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A remarkable growth

In the past several years, health maintenance organizations (HMOs), which hit the Philippine health care scene in the 1980s, have been growing remarkably on the back of the country’s robust economy, which benefits the private corporations that form the massive bulk of HMOs’ client base.

In 2017, according to the Insurance Commission (IC), HMOs collectively earned P36.8 billion in revenue, up 11.5% from P33 billion in 2016. Their net income also rose, by 40.44% from P667.5 million to P937.5 million. As of September 2018, the revenues of the country’s HMOs reached P32.2 billion and their net income P1.8 billion.

IC has been supervising HMOs since 2015, a responsibility that the Department of Health (DoH) used to have. One key step the agency took to improve industry standards was to increase the minimum paid-up capital requirements for HMOs. A 2016 circular from the IC said that all existing HMOs should have a minimum paid-up capital of P10 million, while for new HMOs, the required amount is P100 million. DoH previously set the requirement at P10,000 only.

“We welcome the move of the government to put the HMOs under the IC to regulate the industry and protect the public interest,” Jeremy G. Matti, president of Asalus Corp., which operates under the brand name Intellicare, said.

The change also helps combat predatory pricing. In the past, Mr. Matti said, multiple HMOs were forced to shut down because of wrong pricing.

“By definition, it is true that we are a health care service provider, but we are also a risk carrier. We take on risk. Being under the IC, all pricing has to be actuarially sound. So predatory pricing will be at its minimum level eventually, because of reportorial requirements submitted to the IC. More or less they can check the viability of an HMO. Is it still strong financially? Is it capable of servicing a million members? All these will be for the benefit of the public,” he said.

For his part, Franz Joie D. Araque, senior vice-president and head of the health care division of Cocolife, a Filipino-owned insurance company with health insurance business, said, “The shift of the supervision of the HMOs from the DoH to the Insurance Commission is an index that the government is serious about supporting the industry.”

He added: “Our thrust is always to ensure ultimate protection of our consumers. To put everybody on a level-playing field ensures guaranteed protection of our consumers. Unfortunately, there’s a lot of disparity among players in the industry. There are small-scale HMO players that attempt to take on so much risk and of course that jeopardizes the interest of our consumers.”

Improving services through technology

HMOs in the country are harnessing the power of technology to provide better services to its members, as well as to improve their working relationship with their accredited medical institutions and professionals.

Cocolife is taking initiatives to electronically link with its partner hospitals to facilitate faster and more efficient exchange and processing of information, according to Mr. Araque. Their company is also in the process of upgrading its information technology system to adapt to the demands of the digital age.

Medicard Philippines, Inc., meanwhile, uses a suite of business intelligence software by SAS for things like utilization and pricing analyses, said its president, Dr. Nicky S. Montoya.

The firm collaborates with a local bank to produce custom bank statements for its partner doctors. It has also been using electronic fund transfer to quickly compensate their doctors for their services.

“I think our partner doctors appreciate this ease and clarity of information. It’s faster for them to get their payments and easier for them to do accounting,” Dr. Montoya said.

Intellicare has formed a partnership with Medgate, a provider of telemedicine in the country. Telemedicine allows Intellicare members to consult with physicians remotely using their phones. (There’s a Medgate telemedicine app available for download as well.)

Mr. Matti also revealed that they will soon be launching a product sometime this year with Fullerton Healthcare Corp. Ltd., a Singapore-based vertically integrated health care platform that acquired a 60% stake in Intellicare last year. This product will enable Intellicare members to avail themselves of services not only in the Philippines, but in other countries where Fullerton Health operates, including Singapore, without using cash.

Looking ahead

In the coming years, Mr. Matti believes that the demand for the products and services that HMOs provide will continue to grow. “But we also foresee that because of economics and behavioral changes, there will be new products that will address the needs of the public,” he said.

Meanwhile, Cocolife is looking to extend its services to more people. Mr. Araque noted that today, there is still only a handful of private citizens buying health insurance plans and HMOs. It is usually the private companies that purchase these plans to attract talent or incentivize them to stay.

“What we intend to do is to come up with plans and programs that will encourage more Filipinos to have access to medical care,” he said.

When it comes to Universal Health Care Act that President Rodrigo R. Duterte signed in February of this year, HMOs are in a wait-and-see mode.

The law provides that every Filipino citizen should be enrolled in the National Health Insurance Program and that he or she should be granted immediate eligibility and access to preventive, promotive, curative, rehabilitative and palliative care for a bevy of health services.

It also says that to ensure predictability of health expenditures, individual-based health services should be financed primarily through prepayment mechanisms, such as social health insurance, private health insurance and HMO plans.

The DoH and other concerned government agencies were given 180 days to craft implementing rules and regulations (IRRs) in connection with the law. It was reported in various news outfits last month that IRRs would be released by June or July.

“It’s a wait-and-see thing for our industry now. We’re not yet sure how the final implementation of the law [Universal Health Care Act] will be,” Mr. Araque said, adding that the government’s intention to extend medical care to more people through the law is admirable.

MediCard: Always responding to the patients’ evolving needs

By Mark Louis F. Ferrolino, Special Features Writer

As a health maintenance organization (HMO) founded and run by doctors, MediCard Philippines, Inc. prides itself with a unique concept of service-oriented health care that is difficult to be matched by other organizations. Since its inception in 1987, the company has remained committed to its promise of providing Filipinos accessible and quality health care, giving more attention to services.

“MediCard is founded and run by doctors. So we have the doctors’ perspective, we have the business perspective, and we have the patients’ perspective,” Dr. Nicanor S. Montoya, president of MediCard, told BusinessWorld in an interview when asked what makes MediCard different from other industry players.

