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Groundbreaking set on Marawi’s rehabilitation

By Camille A. Aguinaldo, Reporter
THE groundbreaking of the rehabilitation of Marawi City’s most affected area is scheduled on Oct. 17, a year after the Islamic City’s liberation from Islamic State terrorists, Task Force Bangon Marawi chair Eduardo D. Del Rosario said on Friday.
“Well, actually, we are already prepared for the groundbreaking. Our people are now on the ground preparing for this. And since October 17 is very significant, as the declared date of liberation of Marawi, as declared by our President. So, we find it fitting that the groundbreaking will be on October 17 also,” Mr. Del Rosario said in a press briefing at the Palace.
Asked if the President will attend the groundbreaking rites, Mr. Del Rosario said they are still awaiting the response of the Office of the President.
“If the President could not make it on October 17, we are open to have it one week later. But we are now doubling our efforts in the preparation of the groundbreaking activity. Because we would like to highlight the importance of this groundbreaking, and the President’s presence is very important,” he said.
Mr. Del Rosario said the debris cleaning in the most affected area will be the first task in rebuilding Marawi City, followed by road network construction with underground utilities, then the construction of facilities, such as the classrooms, barangay centers, and markets.
He said a local construction company will be in charge of clearing out the debris in the pilot area, which is around six hectares. The debris cleaning project is worth P75 million.
On concerns over the unexploded bombs, Mr. Del Rosario said the military was able to retrieve already 80% of the ordnances. But he assured that the pilot area will also be screened once again of ordnances before the debris clearing.
“So what we will do now, the strategy that we will apply for this pilot project, there will be six hectares before the contractor will clear the debris, it will be subjected to another clearing of unexploded ordnances. So it will undertake the same process. But we were told that the contractor has the capability to look for unexploded ordnances,” Mr. Del Rosario said.
He also pointed out that other projects in the rehabilitation area have yet to undergo negotiations.
He noted too that the working budget of the whole rehabilitation in the most affected area in Marawi City is around P15 to 16 billion. The task force’s target for rehabilitation completion is the first quarter of 2021.

Set yourself up for success: Goal-setting for wellness

With any grand adventure into the unknown, the smart traveler carries with them a map to guide them to their destination. In business, teams conduct studies and build out strategy plans before launching new projects. When the destination is clear, the path to get there reveals itself. The traveler only needs to take the steps.
Your personal wellness journey is no different.
As a wellness coach, I’ve found that it’s my clients who articulate and commit to certain goals before starting a new workout program that achieve the best results. Most importantly, they appreciate the journey they’ve undertaken.
But is it enough to just list down goals? Often, I hear clients say: “I just want to get healthier” or “I’d want to lose some weight”. Don’t get me wrong, simple, general goals are better than having no goals at all. But to make the process more effective, I like having my clients set their goals following the S.M.A.R.T principle:

  • Specific,
  • Measurable,
  • Achievable,
  • Relevant,
  • and Time-bound.

These guidelines make the goal-setting process not just aspirational, but strategic. And it’s just as effective for personal wellness, as it is for pursuing any professional goal.
Let’s go back to one of my examples. “I just want to get healthier.” There as countless ways of measuring health, and even more ways to get healthy. But what path is right for you? Broad goals aren’t helpful. Specific goals call for specific actions, and those are always going to be easier to follow.
So maybe we use the second example, “I’d want to lose some weight.” That’s a bit more specific. A week without rice will likely reflect on the weighing scale. A month of non-stop high intensity interval training will definitely reflect on the weighing scale. But so would simply spending a week without rice. If you’re looking to lose, say, 30 lbs, maybe the no-rice diet won’t cut it.
Always make sure the goals are measurable, as hard data will not only contextualize your program, but motivate you as you chart your progress.
Of course, goals need to be achievable or else the client gives up when the goal is near impossible. If you say your goal is to get strong enough to lift a truck, you’re just setting yourself up for failure. There’s nothing wrong with being optimistic, so long as you keep goals realistic.
But even realistic programs can be difficult. When you get derailed, it takes a lot of motivation to get back on the path. A personally relevant goal will handle that for you. If you’re trying to lose weight so you can finish that 10km company fun run your team is organizing, then you have some skin in the game to keep you motivated.
And when you build a timeframe into your goals, you ensure two things: that you start now and not later, and that the journey you’re embarking on is a sustainable one. If you have three months until that fun run, you know you need to start your endurance training as soon as possible. But also that you aren’t pushing yourself that way forever.

The gun-start program

In Village Fitness, I’ve conceptualized what’s called a Gun-start program, where clients can articulate their ultimate wellness goal and the coaches help them set mini-goals under the four pillars of wellness: Exercise, Nutrition, Supplementation, and Lifestyle.
We also list down three concrete follow-up actions that put the context of time in achieving those goals. Once my client and I are finished with the consultation, I ask them to review the goals they’ve set and sign the document, placing their commitment to fulfilling them. I also sign the document, signaling my commitment to helping them achieve those goals.
Keep in mind that wellness goals vary per individual and that you should take your time in really searching for that deep “Why” that should propel you take the actions that you need to.
Having a personal trainer with experience working with various clients is vital in ensuring you not only build a solid program, but set the right kind of goals for yourself. For some, building up their physique is the end goal, and that’s fine. But as one of my clients once said to me: “The gym is not only for aesthetics but it’s also a place for healing”.
Find your personal wellness goals, define them, make them concrete, and watch how you motivate yourself to do things you never thought you could.

