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Gov’t forming task force to draft AI strategy

THE Department of Trade and Industry (DTI) said Wednesday that the government is creating a task force to formulate an Artificial Intelligence (AI) road map to help industry respond to technological disruption.

“We’re trying to form a task force,” Undersecretary Rafaelita M. Aldaba of the DTI Competitiveness and Innovation Group (CIG) said in an economic briefing at the Palace on Wednesday.

She said the task force is expected to draft the government’s strategy for dealing with the rise of automation and artificial intelligence, which has been called the Fourth Industrial Revolution or Industry 4.0.

“This is really going to affect many industries. And so we need to engage with these industries, as well as with other government agencies like DoST (Department of Science and Technology), with TESDA (Technical Education and Skills Development Authority) and CHEd (Commission on Higher Education), DepEd (Department of Education), NEDA (National Economic and Development Authority), and DICT (Department of Information and Communications Technology),” she said.

Asked when the task force will be constituted, she said: “I hope next month, in August. Kasi marami na kaming mga discussions, marami na ring nag-signify in terms of participating actively in the task force (we’ve had many discussions, and many parties have signified their interest in participating). So I hope by August, we’ll be able to present to you the plans.”

She also noted that strategies are needed to address the disruptive effects of the new technology because a lack of preparedness “could lead to job losses if we don’t properly implement a good strategy.”

She cited a McKinsey study that found that 48% of activities — equivalent to 18.2 million jobs — can be automated. “And mostly, it’s going to affect agriculture with 6 million jobs being lost due to automation; retail, 3.4 million jobs; manufacturing, 2.4 million jobs,” she said.

Only “a very few” industries in the Philippines are future-ready, she noted.

“But there are also some that are shifting, but mostly [they are in] Industry 3.0. And there are some that are still in Industry 2.0, while agriculture, sad to say, is still in the mechanization phase,” she added.

The first three industrial revolutions involve the harnessing of steam energy to mechanize factories; the creation of mass markets and mass production; and computer-driven gains in productivity.

She said Industry 4.0 in the Philippines “is still in its infancy, and that’s the reason why we want to move up, we want to be able to accelerate this process kasi hindi tayo hihintayin ng mundo kaya kailangan nakahanda tayo (the world will not wait for us so we need to be ready) because investors are already looking for new areas to invest in.”

“I hope in three to four years time, we’ll be able to really say na pasok na tayo (we have entered Industry 4.0),” she said. — Arjay L. Balinbin

Peak power demand in first half fails to breach DoE forecast

THE National Grid Corp. of the Philippines (NGCP) said Wednesday that peak power demand, usually achieved in the first half, failed to breach the government’s forecast.

In a statement, the grid operator said the peak for the year was recorded at 11,344 megawatts (MW) at 1:52 p.m. on June 21.

The peak level surpassed 2018’s peak by about 468 MW but was “slightly lower than the Department of Energy’s (DoE) projected (peak) demand of 11,403 MW for 2019,” it said.

NGCP said this year’s peak load factors in the 246 MW under the interruptible load program (ILP), a scheme that prompts private entities to run their own power generation units to ease the demand from the grid.

NGCP said with the DoE’s forecast for the this year breaching 11,000 MW, the privately owned company “worked round-the-clock to ensure the reliability of its systems and to avoid any issues or difficulties during this critical period.”

“We constantly coordinated with other industry players — power generating plants, the market operator, and the DoE — to fully mitigate the impact of the record-breaking demand for power and the limited generating capacity of plants.

To further mitigate the supply-demand balance, NGCP campaigned for energy use efficiency in national, local, and social media channels, it added.

It said with the onset of the rainy season, the system’s condition is expected to improve, but until the situation normalizes, more grid alerts could be issued. It appealed to the public to continue to use energy efficiently.

“Now that the summer season is officially over, this does not mean that we should stop implementing energy saving measures. Let us make it a part of our lifestyle to be wise electricity consumers so that we can do our part in ensuring improved power flow within the grid,” NGCP said. — Victor V. Saulon

Labor dep’t signs partnership with ILO to design OFW country briefings

THE Department of Labor and Employment (DoLE) said it has entered into a partnership with the International Labor Organization (ILO) to create post-arrival briefing system for Overseas Filipino Workers (OFWs), starting with those deployed to Hong Kong.

