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Shifts and turns: The imperatives for Philippine businesses

PHILIPPINE STAR/MIGUEL DE GUZMAN

By Ron F. Jabal

THE global business landscape has been dramatically reshaped by a series of unprecedented challenges. The coronavirus disease 2019 (COVID-19) pandemic served as a major catalyst, accelerating trends that were already in motion while introducing new dynamics that have irrevocably altered how companies operate. The rapid advancements in artificial intelligence (AI) are changing the way we do business, even creating new work paradigms.

Thus, it has become imperative for businesses to not only adapt to these changes but to actively shape the future. The post-pandemic era, defined by the integration of artificial intelligence (AI) and the reimagining of work, truly presents opportunities, risks, and challenges. It is therefore critical to explore and review how Philippine businesses have been transforming and how they must continue to evolve over the next decade.

THE POST-PANDEMIC LANDSCAPE: A CATALYST FOR CHANGE
The COVID-19 pandemic was more than just a health crisis; it was a wake-up call that forced businesses to rethink their strategies, operations, and priorities. As the world ground to a halt, companies that were quick to pivot and adapt found themselves not just surviving but thriving in an altered environment. The pandemic exposed the vulnerabilities in global supply chains, highlighted the importance of digital infrastructure, and underscored the need for agility in business operations.

For Philippine businesses, the pandemic accelerated the adoption of digital technologies. Companies that had previously been slow to embrace digital transformation were suddenly thrust into a world where online platforms became the primary mode of operation. Retailers, for example, shifted to e-commerce models almost overnight, while service providers adopted remote work arrangements. This rapid shift was not without challenges, but it laid the groundwork for a more digitally integrated economy.

EMBRACING AI AND THE FUTURE OF WORK
As we look ahead, the role of artificial intelligence in business cannot be overstated. AI is no longer a futuristic concept; it is here, and it is transforming industries across the board. From automating routine tasks to providing deep insights through data analytics, AI is enabling companies to operate more efficiently and effectively.

In the Philippines, the integration of AI is still in its early stages, but the potential is immense. AI-driven solutions can help businesses enhance customer experiences, optimize supply chains, and improve decision-making processes. However, the widespread adoption of AI also raises important questions about the future of work. As machines take on more tasks, what will happen to the human workforce? This is a critical issue that businesses must address as they navigate the road ahead.

The future of work is not just about technology; it is about people. The pandemic has fundamentally changed how we work, with remote and hybrid work models becoming more common. This shift has implications for everything from employee productivity to company culture. As businesses in the Philippines adapt to these new work arrangements, they must find ways to balance the benefits of flexibility with the need for collaboration and connection.

As we consider the future of Philippine businesses over the next decade, several scenarios emerge that will shape the landscape in significant ways. These scenarios are not predictions, but they highlight potential trends and challenges that businesses must be prepared to navigate.

Digital Transformation as a Continuous Process: The rapid digitalization prompted by the pandemic is just the beginning. Over the next decade, businesses will need to view digital transformation as an ongoing process, continuously integrating new technologies and refining their digital strategies. This will require not just investment in technology, but also in upskilling employees to thrive in a digital-first environment.

AI-Enhanced Decision Making: As AI becomes more sophisticated, it will play an increasingly central role in business decision-making. Companies that leverage AI to analyze data, predict trends, and optimize operations will gain a competitive edge. However, they must also address the ethical considerations of AI, including issues of transparency, bias, and data privacy.

The Evolution of Work: The future of work will be defined by flexibility. Remote and hybrid work models are likely to become permanent fixtures, but businesses will need to navigate the challenges of managing distributed teams, maintaining company culture, and ensuring employee well-being. The gig economy will also expand, offering workers more flexibility but also raising concerns about job security and benefits.

Sustainability as a Business Imperative: Environmental sustainability will move from being a corporate responsibility to a business imperative. Companies will need to adopt green practices not just to comply with regulations, but to meet the growing demand from consumers and investors for sustainable products and services. This will involve everything from reducing carbon footprints to embracing circular economy models.

Resilient Supply Chains: The disruptions caused by the pandemic highlighted the fragility of global supply chains. In the coming years, businesses will need to build more resilient supply chains that can withstand shocks, whether from pandemics, geopolitical tensions, or natural disasters. This may involve diversifying suppliers, investing in local production, and leveraging digital technologies to improve supply chain visibility and agility.

Cybersecurity as a Top Priority: As businesses become more digital, they will also become more vulnerable to cyberthreats. Cybersecurity will need to be a top priority, with companies investing in advanced security measures, training employees on best practices, and developing robust incident response plans. Protecting customer data and maintaining trust will be critical in an increasingly interconnected world.

The Rise of Regional Trade: Geopolitical shifts and the rise of regional trade agreements will reshape global trade dynamics. Philippine businesses will need to navigate these changes by exploring new markets and forging strategic partnerships. The Regional Comprehensive Economic Partnership (RCEP), for example, presents opportunities for businesses to expand their reach within Asia, but it also brings competitive challenges.

The Consumer of the Future: Consumer behavior is evolving, with a growing emphasis on convenience, personalization, and digital experiences. Businesses will need to stay ahead of these trends by offering seamless, omnichannel customer journeys. The next decade will also see the rise of the conscious consumer, who prioritizes ethical and sustainable products. Companies that fail to adapt to these shifting preferences risk losing relevance.

