Senator vows to pursue financial inclusion

September 6, 2019 | 7:46 pm

SENATOR Grace Poe on Friday vowed to pursue financial literacy and inclusion as head of the banks committee.

In a speech before members of the Chamber of Thrift Banks, the lawmaker said financial literacy could help more Filipinos to take part in banking services.

“More than 80% of our countrymen have not been to a financial institution,” Ms. Poe said. She added that many Filipinos rely on money sent by a family member working overseas. “So can you imagine the potential of your industry?”

Members of her committee would meet with Education Secretary Leonor M. Briones in November to see how financial literacy could be included in the country’s school curriculum, Ms. Poe told reporters at the forum. — Luz Wendy T. Noble

Bourse joins global cheer on hopes trade tensions will ease

September 6, 2019 | 7:46 pm

LOCAL SHARES gained for the third straight day, joining Wall Street and major Asian markets in cheering easing US-China trade tensions, even as Friday’s finish was lower than a week ago.

The 30-member Philippine Stock Exchange index (PSEi) went up 35.28 points or 0.44% to close at 7,933.47 — though it was down 0.58% from the week-ago 7,979.66 on Aug. 30 — while the broader all-share index gained 10.74 points or 0.22% to end 4,785.02

“Positivity was due to optimism that the US and China will meet on October to discuss trade,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an e-mail when asked for comment.

“It was a good end to the week as the index gained 35.28 points to close at 7,933.47 on account of the Dow and S&P500 breaking out of their recent trading ranges last night.”

Reuters reported that major Wall Street indices on Thursday cheered news that Washington and Beijing had agreed to hold high-level talks amid their escalating trade war, while strong US economic data tempered concerns about a looming recession. The Dow Jones Industrial Average rose 1.41% to 26,727.4, the S&P 500 gained 1.3% to 2,975.95, while the Nasdaq Composite added 1.75% to 8,116.83.

Other major Asian markets followed suit, with Japan’s Nikkei 225 and Topix Index rising by 0.26% and 0.17%, respectively; Shanghai SE Composite increasing by 0.46%; Hong Kong’s Hang Seng Index climbing by 0.66%; South Korea’s KOSPI edging up 0.22% and India’s BSE Sensex Index gaining 0.92%.

PSE’s Friday finish also came a day after the government reported mixed economic data: a three-year-low inflation rate in August, a surge in committed foreign direct investments in the second quarter and first half, factory output that was down for the eight straight month in July, as well as increased number of the jobless but reduced underemployment in July.

Luis A. Limlingan, head of sales of Regina Capital Development Corp. said “stronger-than-expected US economic data” also helped the index climb. “Shares made another climb towards 8,000 as the stronger-than-expected US economic data and hopes of a cooled down US-China trade war soothed fears of an economic slowdown,” he said in a mobile phone message.

Back home, four of the six sectoral indices gained: property by 61.55 points or 1.54% to 4,050.97, services by 18.31 points or 1.16% to 1,594.99, industrial by 21.97 points or 0.2% to 10,915.02 and holding firms by 3.21 points or 0.04% to 7,908.14.

Ending Friday lower were mining & oil which gave up 107.92 points or 1.15% to 9,269.45 and financials which shed 11.54 points or 0.63% to 1,804.17.

Trade volume increased, with 2.099 billion shares worth P7.654 billion changing hands on Friday, compared to Thursday’s 869.684 million shares worth P7.108 billion.

Stocks that advanced narrowly edged out those that declined 96 to 91, while 46 others ended flat.

Investors abroad were predominantly bearish for the third straight day, ending Friday with P29.11 million net selling that was nevertheless 95.7% smaller than Thursday’s P672.43 million and was the smallest net outflow in those three days. — Vincent Mariel P. Galang

PHL offers perks to lure start-ups from around the world

September 6, 2019 | 3:19 pm

LIRON GROSS moved to the Philippines with her family in 2017 to start Payo, a start-up e-commerce payment solution.

She saw a good potential from selling jewelry back in Israel in 2012, when intermediary costs led to higher prices.

Starting a business is never easy and starting a successful one is even harder especially for one that was introducing a new product. “I remember back then, the words I did not use was ‘start-up,’” Ms. Gross said in an interview.