On Wednesday, DoLE and ILO signed the agreement to create the briefings on local work conditions, known as the Post-Arrival Orientation Seminar (PAOS). The two sides will collaborate to “design, pilot, conduct consultations, and finalize a Hong Kong-specific PAOS learning system” which DoLE hopes added will “soon be replicated by other Philippine Overseas Labor Offices (POLOs).”

The agreement was signed by Labor Secretary Silvestre H. Bello III and ILO Country Office for the Philippines Director Khalid Hassan.

Mr. Bello said in a statement that the agreement is vital to educate OFWs on the work environment of their host countries.

“It is important for our OFWs to be oriented about the profile of their working environment, including the host country’s culture and laws relevant to their labor migration. They must be informed on their rights and responsibilities as migrant workers to fully secure their welfare as well as enjoy the benefits of working overseas for the sake of their families back home,” he said.

Section 224 of the Revised POEA (Philippine Overseas Employment Administration) Rules and Regulations Governing the Recruitment and Employment of Land-Based Overseas Filipino Workers gives POLOs the responsibility for conducting the PAOS briefing.

According to DoLE Administrative Order No. 532, Series of 2018, the PAOS must be attended by OFWs within a month of their arrival in the host country. — Gillian M. Cortez

SC expands parts of law practice open to law students

THE Supreme Court (SC) said it will allow law students who have completed their first year of study to be certified to engage in the limited practice of law under the supervision of a lawyer starting 2020.

The SC Public Information Office said the court, sitting en banc on June 25, adopted and promulgated A.M. No. 19-03-24-SC Rule 138-A Law Student Practice or Revised Law Student Practice Rule (Revised Rule).

Under Section 3 of the revised rule, law students who have completed first-year law courses may apply for Level 1 certification from the executive judge of a regional trial court. Students enrolled for a second semester of their third year may apply for Level 2 certification issued by the Office of the Court Administrator.

The ruling revises Rule 138-A which previously allowed only law students who have completed their third year of study to appear in any case before a court, tribunal, board or officer.

Level 1 certification is valid before all courts, quasi-judicial and administrative bodies within the judicial region where the law school is located while Level 2 certification is valid before all courts, quasi-judicial and administrative bodies.

Under the revised rules, those in Level 1 may give legal advice to clients, draft legal documents, and provide legal public orientations, among others. Those in Level 2 can perform all activities under Level 1, assist in the taking of sworn evidence and prepare judicial affidavits of witnesses, appear on behalf of the client at any stage of trial, among other tasks that are subject to approval of the supervising lawyer.

Once a student is certified, the certificate number must be used in signing briefs, pleadings, and other legal documents under the direction of the supervising lawyer.

The revised rules will take effect at the start of Academic Year 2020-2021. — Vann Marlo M. Villegas

DoE studying options on TRO against ‘unbundling’

THE Department of Energy (DoE) said it is taking advice from the Office of the Solicitor General (OSG) on whether to appeal a temporary restraining order (TRO) against a circular requiring oil companies to submit a breakdown of the items that go into the prices of petroleum products.

“The reason why the meeting with OSG is critical is because we need to meet a decision point to decide if it is practical to appeal the TRO and file a motion for reconsideration or just wait for it to lapse,” Assistant Secretary Leonido J. Pulido III told reporters in a chance interview on Wednesday.

“If you think about it, we might just wait,” he added. “The first one, Makati RTC (Regional Trial Court) if I’m not mistaken will lapse by July 22.”

Mr. Pulido said the “unbundling” circular was issued because Energy Secretary Alfonso G. Cusi believes that the DoE decision to ask oil companies for information “and not the dissemination of information is expressedly authorized under the oil deregulation law.”

The unbundling circular is supposed to show the “industry take” or the margin that goes to the oil companies.

“We support the deregulation of the industry because we believe that since the passing of the law, it has been beneficial to the country and allowed competition to flourish but then again, it does not mean that it has robbed the secretary or the DoE of its mandate of being able to implement the proper policies under the oil deregulation law,” Mr. Pulido said.

“That mandate cannot be fully satisfied unless the department can be given all the information required,” he added.

DoE Department Circular No. DC2019-05-008 was signed on May 28, 2019.

Accenture offers accessibility solutions for PWD workers

ACCENTURE said it launched a center that hopes to promote inclusive initiatives for people with disabilities (PWDs).