Over the past years, MediCard has performed well from recording strong financial strength, up to expanding its network of members, partnered hospital and clinics, and accredited doctors, specialists and dentists nationwide. 

Dr. Montoya shared that MediCard currently enjoys a healthy financial record, which the organization plans to take advantage of in making health care more accessible and affordable.

“What I want to emphasize is the stability that we have. By getting your HMO benefits from us, you can be assured that we will deliver because providers are happy partnering with us, doctors are happy working with us,” Dr. Montoya said.

Dr. Nicanor S. Montoya, MediCard president

In an effort to bring affordable and quality holistic medical insurance to Filipinos, MediCard continues to introduce new products that allow individuals and families to take charge of their health without taking a heavy toll on their budget.

The MediCard Health Check Card, for instance, provides members with one-year coverage of unlimited consultations with the organization’s primary care physicians for only P500. Cardholders can also avail themselves of the annual physical examination and get 20% discount on all laboratory and diagnostic procedures that can be availed at the MediCard free-standing clinic where the card was purchased.

The Healthplus Card, on the other hand, has similar benefits to Health Check Card but it can be used in all MediCard free-standing clinics. This card can be availed at P1,100, which is also valid for one year.

For those who want a specialized health care maintenance service that covers emergency, preventive and outpatient care, they can avail of the RxER for P1,998.

RxER cardholders are entitled to emergency coverage for P20,000 in MediCard-accredited hospitals but is limited to trauma cases, animal bites, and accidental chemical food poisoning.

Other benefits include unlimited consultations with primary care physicians and some specialists; a flat rate of P350 for consultations with other specialists; and 30% discount on all laboratory and diagnostic tests, surgeries, and dental procedures done at MediCard free-standing clinics. Dental consultations at MediCard free-standing clinics are also covered including a one-time prophylaxis.

Meanwhile, to boost its efforts in attending to the health care needs of its members, and even non-members, MediCard is continuously growing its list of free-standing clinics in key cities.

MediCard’s free-standing clinics are equipped to provide laboratory tests, diagnostic procedures, annual physical examination, executive checkup, pre-employment exam and other medical evaluation, as well as first aid treatment in case of emergencies. These clinics are also accredited to perform minor operations by accredited surgeons of MediCard.

The company recently opened its 15th free-standing clinic in the country located at One Uptown Residences in Uptown Bonifacio, Taguig City. Dr. Montoya said that the firm plans to open one more clinic this year and at least one every year for the coming years.

Aside from its free-standing clinics, MediCard aims to transform the standard in health care service by investing heavily in digital innovations.

MediCard was one of the firsts to introduce telemedicine — or the use of telecommunication technology to provide patients clinical health care at a distance — in the country called My Pocket Doctor. This telemedicine application by MediAxes allows MediCard members to easily get in touch with doctors and get consultations anytime and anywhere.

According to Dr. Montoya, My Pocket Doctor makes medical consultations handy with less effort, time and cost, giving patients the opportunity to easily talk to medical experts at the comfort of their offices or homes even in the middle of the night.

Designed carefully to fit everyone’s needs, patients can access My Pocket Doctor using any phone or computer. Once the nurse schedule the consultation, a doctor will call the patient for a checkup and give prescriptions or instructions. For cases that need visual assessment, video call via Webcam can also be done during medical consultations.

“We’re just doing things better. We’re trying to find ways to be more efficient, and to be more responsive to what the patients’ needs are,” Dr. Montoya said.

In the years to come, Dr. Montoya said that the organization will continue to invest in technology and in putting up more clinics to make health care more accessible to more Filipinos.

Cocolife: Committed to the health and well-being of Filipinos

By Bjorn Biel M. Beltran, Special Features Writer

Health is wealth. It is a saying that is popular with many Filipino households, whether rich or poor. Given the Filipinos’ inherent nature to value personal relationships and family over things like material wealth, it makes sense that many believe that a healthy life is a happy life. But perhaps the saying also serves as a warning. Because for many Filipinos, losing one’s health is akin to losing control over one’s life.

“We know for a fact that at any time an ordinary hardworking employee who’s working for his family gets sick of dengue, a three- to five-day confinement may deplete the financial resources of the whole family, which may possibly cause them to skip meals, or possibly cause the temporary stopping of a child from going to school,” Franz Joie Araque, senior vice-president and chief of the Healthcare Division of Cocolife, told BusinessWorld in an interview.

He said that to prevent this from ever happening is why Cocolife, which is celebrating its 20th anniversary this year, established its health care division in the first place. As many Filipinos struggle to cope with the financial burden of medical care, Cocolife saw an opportunity to provide health insurance to complement its developing lineup of accident and life insurance programs.

“We facilitate the services in between the patient and their service providers which are the hospitals, doctors, and clinics. Primarily to ensure that there is efficient process to that health care access, and that, more importantly, we alleviate the burden of cashing out. We provide the financial support for these medical services, particularly in times where there have been an unexpected occurrence of emergency and accidents,” Mr. Araque said.

Franz Joie Araque, senior vice-president and chief of the Healthcare Division, Cocolife

Starting out in August 1999, the company’s health care division slowly gathered momentum and developing the framework for its business. Since then, Mr. Araque said that Cocolife has grown its health insurance premiums by around 1000%, its human resource by around 500%, and its client base by around 10 times. This roughly translates to around 1000 corporate clients, with an estimated 450,000 individual members, making it among the biggest health insurance providers in the country.

Health care insurance premiums by the company amounted to around P2.5 billion in 2017, contributing a significant portion of Cocolife’s overall premium income of P6.6 billion in the same year.

Cocolife has the unique position as one of the biggest Filipino-owned stock life insurance companies, offering a complete array of life insurance, non-life insurance, health care, and mutual fund products through its various business units and subsidiaries in the non-life business (UCPB General Insurance), pre-need (Cocoplans) and mutual funds (Cocolife Asset Management Co., Inc.).