“If I came to people and told them to join a start-up, they might think this could disappear in three months.”

Southeast Asia is home to some of the biggest start-ups such as Malaysia’s Iflix, Indonesia’s Gojek and Singapore’s Hooq, all of which have raised money at a clip, showing heavy interest among investors.

The country’s cash-heavy society inspired Ms. Gross to form Payo, a Philippine-based business that has since grown to half-a-million dollars in monthly revenue. Payo gets revenue from e-commerce clients who avail themselves of its logistic services.

Aside from the difficulty of getting people to join Payo, a major challenge was getting funding to support the start-up’s working capital.

“It’s very hard for me to get a credit card without having at least three years of operations. Local investors were hard to start a conversation with,” Ms. Gross said.

LAW FOR START-UPS

But in two years, the Philippines has become more accepting of start-ups.

For starters, the government in April enacted a measure that offers incentives to start-ups and removes constraints to encourage this type of business to flourish.

Republic Act No. 11337, or the Innovative Startup Act gives subsidies in business registration and in the use of office space and equipment, provides research and development grants, and offers special visas to start-up owners, employees and investors.

It also aims to build a so-called startup development program led by the departments of Trade, Science and Technology, and Information and Communications Technology.

Rules that will implement the law are now being drafted, and Trade Undersecretary Rafaelita M. Aldaba has said the initiative would help the Philippines “catch up with our neighbors.”

Having a clear legislative direction is key to help start-ups thrive, said Katrina R. Chan, director at local start-up organization QBO Innovation Hub. Start-ups, she said, are different from small and medium enterprises, which enjoy a different set of incentives, regulations and industry objectives.

“We want to make the Philippines a friendly place for start-ups,” Ms. Chan said. “It’s important that we set up the Philippines in such a way that it’s easier for talent and ideas to prosper no matter where they come from.”

Kumu, a local start-up that offers a Filipino culture-based livestream platform, is one of these. Its founders said the idea for the company was born when they were overseas.

Jose L. Cuisia, Jr., a former Philippine ambassador to the US, challenged its founders to move to the Philippines to start a tech company. Kumu launched its app last year and now has a million users.

Some Philippine start-ups that have yet to hit a homerun are seeking more government support, particularly protection from predatory entities from abroad.

Raphael Layosa, founder and chief executive officer of RetailGate — a start-up that uses artificial intelligence to gather consumer behavior and help retailers optimize operations — said the government should form a regulatory body that startups can run to for protection.

He cited the need for a “Filipino-First” policy for start-ups, adding that foreign technologies entering the Philippines are a big threat. “If you bring in a giant from abroad, it’s difficult to fight.”

Mr. Layosa said local startups, especially those with a rather limited funding, should be given more support and protection since foreign giants entering the Philippines more often have much bigger and deeper pockets.

“Every local startup founder shares a common dream — to be able to have their product or service be recognized globally as proudly Filipino-made,” he said. “But if at the onset these founders find themselves eaten up in their own homeland by foreign giants, then that dream can be easily lost.”

TARGETING UNICORNS

“More than encouraging people to have a start-up, what really matters is getting people who are already in start-ups to stay there and run the race,” Mr. Layosa said.

“If you have the government hand-holding start-ups in that marathon, I’m sure you have fewer people giving up.”

Ms. Gross, mentioned at the outset, thinks the new law on start-ups is a good start and could motivate foreign unicorns — start-up companies valued at more than a billion dollars, typically in the software or technology sector — to consider the Philippines as their first market.

Ms. Gross said there are international start-ups that believe in Southeast Asia but never considered the Philippines as their first market.

“Now the government is opening its doors to those initiatives,” she said.

“It’s a very good go-to market for Southeast Asia because of the language and the high penetration rate for smartphones.”

FDI pledges double in first half

September 6, 2019 | 12:34 am

COMMITTED foreign direct investments (FDI) grew by more than half annually in the three months to June, helping foreign pledges double last semester.

Preliminary data from the Philippine Statistics Authority (PSA) showed approved foreign commitments registered with the country’s seven main investment promotion agencies (IPAs) grew 60.2% year on year to P49.58 billion last quarter from P30.95 billion a year ago.