On Wednesday, Accenture formally launched its Suite of Accessibility Solutions, which provides technology and equipment that will allow their employees who are people with disabilities (PWD) to be more productive at work through the use of accessibility equipment.

Accenture Managing Director in the Philippines Lito T. Tayag said at the launch, “We take pride in developing and pioneering this initiative in the Philippines, which underscores our unwavering commitment in advancing inclusion and diversity and welfare of our people.”

The Suite of Accessibility Solutions is also the first of its kind for Accenture globally, with the Philippines serving as the group’s launch market. The center formalizes various efforts over the years to adapt technology as it became available that had the potential to be harnessed to assist Accenture’s own PWD employees.

Accenture Intelligent Cloud and Infrastructure Lead Paul Ranjan said at the launch that the dedicated space provides options for various types of PWD, adding: “We need to come up with different solutions because each person has a different disability.”

The center will allow employees to test tools and equipment that will enable them to do better at work. The technologies and equipment available aid those with disabilities in hearing, speech, sight, and mobility. Accenture Inclusion and Diversity Lead Marixi Carlos added that the center hopes to create an environment that recognizes each individual’s specific needs in order to enhance their potential.

“We are enabling our people with best-fit technologies that will unlock their unique talents helping them to succeed professionally and personally,” she said.

More centers will also be launched soon, with one in Cebu by December. — Gillian M. Cortez

Withholding Taxes: Are you on top?

The withholding tax system, specifically that of the creditable/expanded withholding tax or “EWT,” is a means of approximating and collecting in advance the income tax liability of a payee or income earner for certain types of income payments.

Income taxes due are paid upon the filing of the quarterly and annual income tax returns. However, the withholding tax system allows the government to collect the income tax monthly, which is ahead of the payees’ quarterly income tax payment. Because the EWT is deducted regularly from the income of the payee, the monthly requirement to withhold and remit EWT on the part of the income payor guarantees continuous revenue inflows to the National Treasury and helps prevent delinquencies or revenue loss.

Moreover, during a tax audit, the Bureau of Internal Revenue (BIR) normally assesses any discrepancy between purchases/expenses subjected to withholding tax by the income payor vis-a-vis sales/revenue declared by the income earner.

The Consolidated Withholding Tax Regulations or Revenue Regulations No. 2-98 (RR No. 2-98), as amended, enumerates the types of income payments to persons residing in the Philippines that are subject to EWT. Generally, the list is specific to:

a) The types of income (e.g., rentals, professional fees, commissions, and purchases of specific goods such as sugar, mineral products, and quarry resources);

b) The types of payee (e.g., contractors, partners of a general professional partnership, beneficiaries of estates and trusts, and specific brokers/agents); and

c) The types of payor (e.g., government offices, political parties/candidates, top corporations, and individual taxpayers).

For top corporate taxpayers, they would most likely point to Section 2.57.2(I), as amended by RR No. 11-2018, as the most challenging EWT provision to implement administratively even with advances in technology for bookkeeping and accounting-related systems. Under this catch-all provision, private corporations classified as Top Withholding Agents (TWAs) are required to withhold 1% and 2% EWT on their local/resident suppliers of goods and services, respectively, if the local purchases are not covered by the other EWT rates.

Prior to the 2018 RR, only Top 20,000 private corporations duly informed by the BIR as such were required to withhold 1% and 2% EWT rates on their regular purchases. In 2018, RR No. 11-2018 introduced the TWA classification which expanded the scope to include Medium Taxpayers and those taxpayers under the Taxpayer Account Management Program (TAMP).

In a more recent BIR issuance, RR No. 7-2019 further amended the TWA criteria to include taxpayers whose gross sales/receipts or gross purchases/claimed deductible itemized expenses amounted to P12 million pesos during the preceding taxable year.

At first glance, the threshold amount of P12 million may appear high. However, it is easy to breach because the rule provides two ways of measuring the threshold amount, that is either by calculating the: a) gross sales/receipts; or b) gross purchases/deductible expenses. Thus, it would not be outside the realm of possibility for some medium-sized businesses to suddenly earn the TWA classification, and assume the administrative burden and obligation that comes with it.

Does this make a taxpayer automatically a TWA the following year upon breaching the P12 million threshold? Fortunately, the answer is no.