Health and Well-being as a Business Focus: The pandemic has placed a spotlight on health and well-being, not just for individuals but for businesses as well. Companies will need to prioritize the health and well-being of their employees, customers, and communities. This will involve providing comprehensive healthcare benefits, supporting mental health, and fostering a culture of wellness. Businesses will also play a critical role in addressing public health challenges, from vaccine distribution to promoting healthy lifestyles.

Innovation as a Driver of Growth: Innovation will be the key to staying competitive in a rapidly changing world. Businesses will need to foster a culture of innovation, encouraging employees to think creatively and take risks. This will require investing in research and development, embracing new business models, and staying attuned to emerging trends. Companies that prioritize innovation will be better positioned to seize new opportunities and drive long-term growth.

TRANSFORMING FOR A BETTER FUTURE
The scenarios outlined above represent both opportunities and challenges for Philippine businesses. To navigate these future trends successfully, companies must embrace a mindset of continuous transformation. This involves staying ahead of technological advancements, understanding and responding to evolving consumer behaviors, and fostering a culture of innovation and resilience.

To thrive in the AI-driven future, businesses will need to make strategic investments in technology and talent. This includes adopting cutting-edge technologies such as AI, machine learning, and blockchain, as well as upskilling and reskilling the workforce to meet the demands of the digital economy. Companies that prioritize innovation and invest in human capital will be better positioned to adapt to changing market conditions and drive long-term growth.

Collaboration will be key to navigating the complexities of a fragmented world. Businesses in the Philippines should seek partnerships with other companies, government agencies, and nongovernmental organizations to address common challenges and achieve shared goals. Additionally, embracing inclusive business models that prioritize diversity, equity, and social impact will be crucial in building trust and ensuring long-term sustainability.

The ability to adapt quickly to changing circumstances will be a critical success factor for businesses over the next decade. This requires cultivating a culture of agility and flexibility within organizations, where decision-making processes are streamlined, and teams are empowered to respond swiftly to new challenges. Businesses that can pivot and innovate in response to unforeseen events will be better equipped to thrive in an unpredictable world.

As businesses navigate the future, they must do so with a commitment to ethical and responsible practices. This includes addressing the ethical implications of AI, ensuring data privacy and security, and promoting transparency in business operations. Companies that prioritize ethical considerations and act with integrity will build stronger relationships with stakeholders and contribute to a more just and equitable society.

RIDING THE TRAILS OF TRANSFORMATION
The next decade presents a transformative journey for Philippine businesses. The scenarios above highlight the critical areas where companies must focus their efforts to remain competitive and drive positive change. As the business community navigates the post-pandemic landscape, embraces AI, and redefines the future of work, there is a unique opportunity to create a better, more inclusive, and sustainable future for all Filipinos.

By riding on the trails of transformation, businesses can not only adapt to the challenges of a rapidly changing world but also lead the way in shaping a brighter and more prosperous future. The road ahead may be complex and uncertain, but with the right strategies, investments, and a commitment to continuous improvement, Philippine businesses can turn these challenges into opportunities and achieve lasting success.

 

Dr. Ron F. Jabal, APR, is the CEO of PAGEONE Group (www.pageonegroup.ph) and the founder and president of the Reputation Management Association of the Philippines (www.rmap.org.ph). Please correspond to ron.jabal@pageone.ph or rfjabal@gmail.com

Philippine students are in deep trouble

Students answer test questions at a state high school in Manila. — REUTERS

By Kenneth Christiane L. Basilio, Reporter

THE PHILIPPINE education system is walking on thin ice, with nine of 10 Filipinos unable to read and understand a simple age-appropriate text at age 10, according to the World Bank.

The coronavirus pandemic made that worse as the country endured the longest school closure among 122 countries, along with highly unequal access to the internet and digital learning resources.

The government should address this crisis if the Philippines wants to realize its growth potential. Failure to do so would lead to economic stagnation, according to an education expert.

Reforming the country’s education system is no small task, and the state should look at slowly improving the sector, Elvin Ivan Y. Uy, executive director of the Philippine Business for Social Progress, said in an interview.

“If we are unable to properly capacitate, educate, and develop our human capital, then the Philippines will be caught in a middle-income trap,” he said. “For education, the hope is you are improving every day, every year. You can at least say that this school year is better than the last… it shows that there is progress.”

The Philippines’ human capital indicators are “lackluster” compared with other countries, the World Bank said in a report in June. A Filipino child could only achieve half of their productive potential by the time they reach 18 years, it said.

“The Philippines is currently missing out on almost half of its human capital potential,” the multilateral lender said. “The Philippines has the lowest human capital index, which warns of the constraints to productivity of the next generation of workers given the prevailing rates of mortality, schooling achievements, and health outcomes.”

“The next five to 10 years will define whether we can maximize our demographic dividend window by 2049,” Mr. Uy said.

Filipino students were among the world’s weakest in math, reading, and science, according to the 2022 Program for International Student Assessment. The Philippines ranked 77th out of 81 countries and performed worse than the global average in all categories.

Institutional neglect is largely to blame for the failures of the system, said Justine B. Raagas, executive director of the Philippine Business for Education.

“Despite various reforms and initiatives, the country continues to grapple with issues such as low student performance in international assessments, insufficient resources, overcrowded classrooms and a lack of qualified teachers,” she said in an e-mail.

NEW CURRICULUM
Vice-President and former Education Secretary Sara Duterte-Carpio introduced in August 2023 the so-called Matatag  (stable) curriculum, focusing on subjects that will produce “competent, job-ready, active and responsible citizens,” according to the Department of Education (DepEd).