Ryan Fermin is an entrepreneur and fitness professional focusing on sports science, strength training, and conditioning. Find him on Instagram at @coach.ryfit.

Today’s tech revolution needs leaders with the right ‘heartware’

In the past few years alone, new technologies have changed nearly every aspect of every industry. A smartphone in every pocket means any service needs to be on-demand to be competitive. Social media has completely rebuilt the advertising and journalism business models. Bleeding edge frontiers like artificial intelligence have turned computer science from a specialized course into a basic component of today’s high school curriculum.
They’re calling it the Fourth Industrial Revolution (4IR). If the past few years have seen new technologies change nearly every aspect of every industry, the next few will see monumental changes in industries that haven’t even been invented yet.

Designing humans into obsolescence

According to this year’s edition of the World Economic Forum’s (WEF) “The Future of Jobs Report”, four new technologies in particular will largely affect business growth until 2022: ubiquitous high-speed mobile internet, artificial intelligence, widespread adoption of big data analytics, and cloud technology.
The report found that Filipino companies have already been utilizing these technologies in one form or another. Big data analytics was the most commonly implemented at 92% of businesses surveyed; the internet of things and app and web-enabled markets followed at 83% and 81%, respectively. Rapid adoption of these technologies have created new openings in many of these companies looking for data analysts and software and applications developers.
And now, the elephant in the room: job automation. A majority of businesses surveyed by the WEF reported that streamlining workflows by implementing new technologies will inevitably cut down on their manpower. For the jobs that survive the tech-culling, massive reskilling will be required — with tech and programming knowledge in high demand.
At first glance, these trends paint a bleak, robotic picture of the future. But while humanity seems to be designing itself into obsolescence with each new advancement in technology, some experts project that these massive industry-shattering changes may make humans and human work more essential than ever.

From working with tech, to working alongside tech

A study by Oxford University revealed that routine jobs — like those of telemarketers, loan officers, even runway models — had a 98% chance of being automated due to their routine nature. A machine can run a spiel, or process your financial history, or follow a route down the catwalk.
So what will keep humans in the playing field? Two things.
First, soft skills. As of today, machines are still incapable of capacities like emotional intelligence, critical thinking, and creativity. But more than soft skills, are the character, drive, and core values that make human beings human.
That’s the second advantage human workers have over tech. Delane Lim, Chairman of the ASEAN Youth Community (AYC) calls it ‘heartware’, and believes these will be vital in managing the transition from humans using tech, to humans working alongside tech.
The advent of 4IR poses overwhelming challenges. Tons of new information and rapidly advancing technologies will affect interpersonal relationships in ways we have yet to anticipate.
With these huge developments happening so rapidly, it would be easy for most to sink. It’s the heartware that will keep humans afloat.

Developing your ‘heartware’

This is the drive of the AYC, the Singapore-based regional empowerment program that aims to prepare the young Southeast Asian not only for 4IR but also for the lofty economic goals of the ASEAN Economic Community (AEC).
The development of one’s heartware will mean identifying and solidifying one’s purpose and personal value. This in turn, also develops one’s “personal leadership” — the figurative lighthouse that guides one through periods of personal and professional struggle. When one’s heartware is strong and sound, then the individual is resilient enough to push through in the right direction. After that, the acquisition of soft and hard skills will naturally follow.
For workers thrust into the fourth industrial revolution, well-developed heartware will be a powerful asset in their careers. For leaders guiding entire organizations through these particularly tumultuous times, it’s absolutely essential.
“Without heartware, we’ll just be electric,” Mr. Lim said. “That’s why humanity is important. There is a need for a human touch. Because today, employers are not just looking at you being technology-savvy, but for the ability to connect with people, the ability to communicate with people. I think these are two very important gaps we have to close.”

DENR lifts ECC suspension for compliant Boracay establishments

boracay
As of Oct. 8, 159 establishments in Boracay have received certification for complying with “90 to 95%” of environmental regulations. — PHILSTAR

By Anna Gabriela A. Mogato

THE Department of Environment and Natural Resources has lifted the suspension on the environmental compliance certificates (ECC) of “complying” businesses in Boracay, weeks ahead of the island’s reopening to the general public.

In a statement on Friday, Environment Secretary Roy A. Cimatu announced that he had issued the Memorandum Circular 2018-14 dated October 5, green-lighting the Environmental Management Bureau (EMB) in Region 6 to lift the suspension on ECCs made last July. The suspension was intended to give the Department of Environment and Natural Resources time to review business compliance to both local and national laws.

Shortly after lifting the suspension, Mr. Cimatu said that “the EMB Regional Office 6 shall continue to monitor establishments despite such lifting of suspension of their respective ECCs.”