Under the RR, the BIR is required to serve notice by publishing the list of TWAs in a newspaper of general circulation or to post it on the BIR website. After being notified, the obligation of the TWAs to withhold 1% and 2% EWT shall commence on the first day of the month following the month of publication. This rule shall apply to all TWAs except those already classified as TWAs under RR No. 11-2018 including the Top 20,000 private corporations identified in previous regulations.

Thus, the “notice by publication” rule means that breaching the P12 million threshold does not automatically make one a TWA. Instead, taxpayers that earned gross sales/receipts or incurred gross purchases/deductible expenses of at least P12 million during the previous taxable year can take a breather in the meantime until the BIR updates and publishes the new list of TWAs. For now, they can heave a sigh of relief until the directive to withhold 1% and 2% EWT is handed down.

It would not be difficult to assume that the new regulation is another way for the BIR to broaden its tax base and to improve tax administration. Expanding the scope of the EWT would make taxpayers more transparent about their transactions and how they declare these in their tax returns.

Although RR No. 7-2019 clarified the definition of TWAs, it did not make the lives of corporate finance and tax personnel, especially of newly classified TWAs, any simpler. Unfortunately, some multinational companies and large corporations consider EWT a challenging obligation added to their fair share of work.

No matter what, the policy is the way it is for now. As a word of advice, it is probably best for TWAs to go the extra mile in monitoring their transactions and prudently ask, “Are we on top of our withholding taxes?”

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

 

Crystabelle Cruz Lucas is a manager at Tax Services Department of Isla Lipana & Co., the Philippine member firm of PwC network. Readers may call +63 (2) 845-2728 or e-mail the author at crystabelle.d.cruz@pwc.com for questions or feedback.

Logistics, infrastructure and the consumers

Last Monday, upon the invitation of the Department of Trade and Industry (DTI), I attended the 2nd Logistics Services Conference and Exhibition at the Philippine International Convention Center. I was invited as media and I attended the press conference led by Department of Trade and Industry (DTI) Secretary Ramon Lopez, flanked by leaders of various private industry associations and government officials from the Philippine Economic Zone Authority, the Technical Education and Skills Development Authority (TESDA), the Export development Council the International Finance Corp. ), and the DTI.

I am unfamiliar with the major issues of this sector, hence my curiosity about the conference. I was also intrigued by the World Bank’s Logistics Performance Index (LPI) so I checked that biennial report. The index is composed of six factors — Customs, Infrastructure, International shipments, Logistics quality and competence, Tracking and tracing, and Timeliness.

I extracted from the Excel database the numbers for major Asian economies for the years 2010, 2014, and the latest report 2018. Germany is included in this list because it is the consistent No. 1. The Philippines has a bad trend — a declining score and declining global rank out of 160 countries and jurisdictions covered. In particular, its rank in Customs has fallen from 47th in 2014 to 85th in 2018. The good news is that its rank in infrastructure has somehow improved (see Table).

I know Secretary Mon Lopez — we are both members of the UP School of Economics Alumni Association and I spoke with him a few times. I know that he is solutions-oriented as the private sector and business competition had been his home for many years before joining the DTI.

Listening to him and many other speakers at the press conference, I was surprised that while it was the DTI that led this conference, many of the issues that cause headaches to players in the sector are outside the mandate and core concerns of DTI. Like lack of drivers for trucks, forklifts and heavy equipment (TESDA training), port congestion (Customs bureau, Department of Finance), truck ban and numbers coding ban (Metropolitan Manila Development Authority), long period to get vehicle franchises (Land Transportation Franchising and Regulatory Board, Department of Transportation), etc.

During the open forum, I asked if the advocacies by various stakeholders cover the wider macro-economic and intra-industry reforms like airlines and shipping lines liberalization, seaports and airports modernization, tollroads expansion nationwide. Secretary Mon said they do, that the administration’s Build, Build, Build programs address these infrastructure challenges, and investment liberalization measures are being advanced.

My impression now is that the DTI has become a sort of intermediary for many government agencies that tend to over-bureaucratize logistics players like truckers, freight forwarders, cargo handlers, airlines and shipping lines, to temper their itch to demand too many requirements and simplify these instead.

This should extend to infrastructure development. Too many permits and requirements — from local governments to various national agencies — to build or expand seaports, airports, tollways, power plants, dams and water sources, etc.

The goal of policy reforms should be the betterment of the consumers. More goods and services at lower cost and prices, reduced waste due to faster mobility of commodities from manufacturers and traders to end-users. Less government bureaucracies and more private competition, these will favour the consumers. Happy to see the DTI leading this.