Throughout its history, that position — and the sizeable pool of resources made available because of it — has granted Cocolife the edge over its competitors in the health insurance sector.

“There are only a few service providers of medical insurance and HMOs coming from the life insurance sector. There’s only a handful, maybe about less than 10 companies. And the uniqueness of that is that Cocolife is the biggest service provider of health insurance who is classified as a life insurance company,” Mr. Araque said.

“So that simply means that our commitments to our consumers buying health care protection are supported by the entire resources of the life insurance organization, over P27 billion of resources,” he added.

To build on that advantage, Cocolife recently restructured its organization with a new leadership focused on having a fresh perspective on how to approach business in the digital era. As the landscape of Philippine business shifts towards a workplace dominated by tech-savvy, time-poor millennials, the company is looking towards adapting more efficient, more accessible, and more convenient services for its clients.

“Back in the day, you know, maybe about two decades ago, medical services is a seller’s market, which means that medical service providers can impose a time when they are available to provide the service. It completely changed in the two decades after. Consumers, the patients, cannot wait for so long,” Mr. Araque said.

“Life is very fast-paced for millennials and so we as a business would need to adapt to that. And that also has created a substantial change in the expectations of our customers,” he said.

Cocolife’s new plan involves improving the company’s brand presence, promising 24/7 accessibility for its customer support and call center services, as well as through the establishment of more contact points around the country to expand its reach. Cocolife currently works with almost 700 accredited hospitals, around 1,100 accredited clinics, and over 24,500 accredited doctors.

“What we provide is a promise. There is no tangible material that is given to the consumer when they buy our product, but rather a promise that in their time of need, we will pay for their hospitalization,” Mr. Araque said.

“The primary objective is to reach out to more Filipinos and encourage protection against risk, not only on unforeseen loss of life nor accident, but also on health, to ensure that they are more capable of bringing up a better, younger generation of Filipinos in the future. We are also very optimistic that with the new leadership of former Supreme Court Justice Bienvenido Reyes as chairman and Georgetown-educated lawyer Martin Loon as president, Cocolife will reach greater heights,” he said.

Intellicare: Providing a holistic way of managing the clients’ health

By Adrian Paul B. Conoza, Special Features Writer

Founded in 1995 with only 10 employees working together to attend to the health care needs of its clients, Intellicare has grown to be one of the country’s leading names in the health care industry today. Now, it has around 2,000 work force catering to over one million members who have put their trust in Intellicare.

This increase in number of clients was a result of existing Intellicare clients testifying to the excellent service that the company provides, Intellicare President Jeremy G. Matti shared in an interview with BusinessWorld.

Intellicare, now on its 24th year, has modified its approach in health care as it addresses the current medical needs of its clients.

Mr. Matti explained that before, the firm had a curative approach, solely focusing on bringing members to treatment. At present, the approach has changed into “a holistic way of managing health”, putting emphasis on wellness and prevention.

Intellicare’s services now focus on both treatment and wellness. In terms of treatment, this is being done with cost management in mind while still giving the best service available.

“When we speak of cost management, we do not necessarily mean that we would shortcut the treatment or medical management. It is showing our members what is the best way or option to have their treatment,” Mr. Matti said.

With the apparently rising cost of treatment in well-known hospitals, which Mr. Matti regards as the challenge brought by medical inflation, Intellicare serves as an advisor who makes members aware that there are alternative hospitals that can provide the basic service, but can still address their wants and needs in a cost-effective way.

On the other hand, while treatment remains a part of Intellicare’s services, it is now coupled with attending to the wellness of members. With the emergence of lifestyle diseases among younger generations, “The approach of all stakeholders in the health care space is more focused now in the well-being of the individual,” Mr. Matti explained. One of the notable ways Intellicare does this is through partnering with  wellness companies such as skin care centers, spas, salons, and fitness hubs.

Jeremy G. Matti, Intellicare president

While Intellicare’s approach has grown into a holistic kind, one thing that stays the same is the firm’s values. “With the foundation of our values set in place, when we deal with our customers or all our stakeholders, it is always based on integrity, fairness, hard work, and compassion,” Mr. Matti said.

He emphasized that compassion or care is one of the most important values in place in Intellicare. “Care, in the delivery of the service, is a key factor for the growth of Intellicare because we are dealing with human beings,” Mr. Matti said.

This holistic and values-driven approach to health care guides Intellicare’s delivery of service, which  is “high-touch” and “high-tech.”

As Mr. Matti shared, current developments have occurred in improving their utilization of technology: the upgrading of HMO system to better serve members, the creation of online portals, and the upgrading of their app into “a more robust type of app that can address the needs of our members”.

Mr. Matti also said that Intellicare’s call center is being upgraded. “It will happen sometime August or September, [and it will be] a more powerful call center system without removing the human side of it.”

In further improving its services, Intellicare also partnered with other health-oriented services.

Intellicare tied up with Medgate Philippines to provide a telemedicine service within Intellicare. By one press on a smartphone, the patient can consult with a doctor any time to diagnose his/her condition. Through this, the time consumed in commuting to a clinic and in lining up for checkup is eliminated.

Intellicare partnered with ComPsych, a global leader in employee assistance program, for addressing behavioral issues. Through ComPsych’s program, a member can call a clinician to assist him/her in identifying the cause/s of the apparent behavioral stress.

The Intellicare Group also partnered with Asian health care solution provider Fullerton Healthcare Corporation Ltd. In 2017, Fullerton entered the Philippine market through Intellicare.

For Mr. Matti, this means that the whole ecosystem of the health care landscape becomes vertically integrated under one group, unlike before when Intellicare simply stood at the center as a funder that brings members to medical facilities.