The curriculum will be implemented in batches, starting with kindergarten, grades 1, 4, and 7 in the school year 2024-2025. It will be fully implemented by 2026-2027.

Pasig Rep. Roman T. Romulo said the curriculum, which seeks to “decongest” competencies and subjects, would improve education quality.

“Under the Matatag curriculum, we will not only limit competencies but also subjects,” Mr. Romulo, also a co-chairperson of the Second Congressional Commission on Education (EDCOM II), said in an interview in mixed English and Filipino.

“We will focus on functional literacy and numeracy, which is what we really need because if you look at it, we score low in reading comprehension and in numeracy,” he added. 

Matatag claims to decongest the old curriculum by 70%, while still ensuring that the heavier weight of the learning areas would be on English, Filipino, Science, Mathematics, and Technical Livelihood Education.

Education authorities should assess the new curriculum to determine if it’s effectively addressing learning losses, Ms. Raagas said.  She added that it should be “adaptable to local contexts,” allowing local school authorities to have a say in what should be included in the syllabus. 

“The curriculum should be adaptable to local contexts, allowing schools and teachers flexibility, while decentralizing decision making to empower local authorities,” she said.

Ms. Raagas said the Education department is too centralized, hindering its ability to quickly enforce policy interventions.

DepEd’s authority should be cascaded to local governments, she added, noting that strengthening local education boards would make community-based learning programs possible.

The Education department is already “functionally decentralized,” Mr. Uy, a former DepEd assistant secretary, said. “When I say functional, responsibilities from what used to be at the national or regional level were already transferred to the field or school level.”

The problem lies with funding sources for regional and local school boards, he said, noting that DepEd failed to decentralize fiscally.  “The funds are still controlled by the National Government,” he added.

DepEd’s proposed budget for 2025 increased by 4.2% to P745.8 billion, while the budget for education as a sector inched up by 0.9% to P977.6 billion, according to a summary from the Budget department. The latter covers the Education department, Commission on Higher Education, Technical Education and Skills Development Authority, and state universities.

Education’s share in the 2025 budget fell to 15.4% from 16.8% this year.

“It’s not just the amount, but the quality of spending [that we have to consider],” Socioeconomic Planning Secretary Arsenio M. Balisacan said in an interview. “If we can improve the quality of spending, even a small amount can do a lot.”

COLLEGE WOES
The college education system also faces issues, including incompetency among graduates and the lack of emphasis on soft skills, Ms. Raagas said.

“One significant issue is the lack of collaboration between industry and academia, resulting in graduates who are not adequately prepared for the workforce,” she said. There’s also a problem with redundant competencies — many skills taught in senior high school are repeated in college, wasting valuable time and resources.”

In a report to the House of Representatives, the Commission on Higher Education (CHED) said three of 10 Filipino college students who were supposed to graduate this year dropped out.

About 37% of students dropped out in 2021-2022. The college dropout rate spiked to 41.03% the following school year before settling at 29.4% in 2024, according to CHED data.

CHED has started enforcing key policies that could improve higher education, chairman Prospero E. de Vera III said in an interview.

He said CHED now requires state universities and colleges to submit a certificate of program compliance, which the agency could review to check if their degree complies with minimum education standards.

Mr. De Vera is also pushing internationalization efforts. “If our universities are willing to benchmark and compare themselves with the top universities in the world and adopt good practices, they will definitely improve what they are doing in teaching and research.”

Internationalization would also let graduates of Philippine schools find jobs overseas, he added.

“If the curriculum for nursing in a Philippine university is the same as the curriculum in universities abroad, then they could find employment [easily],” Mr. De Vera said.

A joint education master plan crafted by the government and business stakeholders would benefit the education sector as a whole, Ms. Raagas said.

“A combined government-business master plan could enhance curriculum relevance, ensure proper resource allocation, and foster public-private partnerships for innovative programs,” she said. “This collaboration would make sure graduates have the necessary skills and knowledge to succeed, boosting the country’s economic development.”

Mr. Uy said a long-term learning master plan would help chart the direction of the country’s educational system.

Having a joint master plan would produce students with the skills needed in the job market, Ms. Raagas said.

“Universities can be informed about the competencies their graduates need so they can change the curriculum to ensure that students are industry- or work-ready upon graduation,” Mr. De Vera said.

“The problem is that if the industry has no input in the curriculum, graduates will need retraining. So we need to adjust the curriculum to meet the needs of the industry.”

Mr. Romulo said he’s pushing for businesses to have more say in technical-vocational (tech-voc) skill training programs. “There needs to be a bigger role because the tech-voc track is about skills training,” he said.

Data integration is the game changer for Philippine healthcare

VJOHNS1580 - PIXABAY

By Patricia B. Mirasol, Multimedia Producer

THE application of robotics and artificial intelligence (AI) in clinical operations in the Philippines has already started, but according to healthcare stakeholders, the real game-changer is data integration.

Data integration is the process of combining data from different healthcare sources, including electronic medical records (EMRs) and medical devices.

“We can go on and on with AI applications here, but there is value in having an EMR,” said Einstein C. Rojas, a board member of the Philippine Alliance of Patient Organizations, and an innovation ecosystem consultant for an international company.

“One of the most basic problem-solution fits that data analytics can do is when you go to a hospital,” he said in an Aug. 6 Zoom interview. “The first thing they ask you to do is fill up a form — but this form [asks for] your basic information that you already gave to other hospitals.”