“[EMB will also] monitor all establishments issued with Certificate of Non-Coverage (CNC) to ensure their compliance with environmental laws and assure that no violation against the same is committed,” he added.

CNCs are issued to proposed projects that are deemed unlikely to cause environmental problems. Business that pose potential environmental risks, on the other hand, are required to secure ECCs.

The DENR also began to issue Certificates of Conditional Approval (CCAs) to businesses that are “90% to 95%” compliant with environmental regulations.

These businesses have complied with all regulations save for sewage treatment facilities, which may still be under construction. As of Oct. 8, 159 establishments have received their CCAs.

These businesses can proceed to have their permits assessed by the Department of Interior and Local Government before receiving clearance from Department of Tourism to operate once the island opens.

Fintech lender First Circle to expand, boost financial literacy nationwide

Online lending firm First Circle is expanding its coverage to support small and medium-sized enterprises (SME) outside Metro Manila.
This follows news of the firm’s latest partnerships with the Department of Trade and Industry (DTI) and the Bangko Sentral ng Pilipinas, to provide P1.5 billion in loans to local businesses.
“We want to work with as many [SMEs] as we can,” Chief Commercial Officer Axel Regnström told SparkUp. As the nation’s first fintech-powered online lending firm, First Circle has leveraged its digital tools to streamline its services and expand rapidly. They are currently looking to work with prospective clients from CALABARZON, Cebu, and Mindanao.
“That’s the beauty of working with technology, because we’re not as limited as maybe as bank is with how many employees we have,” he added. “We can use the technology to process customers in a faster, [more efficient] way. That means we can work with more customers without having to at least drastically expand our operation.”
Through its services, clients can receive their loans within three to five days by simply uploading the necessary documents online through their mobile devices or computers. And Mr. Regnström says the firm plans to speed up processing times even further.
“We don’t really think that that’s good enough,” Mr. Regnström said. “We think that you should have money within 24 hours in your bank account and that’s really the ambition. If you have the purchase order, why can’t you have the money [right away]?”

Expanding its services

Through the P1.5 billion worth of available loan and an average loan size of P500,000, Regnström said that the number of businesses the initial credit line could cover around 1,500 clients but this is not completely set in stone.
Since publicly launching in 2016, First Circle claims to have serviced more than a thousand clients, lending about P1 billion, with no collateral needed. At an average loan size of P500,000, Regnström says their pool of P1.5 billion in available loans could cover another 1,500 businesses.
“We’re getting additional funding so we can expand that credit line further. While 1,500 customers is a good number, we want that to be in tens of thousands, hundreds [of thousands],” Mr. Regnström said.
As it continues to expand its client base, the company is looking beyond the Philippines and into other Southeast Asian markets such as those in Indonesia, Vietnam, Thailand, and Cambodia.
“There’s a lot of potential to expand our fintech products [out there],” Mr. Regnström said.

Financial literacy

In partnership with DTI, First Circle is looking to improve financial literacy among local firms, targeting those unfamiliar with modern financial products.
According to Trade Secretary Ramon M. Lopez, DTI plans to include First Circle speakers in seminars conducted across its 950 Negosyo centers nationwide. Mr. Lopez has also invited First Circle to participate in its SME Academy, launching on Oct. 27.
The academy, housed in the former Philippine Trade Training Center in Pasay City, will offer seminars covering various financial literacy modules and entrepreneurship courses.
“We’re a fintech [company], so we’re a bit new and the SME owners are a bit older on average,” Mr. Regnström said. “So we’re going to have to teach them to adopt a tech product. But once they adopt a tech product, and they see how powerful it is, how it can work for them, then [they’d be more open to use it].”

Reimagining PUVs

The Public Utility Vehicle Modernization Program is a large-scale initiative of the Philippine government aimed at transforming the entire public transportation system. Launched by the Department of Transportation (DoTr) in 2017, it “envisions a restructured, modern, well-managed and environmentally sustainable transport sector where drivers and operators have stable, sufficient and dignified livelihoods while commuters get to their destinations quickly, safely and comfortably.”

A key component of this program is fleet modernization: replacing public utility vehicles (PUVs) that are more than 15 years old with those that are safe, reliable, efficient and environment-friendly.

In April of this year, DoTr mounted an exhibition, “Public Transport Modernization Expo: Modernong Sasakyan, Progresibong Bayan,” at the Philippine International Convention Center in Pasay City, to showcase the modern PUVs and give them the public, particularly the operators and drivers of PUVs, a lowdown on the benefits of the modernization program and its components.

Among the prototypes on display were low-floor public utility buses, jeepneys and e-tricycles. The exhibit was also an occasion for the attendees to ask the manufacturers and body builders of the PUV prototypes questions regarding the design of the vehicles, their technical specifications, performance and efficiency, among other things.

Isuzu Philippines Corp. was one of the participating brands. It put on view three prototypes, all sharing the Isuzu QKR platform, which run on a Euro 4-compliant 4JH1-TC diesel engine capable of providing maximum power of 106 PS at 3,200 rpm and maximum torque of 230 N-m from 1,400-3,200 rpm.