The second-quarter pledges brought foreign commitments in the first half to P95.56 billion, 111.6% more than the P45.15 billion a year ago.

Combined investment pledges by Filipino and foreign nationals totaled P107 billion in the second quarter, down 6.7% from the previous year’s P114.7 billion. Domestic investors accounted for 53.7% of the total investment pledges during the quarter.

Should they materialize, foreign and local investments pledged in the second quarter are expected to generate 30,135 jobs across industries, 32.3% lower than the projected employment of 44,526 jobs in the second quarter of 2018.

IPAs are government agencies that grant tax and non-tax incentives to investors putting up businesses or expanding existing ones in priority sectors. The seven main IPAs monitored by the PSA are the Board of Investments (BoI), Clark Development Corp. (CDC), Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan (AFAB), BoI-Autonomous Region in Muslim Mindanao (BoI-ARMM) and Cagayan Economic Zone Authority (CEZA).

The second quarter saw the BoI contributing the most to FDI commitments at 76.8% of the total with P38.05 billion. It was also the only IPA that saw an increase in year on year pledges, growing by 177.8%.

It was followed by PEZA with a 21.2% share at P10.52 billion, 27% less than the previous year’s P14.41 billion.

The rest were CDC’s P478.4 million with a one percent share, SBMA’s P369.3 million (0.74% share), CEZA’s P142.6 million (0.3%), and AFAB’s P15.1 million (0.03%). Data from BoI-ARMM were not available.

SBMA’s P369.3 million was 43.8% less than its year-ago P657.6 million, while those of CDC and CEZA were 76.2% and 18.3% smaller than the past year. Data from AFAB were not available in the second quarter of the previous year.

Foreign investment commitments are different from actual capital inflows tracked by the Bangko Sentral ng Pilipinas (BSP) for balance of payments purposes.

The BSP recorded $3.145-billion in January-May net inflows, dropping 37.1% from the past year’s $5.002 billion.

Singapore was the biggest source of approved FDI pledges in the second quarter with P36.18 billion, 88% more than a year ago and accounting for 73% of the total pledges. It was followed by Japan and the Netherlands, pledging P4.04 billion (8.2% share) and P1.3 billion (2.6% share), respectively.

Notably, investment pledges from the US and China amounted to P997.1 million and P405.4 million, respectively, down 75.1% and 70.7% year on year.

Among regions, Calabarzon — the region immediately south of Metro Manila consisting of Cavite, Laguna, Batangas, Rizal and Quezon — got the most foreign commitments in the second quarter at 83.4% of the total or P41.37 billion. This was more than five times the commitments to the region in the second quarter of 2018.

Metro Manila received the second-biggest amount of foreign investment commitments with an 8.5% share at P4.21 billion while Central Luzon came in third at 3.7% or equivalent at P1.84 billion.

By industry, bulk of the pledges went to electricity, gas, steam, and air conditioning supply with a 72% share at P35.69 billion, followed by manufacturing (P6.14 billion) as well as administrative and support service activities (P3.1 billion).

“This modest growth was influenced by the external challenges of the trade war and can also be attributed to the uncertainty brought by pending fiscal reforms, particularly the bill on corporate taxes and incentives,” said UnionBank of the Philippines, Inc. chief economist Ruben Carlo O. Asuncion in an e-mail.

“Foreign investments would have been higher if there was clarity already on the aforementioned pending legislation and lesser uncertainties brought by the US-China trade war.”

The Tax Reform for Attracting Better and High-Quality Opportunities bill, which did not pass the previous Congress, was refiled this year under a new name — the proposed Comprehensive Income Tax and Incentives Rationalization bill. The bill, House Bill 4157, seeks to gradually trim the corporate tax rate to 20% by 2029 from the current 30%, which is the highest in Southeast Asia. The measure will also remove redundant fiscal incentives.

Mr. Asuncion said that foreign investments are “still expected to grow but rather slowly.”

“If future policy on corporate taxes and investment incentives have been finalized, [then] foreign investments are expected to return stronger and higher as investors see a clearer and more competitive investment policy for the Philippines,” he said.

