Smart home tech makes inroads into China’s emerging elderly care market

August 15, 2019 | 12:01 am

WEIFANG, CHINA — Charging elderly clients just 1 yuan or about 15 cents a day, little-known Lanchuang Network Technology Corp. has embarked on one of the most ambitious undertakings in aged care by a private sector firm in China.

Provided with a setup box, a webcam paired with a TV set and “Xiaoyi,” a Siri-like voice assistant, customers gain access to telemedicine and an SOS system as well as for-pay services that include housekeeping and meal deliveries.

A small robot that can ring up a medical center in response to verbal calls for help costs an extra 2 yuan per day.

Launched just four months ago, Lanchuang’s smart care system has already signed up 220,000 elderly clients in 16 cities, half of which are in Shandong, a rapidly aging province in eastern China where the company is based.

It is targeting as many as 1.5 million users this year, 12 million next year and 30 million in 2021, when it hopes to list on China’s new Nasdaq-style tech board.

The aim, however, is not to make money from its clients, some of whom get by on pensions as low as a few hundred yuan a month, but to take a cut from providers of offline services.

“China’s market for elderly care is huge, but services in the industry are fragmented,” CEO Li Libo told Reuters in an interview at his company’s headquarters in Weifang city.

“Scattered on the ground are pearls,” Li, 47, said of the products and services available, adding it was his company’s aim to string them together.

Lanchuang, which is also working with China Mobile Ltd. on a smartphone for seniors, is an example of growing, albeit still nascent, attempts by entrepreneurs to provide comprehensive smart home care services for China’s vast number of elderly.

China has a quarter of a billion people aged 60 or over, and by 2050, that number is set to climb to almost half a billion, or 35% of the population, according to government estimates.

Liu, 66, a native of Jinan, Shandong’s capital, knows how hard taking care of the elderly can be. In her mother’s final years, her urinary tract would get obstructed despite wearing a catheter and often in the middle of the night, to her daughter’s despair.

“If only I had been able to reach a doctor to help my mother, but doctors are not reachable 24 hours a day,” said Liu, who only gave her surname.

The retired accountant, who was unaware of tech products aimed at the elderly, now lives alone and is reluctant to trouble her own daughter and son-in-law.

Care of aging parents has traditionally fallen on the shoulders of children, but in modern China, where the one-child policy was abolished only in 2016, the son or daughter has to look after as many as four aging people including in-laws. Often, children have moved to cities far away for work.

Retirement and nursing homes are on the rise, but are too pricey for most families and largely perceived as ridden with abuse. Three-quarters of old people prefer to live out their days at home, official surveys show.

LOCAL AUTHORITIES
While Beijing has been eager to establish a policy framework for a formal aged care system, local governments have been reluctant to support aged-care services which they see as nice-to-haves or just too much work.

But change is afoot.

In April, Beijing issued a detailed policy document outlining services to be developed for the sector, including smart technology, as well as financial support.

The central government provided almost 22 million yuan ($3 million) in subsidies for Lanchuang’s smart platform and the Shandong provincial government has given 3 million yuan.

That level of encouragement is a far cry from a decade ago when entrepreneurs consistently met with local resistance.

“Why are you doing this? What has this got to do with me?” said US entrepreneur Wang Jie, 59, as he recalled skeptical looks when he sounded out local authorities in China about trials of motion sensors at people’s homes.

Wang had to go to Canada for his trials. When he returned to Beijing in late 2013 to kick start a venture, Wang had to convince local authorities, district by district, of the virtues of his sensors — which help family members monitor activity levels of elderly people via an app but are not as intrusive as cameras.

Wang, who sits on the National Advisory Committee on Smart Elderly Care, has since managed to make inroads into two Beijing districts, with talks underway with three others.

The two districts have helped Wang identify high-risk individuals, typically those aged 70 and above, who live alone and might be willing to use his sensors.

His firm, Beijing eCare Smart Tech Co., has sold several hundred sets of sensors in Beijing so far this year under three-year contracts with community organizations. Wang’s company also helps train grassroots emergency response crews as part of the deal. Households pay nothing.

“If an elderly person dies and the body is only discovered after three days, this creates negative publicity for the local government, publicity that it wants to avoid,” Wang said.