Mr. Rojas noted the usefulness of a nationwide data integration model, wherein “a patient holds his/her data, and then simply allows the [healthcare provider] to access it during checkup, treatments, or emergency cases.”

The worldwide health records market size was estimated at $32.23 billion in 2023 and is anticipated to grow at a compound annual growth rate of 4.43% from 2024 to 2030, according to Grand View Research.

Government initiatives to encourage healthcare IT usage is a key driver to this market, the market research and consulting company said.

In Asia-Pacific, Singapore and Australia have already enacted nationwide EMR systems that provide healthcare providers access to patients’ medical records.

Singapore’s National Electronic Health Record (NEHR) system, in particular, is an enabler for the island-state’s vision of “One Patient, One Health Record.”

Accenture, a global professional services company, worked with MOH Holdings, the holding company of Singapore’s public healthcare assets, to create the NEHR system using a common application architecture, common data standards, and privacy and security guidelines.

Clinicians have a holistic picture of each patient’s history, as the system provides a summary care record for each patient including problem lists, medications, discharge and event summaries, allergies, immunizations, investigations, and procedures.

Hospitals in the Philippines, including the University of the Philippines-Philippine General Hospital (UP-PGH), are likewise embarking on their own journeys in healthcare innovations. In the works is a more efficient EMR system.

Based on a 2019 study by the Philippine Health Research Registry, the average pre-consultation time of new patients in the UP-PGH’s outpatient department is over an hour, or 72.84±43.39 minutes. The average total service time, meanwhile, is 8.70±6.99 minutes.

“We have a very different patient experience here. We go visit a doctor and have a 5- to 10-minute checkup that you waited two hours for,” Mr. Rojas told BusinessWorld.

Mr. Rojas, whose wife is currently pregnant, says an average checkup with an obstetrician-gynecologist at a tertiary hospital entail “arriving at 8 a.m. for a 9 a.m. clinic, getting listed at around 15th most of the time, [then] waiting two hours at the minimum.”

“Imagine an EMR with an appointment setting, where you have a period to go to a consultation, so you don’t have to wait,” he said. “It saves time, it saves stress, it definitely saves costs from the hospital and doctor.”

There are various factors that eat up a doctor’s time, Dr. Gerardo D. Legaspi, the PGH medical director, said.

Nearly half (49%) of their resident doctors’ time is spent inputting health information, Mr. Legaspi said in a July 23 interview.

“We are partnering with AIM [the Asian Institute of Management] to develop a local speech-to-text program…, so that the actual interview can proceed without the resident typing, and then you retrieve it and actually have a summary afterwards,” he said. “That’s the kind of AI we want to use for patient care.

PERSONALIZED HEALTH PLANS THROUGH DATA
Even primary care providers recognize technology’s role in the implementation of healthcare in the country.

Centralizing data is crucial when assessing patients, according to Karl Aaron G. Dimaano, general manager and chief operating officer of HealthFirst, multispecialty outpatient clinic and Unilab subsidiary.

Data has been consolidated in its four-storey Williams Building, he said during the facility’s June 7 launch. A patient who consults across different outpatient services will have a single record instead of multiple.

Utilizing technology in data collection has helped “facilitate the collection of real-time health data, enabling more accurate monitoring and management of patient conditions,” HealthFirst medical director Dr. Robert T. Castro said.

It has allowed organizations to gain insights into disease patterns and health trends, he said.

Chronic disease programs can likewise be tailored through health metrics profiling, Mr. Castro added in an Aug. 8 e-mail.

“By analyzing data such as blood pressure, glucose levels, BMI [body mass index, which is used to estimate one’s body fat], and lifestyle factors, we create personalized health plans that address the specific needs of each employee,” Mr. Castro said.

“This approach enhances overall workforce health, reduces absenteeism, and boosts productivity.”

CENTRALIZED DATABASE
The Medical City (TMC) has been investing in infrastructure in order to implement its technology-related solutions, according to group chief information officer Jojo C. Dionaldo.

He shared that the network’s initiatives include a superapp with features such as a doctor’s consult queueing system as well as access to each patient’s digital twin.

This is in line with TMC’s focus on preventative healthcare, Mr. Dionaldo said in a July 26 Zoom interview.

“With a digital twin,” he said, “we can map [your body] and tell you that, in five or ten years, if your habits and your [diagnostic] findings do not change, then you will have this kind of sickness.”

TMC, with six hospitals and 64 clinics in its network, is working to create a centralized database to “unify and harmonize all our EMRs” by the end of 2025, Mr. Dionaldo told BusinessWorld.

“The moment we make that successfully implemented across our hospitals and clinics, we will have been able to achieve an EMR which has never been implemented in the Philippines — and in Southeast Asia — in that scale,” he said.

“The government or the Department of Health [DoH] can use this as a benchmark or a reference,” he added.

The global adoption of ESG for inclusive and sustainable growth

FREEPIK

Initially driven by ethical considerations, Environmental, Social, and Governance (ESG) has evolved into a core component of corporate strategy, risk management, and long-term value creation.

Companies are increasingly recognizing the significance of sustainability in their operations. In fact, the latest “KPMG Global ESG Due Diligence” report revealed that ESG has become a top priority over the past 12 to 18 months, a trend expected to continue.

Similarly, the “2024 Sustainability Organization Survey” by KPMG mentioned the growing commitment of organizations to ESG, with 90% of organizations planning to increase their ESG investments over the next three years.