“However, the global trade environment remains uncertain and may continue to be a drag on foreign investments.” — Jenina P. Ibañez

Labor force survey (July 2019)

September 6, 2019 | 12:33 am

LATEST labor data show the ranks of jobless Filipinos increased in July, but at the same time, the number of employed Filipinos wanting more work dropped to an all-time low, the Philippine Statistics Authority (PSA) reported yesterday. Read the full story.

More Filipinos unemployed but job quality better in July

September 6, 2019 | 12:33 am

By Marissa Mae M. Ramos
Researcher

Preliminary results of the July 2019 round of the PSA’s Labor Force Survey (LFS) showed the country’s unemployment rate at 5.4%, steady from the figure in the same round last year. Nevertheless, this is equivalent to 2.43 million jobless Filipinos compared to 2.33 million in July 2018.

At the same time, the quality of jobs improved as the underemployment rate — or the proportion of those already working, but still looking for more work or longer working hours — declined to 13.9% in July from 17.2% previously.

Both the latest underemployment and unemployment rates are the lowest among the July LFS rounds since 2005.

The employment rate remained unchanged at 94.6% in July albeit the number of employed Filipinos increased to 42.95 million from 40.65 million previously.

“This translates to 2.3 million additional employment, almost five times the 479,000 employment generated in the same period last year,” the National Economic and Development Authority (NEDA) said in a statement.

NEDA also noted that the 5.2% year-to-date unemployment rate is near the upper end of the 4.3-5.3% target in the Philippine Development Plan 2017-2022.

The changes in the absolute figures despite steady unemployment and employment rates can be explained by changes in the labor force participation rate (LFPR), which is defined as the percentage of the total number of persons in the labor force to the total population 15 years old and over.

In July, the country’s LFPR stood at 62.1%, more than the 60.1% a year ago. This is equivalent to 45.38 million Filipinos in the labor force out of the 73.13 million Filipinos 15 years and older.

Likewise, the LFPR among the youth improved to 38.3% from 36.8%. However, unemployment in this segment remained high at 14.4% from 14.1% last year. The July figure corresponds to roughly 1.1 million of the 7.7 million in the labor force population aged 15-24 years old.

On the other hand, the proportion of youth not in employment, education and training shrank to 18.7% from 21.3% in July 2018.

UnionBank of the Philippines, Inc. (UnionBank) chief economist Ruben Carlo O. Asuncion noted the increase in the number of employed and unemployed Filipinos. “This tells me that there are sectors that are lagging behind. There may be expansion in one sector and a regression in another,” he said in an e-mail.

Mr. Asuncion also noted the increase in the LFPR, which is a “good sign.”

“This means that more part of the population are either looking for work [or] are actually employed. This tells you the perception of the population about the economy and how it is expanding or growing,” he said.

“The improvement of the underemployment rate [among the younger part of the population to 1.8% from 2.3%] can be attributed to education reforms like the K to 12 program and potentially free college education. Another factor is the availability of more quality jobs in the economy and with continuous economic expansion comes the availability of not just jobs but also better jobs,” he added.

For Security Bank Corp. chief economist Robert Dan J. Roces, the latest LFS figures “show a relative stability” in terms of unemployment in the country.

“[R]ates have been hovering in the vicinity of 5 to 5.5% since mid-2017…” noted Mr. Roces in a separate e-mail. “The July 5.4% [unemployment] level also validates the view that we are relatively safe from the trade war, so far, with firms employing relatively the same number of workers.”

Moreover, Mr. Roces said that the declining underemployment rate “underscores the fact that more Filipinos have been finding more gainful employment opportunities that allow them to contribute realistically into the economic system.”

“Factors may have been the realignment of taxes for firms, which allowed the latter to create jobs in certain brackets,” he surmised.

By economic sector, services made up the majority of the employed population at 57.8% from 57.5% in the same period last year.

Employment in the agriculture sector, likewise, inched up to 23.5% from 23.1%.

On the other hand, employment share of the industry sector fell to 18.7% from 19.4%.

NEDA Undersecretary for Policy and Planning and current Officer-In-Charge Rosemarie G. Edillon said in the agency’s statement that full implementation of the Ease of Doing Business and Efficient Government Service Delivery Act, and the reduction of foreign investment restrictions would contribute to creating more employment opportunities for Filipinos.