EARLY DAYS
Entrepreneurs in other graying economies such as the United States, Britain and South Korea have similarly seized on opportunities in the sector, touting technologies from voice recognition for home appliances to robot companions for lonely old people.

But it is still early days in China.

In Weifang, Zhuojing Healthcare Center, one of 147 community medical service providers connected to the Lanchuang network, said it has only receives 1-2 calls through the system a day.

On a Reuters visit organized by Lanchuang to the homes of two elderly clients in Weifang, both said they use the platform mainly for video chats with family.

Zhao Xi’e, 55, said she uses it to talk to her mother who lives nearby.

Zhao’s shopping and food delivery panels on her TV display were grayed out, indicating zero service providers in her neighborhood.

She was also unaware the red button on her handheld control had an SOS function.

“Is that an on/off button?” she asked. — Reuters

NRCP posts higher net income

August 15, 2019 | 12:01 am

NATIONAL Reinsurance Corporation of the Philippines (NRCP) posted a higher net income in the second quarter amid a climb in its underwriting profit as its premiums rose.

In its quarterly report posted on the local bourse on Wednesday, NRCP said it booked a P14.127-million net income in the second quarter, a reversal of the P31.017-million loss it posted in April to June last year.

The reinsurer’s net underwriting profit stood at P22.9 million in the three months ended June, up 164% from P35.7-million loss it booked in the same period last year.

“Positive underwriting results in 2019 mainly resulted from higher earned premiums, better loss experience…and lower commission costs…relative to premiums earned. Higher earned premiums in 2019 was due largely to higher net premiums written,” it said.

Net premiums written for the quarter went up 18% to P663 million from P561.4 million in the same period in 2018, “resulting mainly from business growth and lower cost of excess of loss facility in 2019.”

Gross premiums written net of returns amounted to P1.05 billion, 6% more than the P991 million booked last year.

This resulted in net premiums earned of P720 million for the second quarter, up 15% from the previous year’s P627.5 million.

“Higher net premiums earned in 2019 resulted mainly from higher net premiums written in 2019,” NRCP said.

The reinsurer’s second-quarter performance brought its first semester bottom line to P199.6 million, almost ten times its P18.5-million net profit in the same period last year.

NRCP’s assets totalled P14.683 billion as of June 30, 6% higher than the P13.871 billion booked at end-December 2018.

Shares in NRCP closed at P1.01 each on Wednesday, up three centavos or 3.06%.

Which asian stock markets are expensive/cheap?

August 15, 2019 | 12:00 am

How PSEi member stocks performed — August 14, 2019

August 15, 2019 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Wednesday, August 14, 2019.

DFA signals openness to bigger foreign role in EEZ surveys

August 14, 2019 | 10:46 pm

FOREIGN AFFAIRS Secretary Teodoro L. Locsin, Jr. is considering opening up marine surveys of the Philippines’ exclusive economic zones (EEZs) to more foreign participation, subject to the condition that they use Philippine ships or cede leadership of the survey mission to Filipinos.

Mr. Locsin was responding to a proposal put forward by the University of the Philippines Institute of Maritime Affairs and Law of the Sea Director Jay L. Batongbacal, who noted that foreign scientist joined the Bureau of Fisheries and Aquatic Resources in an expedition to the Benham Rise in May 2016.

“Well there you go. Let the foreigners hitch a ride on our marine survey ships,” he said in a social media post on Wednesday.

Mr. Locsin had earlier threatened to ban Chinese survey ships win the Philippines’ EEZ, which he later learned was prohibited under the United Nations Convention on the Law of the Sea.

He noted, however, that while the Philippine government cannot impose a ban, it can refuse to grant authority to conduct marine surveys.

Mr. Locsin is also considering the possibility of allowing foreign-owned survey ships to enter Philippine waters, as long as that Filipinos are in charge.

“We can’t join their ships as just passengers; foreigners (need to) turn over command and control, all data gathering facilities, the entire enchilada to Filipinos,” he said in a separate post.

Mr. Batongbacal said in a social media post that Mr. Locsin’s openness to foreign participation will help researchers move forward a number of pending research proposals.

“I hope we can in future also work out system for proposals for PH use of foreign vessels (eg, collaborative project w/ Japan or Korea for deep-sea geological research in Benham Rise Region),” Mr. Batongbacal said Wednesday.