The report also stated that 43% of these companies recognize the need for specialized roles focused on sustainability to ensure that ESG considerations are integrated into decision-making processes across the organization.

The demand for advanced software solutions tailored to ESG management is also increasing, with 40% of companies using ESG-specific software to improve data collection, analysis, and reporting. Meanwhile, 38% are investing in employee training programs to equip their workforce with the knowledge and skills necessary to support ESG initiatives and foster a culture of sustainability within their organizations.

According to the “2023 ESG Global Study” conducted by Capital Group, global adoption of ESG investment has reached a new high, with 90% of investors identifying as adopters, up from 89% in 2022 and 84% in 2021.

However, while the overall adoption rate is rising, the proportion of “conviction investors,” those who consider ESG central to their investment strategies, remains at 26%. The study also notes that 57% of investors believe incorporating ESG analysis can uncover attractive investment opportunities, and 45% think it is likely to improve long-term investment results.

Meanwhile, nearly three-quarters of ESG adopters prefer active investment strategies, allowing for better engagement and a more comprehensive view of company ESG profiles.

Disconnection between perception and preparedness

Despite increasing investment in ESG, a significant disconnect remains between organizations’ perception of their ESG readiness and their actual preparedness. The KPMG ESG Assurance Maturity Index shows that while 83% of organizations believe they are ahead of their peers in ESG reporting, nearly half still rely on spreadsheets for managing ESG data — a method lacking the robustness and scalability needed for comprehensive ESG management.

The reliance on outdated tools, according to the report, highlighted the gap in data management capabilities. As the complexity and volume of ESG data grow, so does the need for more sophisticated data management systems that can integrate sustainability goals with broader business objectives.

Furthermore, the maturity levels of companies in ESG also remain low. In fact, 75% of respondents are still in the early stages of ESG maturity, making them less prepared for ESG assurance. The lack of readiness is evident with only 25% of companies feeling confident in their ESG policies, skills, and systems to achieve assurance.

Investors also often struggle with defining a meaningful and actionable scope, obtaining high-quality data from target companies, and quantifying potential ESG findings. The KPMG report, however, noted that solutions are beginning to emerge.

For instance, there is now greater clarity on which ESG topics should be included, with a shift to focusing on value. Moreover, there is an increasing opportunity for sellers and sell-side advisors to add value through higher-quality ESG vendor documentation.

The latest “KPMG Global ESG Due Diligence Study” said that budgets remain low for ESG due diligence compared to other workstreams, such as financial, commercial or legal. This limits ESG specialists’ ability to perform in-depth analysis across the many complex environmental, social and governance topics that investors seek.

Another KMPG report mentioned that 44% of companies cite high initial costs as a major barrier to ESG. Many firms struggle to allocate adequate budgets for developing robust ESG frameworks, which hampers their progress.

Interestingly, beginners in ESG are facing between four to five main challenges, while more mature companies encounter slightly fewer with around three to four.

The rapid investment in ESG

ESG integration is becoming prominent across various industries as environmental concerns, social justice issues, and governance standards grow increasingly important to stakeholders.

According to a 2023 research by McKinsey & Company, companies that actively pursue ESG goals alongside traditional growth and profitability metrics tend to generate better returns for their shareholders. The study analyzed performance data from the world’s 10,000 largest companies between 2016 and 2022, and discovered that companies excelling in both ESG and financial performance, also known as “triple outperformers,” achieve an annual excess Total Shareholder Return (TSR) that is two percentage points higher than their peers who focus only on financial metrics.

This finding is particularly significant given the challenges of the past five years, which include the COVID-19 pandemic, high inflation, geopolitical tensions, increasing climate events, and the emergence of generative AI. Despite these challenges, companies with a strong focus on ESG were more likely to achieve or exceed the 10% annual revenue growth benchmark. In fact, more than half of the triple outperformers studied were able to accomplish this feat.

The research also indicates that the benefits of ESG-focused strategies are not limited to large and established corporations. Companies of various sizes and sectors can leverage ESG to enhance their growth prospects and resilience in the face of global challenges.

Leading investors are also using ESG to identify risks and unlock financial value. According to KPMG, they are incorporating ESG considerations into their investment theses, ensuring that ESG risks and opportunities are thoroughly understood and managed.

The focus on ESG is particularly evident in areas like decarbonization, recycling and circularity, and supply chain management. With improved ESG, investors can drive revenue growth, reduce costs, and mitigate risks to further enhance the overall value of their investments.

On the other hand, increasing regulatory requirements and pressure from customers and investors are compelling companies to adopt ESG frameworks. According to software-led risk management solutions provider Alcumus, 55% of companies cited regulation as a key reason for integrating ESG practices, while 54% pointed to pressure from investors and customers.

The same report also mentioned that about 60% of companies said that gaining an improved image is a significant benefit of ESG adoption, highlighting the reputational advantages associated with sustainable practices.

George Richards, Partner and Head of ESG Reporting and Assurance of KPMG in the UK, noted that forward-thinking companies are leading the charge by integrating ESG principles into their core operations to create significant value for their organizations.

“One of the potential benefits [of ESG is] that it allows the company to show how they will operate not only profitably in the long term, but also sustainably, in a much more credible way,” he said. — Mhicole A. Moral

Echelon conference debuts in PHL this September

e27, Brainsparks back the startup event happening at SMX Convention Center

In a groundbrreaking collaboration, e27, renowned as Asia’s leading tech and startup media platform, joins forces with Brainsparks, a Philippine-based venture capital company, to present the inaugural Echelon Philippines 2024, scheduled to take place on Sept. 26 and 27 at the SMX Convention Center.