“We will also be part of the provider side through our Aventus clinics. Likewise, we will  have laboratories and imaging centers,  and partner with other reputable organizations to complete the whole ecosystem of the health care space,” Mr. Matti added.

Along with these developments, Mr. Matti said that their people who commit to bring excellent and values-oriented service makes them a worthy choice for the health care needs of clients. “We stand by our core values, and what we commit, we deliver,” he said.

A better health care experience

Advances in technology across retail, hospitality and finance, among others, have caused consumers to become more demanding. The exact same thing came to apply in health care insurance, where clients expect a digital, convenient, and personalized experience from their insurers or health maintenance organizations (HMOs).

According to the World Insurance Report 2019 published on May 14 by Capgemini, one of the world’s foremost providers of consulting, technology and outsourcing services; and Efma, a global nonprofit organization, insurers must respond to emerging threats and changing customer expectations by embracing new technology and partnerships.

“Emerging risk trends and rising customer expectations are dramatically changing the landscape for insurance, and providers must be agile in how they respond,” Anirban Bose, chief executive officer of Financial Services at Capgemini and member of the group executive board, was quoted as saying in a statement.

“Those that can evolve their products through technology, collaborate with innovators, and think of themselves as partners and preventers to their customers, stand to benefit the most,” Mr. Bose noted.

To provide a seamless and simplified customer experience, insurers and HMOs have already integrated digital innovations in their operations. Some of these include chatbots and voice assistants, mobile apps, IoT (Internet of things) devices, analytics, and telemedicine.

A report by Capgemini titled “Top 10 Technology Trends in Health Insurance: 2019” said that chatbots and voice assistants are being leveraged by industry players to provide meaningful customer engagement; help clients better understand their health benefits; and provide personalized sales conversations with them. Moreover, these tools can also act as a continuous care companion for older patients, reminding them about taking medications and doing other tasks.

The report, however, noted that firms would have to carefully navigate the hurdles of misinterpretation risks and privacy concerns that voice assistants pose.

Mobile app has also become a good channel to increase engagement and capture customers’ mindshare by being present in their mobile devices.

“According to a report by Research 2 Guidance, 325,000 health apps were available in 2017 with 78,000 apps added to major app stores in 2016,” the Capgemini report said.

Meanwhile, with the increasing demand for personalized offerings from customers, insurers are moving toward a preventive model of care, which involves real-time monitoring of user’s parameters for timely care interventions and encouraging healthier lifestyles through wellness initiatives. In this way, health incidents are prevented in advance rather than being addressed only after they occur.

The same report explained that industry players are now using wearables to constantly monitor the health parameters of their members which greatly help in timely intervention in case of anomalies. To encourage healthy lifestyle behavior, they also offer proactive wellness initiatives that involve a reward for displaying healthy behaviors. Moreover, they are developing more community-based care programs and offering solutions for aging and chronic populations. 

Analytics is also increasing in importance when it comes to providing customers with personalized care. Firms, in particular, can leverage analytics to make predictions about members’ susceptibility to ailments.

Analytics enables insurers to get insights into members’ future health trajectories through predictive analysis of the profitability a customer may contact an illness. It can also be used for deciding the best course of action in terms of identification of most effective treatments and drugs resulting in cost-efficient treatments. Moreover, behavioral analytics enables firms to study customer preferences and improve adherence and personalize care thereafter.

Another innovation that is gaining prominence and transforming the nature of provider-payer-client interactions is telemedicine. It provides users convenient access to physicians from anywhere through video consultations on their mobile phones and tablets.

“Diagnosis performed remotely can result in convenience and cost benefits to all the members in the health care ecosystem by reducing in-patient visits and enabling patients to avoid travel and other costs associated with a trip to the doctor’s office,” the Capgemini report said.

Telemedicine continues to grow in popularity, with the global telemedicine industry predicted to be valued over $40 billion in 2021.

“More and more health insurers are moving to customer-centric business models by leveraging technologies such as voice assistants, wearables, telemedicine, etc. The availability of a wealth of customer data and improved analytical capabilities will enable insurers to become customers’ health partners by providing seamless guided-use experiences, proactive wellness initiatives, and preventive and personalized care,” the Top 10 Technology Trends in Health Insurance: 2019 report concluded. — Mark Louis F. Ferrolino

What you should know about HMOs

For a vast majority of Filipinos, falling sick is unacceptable. The demands of daily life are often too rigid and unyielding to allow for any unexpected breaks, especially if someone is the breadwinner in their family. The financial costs of a bad accident, an unfortunate injury, or an unexpected diagnosis can set a family back and derail their lives completely.

This is, among many reasons, why health insurance is so important to daily life. Fortunately, many employers in the Philippines are partnered with renowned health maintenance organizations (HMOs) to give their employees the security they need to avoid the worst scenarios.

HMOs are a type of insurance provider that works with a network of physicians to give the subscribers under its coverage basic and supplemental health and medical care in times of need. Typically, the network or organization provides such health insurance coverage for a monthly or annual fee charged to one’s employer, and covers the fundamental services needed by individuals to maintain their health and well-being such as in-patient and out-patient care, basic surgeries, and other ancillary services like laboratory testing and medication.

While HMOs may not provide the extensive and comprehensive coverage given by private health insurance, they also come at a cheaper cost. By limiting the coverage to medical aid provided by the primary care physicians, clinical facilities, and specialists within their network, HMOs can allow for lower, more affordable premiums. This also comes to the health care providers’ benefit, as such contracts give them a steady stream of patients to look after.

HMO subscribers pay a monthly or annual premium to access medical services in the organization’s network of providers. Many companies in the Philippines are partnered with HMOs and automatically provide their employees with all the included benefits without any additional work on their part.