One of the prototypes, a collaboration with Centro Manufacturing Corporation, was the Isuzu-CENTRO Class II jeepney substitute, which had a 23-passenger standard type cabin, side-facing fixed foam seats, sliding windows and electric folding service door. The Isuzu-ALMAZORA Class II prototype, meanwhile, had a special structural body designed by Almazora Motors Corp., and featured side-facing fiber glass seats with cushions and panoramic glass windows. The third prototype Isuzu Philippines displayed was a collaboration with Santarosa Motor Works called Isuzu-SANTAROSA Class III PUV, which had 23 front-facing seats and Galvannealed sheet body panels. All three were fully air-conditioned.

“Our latest PUV display is a result of the test and development process we had with our previous prototypes. We try to work with different local body manufacturers to give our transport groups more designs to choose from,” Hajime Koso, president of Isuzu Philippines, was quoted as saying in a press release. “Rest assured that we work closely with them to ensure the quality and safety of these new products,”

Hino Motors Philippines, the official distributor of Hino trucks and buses in the country, also participated in the expo, showing off its modern jeepney prototypes. These prototypes came in four variants: Hino four- and six-wheelers for Class II and III in air-conditioned and non-air-conditioned versions. These Euro 4-powered Hino jeepneys had a seating capacity of 23 to 30 passengers.

The Hino Class III model is minibus-like with front-facing passenger seats. The Hino Class II PUV, which was designed to look more like a conventional jeepney, had side-facing passenger seats and covered open-air windows and could accommodate standing passengers.

“Our active participation in the government’s project is driven by our Hino’s Total Support mantra. We are committed to providing reliable and innovative transport system solutions for the welfare of all our stakeholders — including our natural resources such as the air we breathe. We believe that this is the first step toward an upgraded and greener transport system,” Vicente Mills, Jr., chairman of Hino Motors Philippines, said in a statement.

The Bureau of Philippine Standards of the Department of Trade and Industry has set standards on the dimensions of PUVs. Class 1 vehicles have a passenger capacity of nine to 22. Class 2 vehicles can carry more than 22 passengers who can either seat or stand. Class 3 vehicles can accommodate of 22 or more sitting passengers. Class 4 vehicles have the same seating capacity as Class 3 vehicles, but they have provisions for cargo.

Last July, DoTr dispatched 150 modern jeepneys to operators. These vehicles had side doors, doing away with the old rear entrance of conventional jeepneys, and a higher ceiling for standing passengers. There were units that had provisions for persons with disabilities, a Wi-Fi connection, a global positioning system or GPS, closed-circuit television (CCTV) camera, dash camera, speed limiter and automatic fare collection system.

Thomas M. Orbos, undersecretary for road transport and infrastructure at DoTr, was quoted in a BusinessWorld report as saying that the rollout of the modern jeepneys was only the first step in providing commuters with the public transportation they deserve.

“Commuters are suffering from smoke-belching, unsafe, and damaged jeepneys because this was what we’re used to. That shouldn’t be the case. It’s the government’s job to give the public what they deserve,” he said.

A push to safer and modernized public transport

Compared to its neighboring countries like Malaysia and Singapore, the Philippines has long been left behind when it comes to modernization of the mass transport system. Commuting nowadays remains a struggle for many Filipinos, not only because of the awful traffic but also because of its potential threats to passengers’ health and safety.

With the aim of making the country’s public transportation system efficient and environmentally friendly, the government launched the Public Utility Vehicle Modernization Program (PUVMP). This is pursuant to Department of Transportation’s (DoTr) Department Order No. 2017-011, the Omnibus Guidelines on the Planning and Identification of Public Road Transportation Services and Franchise Issuance.

PUVMP is a flagship program of the Duterte administration which envisions a restructured, modern, well-managed, and environmentally sustainable transport sector, ensuring drivers and operators have stable, sufficient and dignified livelihoods while commuters get to their destinations quickly, safely and comfortably.

The Land Transportation Franchising and Regulatory Board (LTFRB) says on its Web site that the PUVMP is not only a vehicle modernization program, it is a comprehensive system reform that will entirely change the public land transportation industry.

“It features a regulatory reform and sets new guidelines for the issuance of franchise for road based public transport services. It devolved the function of route planning to the local government units as they are more versed in the terrain and passenger demand within their respective territorial jurisdiction,” the LTFRB says.

The DoTr and LTFRB, together with the Land Transportation Office, Office of Transport Cooperatives and other concerned agencies, are responsible in conducting a pilot implementation in order to review and assess whether the new policies are responsive and efficient in achieving the program’s intended outcomes.

Under the PUVMP, the local government units are required to submit their own Local Public Transport Plan (LPTRP) as a prerequisite for the opening of public utility vehicle (PUV) franchises within their jurisdiction.

To determine the appropriate mode, quantity and service characteristics of the public transport service in each corridor, route rationalization studies will be conducted. This will make the routes more responsive to the demand of the passengers and ensure that the hierarchy of roads and modes of transportation are followed.