“While the Philippine economy has shown remarkable improvements in the labor market, the government should continually improve its efforts towards generating more productive and higher quality employment that provides adequate income for Filipino workers and their families,” Ms. Edillon said.

For UnionBank’s Mr. Asuncion, employment is likely going to be “steady.”

“With economic growth expected to recover in the second half of 2019, labor demand is expected to increase accordingly,” he said.

“However, there may be job losses as well in sectors that are challenged by the status of the external environment, such as exports and other export products.”

Mr. Asuncion noted that jobs in the services and agriculture “are expected to grow” while that in industry-related jobs “may be challenged for the rest of the year.”

For Security Bank’s Mr. Roces: “[W]e expect it to remain relatively stable on the business cycle path.”

Overall price increase in August slowest in 3 years

September 6, 2019 | 12:32 am

By Mark T. Amoguis
Senior Researcher

INFLATION clocked in at its slowest pace in three years in August amid a softer increase in food prices, particularly rice, the Philippine Statistics Authority (PSA) reported on Thursday.

The headline inflation rate — the general increase in prices of widely used goods and services — logged 1.7% in August, slower than 2.4% in July and 6.4% in August 2018. August’s reading matched the 1.7% logged in September 2016 and was the slowest in three years or since the 1.3% inflation rate posted in August 2016.

Last month’s inflation fell at the midpoint of the Bangko Sentral ng Pilipinas’ (BSP) 1.3-2.1% estimate. It was, however, lower than the 1.8% estimate median in BusinessWorld’s poll of 12 economists late last week.

Core inflation, which strips out commodities prone to volatile price swings, eased to 2.9% in August from 3.2% in July and 4.8% in August 2018.

Year to date, headline inflation clocked in at three percent, at the midpoint of the BSP’s 2-4% target range for 2019, albeit still above the central bank’s 2.6% forecast for the entire year.

In a mobile phone message to reporters, BSP Governor Benjamin E. Diokno described the latest headline inflation rate as “excellent news.”

“This gives us more confidence that average inflation would be in the neighborhood of 2% in Q3 before it would increase slightly in Q4,” Mr. Diokno explained.

“The Monetary Board will definitely take note of this positive development in its next policy meeting on Sept. 26.”

In a separate statement, the BSP cited “ample domestic food supply conditions along with lower global oil prices” as having contributed to the inflation downtrend.

It warned, however, that the “deepening trade tensions between China and the US along with ongoing geopolitical risks have raised global economic uncertainty which poses a downside risk to the inflation outlook.”

The PSA attributed the August slowdown primarily to the slower increase in prices of heavily weighted food and non-alcoholic beverages component at 0.6% from 1.9% in July and 8.5% in August 2018. Food and non-alcoholic beverages account for 38.3% of the theoretical basket of goods that an average Filipino consumes.

The PSA also noted slower annual rates in housing, water, electricity, gas and other fuels (1.8% from 2.2% in July); health (3.1% from 3.2%); recreation and culture (1.8% from 3.2%); and restaurant and miscellaneous goods and services (3.2% from 3.3%). Meanwhile, the transport commodity registered a decline at 0.2% from 0.7% the previous month.

The food-alone index likewise slowed to 0.3% versus the previous month’s 1.7% and 8.2% a year ago as slowdowns were noted in most food groups. In particular, rice — which accounts for 10% of the average household’s consumer basket — saw its annual rate decline further to 5.2% in August from a 2.9% contraction in July.

“Last year, we had a relatively high retail price for rice. If you’ll notice, the negative inflation [for rice] started four months back. There’s really a continuing drop in the actual price month on month because of the negative inflation in rice,” National Statistician and Civil Registrar General Claire Dennis S. Mapa said during the press briefing.

In a statement, National Economic and Development Authority (NEDA) Undersecretary for Policy and Planning and currently Officer-in-Charge (OIC) Rosemarie G. Edillon said that the law liberalizing rice imports that was signed into law six months ago “continues to help increase [the] rice supply in the country.”

The same statement from NEDA noted that the domestic retail and wholesale price of the staple is down by 10-13% or by P4.2-5.2 per kilogram compared to price levels last year.