He also said the plan to sign cooperation agreements in exploring the Philippine EEZ is viable and has been practiced in previous joint research projects. “If we don’t have the appropriate ship and gov(ernment)-provided budget, we could do that. Without enough money, we have had to enter into cooperation agreements so that our scientists can use their ships, or we joined (international) research projects that also cover our areas of research.” — Charmaine A. Tadalan

Banks expect national ID to enable faster loan processing

August 14, 2019 | 10:45 pm

THE Philippine Identification System Act (PhilSys) is expected to lead to the expansion of bank lending by enabling faster processing of loan applications, a bank official said.

Philippine National Bank (PNB) President and CEO Jose Arnulfo A. Veloso said the Philippine ID (PhilID) will help the banks establish a reliable credit scoring system which will speed up loan decisions.

“Kapag nagkaroon ng ID national system, isipin mo ‘yung 65% unbanked. (With a national ID system, we can more easily serve the 65% of Filipinos who are unbanked) If I have an idea that this vendor is a good borrower, wala lang syang ID, may national ID lang sya (even if all he has is a national ID), now I’ll be able to help him” with a business proposition which the bank can finance, Mr. Veloso told reporters in a briefing Tuesday night.

The national ID system is due to be launched in a September test run involving priority segments of the population. By 2022, the government hopes to register 107 million Filipinos.

PhilSys or Republic Act 11055 was signed into law in August 2018, requiring the government to establish a single national identification system for all citizens and residents, as a means of improving financial inclusion and raise the efficiency of government service delivery.

“The moment na lumabas yang national ID system, dapat nakaprepare na tayo dito (We should be prepared the moment the national ID becomes available),” he added.

Mr. Veloso also expects mobile internet costs to drop, which will allow the banking industry to reach clients without having to build branches.

“In three years time, the cost of data will be so cheap that (online business might overtake that of) bricks and mortar operations,” he said.

The law provides for the initial issuance of the national ID to be free of charge. — Beatrice M. Laforga

Israeli company signs financing deal to build crop processing plants

August 14, 2019 | 10:45 pm

A FARM equipment manufacturer said it has partnered with an Israeli company to help finance $100 million worth of processing plants.

In a briefing, James P. Amparo, president and chief executive officer of Yovel East Research and Development Inc., said that the funding will be provided by Israel’s Mima Tech, while Yovel will build the facilities.

“This is in partnership with the Philippine government, so Yovel, Mima Tech, and GGVC (Gilan Global Ventures Corp.) will be partnering with the Department of Agriculture (DA)… we will work closely with the government kasi gusto namin s’yang dalhin doon ito sa mga (because we want to bring this to the) local governments… who will be able to benefit from this loan facility,” he said Wednesday in Quezon City.

President Rodrigo R. Duterte witnessed the signing of several cooperation agreements including some with agricultural technology firms during his visit to Israel last year.

Mima Tech is seeking to break into the Philippine market for post-harvest processing technology, while GGVC will serve as consultant on the projects.

Mr. Amparo said that he is planning to begin with rice farmers, who were heavily affected by the implementation of the Rice Tariffication Law, but hopes to move on to other crops and commodities. The DA will help determine where to establish the plants.

“As of now we can give (borrowers) 10 to 15 years to pay. For interest we are still looking at 3% to 4%, and it is self-liquidating, meaning the process facility can earn on its own,” he said.

The processing facility can accept undried palay from farmers, eliminating the need to dry the unmilled rice on any flat surface available, sometimes on public roads, resulting in damage to the grain that lowers quality and yields.

Yovel will build the facility for the farmers, purchase the produce, or offer marketing services. The facility will also be co-managed with local government for three to five years to properly familiarize the farmers on plant operations before the plants are fully handed over to them. — Vincent Mariel P. Galang

DoE to evaluate 3 exploration bids, warns participating firms to meet qualifying requirements

August 14, 2019 | 10:42 pm

THE Department of Energy (DoE) has warned three entities which nominated areas to explore for possible petroleum or gas deposits that it will disqualify any of them should they fail to meet eligibility requirements.

“The lack of any documentary requisite in the PCECP Guidelines and Application Checklist, which includes legal, technical and financial qualification documents, will warrant an automatic disqualification,” the DoE said in a statement on Wednesday.