Fleet modernization is among the major components of the PUVMP. New vehicle standards are being developed that is based on extensive consultations with concerned involved government agencies, jeepney associations and local and international manufacturers.  The modern vehicles are designed to be environment-friendly, safe, secure and convenient with due consideration to persons-with-disabilities passengers.

Last April, the DoTr held the Public Transport Modernization Expo: Modernong Sasakyan, Progresibong Bayan to showcase the modern vehicles and inform the public, especially the operators and drivers, of the PUVMP’s benefits.

Despite various advantages that the modernization program brings, it was received negatively by several transport groups, saying the program is “anti-poor.” The cost of modern jeepneys — which about P1.2 million to P1.6 million — and the plan to replace all PUVs aged 15 years or older have caused outrage to many drivers and small operators.

Amid all the criticisms, DoTr Secretary Arthur P. Tugade clarified that the program is not designed to eventually put PUVs out of business. He stressed that the PUVMP will help improve and strengthen the public road transport sector.

“Nililiwanag ko lang ho na ‘yung programang modernization of public utility is not anti-poor; it is not designed to phase out the jeepneys or the jeepney business. It is actually designed to strengthen and guarantee the profitability of the jeepney business,” Mr. Tugade said.

In a separate statement, the DoTr also explained that the program is long overdue.

“Past administrations have long wanted to modernize transportation, but every time people wave flags saying that the program is anti-poor, we take a step back,” the agency said, adding that: “If not now, then when? Remember that the same issues raised now hindered the modernization program before. We will never be ready if we keep on looking for reasons to delay the project.”

The DoTr assured that the modernization program will happen, noting that drivers and operators have only two options: cooperate and benefit from this program, or oppose and get left behind.

Considering the clamor of drivers and operators who will be affected by the PUVMP, a special loan program with Landbank and Development Bank of the Philippines is being proposed which will provide access to adequate funding.

In addition, drivers will be given access to various trainings and social support programs which will be offered to enable them to be competent, self-sufficient and well-equipped with the necessary technical knowledge and skills.

Meanwhile, the DoTr rolled out around 200 modern utility jeepney units to operators with franchises validated by LTFRB last July.

In the same month, two transport cooperatives launched their PUV Modernization Program-compliant jeepneys to ply new routes along Taguig and Pateros. The Taguig Transport Service Coop PUVs are plying the Bagumbayan (Taguig) to Pasig route via San Joaquin, while the Pateros-Fort Boni Transport Coop PUVs’ route is from Gate 3 of Fort Bonifacio to Guadalupe Market.

Last June, 15 out of 35 modern public utility jeepney units of the Senate Employees Transport Service Cooperative were rolled out and started to ply the route of Star City or CCP to PICC, GSIS or Senate to MOA to PITX and back.

The PUVMP was first launched in Tacloban City, Leyte in January with the deployment of 45 solar-powered jeepneys. — Mark Louis F. Ferrolino

2018 FINEX Conference puts the spotlight on innovation

The world is about to change even faster. To stay relevant and ahead of the curve, organizations and institutions have to constantly innovate and recognize its importance in driving long-term growth and success.

With the aim to bring fresh insights and stern principles on innovation — what moves it, who will likely move it, and what it will take to move it — the Financial Executives Institute of the Philippines (FINEX) will hold its annual conference today, Oct. 12, at the Grand Ballroom of Shangri-La at the Fort in Bonifacio Global City, Taguig City.

The 2018 FINEX Annual Conference follows the theme “Future-Proofing through Innovation.” The event serves as the highlight of FINEX’s 50th anniversary celebration, which will bring together the country’s top finance professionals.

The Republic of Singapore’s Ambassador to the Philippines H.E. Kok Li Peng, Institute of Management Accountants’ Global Board of Directors Chairman Emeritus Alex C. Eng, and APAC Microsoft Director of Business Development for Emerging Markets Digital Transformation Inam Hussain will deliver keynote address during the conference, sharing their ideas and knowledge on innovation.

The first session on “How Now Innovation Cow?” will explore the four fundamental concepts of innovation, developed by John Bessant and Joe Tidd, namely product innovation, process innovation, position innovation and paradigm innovation.

Sharing their thoughts on these concepts are Ayala Corp. Head of Innovation Vincent G. Tobias and Aboitiz Equity Ventures Chief Digital Officer Jojo Guingao. The session will be moderated by Ayala Corp. Managing Director and CFO Jose Teodoro K. Limcaoco.

The second session, “Learn to Rock,” will discuss the significance of education to spark innovation and creativity.

Mansmith & Fielders, Inc. Chairman Josiah Go, Asian Institute of Management President and Dean Jikyeong Kang, and De La Salle Philippines President Bro. Armin A. Luistro will share their insights about the topic. John Clements Consultants, Inc. Managing Director Alicia Morales will serve as the session’s moderator.

The third session of the conference, “To Tech or Not to Tech? That is the Question,” aims to answer the said question (which is really rhetorical in the first place) and discuss how organizations use technology to fuel innovation.