For HSBC Global Research economist Noelan C. Arbis, the decline in food and oil prices “led to the moderation in prices.”

“Meanwhile, core inflation remains on a stable trend, with most components rising only moderately and within their historical trend. If this trend persists, headline inflation is likely fall even lower in months ahead (i.e., low 1%) due favorable base effects,” Mr. Arbis said in a separate research note.

For his part, Security Bank Corp. chief economist Robert Dan J. Roces said that the below-target inflation rate gives the BSP more room to continue its easing cycle.

“The Monetary Board will definitely take note of the latest CPI (consumer price index) data in its September 26 policy meeting with a high chance of a 25 bps (basis point) cut and continuing its easing cycle to reverse the heavy 175 bps hike in 2018,” Mr. Roces said in an e-mail.

JPMorgan Chase Bank NA Singapore Branch economist Nur Raisah Rasid noted the August print marks the first time since October 2016 that inflation has fallen below the lower bound of the BSP’s 2-4% target range.

“The slower overall CPI growth in the coming months amid a softer than expected pickup in domestic growth, in our view, likely opens the room for another cut in [fourth quarter of 2019],” Ms. Rasid said in a research note.

With inflation moving below the central bank’s target, ING NV Manila Branch senior economist Nicholas Antonio T. Mapa expects BSP’s Mr. Diokno “to deliver on his pledge and cut policy rates by an additional 25 bps” in their next policy meeting.

Mr. Mapa also expects the central bank to slash banks’ reserve requirement ratio (RRR) by 100 bps in the fourth quarter this year, saying that Mr. Diokno “has telegraphed his moves effectively” by indicating that decisions on the RRR will be announced on a quarterly basis.

“[W]e expect him to reduce [the] RRR in two tranches of 50 bps, possibly at the end of October and end of November,” Mr. Mapa said in a separate research note.

BSP’s Mr. Diokno signaled last month that the central bank will cut policy rates by 25 bps before the year ends.

The central bank has so far cut benchmark rates by a total of 50 bps this year, partially dialing back the 175 bps cumulative hikes triggered last year by successive multi-year-high inflation that peaked at a nine-year-high 6.7% in September and October. This brought the overnight deposit rate to 3.75%, overnight reverse repurchase rate to 4.25% and the overnight lending rate to 4.75%.

On the other hand, the RRR currently stands at 16% for big banks and six percent for thrift, savings and cooperative lenders following the phased 200-bp cut implemented after an off-cycle meeting last May. Mr. Diokno had said that the Monetary Board’s consensus is to “pre-announce” plans for the RRR on a quarterly basis.

PSA: Manufacturing declines for eighth straight month in July

September 6, 2019 | 12:30 am

By Mark T. Amoguis
Senior Researcher

FACTORY OUTPUT once again declined in July, extending its contracting streak to eight straight months, the government reported on Thursday.

Preliminary results of the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries, showed factory output — as measured by the volume of production index — declining by 8.1% year on year in July versus the June’s revised 11.6% contraction and the 10.1% growth in July 2018.

Manufacturing production has been registering a decline since December 2018.

Factory output decline averaged 9.9% as of July compared to the 13% growth average in 2018’s comparable seven months.

Six out of 20 subsectors registered declines in July, led by double-digit contractions in petroleum products (-75.8%) and furniture and fixtures (-24.8%).

Notably, food manufacturing, which is the largest subsector in terms of contribution to factory output, has snapped its eleven-month losing streak, growing by 8.4% in July.

In comparison, the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI), which used a different set of parameters, improved that month to 52.1 compared to June’s 51.3 and July 2018’s 50.9, marking the strongest improvement in six months or the 52.3 logged in January. A reading above 50 signals improvement in business conditions from the preceding month, while a score below that point indicates deterioration.

Average capacity utilization — the extent by which industry resources are used in the production of goods — was estimated at 84.3%. Twelve of the 20 sectors registered capacity utilization rates of at least 80%.

In a statement, National Economic and Development Authority Undersecretary for Policy and Planning and current Officer-in-Charge Rosemarie G. Edillon said that the decline in construction-related manufactures reflected the deceleration in public infrastructure spending on infrastructure since the first half of this year.