The catch to such convenience is that HMO subscribers are also limited to receiving health care from specific contracted medical providers under their particular network. The insured employee can only get medical care and services from doctors under the HMO network or else pay out of his own pocket. However, there are some companies that offer out-of-network medical care coverage, including services like emergency care and dialysis.

Additionally, HMO coverage could require the insured to live or work in their particular plan’s area of network in order to be eligible for coverage. This is a non-issue for Filipinos working within Metro Manila, but could be something worth considering when one is moving to the provinces.

What also bears noting is that many HMO plans also work with PhilHealth, giving Filipinos much more out of their health insurance. As the health insurance provider run by the government, PhilHealth seeks to offer all Filipino citizens an affordable and progressive insurance program that extends financial assistance to all citizens seeking medical help, whether employed or unemployed. This means that it comes first before any health insurance plan. For instance, in times of hospitalization, PhilHeath will partially cover one’s medical bills from anywhere to 15% and 30% by default, while the remaining balance could be paid by HMOs or private health insurance provider.

PhilHealth membership is compulsory for all Filipino employees and typically half of the monthly contribution is covered by the employer while the other half is deducted from the employees’ salary. The amount of financial assistance it extends to its members will vary according to the disease, and knowing more about particular illnesses and the associated coverage plan could save a lot of trouble down the road.

The major downside to HMO plans is that they are not as comprehensive and extensive as private health insurance, which may offer much better financial assistance in times of critical illness. Premiums at these organizations are priced much higher than HMOs and are usually fully paid by the insured, but these come with facilities that are typically at par with international standards and policies that may extend even outside the country. Many private insurers also offer lifelong coverage, as opposed to the limited coverage and duration of HMO plans.

Given enough resources, of course, the best option would be to subscribe to both an HMO plan and private health insurance, as this will ensure that any health and medical needs could be paid for if the need arises. If that is too much, and all you want is basic health coverage to protect you from any common illnesses and emergencies, then an HMO will be enough. — Bjorn Biel M. Beltran

A key to prevention and wellness

Apparently, checkups are called for when one is already sick. But, nowadays, health care providers are changing the norm as they try to prevent or mitigate illnesses and promote a healthy lifestyle among their clients through executive checkups.

An executive checkup, more known abroad as executive physicals, is defined by Mosby’s Medical Dictionary as “a physical examination that includes extensive laboratory, radiographic, and other tests that may be provided periodically to management level personnel at employer expense.”

As it takes the regular physical examination to a larger extent, executive checkups “typically begin with an in-depth health evaluation that includes advanced lab testing, specialized imaging and specialty consultations,” as American health care provider PartnerMD put it.

“Information gathered from this thorough examination is compiled into a comprehensive package that creates an accurate map of the patient’s health status, can achieve early identification of health risks, and helps the patient plot a course to optimal health and performance,” the PartnerMD added.

In addition, according to the Web site of Aventus Medical Care, executive checkups include “full-body scans, blood testing for multiple rare conditions, and extensive time spent with a doctor going over medical history, and discussing any issues that the patient might otherwise not mention in a standard physical.”

Follow-ups may supplement the already-comprehensive checkup which, as Florida-based health care provider MDVIP wrote, “may also include optional lifestyle counseling and add-ons like fitness and nutrition coaching, a personal trainer, holistic services and massage.”

Since it efficiently puts essential health examinations in a single- or two-day package, an executive checkups aims to meet several goals, which MDVIP specifically enumerates on its Web site: to determine risk factors and preempt potential health problems before they occur; provide expert personal health care for conditions, illnesses and injuries; and promote general health, including nutrition, fitness and stress management.

Executive checkups are becoming a very important tool in monitoring and taking care of the health of executives and employees, since they are usually caught in the busyness of day-to-day work and so happen to leave their health hardly attended to or even compromised.

“With an eye toward prevention, these one- or two-day examinations attempt to accommodate busy schedules while supporting the long-term wellness and productivity of a firm’s key players,” medicine professor Anthony L. Komaroff, MD, explained in an analysis of executive physicals published in Harvard Business Review.

As this particular kind of health care is being offered by more and more providers, executive checkups matter since they show that the health of each employee should be valued and that a healthy work force is vital for a well-functioning organization.

Executive checkups are a better means to determine conditions or risks that might hint at more serious complications. They are being used as a tool to prevent illnesses, proving indeed that prevention is better than cure.

“An executive physical can help identify medical problems before they become serious,” Pittsburgh-based health care provider and insurer UPMC explains. “Many conditions — such as diabetes, heart disease, and some cancers — have a high rate of successful treatment when detected early.”

A post by the Lung Center of the Philippines agrees, stating that an executive checkup “is often considered as the cornerstone of disease prevention, and works hand in hand with other ways of avoiding disease like changes in lifestyle, controlling risk factors and vaccination programs.”

As a result, as Aventus’ Web site wrote, “Early diagnosis of a condition can mean that people are more likely to get early treatment, which can result in cures or management of conditions that may be too late to treat or reverse by the time they manifest symptoms.”

A study by the University of Michigan’s Management Research Center on executive health examination recognized that “[t]he success of a corporation is significantly dependent on the health and productivity of the executive work force.” And since executive checkups become a vital way of preventing and mitigating health woes, they are very helpful in keeping members of the work force healthy.

With the corporate sector possibly being subject to various lifestyle diseases, an executive checkup promotes the wellness of employees. This, in turn, contributes to their enthusiasm and productivity at work, and lessens their chances of taking time off work because of some health problem.