Speakers in this session will be Bank of the Philippine Islands’ Head of Enterprise Services Group Executive Vice-President Ramon L. Jocson, Thinking Machines Data Science, Inc. Founder and CEO Stephanie Sy, and McKinsey & Co. Philippines Associate Partner Boris Van. The session will be moderated by Hungry Workhorse President and CEO Reynaldo Lugtu, Jr.

The last session on “Shake Rattle and Roll: Innovations in Marketing and Media” will focus on media and marketing as vehicles of innovation.

To lead the discussion are Dentsu Aegis Network Philippines Country CEO Donald Lim, Google Philippines Country Head Kenneth Lingan, Sun Life Financial Philippines Chairperson Rizalina G. Mantaring, and McDonalds Philippines Managing Director Margot B. Torres. Ateneo Graduate School of Business Professor of Strategic and Marketing Management and Economics Wilfrido E.A. Arcilla will serve as the session’s moderator.

INNOVATION AND ITS CRUCIAL ROLE TO ORGANIZATIONS

Innovation, which is defined as the “process of translating an idea of invention into a good or service that creates value or for which customers will pay,” is one of the most significant and complex challenges each organization faces today.

By looking at history, one can clearly recognize its real value. For instance, in the United States, 85% of the companies included in the Fortune 500 list in 1955 are now replaced by new ones. Companies like GM, Ford, Kodak, IBM, ITT, Polaroid, Nokia, Blackberry, Sony and Atari are now a shadow of their former selves.

Similarly, this was observed in the local setting. Some of the largest companies in the country during 60’s and 70’s are now replaced by new players who bring innovations that customers find beneficial to their lives.

Moreover, many “in” products of the past years are nowhere in use or were doomed to go, such as videocassette recorder, digital optical disc, camera film, fax, beeper, landline, and typewriter. The list continues as the world spins at a much faster rate than it used to, or much faster than how people used to see it. This only means that the wunderkind of today will likely be an old man in no time.

To add to the challenge, it’s not as if one innovation will drive and keep the company up the ladder. A one-hit wonder can create some magic, but not for long, because innovation is a never-ending thing. And this is what FINEX aims to instill in the consciousness of the delegates to today’s conference — that we all need to Future-Proof ourselves and our organizations through Innovation.

Nestor A. Espenilla, Jr.: An icon of grit and perseverance

Since taking up office as the fourth Governor of the Bangko Sentral ng Pilipinas (BSP) on July 3 last year, Nestor A. Espenilla, Jr. has been kept busy by the times. With the central bank delivering on the recent news of its fourth interest rate hike this year to rein in the country’s soaring inflation rates, the challenges currently facing Mr. Espenilla are numerous and significant.

The responsibilities that come with the role of BSP governor include serving as the chairman of the Monetary Board, the central bank’s principal policy-setting policy, as well as concurrently serving as chairman of the Anti-Money Laundering Council and the Financial Stability Coordination Council. Prior to his appointment as governor, Mr. Espenilla cut his teeth bearing the duties of deputy governor in-charge of the Supervision and Examination Sector (SES), which regulates and supervises banks and non-bank financial institutions under BSP jurisdiction. In that capacity, he focused on banking supervision, capital market development, credit policy, and financial inclusion.

According to the BSP’s own profile of him, Mr. Espenilla “institutionalized risk-based and proportionate regulations, enabling BSP-supervised institutions to innovate business models and adopt digital financial services. He likewise championed the issuance of regulations that promote financial inclusion and consumer protection. He is a staunch advocate of an efficient, interoperable, and consumer-friendly digital payments system.”

This is not surprising for those who know him, as such accomplishments come from a history of personal successes: from graduating magna cum laude with a bachelor’s degree in business economics from the University of the Philippines (UP), to his graduate degrees from UP and the Graduate Institute of Policy Science in Tokyo, Japan. Starting as an external debt analyst at the BSP in 1981, Mr. Espenilla steadily worked his way up through the ranks, finding a successful career under the institution through grit and perseverance.

Amando M. Tetangco, Jr., the third governor of the BSP and Mr. Espenilla’s predecessor, was quoted as saying in a text message to reporters, “DG Espenilla is well respected in the banking community and highly regarded by other central banks and financial regulators both here and abroad. He is also well supported by the BSP family. I am confident that with him at the helm, the BSP will continue to be a pillar of support to the economy, that should remain among the top performing economies in the world.”

Mr. Espenilla, in a speech made to students at the launch of the UP BGC Graduate Business Program, said that his ‘sticktoitiveness’, his quality of finding the determination to overcome obstacles, has made all the difference in his career.

“There are good days and there are bad days. While we are presumably talented and intelligent uniformly each day (at least we hope to be!) — the feeling of wanting to persevere and stay on, changes. It changes with our moods and is affected by situations and circumstances. This is why sticktoitiveness, commitment, is the true formula for success,” he said.

“In the central bank, grit is always required. Grit is what brings about constancy, continuity, credibility and stability to the financial system.
Grit translates to us preparing well, committing to the implementation
of difficult but necessary and bold reforms. Grit is synonymous to the
perseverance needed to cushion the economy from any volatility.”

