quality of flour it produces to offset further price pressures.
The food and beverage firm is also strengthening its ice cream business, investing P1.1 billion to expand its current capacity. The investment is expected to support the growing demand for more ice cream over the next four years.
It is also deploying more freezers in sari-sari stores and local groceries to bring the Selecta brand closer to more Filipinos.
Given RFM’s nine-month performance, Mr. Concepcion said they expect to achieve double-digit growth in terms of revenues for full-year 2018, while net income could grow by single digit. The company is banking on the start of the midterm election period, as well as the boost in sales during the Christmas holiday.
Incorporated in 1957, RFM also engages in non-food businesses, including barging services and leasing of commercial or office spaces for its operating divisions.
Shares in RFM were unchanged at P4.79 each at the stock exchange on Friday. — Arra B. Francia

Nothing in life is permanent, not even dermal fillers

WE LOOK for evidence of the passage of time in clocks and calendars, but we really need look no further than at our own faces in the mirror. Every passing day is etched onto our faces, seen in fine lines and wrinkles. But while we cannot reverse time, as of yet, we can at least reverse its effects on our faces through the use of dermal fillers.
Earlier this month, Merz Pharma, the international health care company that deals in technologies used in aesthetics and dermatology, held a talk on dermal fillers. A panel made up of doctors Wilson Ho, Gio Dimayuga, Gerald Sy, and Gaile Robredo Vitas talked to dispel some myths about dermal fillers and to educate possible consumers on risks of the procedure.
At its core, the procedure is easy. Deficiencies on the face’s structure, such as gaunt, sagging cheeks, can be remedied by injecting a substance into them. Aside from filling in cavities, the procedure has been used to enhance features such as lips, the cheekbones, and the nose. Unfortunately, potential end-users have seen depictions in popular culture of people who have had too much work done, resulting in puffed-up, swollen features. Dr. Ho credits these botched jobs to the use of permanent fillers, that are sometimes made with unsafe substances such as paraffin, oil, or even cement.
The doctors on the panel collectively advocated the use of dermal fillers made of hyalauronic acid (HA) and calcium hydroxylapatite (CHA), which Merz produces. According to Dr. Ho, hyalauronic acid is naturally occuring within the body, found in tissues with one of its functions being to lock in water within the body. As for calcium hydroxylapatite, it is a naturally occuring mineral, found, for example, in bones and teeth.
Dr. Vitas said that different fillers are used for different purposes. “It depends on where you want to put it,” she said. Most of her patients, she said, elect to have fillers placed in their lips, chin, and nose, with some men opting to have them placed on their jawlines to create a more powerful and masculine jaw. For the lips, she said, “You don’t want a filler that’s too hard, or too bumpy, and lumpy.”
For other parts of the face, something more robust is needed. She then points out that she has fillers in her own face: on her temples and mid-cheeks. “Good fillers, when done correctly, on the right patient, by the right doctor, will look very natural.”
Dr. Ho then pointed out the same fillers in his own face; they were used on his temples, tear troughs, cheeks, and chin. He talked about how the procedure can be very simple, if done correctly. “Go run… go to kiss your boyfriend. No problem. Drink wine,” he said of the things that you can do after what he calls a “lunchtime” procedure.
But before you go rushing out to have your face filled, bear in mind that these procedures need to be done correctly, and by a professional.
CHA and HA fillers will last for about 12 to 18 months. The doctors say that the substances can also work as a collagen stimulant, so the next time one doesn’t need to fill the cavity with the same amount. It’s the excess filling that leads to the puffed-up face that becomes the butt of jokes about botched-up procedures.
Another thing one needs to watch out for is the promise of permanence. Earlier procedures — and by early, we mean the 1800s — promised users permanent effects with the injection of paraffin and silicone into the body, leading to complications in the long run. Such promises are outdated, and Dr. Ho reminds us: “Permanent filler, permanent problem.” In life and in the body, change is constant, and putting something hard, rigid, and potentially harmful into your face is perhaps tantamount to going through life with emotional baggage. Weight loss and weight gain would look awkward next to permanently puffed-up lips and cheeks, just like how a bad memory can alter otherwise good circumstances.
“The thing is — what kind of thing in your life is permanent?” Dr. Ho argued. “Nothing is permanent.” — Joseph L. Garcia

Melissa to release extensive new collection in 3 batches


DIFFERENT activities require different footwear and the shoes not only have to be comfortable but stylish too. This month Melissa launched the Melissa Family collection, a wide range of shoe styles for various lifestyles — and in this case, the shoes are not just comfortable and stylish, but sustainable, waterproof, and fragrant too.
The entire collection will be released in batches until February 2019.
Established in Brazil in 1979, Melissa uses Melflex, its flexible and hypo-allergenic patented technology, on staples designs such as sandals, flats, sneakers, and heels.
“We talk about family, but we want to secure the essence of Melissa’s DNA inspired by three moods: nostalgia, crew & the cool, and the diverse ’90s,” Joy Cortez-Dauz, brand manager of Tykes Trading, Inc., Melissa’s exclusive distributor in the Philippines, was quoted as saying in a press release. “Through this collection, Melissa Philippines hopes customers experience and establish this connection with our new releases.”
The collection includes the Melissa Lance which are bicolor ballerina flats; the Melissa Slim Sandals which are sling-back sandals adorned with bows; and the Melissa Ugly Sneaker which was inspired by the chunky shoes popularized in the 1990s. In addition, designer Jason Wu showcases a new style with the Melissa Kate, ballerina flats designed for warm weather; and strap sandals called the Melissa Hailey.
Aside from the new shoe styles, Melissa will be launching tote bags and backpacks in monochrome and nude colors in November.
“We saw the category of women who collect shoes and bags. We might as well enter into the category where we can tap both (markets),” Ms. Dauz told BusinessWorld, shortly after the collection’s launch on Oct. 24 at the Manila House Private Club in BGC, Taguig city. “The thought is for them to wear the shoe and pair it with the bag.”
Ms. Dauz said that the store’s signature sweet smell has always been part of bringing back the nostalgic atmosphere.
“When you think back to candy scents, you think of your childhood. That’s what we try to imbibe in our shoes. When you smell bubblegum, you smell candy. Hopefully we bring back those memories,” she said.
For information, visit www.melissaphilippines.com. — Michelle Anne P. Soliman

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