Echelon, an annual startup and tech conference in the Asia-Pacific region headquartered in Singapore, is one of the largest and most acclaimed events of its kind. With over 90,000 attendees across its past 10 editions, Echelon is known for its impressive reach and impact within the tech industry. Notably, after a decade of successful installments, the conference is making its highly anticipated debut in the Philippines, marking a significant milestone in its growth and expansion.

Echelon Philippines 2024, a dynamic convergence of startup leaders, visionary entrepreneurs, and forward-thinking investors, will foster regional partnerships, investments, and business matching. The conference aims to showcase insights from thriving and emerging sectors, unveiling new avenues for growth and stimulating entrepreneurship. Additionally, it seeks to cultivate fresh talent, arming them with the necessary tools and resources to navigate existing markets and drive growth.

In addition, the conference will feature fireside chats, panel discussions, and keynote speeches from esteemed local and international speakers with the likes of Angeline Tham, co-founder & chief executive officer (CEO) of Angkas; Adriel Yong, Head of Investments of Ascend Network; Jojo Malolos, CEO of Paymongo; ER Rollan, founder and CEO of Growsari; Mario Domingo, Global Chief Technology Officer of UBX Philippines; Visa Kannan, managing partner of Saison Capital; Gregorio Mantaring, director of JG Digital Equity Ventures; Amanda Cua, founder and CEO of Backscoop; Jay Fajardo, executive director of Ideaspace; Carlo Chen-Delantar, co-founder of Gobi-Core Philippine Fund; Rene Cuartero, co-founder and CEO of AHG Lab; John Aguilar, founder and host of The Final Pitch; and many more.

In addition to the insightful speakers, the conference will feature a diverse range of exhibitors who will showcase their distinctive products and services, opening up a realm of possibilities for attendees. Among these exhibitors are BuildHub, Smile API, InsightGenie, Gateway of Asia, AHG Lab, Zoho, Plug and Play, and Founders Launchpad. Each exhibitor brings their unique offerings, providing attendees with opportunities to explore innovative solutions and connect with industry experts.

Echelon Philippines 2024 promises to be a pivotal event, showcasing not only the most recent technological advancements but also offering crucial support for the growth of the local startup ecosystem.

One of the highlights of this event will be the Startup Pitch Competition, dedicated to spotlighting the most promising startups in the Philippines. This segment will provide a platform for local innovators to showcase their solutions to real-world problems faced by the country.

Secure your tickets for Echelon Philippines 2024 at https://e27co.e27.co/ECPH.

The digital shift: Transforming PHL education through cloud-based edtech

COMPARE-FIBRE-UNSPLASH

By Harrison Kelly

THE DIGITAL TRANSFORMATION of education accelerated by nearly a decade due to the coronavirus pandemic, but the rapid shift didn’t come without cost. In the Philippines, the road to fully embracing digital education is filled with both challenges and opportunities.

Beyond issues related to infrastructure or funding, many institutions are still grappling with student expectations and their own technological limitations. These challenges are often rooted in the outdated notion that technology for collaboration, accessibility, and learning is less important now that we’ve returned to physical classrooms. However, returning to in-person learning does not diminish the importance of digital tools; instead, it highlights the need for a more integrated approach, often referred to as hybrid or blended learning.

For instance, some universities adopted a blended learning model, which combines face-to-face (f2f) and online teaching to ensure continuity beyond the pandemic. Other universities, like Ateneo de Manila University, implemented similar methods, such as the hybrid flexible or hyflex learning model, which integrates simultaneous f2f and synchronous online instruction. This approach has evolved to enhance flexibility, support academic excellence, deliver accessibility, and build institutional resilience.

This shift to blended learning methods prompted many institutions to opt for free, self-hosted learning management system (LMS) platforms, with the option to add services and tools at a cost. This led them to invest substantial sums in hardware, training, and technical support to stay updated with the trends shaping the new educational landscape.

Today, many of those institutions are facing roadblocks because their self-hosted LMS lacks scalability. This limits their ability to respond swiftly to new opportunities or adapt to changing market conditions.

Another consequence is that while the self-hosted LMS approach allowed universities to survive during a crisis, it has also placed their students at a disadvantage. Students in these institutions are often less equipped with flexible and interactive options than their peers who are studying at universities that have already migrated to cloud-based LMS solutions.

These more modern learning management systems offer the flexibility and scalability necessary to support the diverse learning pathways required for lifelong learning and provide skill-based learning opportunities.

EVOLVING TOWARDS A TECHNOLOGY-ENRICHED LEARNING ENVIRONMENT
In 2022, the World Bank noted that in Philippine higher education, “…a cultural transformation is needed to use technology for better service delivery, as digital transformation is more than just digitizing and digitalizing services.”

The emphasis here is on the word “transformation” — a shift in mindset that recognizes technology as a fundamental component of modern education and not just a temporary solution to a temporary problem.

For higher education institutions (HEIs), adapting to evolving technological demands is no longer an option but a necessity. While significant advancements have been made in integrating educational technology (edtech) into classrooms, many institutions in the Philippines are still playing catch-up. Edtech has the potential to increase performance, foster inclusivity, ease the burden on teachers, and offer more personalized learning experiences to students. However, the adoption of these technologies varies widely across the country.