Executive checkups, as an extensive and well-rounded service that aims at prevention and promotes wellness, are very helpful in maintaining the good health of employees, and eventually in keeping organizations up and running. — Adrian Paul B. Conoza

Thrift, rural bank reserve requirement cut

THE MONETARY BOARD of the Bangko Sentral ng Pilipinas (BSP) on Thursday announced an expected reduction in thrift, rural and cooperative banks’ reserve requirement ratio (RRR) — a week after it did so for big banks and two weeks after it cut policy interest rates — releasing more funds for lending to further prod economic activity at a time of easing inflation and slowing gross domestic product growth that disappointed at a four-year-low 5.6% last quarter.

BSP Governor Benjamin E. Diokno told reporters in a mobile phone message: “This morning, the Monetary Board decided to cut the RRR for thrift, savings and cooperative banks.”

“For thrift banks, the RRR cut was by 200 bps from eight percent to six percent… : 100 bps effective May 31… 50 bps effective June 28… and 50 bps effective July 26…,” Mr. Diokno said.

“For rural and cooperative banks, the RRR was cut by 100 bps from five percent to four percent, effective May 31… The BSP will issue the necessary circular shortly.”

The MB had announced after its May 16 meeting a phased 200 bps cut in universal and commercial banks’ RRR to 16% from 18% currently, “to be implemented in three stages: 100bps effective May 31, 50bps effective June 28 and 50bps effective July 26.”

Current rounds of RRR cuts for all banks in the country follow a cumulative 200 bps cut in February and May last year that nevertheless left the requirements for thrift, rural and cooperative banks untouched.

BSP Deputy Governor Diwa C. Guinigundo on May 16 parried reporters’ questions on prospects for more RRR cuts, saying such a move “[d]epends on system liquidity in the near future and outlook on inflation” since it frees more funds for banks to lend to businesses and households, in turn spurring both economic activity and overall price increases.

“Exactly a week ago, the BSP cut the RRR of the biggest banks by a total of two percentage points or equivalent to about P190 billion in additional peso liquidity to be infused into the financial system (about P95 billion effective May 31… about P47 billion effective June 28… and about P47 billion effective July 26…),” Michael L. Ricafort, economist at the Rizal Commercial Banking Corp., told reporters in an e-mail.

Mr. Ricafort said the announced RRR cut for smaller banks “would be equivalent to about P22 billion additional peso liquidity to be infused into the financial system.”

“Thus the overall additional peso liquidity to be infused into the local financial system from any combined RRR cuts for all banks worth a total of at least P200 billion would be positive for both the Philippine economy and financial markets, in terms of greater economic activity/faster gross domestic product growth,” Mr. Ricafort explained.

Money supply growth eased further in March by the slowest pace in over six years. Domestic liquidity or M3, considered the broadest measure of money in an economy, grew 4.2% year-on-year to about P11.4 trillion in March, slower than the 7.1% expansion in February and 7.6% growth in January. This pace is also the slowest recorded since September 2012.

In an e-mail, Security Bank Chief Economist Robert Dan J. Roces said, “We see this as an alignment by the BSP after cutting large banks RRR last week.”

“The additional liquidity injection is, of course, a positive to economic growth, further propping-up aggregate demand and bringing down financial intermediation costs, thereby leading to better credit growth that should go into capital formation and consumption,” Mr. Roces explained.

Headline inflation eased for the sixth straight month from a nine-year-high 6.7% in September and October last year to a 16-month-low three percent in April — marking the third month in a row that the overall rise in prices of widely used goods fell within the BSP’s 2-4% target — taking the year-to-date pace to 3.6% against the central bank’s downward-revised 2.9% full-year forecast average for 2019.

In its third policy review for the year on May 8, the BSP partially dialed back a 175 bps cumulative increase in benchmark interest rates fired off in five meetings in 2018, adopting a 25 bps cut that brought down BSP’s overnight reverse repurchase rate to 4.5%, the overnight deposit rate to four percent and the overnight lending rate to five percent. — Reicelene Joy N. Ignacio

ADB OK’s its biggest infrastructure financing yet

By Victor V. Saulon
Sub-Editor

THE ASIAN Development Bank (ADB) on Thursday approved financing for up $2.75 billion for the construction of a passenger railway linking Malolos in Bulacan to Clark economic zone and international airport in Central Luzon, making it the regional lender’s “single largest infrastructure project financing ever.”

The 53.1-kilometer Malolos-Clark railway is part of the Philippine government’s North-South Commuter Railway (NSCR) project, which spans 163 kilometers from New Clark City in Tarlac province in the north down to Calamba in Laguna province. The project is expected to be completed by 2025.

Markus Roesner, ADB principal transport specialist for Southeast Asia, said in a press conference in Mandaluyong City that what had been approved by the bank’s board yesterday is the elevated railway’s section from Clark International Airport, then the Clark area all the way down to Malolos.

“This will follow the existing railway alignment,” he said, adding that a short section will link the project to the Light Rail Transit (LRT) 1 station in Blumentritt through a “convenient” interchange.

The approved north rail transport system, which is targeted to be partially operational by 2022, will have a maximum speed of 160 kilometers per hour, with stops in seven stations designed to also accommodate the elderly and the disabled, he said.

Six contracts are now out for bidding to cover parts of the project, of which five are for the Malolos-Clark section, and one for the Solis-Blumentritt section. The contracts are for the railway system, electrical, mechanical, signalling, power supply, among others.

“Internationally experienced operation and maintenance contractor will be selected,” Mr. Roesner said, adding that any entity belonging to any of ADB’s 68 member countries could participate in the bidding.

The Malolos-Clark railway project can serve about 342,000 passengers daily along the Manila-Clark corridor and up to 696,000 passengers per day to Calamba by 2025. It is expected to reduce the travel time from Metro Manila to Clark International Airport to less than one hour by rail, compared with the 2-3 hours today by car or bus.