 

Bienvenido S. Oplas, Jr. is the president of Minimal Government Thinkers.

minimalgovernment@gmail.com

Technology has its downside

Airbnb is an online marketplace or brokerage that people use to book or offer lodgings. It is popular among internet-savvy travelers and short-term renters. I have used the service myself a number of times looking for places to stay in while on vacation, and, to be honest, I have been quite happy with it. And, I am sure many others are happy with it, or else Airbnb’s global business couldn’t have made $2.6 billion in gross commissions in 2017.

Online companies like Airbnb and Uber and Grab have been matching people with surplus lodgings and transportation with consumers who need them. In the same way, Amazon and Alibaba have become online marketplaces for products from different makers all over the world, for sale to consumers globally. Even Facebook now has its own marketplace for goods and services, which I occasionally peruse.

And, for about a decade now, I have come to accept such use of technology to avail myself of goods and services. At some point, I even raved about it. Improvements in internet service in recent years, as well as the availability of more sophisticated and more powerful mobile devices, and the proliferation of sellers and service providers online have made all this happen. As such, when travelling, the mobile device with reliable data connection has become indispensable.

It was thus with some concern that I came across a story by Joseph Schmid of the Agence France Presse dated July 9, which narrated how families have been leaving Paris in favor of the French suburbs, and, as a consequence, many Paris schools have been forced to shut down. And the situation has been blamed on Airbnb, and how it prompted a significant rise in Paris property prices and how this has been driving out families from the French capital.

Schmid wrote, “Real estate prices in Paris and most Western capitals have soared in recent years, making it harder for middle-class couples to find family-sized apartments in a city already known for its cramped living conditions. While record low interest rates and a shortage of housing have fueled the boom, fingers are increasingly being pointed at Airbnb. Its popularity has encouraged thousands of property owners to turn Paris flats or commercial spaces into short-term rentals that are far more profitable than traditional leases.”

He added, “The fall in the number of children in Paris is inversely proportional to Airbnb’s spectacular growth since 2013. With 65,000 listings for a population of 2.2 million in the 20 districts that fall within the city’s limits, compared with 50,000 for the 8.5 million people spread across New York’s five boroughs, Paris is Airbnb’s single biggest market. By contrast with Berlin, where many Airbnb offerings are for a room in an apartment, nearly 90% of the Paris listings are for an entire home, according to the Paris Urbanism Institute. City officials accuse Airbnb of effectively siphoning thousands of apartments off the market.”

With homes suitable for families being lost to tourists and short-term renters, many couples with children have opted to live out of Paris. As such, they’ve also put their children in schools outside Paris. As a result, four schools have shut down in four years, following 10 others that have shut after being merged with other schools because of lack of enrollees, Schmid reported. He added that a dozen more “are at risk of closure or ‘merger’” since “student levels have fallen every year since 2012 — a decline of 9%, or nearly 13,000 pupils overall.

I am sure that Airbnb is not entirely to blame for this situation, and that other factors may have had their contributions to the issue. Schmid’s report also noted a shortage in new housing projects and falling birth rates. He also quoted Airbnb as saying, “Official data show the Paris population has been declining since the 1950s, and the housing issues in Paris go back several decades before the creation of Airbnb.”

There is still a need to ascertain statistically that falling enrollment, and thus school closures, in Paris in recent years can truly be attributed to the popularity of Airbnb. However, never did I imagine school closures to be among the possible unintended adverse consequences of its business model. Such a socioeconomic implication, if at all proved to be strongly correlated with Airbnb’s success, should be a cause for concern.

But one cannot easily blame property owners for turning to short-term rentals. After all, it pays better, and not only in Paris. In Manhattan’s Lower East Side, one study found that full-time Airbnb listings earned, on average, two to three times the median long-term rent. This was noted by Daniel Guttentag, an assistant professor in hospitality and tourism management at the College of Charleston, South Carolina, who in 2018, was commissioned by the BBC News to analyze how Airbnb was affecting neighborhoods globally.

A number of territories have also started to curb short-term renting. BBC News quoted New York City council member Carlina Rivera: “The aim is protecting our affordable housing stock for the millions of New Yorkers who could not live here without it.” In Barcelona, short-term rentals must be licensed, and new licences are no longer being issued, noting that illegal accommodation “creates speculation and illicit economies and its activities leave nothing positive for local neighbors, causing nuisance and complaints.”