PCECP, or the Philippine Conventional Energy Contracting Program, is the department’s initiative to revive exploration activity. The DoE identified 14 areas with potential for oil and gas finds. It also welcomed any entity to nominate areas outside the ones it enumerated.

It was able to receive three bids, one for the Sulu Sea Basin, which will be first to be disclosed to the public on Aug. 16. A second area, Northwest Palawan Basin, is set for disclosure on Aug. 19, and the third, Southeast Luzon Basin, on Aug. 20.

Challengers are welcome to come forward on these dates at the agency’s headquarters in Taguig City.

“The DoE has set up a one-stop-shop at the venue to accommodate any last-minute submissions from challengers until the prescribed deadline,” the agency said.

Challengers have until 11:00 a.m. on each day to submit their application requirements before bids are opened at 1:30 p.m.

The department said each of the three nominating companies had complied with area clearance and nomination requirements prescribed under Department Circular (DC) No. 2017-12-0017 on the PCECP Circular and Guidelines.

It said members of the centralized review and evaluation committee, or C-REC, will be running the bid opening process and conduct a “completeness check” for each submitted proposal.

Qualified applications will be subjected to further evaluation from the C-REC, before the endorsement of the highest-ranked application to Energy Secretary Alfonso G. Cusi. The signing of a corresponding service contract by President Rodrigo R. Duterte follows.

The DoE said it has been “pushing to reinvigorate petroleum exploration and development activities in the country to serve as a cushioning measure against the volatility of oil prices, which has a direct impact on the costs of transport and power.”

It cited a successful case — the Malampaya deep water gas-to-power project — the largest natural gas industrial project in the Philippines, which it said recovered all costs in four years.

“Thus, the Department is committed to ‘Explore, Explore, Explore’ in its pursuit of energy independence, security, and sustainability through the effective and reasonable development of all indigenous energy resources in the Philippines,” the DoE said. — Victor V. Saulon

Duterte signs law amending Cooperative Authority charter

August 14, 2019 | 10:42 pm

PRESIDENT Rodrigo R. Duterte has signed a law reorganizing the Cooperative Development Authority (CDA), making the agency more capable of promoting cooperativism.

Mr. Duterte signed Republic Act No. 11364, or the Cooperative Development Authority Charter of 2019, on Aug. 8. The law repeals RA 6939 to revise the CDA’s charter passed in 1990.

Senate Majority Leader Juan Miguel F. Zubiri, who chairs the Senate committee on cooperatives, wrote and sponsored the CDA Charter of 2019.

“This will respond to the clamor of the cooperative sector, to make the Cooperative Development Authority more responsive to the needs of the sector and further promote cooperativism as an effective tool in achieving inclusive growth,” Mr. Zubiri said in a statement.

He said the revised charter introduces institutional reforms that will strengthen the CDA.

The law modified the composition of the CDA’s Board.

“Where the old charter called for a Board of Administrators made up of two representatives each from Luzon, Visayas, and Mindanao, the new charter mandates instead the creation of a Board of Directors. Each director will represent a cluster of cooperatives instead of a region. Candidates for directorship must have at least five years of professional experience as officers of a cooperative, and they are to represent the following cooperative sectors: Credit and financial services, banking, and insurance; Consumers, marketing, producers, and logistics; Human services: health, housing, workers, and labor service; Education and advocacy; Agriculture, agrarian, aquaculture, farmers, dairy, and fisherfolk; Public utilities: electricity, water, communications, and transport,” Mr. Zubiri said.

“With a Board of Directors composed of a Chairperson and six representatives from the cooperative sector itself, the charter will strengthen the partnership between the CDA and the cooperative sector in allowing for stronger consultative mechanisms between them.”

The Board, under the new charter, will also function as a policy-making body, and adjudicating body on cases brought before it. — Arjay L. Balinbin

Trade dep’t to test business registration plan before rolling out online system

August 14, 2019 | 10:42 pm

THE Department of Trade and Industry (DTI) said it will set up a pilot operation in Metro Manila within two months to test a one-stop shop system for business registration.

In a statement Wednesday, the DTI said its Ease of Doing Business-Anti Red Tape Authority (EODB-ARTA) Advisory Council will create the National Business One-Stop Shop (NBOSS). The NBOSS aims to reduce the business registration process to five steps, promising a transaction time of three to six days.