The project includes construction of two rail segments, namely: a 51.2-kilometer section connecting Malolos City in Bulacan to the Clark regional growth center, and a 1.9-kilometer extension connecting the NSCR to the Blumentritt Station in Manila, where an elevated interchange station for LRT Line 1 will be built.

ADB will be financing the civil works of the Malolos-Clark railway project, including the stations, bridges, and viaducts for the elevated railway alignment, and a tunnel leading to the underground station in Clark International Airport. The bank will also support the government in using global standards for procurement, and environmental and resettlement safeguards.

Mr. Roesner said the project is co-financed with up to $2 billion by the Japan International Cooperation Agency (JICA), which will finance the rolling stock and the railway systems. ADB policy also calls for the Philippine government to should a portion of the financing, which will cover the relocation of the informal settlers and the shifting of public utilities, he said.

“Additional contracts will be bid out later this year for the section to Calamba. This is still for finalization,” he said.

In an interview after the briefing, Mr. Roesner said financing for the Blumentritt-Calamba section is still being finalized.

“We’re still finalizing the design. It’s almost the same size,” he said.

Asked about when he expects loan approval to take place, he said: “About the same time next year, so May, June next year.”

He said the Manila section of the project is “technically more complicated” because of the informal settlers right beside the existing Philippine National Railways line, thus the design of the financing for the southern section takes longer.

“That’s why we decided to start first in the north,” he said.

In a press release issued during the press conference, ADB quoted Takehiko Nakao, its president, as saying: “It will be ADB’s single largest infrastructure project financing ever, and from a development perspective, we are pleased this investment is taking place in ADB’s host country.”

“The project, combined with other investments in light rail transit, metro rail transit, and subway systems, will bring back the culture of rail transport in Metro Manila.”

Vivencio B. Dizon, president and chief executive officer of Bases Conversion and Development Authority, said the project had seen several ground-breaking ceremonies, although none progressed until now.

“[The project is] truly something that we and the entire country have been looking forward to for so long,” Mr. Dizon said in the same briefing.

He said the Malolos-Clark railway supports the vision of the administration for the Clark and Subic area to become the next urban and economic center of the country.

Senate pushes bigger increase in tobacco tax

By Charmaine A. Tadalan
Reporter

THE SENATE is pushing a bigger increase in excise tax on tobacco products, proposing a hike to P45-60 per pack by 2023 from P35 currently, against the House of Representatives’ proposed P37.50-45/pack rates by 2022.

The measure will be submitted for plenary action on Monday, in an attempt to ratify the bill in time for the June 7 adjournment of the 17th Congress. “We told (Finance) Sec. (Carlos G.) Dominguez (III), we will try with our best effort,” Senate President Vicente C. Sotto III said in a mobile phone message on Thursday.

Members of the Senate’s majority bloc met with Mr. Dominguez on Wednesday to discuss prospects for approval of this particular “sin” tax, whose collections are intended to help fund implementation of the Universal Health Care Act.

The 17th Congress has six session days left to tackle the measure at the bicameral conference committee and ratify it for President Rodrigo R. Duterte’s signature. Otherwise, the measure will have to be refiled in the 18th Congress, which opens July 22.

In its draft committee report, the Senate Committee on Way and Means proposed to increase the tobacco excise tax to P45 from P37.50 in January 2020, to P50 in January 2021, P55 in Jan. 2022; and to P60 in Jan. 2023, and then by five percent yearly thereafter.

The Senate version has higher rates than those under House Bill No. 8677, which proposed to increase excise tax on cigarettes by P2.50 annually until it reaches P45 per pack in 2022, and then by four percent annually thereafter. HB 8677 provided that excise tax on cigarettes will increase to P37.50 from P35 in July 2019, P40 in July 2022, to P42.50 in July 2021 and to P45 in July 2022.

Senator Sherwin T. Gatchalian said the Senate version is an improvement of the proposal of the House of Representatives, whose ultimate proposed rate is lower than the P60 increase proposed by the Department of Finance.

“Malaki ang suporta sa ‘sin’ tax eh. Majority acceptable ’yung (P)60 because that is a large improvement from the lower house… doble ito sa lower house. acceptable naman ‘yung (P)60. But some of us, including myself, gusto natin na mas mataas pa (There is much support for the sin tax hike. P60 is acceptable to majority of senators because that is a large improvement from the lower house version… double that of the lower House. But some of us, including myself, want an even bigger increase),” Mr. Gatchalian told reporters in a briefing, Thursday.

Mr. Gatchalian authored Senate Bill No. 2177, one of the three bills consolidated, which proposed to increase the tax to P70. The other two were Senate Bill Nos. 1599 and 1605, which proposed to raise it to P60 and P90, respectively.

“I really support the ‘sin’ tax. Our version is P70. I will lobby to increase it from P60 to P70 dahil ang pinaka mahalaga dito ay mabawasan ang naninigarilyo at ’yung mga batang nag babalak na manigarilyo (because what is important here is to reduce the ranks of smokers and the youth who are thinking of taking up smoking),” Mr. Gatchalian said.

Republic Act No. 10963, the first of up to five planned tax reform packages, increased the cigarette excise tax to P32.50 from P30 in January 2018 and then further raised it to P35 beginning July 2018. It is scheduled to go up to P37.50 in January 2020.

The Philippine Tobacco Institute, Inc., (PTI) in the November 2018 position paper it submitted to the Senate, argued that over the years the increase in tobacco taxes resulted in a decline in demand, mass termination of workers and worsened smuggling.

“These high tax increases led to the proliferation of illicit cigarettes in the country. In a 2016 report, Oxford Economics estimated that illicit cigarette consumption in 2012 (prior to RA 10351) was at 6.4 billion cigarettes. One year later, Oxford Economics found that illicit consumption in 2013 jumped to a staggering 19.1 billion cigarettes,” the PTI said in its paper.