“When I first joined the Central Bank in 1981, I was idealistic. My grit was tested all at once! During the turbulent 80’s, there was political unrest. A debt crisis was unfolding and it forced the country to declare a moratorium on the payment of its foreign debt by 1983. Dollars had to be rationed. Central Bank interest rates shot up to around 40% per annum. Compare that to 3% today. The economy was in recession. In 1986, Senator Benigno Aquino, Jr. was assassinated. What a challenging time for the central bank and a young central banker like me! I certainly had days when I wondered if I should continue. I am glad I did,” he said.

As challenges like the rising prices of commodities and the weakening peso threaten to derail the growth and development of the Philippine economy, in addition to personal struggles like his bout with tongue cancer, Mr. Espenilla might be facing his biggest obstacles yet.

Shortly after he took office, Mr. Espenilla proposed a number of changes so that the central bank would continue to become more responsive to the needs of the domestic economy, including the movement toward a more market-based execution of monetary policy; constant review of existing tools and policies to make the monetary system more efficient and market-oriented; pursuit of capital market reforms to provide a viable alternative source of financing for long-term investments; and liberalization of the provision of financial products and services to achieve more risk-based, transparent and market-determined policy framework. Whether such measures would ultimately achieve the goals he set out for them, only time will tell.

“In the central bank, grit is always required. Grit is what brings about constancy, continuity, credibility and stability to the financial system,” Mr. Espenilla said. “Grit translates to us preparing well, committing to the implementation of difficult but necessary and bold reforms. Grit is synonymous to the perseverance needed to cushion the economy from any volatility.”

S&P says risk buffers sufficient for now

By Melissa Luz T. Lopez
Senior Reporter
THE PHILIPPINES and other emerging markets have enough buffers to cushion the blow of rising interest rates, slower global growth and weaker currencies, S&P Global Ratings said.
The debt watcher said not all emerging markets will see a funding crunch similar to that buffeting Argentina and Turkey, noting that reforms introduced in recent years have made countries like the Philippines more resilient to external shocks.
In a report, S&P said recent increases in global interest rates led by the United States and “market turmoil” have raised concerns about possible liquidity problems among emerging markets, but it pointed out that such pessimism is misplaced.
Emerging market currencies including the peso have come under pressure over the past month amid contagion risks due to Turkey’s financial crisis, which saw a huge sell-off of the lira and prompted a risk-off appetite towards similar markets. The Argentinian peso also plunged in April as the currency reeled from a stronger dollar, domestic inflation and higher interest rates.
“We do not think that credit problems will spread to the emerging market asset class as a whole,” S&P said in a report published on Thursday.
“A large number of emerging market countries have undertaken reforms over past decades to strengthen their creditworthiness, improving their economic structure and reducing their vulnerability to a potential drop in global liquidity. We expect our sovereign ratings on those countries to be relatively stable over periods of stress.”
The US Federal Reserve has been tightening policy, triggering capital flows from emerging economies back to the US and prompting other central banks to keep up with their own rate hikes.
Local asset prices have consequently declined while currencies have started to depreciate versus the dollar. S&P said these developments could hinder access to liquidity, weigh on economic fundamentals and potentially “lead to lower credit ratings” for some emerging markets.
However, S&P analysts said they “do not foresee an imminent and high risk of contagion” from Argentina and Turkey, noting that other emerging economies have boosted safeguards to “reduce their vulnerability” to tighter global money supply conditions.
“Most of those sovereigns have higher ratings today than in past periods of financial turmoil,” the credit rater said, noting that recent reforms have made monetary policy more effective, allowed greater exchange rate flexibility, deepened domestic debt markets, improved growth prospects and boosted investor confidence.
“Many EM sovereigns have pursued policies to strengthen the productive structure of their economies and diversify the sources of growth, thereby reducing their external vulnerability to the current risk of tightening global liquidity.”
The Philippines has held a “BBB” rating — a notch above minimum investment grade — with a “positive” outlook from S&P since April. A “positive” outlook means the credit rating itself may improve over the next two years. The economy is seen to grow by 6.7% this year, lower than the government’s 7-8% target though still among the fastest in the region.
S&P analysts say the Philippines stands on solid ground, partly on “the strength of steady inbound remittances from Filipinos working abroad, which have improved both the current account balance and GDP growth, contributing to a rising credit rating.”
Reduced reliance on foreign borrowings has slashed the government’s external debt burden, similar to the cases of Indonesia and Thailand.
The peso has been trading at P54:$1 over the past month while inflation surged to a fresh nine-year-high 6.7% in September.
The Bangko Sentral ng Pilipinas has raised rates by a total of 150 basis points so far this year to rein in inflation expectations and temper peso volatility.
Across rated emerging markets, credit profiles have “improved substantially” and remain stable, S&P said.
At the same time, it flagged that credit quality of export-oriented economies will be “more at risk” from an all-out trade war and increased protectionism.