The geographical peculiarities of the Philippines and existing infrastructure gaps add further challenges to achieving accessible and equitable education. The 2023 United Nations Educational, Scientific, and Cultural Organization Global Education Monitoring Report highlights that despite the Philippines embracing technology in education, there is a significant shortage of computers in schools, particularly in rural areas. Many students struggle to go online from home, exacerbating educational access issues.

As educators strive to keep pace with the latest trends and emerging technologies, they must also contend with outside obstacles such as climate change, social inequality, and inconsistent internet connectivity — factors that continue hindering students across the country. A technology-enriched learning approach, where technology is incorporated to complement learning every day in the classroom and to extend it outside of it, is more critical than ever to future-proof the education system against these challenges.

This approach ensures that institutions are using technology to support students during disruptions, provide flexibility and mobility, and offer timely assistance to those who need it most and not only as a stopgap measure. This approach also fosters a lifelong learning culture, which is essential for bridging the skills gap and preparing students for the global workforce.

While some institutions still use their LMS primarily as a repository for course materials, leading universities and vocational education institutions in the Philippines and worldwide are leveraging these platforms in far more dynamic ways. They use data and analytics to make informed, data-driven decisions, personalize education, and identify at-risk students. These capabilities combine the best of technology and education, providing timely interventions and support, so that all students have the opportunity to succeed.

IMPROVING MOBILE LEARNING WITH OFFLINE ACCESS
In the Philippines, according to an Instructure survey, 50% of students use their mobile phones to access their institution’s LMS. Mobile learning has truly become indispensable for students, and this statistic underscores the importance of optimizing mobile learning experiences.

Despite improvements in mobile data affordability, the Philippines still lags other Southeast Asian countries in terms of network performance. Even with near-universal 4G (fourth-generation)  coverage, broadband speeds are lower, particularly in rural areas where slower internet speeds pose significant challenges that make it crucial to meet the needs of students who may not always have access to stable connections.

From interactive apps to collaborative platforms, mobile learning has democratized education by breaking down geographical barriers and making quality learning materials accessible to a global audience. Recognizing this trend, colleges and universities are increasingly optimizing their course designs for mobile apps, ensuring that both blended and online courses are accessible on mobile devices.

However, the success of mobile learning in the Philippines hinges on more than just accessibility — it also depends on ensuring that students can access learning materials offline. This feature, which is usually available in an LMS’ mobile app for students, is particularly crucial in regions where internet connectivity is unreliable. By enabling offline access, institutions can help ensure that all students, regardless of location, can engage with their coursework and succeed academically.

THE FUTURE OF EDUCATION IN THE ERA OF AI
The future of education in the Philippines depends on the country’s ability to embrace and fully integrate digital tools into its educational framework and approach the challenges and opportunities created by generative artificial intelligence (AI). It’s crucial to move away from the initial fear around AI and move towards taking advantage of its potential to significantly impact education, particularly when integrated into an LMS.

We need to be sure AI literacy is taking place in every institution to ensure staff and students have the knowledge and skills necessary to understand, evaluate, and use generative artificial intelligence systems and tools safely and ethically.

It is essential for institutions to recognize that digital transformation is not a one-time fix but an ongoing process. As the educational landscape continues to evolve, so too must the strategies and tools employed by educators. While the challenges are significant, so are the opportunities. By adopting cloud-based edtech solutions that integrate AI with a human-centered approach, fostering a technology-enriched learning environment, and optimizing mobile learning experiences, Philippine educational institutions could overcome many of its challenges and create a more inclusive, equitable, and effective education system.

 

Harrison Kelly is the managing director for Asia-Pacific at Instructure.

PHL gov’t must boost pool of cybersecurity talent, beef up digital infrastructure to attract investors

THE PHILIPPINE GOVERNMENT needs to ramp up cybersecurity education and set up globally recognized training centers to grow its small pool of local cybersecurity talent, which will help boost the country’s resilience against cyberattacks to attract more foreign investors, according to analysts.

“We need to make cybersecurity a standard track in all universities,” Dominic Vincent D. Ligot, founder of Cirrolytix and artificial intelligence, technology, and research consultant for the Information Technology (IT) and Business Process Association of the Philippines, told BusinessWorld in an e-mail.

“This means industry expertise should be tapped by the academia — all of practical knowledge in cyber is outside school and we need to bring it back in.”

Surfshark: Philippines 28<sup>th</sup> most breached country in Q2 2024He said most of the country’s cybersecurity experts are trained outside of schools and are usually sponsored by companies that sell cybersecurity products.

“If the optic from local companies and the public sector is that cyberattacks include a heavy administrative burden, it starts to make other countries more attractive investment destinations,” Mr. Ligot said.

“In addition to a talented labor pool, we need to show our infrastructure and enforcement mechanisms are solid.”

In 2022, the Philippines only had about 200 cybersecurity professionals compared to Singapore’s 2,000 experts, Department of Information Communications Technology Secretary (DICT) Ivan John E. Uy earlier said, noting that 80% of Filipino cyber experts work overseas.

Mr. Uy said cybersecurity experts in the private sector earn about P200,000 a month, while those in the government are only paid P50,000.

The Philippines needs more globally recognized cybersecurity certification programs to keep Filipino experts from taking their talents elsewhere, Allan S. Cabanlong, regional director for Southeast Asia at Global Forum on Cyber Expertise and a former DICT assistant secretary, said by telephone.