“The high tax increases have not only caused the industry to significantly contract but has also enabled illicit trade of tobacco products to flourish,” it added.

“In cooperation with the Department of Finance and law enforcement agencies, we have made progress in 2018 in our fight against illicit cigarette trade. Imposing significant and prohibitive taxes again will further exacerbate the situation.”

Fed’s patience on interest rates to last ‘for some time’

WASHINGTON — US Federal Reserve officials at their last meeting agreed that their current patient approach to setting monetary policy could remain in place “for some time,” a further sign policy makers see little need to change rates in either direction.

“Members observed that a patient approach… would likely remain appropriate for some time,” with no need to raise or lower the target interest rate from its current level of between 2.25% and 2.5%, the Fed on Wednesday reported in the minutes of the central bank’s April 30-May 1 meeting.

Recent weak inflation was viewed by “many participants… as likely to be transitory,” while risks to financial markets and the global economy had appeared to ease — a judgment rendered before the Trump administration imposed higher tariffs on Chinese goods and took other steps that intensified trade tensions.

Still, Dallas Federal Reserve president Robert Kaplan in a Wednesday interview on Fox Business said that to move rates higher or lower, “I would need to see something compelling… We are basically at the right policy setting.”

Analysts saw little new in the minutes regarding Fed policy, although some noted that policy makers’ views may have changed in the intervening weeks since US President Donald Trump took a harder trade line with China.

“The re-escalation in the trade tension between US and China since the meeting, that could change Fed’s outlook a lot,” said Eric Stein, co-director of the global income group at Eaton Vance Management in Boston.

Yields on US Treasury securities briefly rose following the release of the minutes while US stock markets and the dollar pared losses through midafternoon.

The minutes showed the Fed delving deep into the mechanics of how they could best structure their holdings of several trillion dollars of securities to battle a future economic downturn.

“Many participants,” the minutes noted, saw advantage in stocking the portfolio with shorter-term securities, which could, in a crisis, be swapped for long-term bonds in hopes of lowering the longer-term interest rates that impact home mortgage rates, business borrowing, and a number of forms of credit important for the economy.

But a staff report on various balance sheet strategies posed a dilemma. If the Fed skewed its bond holdings toward shorter-term Treasuries, it might come at the cost of higher longer-term rates now — in effect tightening credit conditions for many borrowers.

That would “imply that the path of the federal funds rate would need to be correspondingly lower to achieve the same macroeconomic outcomes.” In the scenarios being discussed that would, ironically, mean the Fed would have less room to cut rates in a crisis — and be more likely to have to rely on its balance sheet tools to boost the economy.

No decisions were made.

Though the support for a “patient” approach to rate hikes was widespread, according to the minutes, “a few” participants did warn of the risk of higher inflation and a possible need for higher rates given the low rates of unemployment.

“Several” warned, on the other hand, that inflation could weaken.

But overall “it appears as though the Fed is exactly where they want to be and don’t have to lean one way or the other,” said Art Hogan, chief market strategist at National Securities in New York.

The Fed meets next on June 18-19, when it will update economic projections. While Fed officials have largely downplayed the Sino-US trade dispute as a short-term problem, they have of late begun discussing the risks if the tariffs and trade tensions persist and begin to reshape global supply chains and pricing. In comments in Hong Kong overnight, St. Louis Fed president James Bullard said that a failure to resolve the trade dispute in the near term could change global trading patterns, and is another reason for the Fed “to tread carefully.” — Reuters

Illegal GoT downloads include more dangers than dragons

HBO’s Game of Thrones may have finally ended its run after a decade but fans of the show who haven’t yet caught up on the series’ final episodes or those who want to relive it all again by downloading episodes illegally were treated to malware attacks instead of the actual episode, according to a study by Moscow-based cybersecurity firm, Kaspersky Lab.

In a press release, the company noted that while spikes on the number of attacks were recorded every time a new episode premiered, some episode proved to be more toxic than others: “the third episode trigger[ed] the highest number of detected attempts to attack users, reaching 3,000 attacks a day at its peak.”

The third episode of the eighth season, “The Long Night,” saw the remaining characters of the show take a stand against the Night King and his army of White Walkers who was determined to put an end to humanity.

“Overall, after tracking associated malicious activity through the entire eighth season, Kaspersky lab researchers have found that the average daily number of attacks on users that involved malware disguised as an episode of Game of Thrones, was around 300 to 400. This number jumped to around 1,200 for the three to four days following the release of each new episode: a three- to four-fold increase in malicious activity,” the company said.

The company also said that it noticed a similar attack vector used in the series and with the recently released Avengers: Endgame film where users are invited to watch newly released episodes for free, but which are actually designed to extract sensitive data from users.

“Typically, the online-player icon shows a scene from the TV show and redirects the victim to a registration page, later asking for bank card details with the CVC/CVV-code, claiming it is only for validation purposes,” it said.

“We see shared TTPs (tactics, techniques and procedures) across the phishing websites where scammers try to steal users’ details by promising a pirated movie before its official premiere. We believe there is a certain group of threat actors that methodically hunts fans of popular movies and TV productions, adjusting schemes dynamically according to pop-cultural happenings,” said Tatyana Sidorina, security researcher at Kaspersky Lab, in the release.

In order not to fall victim to schemes and put one’s cybersecurity at risk, Kaspersky Lab advised users to “avoid questionable websites, especially the ones that distribute pirated content.”

They also said to not enter any information — especially credit card details — on websites “you have no reason to trust,” not to use the same password for different web pages, and, finally, “use [a] reliable antivirus software with protection from online scams and phishing.” — ZBC

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