Index tracks improved PHL human capital

By Elijah Joseph C. Tubayan
Reporter
THE PHILIPPINES’ human capital improved over the past six years, according to the World Bank, which said the country improved on this count better than expected though it still fell short of the regional average due to productivity gaps.
The Washington-based multilateral lender on Thursday launched its The Human Capital Project, which shows that the Philippines’ Human Capital Index (HCI) stood at 0.55 in 2017, from 0.49 in 2012.
The Philippines placed at the bottom half of 157 economies, ranking 84th in the HCI that was topped by Singapore, South Korea and Japan.
It also placed 14th among 24 East Asia and Pacific economies.
The HCI is based on indicators related to survival, schooling and health.
A reading closer to 1 reflects better human capital status.
“The Philippines’ HCI is lower than the average for its region but higher than the average for its income group,” the World Bank said.
“In 2017, the HCI for the Philippines is higher than what would be predicted for its income level.”
“Children in the Philippines can expect to complete 12.8 years of pre-primary, primary and secondary school by age 18. However, when years of schooling are adjusted for quality of learning, this is only equivalent to 8.4 years: a learning gap of 4.4 years,” the World Bank said in its report.
It also said that 80% of the population who are 15 years old is likely to survive until age 60, and that 33 out of 100 children are stunted, or at risk of cognitive and physical limitations that can last a lifetime.
The World Bank also found out that girls had higher HCIs than boys across all indicators, getting 0.58 overall, versus 0.52.
“The Government of Philippines recognizes these challenges and has initiated critical reforms to improve human capital in the country,” said Mara K. Warwick, World Bank Country Director for Brunei Darussalam, Malaysia, Philippines and Thailand, said in a statement.
“Policy makers have introduced universal kindergarten, created senior high school, provided greater funding for basic education, and expanded the Pantawid Pamilya Program, which has boosted school attendance among the poor.
The report noted that “programs can improve people’s incentives to invest in human capital when they make its long-term benefits salient or provide mechanisms to make good choices binding.”
“Young people may not want to stay in school or take care of their health because they lack self-control or do not fully appreciate the benefits of education and good health,” the report read, adding that “[g]oing forward, key policy priorities in the Philippines are reducing stunting and improving the effectiveness of teachers to boost learning.”
Sought for comment, National Economic and Development Authority Undersecretary for Policy and Planning Rosemarie G. Edillon said in an e-mail: “Between 2012 an 2017, we increased our human capital investments: the 4Ps (cash transfer program) which increased enrolment rate and the health-seeking behavior among the poor, and the introduction of the K-12 which increased the expected years of schooling.”
She added that the Duterte administration’s free tuition fee for tertiary education “could further increase the expected years of school.”
“We have also formulated the Philippine Plan of Action on Nutrition which includes programs to ensure the proper nutrition of children especially during the first 1,000 days,” Ms. Edillon added.
“This will improve the survivability index.”

BSP ready to tighten policy again if needed

THE BANGKO SENTRAL ng Pilipinas (BSP) is ready to tighten monetary policy further to rein in prices and support the peso if needed, Deputy Governor Diwa C. Guinigundo said.
“If the peso depreciation will impinge on our ability to maintain the stability of prices, we will not hesitate to sustain our vigilance and continue to tighten monetary policy,” Mr. Guinigundo said in an interview in Bali on Wednesday.
“Our primary mandate is price stability and we intend to do just that.”
The BSP has delivered 150 basis points of interest-rate increases since May, among the most aggressive in Asia. Policy makers are battling surging prices and a weakening currency with the Philippines among those in Asia hardest hit by an emerging-market rout.
Inflation accelerated to 6.7% in September, the fastest pace in more than nine years, mainly on food and fuel prices.
That could have been the peak as measures including the rate hikes start to take effect, Mr. Guinigundo said.
The central bank’s target is for annual inflation to average 2-4% in 2019 and 2020. Inflation could go back to the target range next year once a bill that liberalizes rice imports is passed and implemented, Mr. Guinigundo said.
Tax increases on fuel, sugary drinks and cigarettes implemented at the start of the year have boosted prices. Shortages in the supply of rice, the nation’s staple food, and a more than seven percent slump in the currency this year, further exacerbated price pressure.
OPTIMISTIC
Mr. Guinigundo said he remained optimistic about the country’s economic growth prospects, citing increasing productivity and the government’s infrastructure spending.
Gross domestic product growth slowed to a three-year low of six percent in the second quarter, with the government set to report third-quarter data on Nov. 8.
“Even if you have the impact of the 150-basis points tightening of monetary policy, I think we should have some cushion or counterweight in terms of government spending on infrastructure,” he said.
President Rodrigo R. Duterte has started a $170-billion program to upgrade the nation’s dilapidated airports, roads and bridges.
The central bank expects greater stability in the currency in the fourth quarter as remittances from overseas Filipinos come in ahead of the holidays.
Asked to comment on the perception that officials acted too late and now have to do more to curb inflation, Mr. Guinigundo said market participants and economists should look at the bigger picture.
“This is a manifestation of tyranny of the market” as monetary policy can’t be used to solve supply issues, the central bank official said. — Bloomberg

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