Trade Secretary Ramon M. Lopez told BusinessWorld Wednesday he hopes NBOSS “will be set up in two months.”

NBOSS will gather in one location per region all government agencies involved in the registration process. These agencies include the Securities and Exchange Commission (SEC), Bureau of Internal Revenue (BIR), Philippine Health Insurance Corp. (PhilHealth), Social Security Services (SSS), Home Development Mutual Fund (Pag-IBIG), and the local government units (LGUs).

“The idea is to have an end-to-end process where an entrepreneur wanting to register a business need not go physically to several agencies and the LGU. This in a way is a preview to the eventual end-to-end registration to be done in an online portal. The ultimate ease of doing business is really doing things online and with the use of smartphones,” Mr. Lopez said in a statement Wednesday.

The online portal will be developed in partnership with the Department of Information and Communications Technology (DICT). The portal will enable users to register their businesses in just one hour.

Mr. Lopez said that NBOSS will be operated for about one year while the registration process is brought fully online.

“We will run until necessary, maybe one year, until the full automation of this end-to-end process,” he said. — Gillian M. Cortez

Health facility program received P6.3B in funding in July and August, DBM says

August 14, 2019 | 10:39 pm

THE Department of Budget and Management (DBM) said it has released P6.3 billion worth of funding from the P16-billion Health Facilities Enhancement Program (HFEP) since July.

The DBM said it released the funds in July and August to the Department of Health to support upgrades to health facilities up to barangay level.

“Through the HFEP, health facilities and hospitals will be upgraded and provided with appropriate medical equipment and enhanced infrastructure, leading to high-quality and accessible health care delivery,” the DBM said.

The DBM said it funded the purchases of 251 ambulances, among other items.

Other major budget items in 2019 include P4 billion to staff the upgraded health system.

Former Senator Loren B. Legarda earlier this year singled out HFEP as among the key programs with low disbursement rates.

She said between 2008 and 2018 the program had total appropriations worth P180 billion but had disbursed only 11% as of June 30, 2018. — Beatrice M. Laforga

PEMC complies with order on surplus settlements

August 14, 2019 | 10:39 pm

THE Philippine Electricity Market Corp. (PEMC) said it “immediately” acted on the Energy Regulatory Commission’s (ERC) order on the adjustment of the net settlement surplus (NSS), resulting in either a refund to some market participants or collections from the others.

“We are rectifying the mis-allocation of the NSS through a refund to the market participants who received less than what was due them while collecting from the others who have received more,” PEMC President Oscar E. Ala said in a statement.

“This is similar to a situation wherein you are supposed to give your son and daughter P5 and P10, respectively. However, you inadvertently gave your son P10 and your daughter P5. And as a parent, one has to correct the amounts given to each,” he added.

PEMC, the operator of the country’s wholesale electricity spot market, said the NSS adjustments started with the July 2019 billing period.

NSS is the surplus or deficit remaining after all market transactions have been accounted for. This accounts for price differences occurring between generator and customer locations or nodes because of losses and congestion given the electricity market’s “locational marginal pricing scheme.”

NSS is distributed to trading participants that are entitled to receive a share of the surplus or deficit in accordance with an ERC-approved methodology.

“As the governing body of the electricity market, our interest is in securing the integrity of market transactions, which include settlements, while upholding consumer protection. With this, we promptly complied with the directives detailed in the ERC Order on the NSS issued on Aug. 1, 2019,” Mr. Ala said.

PEMC noted that the collection for non-distribution utilities will be hastened to one month. This is to ensure that utilities expecting a refund will be able to immediately pass on the benefit of the refund to their end consumers, it added.

On Friday, the ERC said it directed the market operator to make the necessary adjustments NSS allocations and the corresponding settlement calculations for the June 2018 to May 2019 billing months.

The regulator said the directive to PEMC is a result of its findings on the inconsistencies in the share of power generators and customers in the NSS allocations issued by the market operator.

“An audit of relevant PEMC/MO (market operator) systems and operations may be in order. We need to ensure that market processes and transactions are accurately and efficiently carried out so as not to compromise the public benefit of reasonable electricity pricing, as well as to ensure that our consumers are spared from unnecessary burden,” said ERC Chairperson and Chief Executive Officer Agnes VST Devanadera. — Victor V. Saulon