BBC News also noted that a Barcelona study and others looking at Boston, Los Angeles, and the entire US have “suggested a link between the concentration of Airbnb properties in a neighborhood and rising rents.” One report also “suggests that Airbnb profits from illegal rentals that ‘cause rent increases, reduce the housing supply, and exacerbate segregation’,” BBC News added.

Despite these developments, I still believe that technology is a friend, not a foe. But, to me, it should be seen as what it is: a tool, a means to an end. With Artificial Intelligence or AI, however, this may no longer be the case. AI and computer algorithms have become surrogates for human intelligence and discretion. Emotions, as well as accountability, have been neutralized as factors in decisions and actions. In this line, any business model that strongly relies on technology for its success should always be audited regularly for its economic and social implications and how it can adversely impact the human condition.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippines Press Council.

matort@yahoo.com

Keep the ‘killer’ tagline alive!

“Drip… drip… drip…” that’s the sound I heard in the middle of the night from the aircon in my bedroom. I got out of bed and rushed for pails! I was annoyed because the aircon was just cleaned a month ago. I called the company the next day to send someone to fix it. It took at least four days for someone to come. Two technicians arrived. They told me that they were the ones who cleaned the aircon a month ago. The older one was the lead man — he said that he was new in the company, but he was proud to say he had years of experience. I was surprised to learn that the younger man was an on-the-job-training employee! I am a loyal customer of their company. But I could not believe that they sent company neophytes!

When the work was done, I signed and wrote a note on the service report. I said, “It is true, right? It is a back job!”

Two hours after they left, it was irritating to hear the “drip… drip… drip…” from the aircon once again. I was disappointed as I ran to get the pails again.

A technical assessment group arrived two days later. To cut the story short, their findings were “For general cleaning. Plus, replacement of damaged window-type aircon cover.” The damage resulted from the aircon service cleaning. The technical group left and the pails were still below the aircon. Furniture was displaced in the rooms.

The company’s killer tagline is “SMILE…!” The service provider’s slogan conveys the assurances that I will smile when they provide me a service. So, what does “smile” mean? According to neuroscientist, Andrew Newberg, a smile denotes emotions that are highly positive. While it is momentary, a smile demonstrates a person’s reaction to a satisfactory service experience. When customers are pleased, they are happy. Thus, they smile. Unfortunately, the service provider failed to deliver what they promised. The smile was rubbed out because the technicians were not reliable. The newly hired was entrusted to deliver work that he did not know. A newly hired employee who is unfamiliar with the work should not be given the responsibility to train a subordinate unless he went through sufficient training himself and was evaluated to perform a job the “company” way.

They conveyed one message, “the customer is not important.” Thus, they just killed their tagline, “SMILE…!”

Actually, it is not so difficult to keep a customer smiling if a company focuses on pleasing its customers. Customers aspire to having a satisfying experience with a service. Service providers should bear in mind that their customers remember their experiences. Any direct or indirect contact with the service provider is a touch point in multiple phases of their customers’ experience. Every touch point relates to the Moment of Truth as it is when a customer interacts with the service being provided. Thus, providing quality customer care and service in all touch points is important.

Achieving service quality. Customers match the service provided to them with their expectations. Parasuraman and his colleagues mentioned five ways that customers measure the quality of a service. They include:

• Tangibles which pertain to the physical component or objects used in the service. The worker’s appearance is considered a tangible. For example, a worker who needs to repair the aircon in a bedroom wearing muddy shoes can upset a customer.

• Empathy is the attention to given to customers. Empathy is the ability of service providers to put themselves in the shoes of their customers. By reassuring a customer that the problem will be resolved, they build customer rapport.

• Reliability is when service providers perform their promised service accurately. This includes the timely service and the accuracy of records about the provided service. The customer should be able to depend on the work that was performed.

• Responsiveness involves providing timely service to the customer. For instance, complaints should be responded to no later than 24-hours.

• Assurances encompass the required knowledge of service providers. For example, returning to do a job again does not demonstrate the expertise of the service provider. Service providers should be competent when it comes to the work that they do to inspire trust and confidence.

The higher the service quality, the higher the perceived value which drives above-expectation customer satisfaction. Customers become dissatisfied when the provided service is below their expectation.