“The slowdown on the implementation of infrastructure projects in the first semester of 2019 contributed to the weak performance of the manufacturing sector…” she said.

Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort blamed the July factory output drop on base effects as “there was some frontloading of purchases, loans and investments by some manufacturers when inflation and interest rates were on a rising trend” last year.

He also cited the escalating US-China trade war that weighs on the global economic outlook, including trade.

POLICY UNCERTAINTY
Mr. Ricafort also attributed the decline to the “wait-and-see” stance adopted by some investors as they await enactment of proposed changes to current tax incentives. The Tax Reform for Attracting Better and High-Quality Opportunities bill, which did not pass the previous Congress, was refiled this year under a new name — the proposed Comprehensive Income Tax and Incentive Rationalization bill. It seeks to gradually trim the corporate tax rate to 20% by 2029 from 30% currently — the highest in Southeast Asia — and remove incentives deemed redundant.

Socioeconomic Planning Secretary Ernesto M. Pernia said last month that the economy needs to be opened up further, noting: “We have too many restrictions.”

For RCBC’s Mr. Ricafort, some manufacturers are waiting for both the domestic inflation and interest rates to bottom out “before they become aggressive in borrowing… for new manufacturing investments and expansion projects.”

Nevertheless, Mr. Ricafort is optimistic that manufacturing can recover in the remaining months of the year.

“Local manufacturing activities and growth could pick up in the coming months of 2019 due to the easing base/denominator in the latter part of 2019,” he said, adding that “any prompt approval into law the rationalization of fiscal incentives that would provide greater certainty especially for some manufacturers… could help attract more investments (both local and foreign) into the country including in the manufacturing sector.”

Hello, Love, Goodbye is now highest grossing PHL film ever

September 6, 2019 | 12:08 am

HELLO, LOVE, GOODBYE is now the highest-grossing Filipino film of all time after breaching the P880 million box office mark after more than a month in local and international cinemas.

The romantic-drama about Overseas Filipino Workers in Hong Kong has grossed P880,603,490, according to Star Cinema — the film’s producers — on Sept. 3.

The announcement was made during the film’s Thanksgiving party at the ABS-CBN offices in Quezon City. A livestream of the party was uploaded on the Star Cinema Facebook page.

The film is still running in cinemas nationwide and select international screens.

It stars Kathryn Bernardo and Alden Richards (real name: Richard Faulkerson, Jr.) and is directed by Cathy Garcia-Molina.

Counting its worldwide gross, Hello, Love, Goodbye replaced another Cathy Garcia-Molina film — and also a Kathryn Bernardo-starred — The Hows Of Us, as the country’s highest-grossing film. The Hows of Us grossed P810 milllion after 50 days in 2018.

During the Thanksgiving party, Ms. Bernardo thanked the cast and crew and Ms. Garcia-Molina.

“I always say that [Ms. Garcia-Molina] is a huge part of my life, especially with Hello, Love [Goodbye] because this is the film which challenged our relationship and I couldn’t have done this without Direk Cathy,” Ms. Bernardo said in vernacular during her speech at the party which was uploaded on the Star Cinema YouTube page on Sept. 4. — ZBC

Horror film replaces dropped (K)Ampon in MMFF lineup

September 6, 2019 | 12:07 am

THE Metro Manila Film Festival Executive Committee (MMFF Execom) has announced that Carlo Ledesma’s film Sunod will replace Kris Aquino’s comeback film (K)Ampon which was disqualified for making a casting change beyond the prescribed deadline.

The announcement was made on Sept. 3 via the film festival’s Facebook page.

Sunod, a horror film, stars Carmina Villaroel, Mylene Dizon, Susan Africa, and Kate Alejandrino and is produced by Ten17P production. Mr. Ledesma was one of the writers of a previous MMFF entry, Saving Sally (2016) while Ten17P has produced several MMFF entries including Siargao (2017) and Mary, Marry Me (2018).

“[MMFF] rules provide that in the case of disqualification, the vacant slot shall be automatically filled by the next-in-rank of the same film genre. Per the ranking of the Selection Committee, Sunod is the horror film next-in-rank to the film (K)Ampon,” the Execom said in the statement.

