THE ASIAN DEVELOPMENT BANK (ADB) has scaled down its Philippine economic growth forecasts for 2019 and 2020 amid “a slowdown in the global economy and in domestic investment,” even as the country will remain among the fastest in Asia next to other major economies like China, India and Vietnam. Read the full story.
THE ASIAN DEVELOPMENT BANK (ADB) has scaled down its Philippine economic growth forecasts for 2019 and 2020 amid “a slowdown in the global economy and in domestic investment,” even as the country will remain among the fastest in Asia next to other major economies like China, India and Vietnam.
ADB slashed its projection anew for Philippine gross domestic product (GDP) to six percent this year from the already-downgraded 6.2% forecast in July, according to the Asian Development Outlook (ADO) Update released on Tuesday, from the 6.4% forecast in the April report.
If realized, the projected GDP growth for 2019 will hit the lower end of the government’s 6-7% target band, but will be slower than 2018’s 6.2%.
For next year, the regional lender also slashed its Philippine forecast to 6.2% from 6.4% previously.
The Philippines’ forecasts are faster than the projections for Southeast Asia of 4.5% this year (down from 4.9% previously) and 4.7% (from five percent) for 2020. Within Southeast Asia this year, Cambodia (seven percent), Vietnam (6.8%), Myanmar (6.6%) and Laos (6.2%) will outpace the Philippines.
Elsewhere in Asia, China is projected to grow by 6.2% (from 6.3% previously), while India’s economy will expand by 6.5% (from 7.2%).
“Economic growth is now seen to be slightly lower than foreseen in ADO 2019, reflecting a slowdown in the global economy and in domestic investment,” according to the report, which cited the “plateauing” of domestic investment due to contraction of state spending that was “held back” by late enactment of the 2019 budget, leaving new projects, especially infrastructure, unfunded for much of last semester, as well as the 45-day ban on public works ahead of the May 13 midterm elections.
At the same time, ADB said that economic growth should recover in the near term, with “domestic private consumption holding up well and accommodative fiscal and monetary policies…”
“Moderating growth is also seen to be accompanied by lower inflation and narrower current account deficits than forecast in ADO 2019,” it added.
Kelly Bird, ADB’s country director for the Philippines, said in a press conference that the “reasons why Philippine economic growth is resilient (are) it got very strong macroeconomic policy settings, lower inflation, with rather low national debt… and the policy setting in terms of central bank and fiscal setting are really sound.”
The report said that “[p]ublic and private investment should regain traction as new, larger infrastructure projects get under way,” noting that “[t]he government is mobilizing more revenue to support public investment, while at the same time keeping he fiscal deficit within its fiscal program… equal 3.2% of GDP.”
ADB also slashed its growth projection for “developing Asia” — consisting of 45 of ADB’s 68 members — to 5.4% from 5.7% for this year and to 5.5% from 5.6% for 2020, due largely to escalating US-China trade tensions, deteriorating growth of advanced economies and declining investment. — Beatrice M. Laforga
The Entrepreneur Of The Year Philippines 2019 has concluded its search for the country’s most successful and inspiring entrepreneurs. Entrepreneur Of The Year Philippines is a program of the SGV Foundation, Inc. with the participation of co-presenters Department of Trade and Industry, the Philippine Business for Social Progress, and the Philippine Stock Exchange. In the next few weeks, BusinessWorld will feature each of the finalists for the Entrepreneur Of The Year Philippines 2019.
Esther Wileen Go
MediLink Network Inc.
AS president and chief executive officer of MediLink Network, Inc., Esther Wileen Go has a mission – to enhance the quality of health care through technology and automation.
Even though her current industry was one that she never envisioned herself in, she acknowledges that the providential alignment of the various factors in her life brought her to where she is today.
As a child, Ms. Go loved technology. She grew up working during summer holidays assembling desktop units, key-punching and programming at her father’s company, Equitable Computer Services.
After earning her MBA in the United States, she worked in an American consultancy firm. Despite her preference to work in financial services, the company assigned her to health care operations. Accepting this, she focused on learning everything she could about the industry. Eventually, she joined a multinational financial services company, with every intent of returning to the Philippines to help run the family bank.
However, by the time she came home in 2004, the bank was already operating under a different owner. Not entirely knowing what to do, Ms. Go looked at the remaining companies in the family’s portfolio.
One of the companies, MediLink, was a technology outfit with just six people. Her father had set up the company because of his own frustrations with how long it took to authorize a health transaction. MediLink offered automated eligibility verification service, where a person’s health care coverage could be quickly approved or declined through an electronic terminal. At that time, this was seen as a faster and more practical way than the traditional practice of having to call one’s Health Maintenance Organization (HMO) or insurance company to get authorization for a medical treatment.
MediLink started in 1999 as a joint venture between F. E. Zuellig and the Equitable Computer services, but all its start-up money had been depleted by the time Ms. Go came onboard. Cash flow was precarious such that making payroll was always a front-and-center concern. As a small operation, MediLink also didn’t have much invested in assets. The company repurposed old credit card terminals that were considered obsolete by the banking industry and deployed them to hospitals to serve as health care eligibility verification terminals.
Ms. Go recalls how they had to find ways to keep their business afloat, such as when their already-old terminals broke down. MediLink disassembled the terminals and consolidated working parts into “Frankenstein” terminals, then redeployed them to the field.