Giving attention to all the touch points in the service journey requires coordination in the entire business. An organization should encourage a culture that is customer-centric to embrace excellent customer service goals. As the killer tagline says, “SMILE…,” the organization should totally strive to keep customers smiling. In this way, the killer tagline is kept ALIVE!

 

Ana LiSa “Pinky” Asis-Castro, DBA, REALTOR teaches in the MBA program of De La Salle University.

ana.asis-castro@dlsu.edu.ph

People make it so hard to ditch plastic straws

By Scott Duke Kominers

RARELY has a minor consumer product received more vilification than the plastic straw. As a symbol of human wastefulness and our careless disregard for the environment, straws are the near-perfect villain. You use a plastic straw once and toss it, but it stays with us forever, sitting in a landfill, floating in the sea, or harming wildlife.

That’s why some local governments like that of New York City have stopped allowing them, along with other single-use plastics. This seems like a perfectly reasonable thing to do, even though plastic straws comprise only a small part of the total volume of plastic disposed of each year.

But eliminating plastic straws offers a case study in how simple solutions can be devilishly tricky to implement — and sometimes even worse than the problems they were meant to solve. For that, we can largely thank ourselves and our behavioral quirks.

Let’s look at just one example: Some restaurants and bars have replaced their plastic straws with reusable metal variants. But there’s a hitch, as the New York Post recently reported: customers keep taking the metal straws home with them.

This leaves restaurants holding the short straw, so to speak. Metal straws are expensive — perhaps a dollar apiece (or more) versus a penny or two for the plastic version — and so replacement costs add up quickly.*

This might not be so problematic if the metal straws that customers walk off with get reused frequently. But most probably go on display as novelties or sit forgotten in a utensil drawer. And this means the metal straws — which presumably required mining, plus large amounts of energy to convert into sheet metal and then fashion it into a cylindrical tube — don’t provide the intended environmental benefit.

I’m not aware of any research on the relative environmental costs of producing different types of straws. But the evidence on reusable grocery bags is not heartening.

Reusable bags take much more energy than single-use paper or plastic bags to make. As a result they become an environmental plus only after a large number of uses — estimates suggest you need to use a reusable bag almost 40 times to break even in terms of environmental costs. Most reusable bags get lost, discarded or neglected in a closet before that milestone, undermining the case for them.

It would be surprising if the calculus for metal straws were any better. If metal straws get pilfered before they’ve been used enough, they may well be worse for the environment than their plastic peers.**

So what’s to be done? Economics offers a straightforward answer: instead of banning single-use plastics, the right strategy is to tax them.

Taxes force people to pay — or in econ-speak, internalize — their own environmental costs. This tends to lead people to change their behavior: with plastic taxes, everyone reduces usage on the margin, with those who get relatively lower value from single-use plastics reducing their usage more. Even small taxes can change behavior substantially: a seven cent tax on all grocery bags in Chicago, for example, was associated with a 42% drop in usage.

We can calibrate taxes to match actual estimates of environmental harm. This helps make environmental concerns tangible, and in particular makes people aware of which types of plastic are most harmful. Moreover, we can use the plastic tax revenue to support environmental causes, as Chicago and other cities have.

Of course, with these sorts of user and consumption taxes we have to be careful about inequality: the effective tax burden tends to fall more on those with lower incomes and/or those who need to use more plastic products. But tax-based policy can be designed to account for individual circumstances. For example, the high-end plastic bags in upscale grocery stores are often taxed more highly than bags at lower-cost stores. Meanwhile, some people have disabilities that mean they need to use straws; they could be exempted from the straw tax.***

So while it’s true that reducing plastic straw usage might be an easy way to limit the harm we do to the environment, we need to make sure the limitations we place really are providing solutions. And that means taxes may be better than bans.

 

BLOOMBERG OPINION

 

*For one restaurateur, losing up to 50 metal straws a month was too many. As he told the New York Post, he now declares: “If your glass comes back, and [the metal straw] is not in it, you’re gonna see it on the bill.”

**The reusable grocery bag assessment looks even worse once we account for the possibility that some single-use bags get reused for household storage or as bag liners. But in the case of plastic straws, at least, reuse is unlikely.

***Exempting these individuals from plastic straw bans would not help nearly as much, since under bans many restaurants will stop stocking plastic straws entirely.