(K)Ampon, which was supposed to be Kristina Bernadette “Kris” Aquino’s comeback horror film, was disqualified in August after Derek Ramsay backed out after prioritizing his contract with GMA Network. Mr. Ramsay currently stars in the network’s primetime show, The Better Woman.

The film’s producers tried to replace Mr. Ramsay with Gabby Concepcion but the MMFF noted that the deadline to request a change of lead actor was on July 30 — the film’s producers submitted their request on Aug. 5.

Sunod now joins the other three entries chosen from script submissions: The Miracle in Cell No. 7, Mission Unstapabol: The Don Identity, and Momalland.

The four finished films chosen as entries will be announced at a later date, completing the eight MMFF official entries. The MMFF’s deadline for submitting finished films for consideration is on Sept. 20, 5 p.m.

The MMFF runs from Dec. 25 to Jan. 7, 2020 in cinemas nationwide. — ZB Chua

PHL hospitals remain vulnerable to cyber attacks

September 6, 2019 | 12:07 am

By Denise A. Valdez, Reporter

YANGON, Myanmar — Medical facilities in the Philippines will continue experiencing high rates of cyber attacks, with seven out of 10 medical machines compromised this year, according to data from cybersecurity firm Kaspersky.

The Russia-based company said it found 76% of medical machines in the country were attacked in the past eight months, making it the most vulnerable in Southeast Asia and second in the Top 15 nations it reviewed.

“In case of Southeast Asia, medical organizations are not in a vacuum. There are computers around them. If you look at the statistics in the Philippines, in general, the number of infections is quite high,” Yury Namestnikov, head of Kasperky’s Global Research and Analysis Team (GReAT) in Russia, said at a forum here on Thursday.

“These devices that are in medical organizations, they got infected (because) people who are responsible for architecture of IT systems in medical organizations, they do not separate the networks,” he added.

Mr. Namestnikov explained that having medical machines connected to a singular internet network could mean a compromise in one system would impact the rest of a facility’s machinery. In the Philippines, he said most of the infections could be traced to universal serial bus (USB) sticks or web threats.

“The right way to solve this problem is to review the architecture for how you design your medical network, and separate computers that should not be visible from the internet. It will help a lot,” he said.

Topping the list of countries with the most cyber attacks on medical machines is Venezuela, which had a 77% rate in 2019. Other countries from Asia Pacific included in the Top 15 are Bangladesh, which ranked 8^th with a 58% rate, and Thailand, which ranked 12^th with a 44% rate.

“One factor we observe is that the chances of being attacked really depend on how much money the government spends on cybersecurity in the public health sector. Another key reason is the low level of cybersecurity awareness the people inside medical facilities have,” Mr. Namestnikov was quoted as saying in a statement.

The company is pushing for bigger investments from countries in Asia Pacific towards ensuring cyber protection in medical facilities, noting losses could amount to $23.3 million if a hospital is faced with a cyber attack.

“We see more and more threats against the health care sector… Hospitals usually store a lot of data, and because of that, they’re becoming quite often the victim,” Stephan Neumeier, Kaspersky managing director for Asia Pacific, said at the forum.

“If you look at the banks who are dealing with probably more or less the same amount of data as a large hospital, that bank is super secure today… I think hospitals have to do the same, because we can see based on recent events this will otherwise not change,” he added.

The rate of cyber attacks in medical machines in the Philippines grew this year to 76% from 64% two years ago. Data from 2018 was not available as of press time.

Mr. Namestnikov said while many of the medical facilities in developing countries such as the Philippines are still heavily reliant on traditional methods of keeping records, the industry’s shift to digitalization is in the near future, hence the need to keep in mind the issues that would eventually come with it.

“These handwritten records will be digitalized in two to three years and everything will be online, because it’s cheaper for hospitals to have an online catalogue of all their patients than having all these handwritten things archived,” he said.

“So from a business perspective, hospitals will move to digital, and it’s just a matter of years when this trend (of medical cyber attacks) will be relevant to these hospitals. They should be prepared for it,” he added.

1...10,46510,46610,467...14,189 Page 10,466 of 14,189

BusinessWorld Online