Unfazed by the challenges, however, Ms. Go saw meaning and purpose in improving the health care experience. She set out to slowly build and transform MediLink’s infrastructure in a way that would let them scale their services and grow the company. Since banks financing wasn’t an option, their funding was purely organic.
To make the business more viable, Ms. Go leveraged Equitable Card’s old credit card platform to create a health care payment card. By transforming every eligibility card into a payment card as well, they were able to increase their revenue streams.
“We lost the family bank, but we made lemonade out of lemons with the card platform,” she reminisces. It also helped that Ms. Go’s deep history and love for technology allowed her to discover innovative solutions as MediLink learned more about the pain points of the health sector. “Many people like technology. I just think I’m able to bridge the coolness of technology with practical, revenue-generating activity,” Ms. Go muses.
This aptitude for finding creative technological solutions led her to develop some of MediLink’s innovative services for the company to survive and thrive. When their customer service center was overwhelmed by the volume of transactions after branching into payments, they created self-service portals that allowed doctors, hospitals and clinics to self-serve their authorization requests without having to make a call.
Another innovation stemmed from their need to aggregate insights from all their transactions. This led to a visualization tool that allow them to identify fraud patterns. MediLink eventually developed machine learning models to identify those patterns for them and automate fraud detection. They also employed robotics process automation to further automate their business processes.
A far cry from cannibalizing old terminals, MediLink is now an industry leader in providing data mining and machine learning solutions. It has been recognized by several awarding bodies, including the Asia Pacific Entrepreneurship Awards (2018) for corporate excellence, AI Global Media (2018) for Best Health care Technology Solutions Provider, and the International Innovation Awards (2017).
MediLink understands that the value of the health ecosystem increases with the number of transactions it processes. They hope to continue to provide value-added services to this network and contribute to improving public health.
As part of their efforts, MediLink developed utilities to help members stay aware of their health status, receive timely reminders, and have easy access to medical professionals. They integrated with mobile health apps to encourage their members to exercise, hydrate, and comply with medicine prescriptions, with functions that allow patients to consult a doctor via telemedicine and maintain an electronic health record.
Another project in the works is the Medibot, a friendly-looking terminal that will provide a personal touch to self-service authorization requests. Medibot has a motion-detector that lets it sense potential users nearby and greet them to encourage use of its touchscreen buttons. The chat feature uses artificial intelligence to understand questions from users that are posed in plain English.
“One of the things we’re trying to do is improve self-service for our patients. Our aspiration is to do for health care what the ATM did for banking.”
Ms. Go believes that one goes through the entrepreneurial experience to find a fit between what the world wants and what one can do well. She relates how, for herself, she strongly feels that it couldn’t have been mere coincidence that her entrepreneurial journey seamlessly brought together her passion for technology, her upbringing, the limited resources she had when she took over MediLink, and even her early exposure to the health care space. “I’m where I was intended to be,” she affirms.
Technology is in the DNA of MediLink, so to speak, and Ms. Go acknowledges that they cannot scale without it. To that end, she advises aspiring entrepreneurs to, “Start small, get it right, then scale fast. If it’s wrong, and you have a negative margin, imagine if you scaled that negative margin!”
The official airline of the Entrepreneur of the Year Philippines 2019 is Philippine Airlines. Media sponsors are BusinessWorld and the ABS-CBN News Channel.
The winners of the Entrepreneur Of The Year Philippines 2019 will be announced on 15 October 2019 in an awards banquet at the Makati Shangri-La Hotel. The Entrepreneur Of The Year Philippines will represent the country in the World Entrepreneur Of The Year 2020 in Monte Carlo, Monaco in June 2020. The Entrepreneur Of The Year program is produced globally by Ernst & Young.
SOME of the Philippines’ top money managers see central bank easing and low inflation pushing the nation’s equity benchmark back above the key 8,000 level.
The Philippine Stock Exchange index (PSEi) has retreated 5.8% since riding a bull market to as high as 8,365.29 on July 15. The gauge has breached the 8,000 mark about a dozen times this year only to retreat amid concerns including the global trade war and slowing domestic growth.
Fund managers at BDO Unibank, Inc. and Security Banking Corp. expect continued interest rate cuts will signal that inflation remains under control. The nation’s central bank is expected to make the second-straight 25-basis-point cut to its key rate at its Sept. 26 meeting. Together with higher government spending, the central bank policy should boost growth, the money managers said.
Fritz Ocampo, chief investment officer at BDO, sees the PSEi rising to 8,400 as early as the fourth quarter. He favors property, consumer companies and some banks and conglomerates, including names such as SM Prime Holdings, Inc. and Metro Pacific Investments Corp. BDO is the Philippines’ largest money manager based on a Bloomberg survey, handling assets of P1.3 trillion ($25 billion).
“We are rotating our funds,” Mr. Ocampo said. “Those that have run up and offer limited upside, we are taking profit and rotating to the laggards. We are accumulating names the market has left behind but are promising.”
Security Bank sees a climb to 8,200 by yearend but cautions that profit taking could kick in above 8,000. In addition to concern over US-China tensions, investors may look to shift funds into upcoming IPOs from Metro Pacific Hospital Holdings, Inc. and AllHome Corp., according to Noel Reyes, the bank’s chief investment officer. Rate cuts should help the market hold above 7,800 support, he said.
“We like stocks with earnings visibility and that promise improvement,” said Mr. Reyes, who helps manage P54 billion. — Bloomberg