Bolts earn playoff for last QF berth

By Michael Angelo S. Murillo
Senior Reporter

THE MERALCO BOLTS kept their Philippine Basketball Association Commissioner’s Cup campaign alive by beating the San Miguel Beermen, 95-91, on the final day of the elimination round on Wednesday at the Smart Araneta Coliseum.

Showing the steadfastness on both ends of the court needed to keep their hopes alive, the Bolts outlasted the Beermen to improve to 4-7 and earn a playoff for the last quarterfinal spot against the Alaska Aces.

Knowing the significance of the contest, the two teams had it close to begin the opening quarter.

The Beermen had early traction but the Bolts would eventually keep in step.

After the first 12 minutes, the count stood at 22-21, and Meralco on top.

The nip-and-tuck nature of the match continued in the second frame, with the teams fighting to a 31-29 score, and the Beermen ahead, after six minutes.

Raymond Almazan then led an 11-7 run by the Bolts to overtake the Beermen, 40-38, with 2:52 on the clock.

Led by import Chris McCollough, however, San Miguel would regain its footing, able to pull even at 42-all at the break.

It was a shootout to begin the third quarter with import Delroy James leading the way for Meralco and June Mar Fajardo for San Miguel.

Meralco managed to hold a 61-58 lead at the halfway point of the frame.

Chris Newsome and Mr. James kept the Bolts machine humming for the rest of the quarter to help their team to a 74-70 lead heading into final 12 minutes of the contest.

San Miguel opened the payoff quarter with more fire, looking to seize the momentum from Meralco.

The Beermen went on a 10-5 run in the first three minutes and a half, to move ahead, 80-79.

Mr. Newsome and the Bolts though stayed the course to mix it up and go on top anew, 87-85, with five minutes left on the clock.

San Miguel pulled even at 89-all with 3:39 to go off an and-1 play from Mr. McCollough.

The score was at 91-all entering the last two minutes.

Mr. James broke the tie with a layup with 1:03 remaining to hand the Bolts the lead, 93-91.

After a timeout, the Beermen tried to execute a play to tie the game but was foiled by the Meralco defense.

Mr. James then made it a four-point lead for the Bolts, 95-91, with another layup with 32 ticks left.

San Miguel had a chance to narrow the gap but Mr. McCollough missed his two free throws with 19 seconds remaining.

The Beermen was forced to foul Mr. Newsome with 13 seconds to go but he missed both charities to leave the window open for the Beermen.

San Miguel, however, was not able to capitalize on it as Meralco held on for the win.

Mr. James led the way for Meralco with 34 points to go along with six assists, four steals and two blocks.

Mr. Newsome had 20 points while Mr. Almazan had 15.

For San Miguel (5-6), Messrs. McCollough and Fajardo finished with 27 points apiece.

“It was a game we had to have to stay alive. The players really stepped up both offensively and defensively. So we lived to fight another day,” said Meralco coach Norman Black after their big win.

With the win, Meralco edged the Phoenix Pulse Fuel Masters for a playoff for the last quarters spot against Alaska with a superior quotient.

Alaska, Meralco and Phoenix finished the eliminations with identical 4-7 cards.

San Miguel, meanwhile, with the loss could fall down to as low as seventh depending on the outcome of the TNT KaTropa-Magnolia Hotshots match later yesterday.

In the event it does fall to seventh, it will have a twice-to-win disadvantage against the number two team in the next round.

BOLICK ROOKIE OF THE MONTH
Meanwhile, Northport Batang Pier’s Robert Bolick is the PBA Press Corp rookie of the month.

Stepping up after the departure of erstwhile team star Stanley Pringle, Mr. Bolick, the third overall pick in this season’s draft, has helped continuity in Northport goes seamless, resulting to a best record to date for the franchise of 9-2 in the Commissioner’s Cup.

The 23-year-old Bolick, was quick to lead the way for the Batang Pier shortly after Mr. Pringle’s departure last June 18, steering the team to back-to-back wins over the Rain or Shine Elasto Painters and Blackwater Elite before losing a close one against the Phoenix Pulse Fuel Masters.

In NorthPort’s first three games in the post-Pringle era, it was Mr. Bolick who was at the forefront, averaging 16.3 points, 5.6 rebounds, and 7.3 assists.

For the month of June, overall Mr. Bolick submitted numbers of 15 points, six rebounds, and six assists in six games to earn his first PBA Press Corps Rookie of the Month honor.

During that stretch, the Batang Pier went 4-2 in the six games they played.

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