“We also need better talent-matching for our experts and boost demand for them since our certified professionals usually go abroad,” he said. “The problem is the government’s defense infrastructure is weak, and the monitoring and detection capabilities are not that good.”

“The government needs to institutionalize digital literacy in basic and secondary education, not just to educate students but also to trigger their interest in taking cybersecurity and other information technology-related courses,” Ronald B. Gustilo, national campaigner for Digital Pinoys, said in a Viber message.

According to Fortinet’s 2024 Global Cybersecurity Skills Gap Report released in August, 77% of organizations in the Philippines said the cybersecurity skills shortage creates additional risks for their organizations, with 94% of firms experiencing a breach in the past year.

The survey was conducted among 25 IT and cybersecurity decision makers in the Philippines from various industries like technology, manufacturing, and financial services.

“More organizations are increasingly linking security breaches to the cybersecurity skills gap, with 94% of organizations in the Philippines recognizing this issue, up from 92% in the last report. This emphasizes the urgent need for organizations in the Philippines to continue addressing the cybersecurity skills shortage to strengthen their security posture,” Alan Reyes, country manager at Fortinet Philippines, said in a statement.

“Our latest report shows that organizations are actively making efforts to bridge this gap, such as diversifying their candidate pools, which the Philippines is showing significant improvement. As organizations in the country continue this effort, they should also invest in training and certifications for their IT and security teams, educate employees about threats and best practices in cyberspace, and implement the right technologies to enhance resilience,” Mr. Reyes said.

The report showed that executives and boards of directors are increasingly prioritizing cybersecurity, with 80% of respondents saying their boards were more focused on security in 2023 than the year before and 94% saying board sees cybersecurity as a business priority.

More than 90% of respondents (94%) said they prefer to hire candidates who hold cybersecurity certifications, but 84% said it is difficult to find candidates with technology-focused certifications. Meanwhile, 98% of respondents said they would pay for an employee to obtain a cybersecurity certification.

“As the cyber workforce shortage persists, some organizations are diversifying their recruitment pools to include candidates whose credentials fall outside traditional backgrounds — such as a four-year degree in cybersecurity or a related field — to attract new talent and fill open roles. Shifting these hiring requirements can unlock new possibilities, especially if organizations are also willing to pay for certifications and training,” Fortinet Philippines said.

“The increasing frequency of costly cyberattacks, combined with the potential of severe personal consequences for board members and directors, is resulting in an urgent push to strengthen cyber defenses across enterprises,” it added.

Meanwhile, Congress should also ensure that next year’s national budget would upgrade the cybersecurity defenses of government agencies, Mr. Gustilo added.

“There should be a clause that the funds will not be allocated for other purposes and can be replenished should the need for the improvement of cybersecurity infrastructure arise,” he said.

“Cyber readiness should be a line item in every agency’s budget for next year,” Cirrolytix’s Mr. Ligot added. “This should include an education and training budget for cyber, an engineering budget to make systems threat-ready, and enforcement mechanisms to incentivize readiness and penalize abuse.”

President Ferdinand R. Marcos, Jr. this year adopted the National Cybersecurity Plan (NCSP) 2023-2028 to help address the rising number of cyber threats in the Philippines. Crafted by the DICT, the NCSP 2023-2028 outlines the country’s policy direction and operational guidelines for a secure cyberspace. 

Aside from NCSP, the DICT amended its Cloud First Policy in 2020 to provide “clearer directives on policy coverage, data classification, and data security.” This policy mandated government departments and agencies to prioritize cloud computing solutions.

In a congressional hearing in April, the DICT reported 282 cyberattacks against government organizations between January and March 2024, adding that 90% of these were resolved. It said 811 early-stage hacking attempts were detected and neutralized by the agency’s National Security Operations Center as of April. This translates to over 74% of total hacking attempts.

The DICT’s Project Security Operations and Network Analysis Research also scanned over 2,000 online assets, exposing 30,682 vulnerabilities.

According to the DICT, the Department of Transportation, the National Economic Development Authority, and the Philippine National Police-Information Technology Management Service are the agencies most frequently targeted by cyberattacks.

The Philippine National Police’s Anti-Cybercrime Group also reported that there were 4,469 cybercrime incidents in the country in the first quarter of 2024, up 21.84% from the previous three-month period.

Last year, the Philippine Health Insurance Corp. was hit by Medusa ransomware, with more than 600 gigabytes of data stolen by hackers.

“The Philippines is one of those countries that is being attacked very often.” Israel Ambassador to the Philippines Ilan Fluss told BusinessWorld in an interview. “If critical infrastructure in water supply, energy supply, banking systems are not protected properly, it could hurt these critical services that are crucial to your population.”

Tomer Heyvi, head of Israel’s economic mission to the Philippines, said Israel could help the Philippines enhance its cybersecurity defenses as many of its startups specializing in security software are looking to enter the country.

“We (Israel government) have a lot of knowledge in cybersecurity especially from military service applying tech in the civilian sphere,” he said. “If hackers are succeeding in some hacking attempts on different government websites, social media, I believe using these innovative technologies it would be beneficial for the Philippines.”

Dotan Sagi, chief executive officer of Israeli software development company Cinten, said the Philippines should invest in tech accelerators to train Filipinos in writing code and innovation.

“If the government invests in accelerators, hubs for young people that can work and understand the tech way of thinking and how to build a startup, it will be easier to work here,” he said. — John Victor D. Ordoñez

Students from Southeast Asia win 2024 FedEx/JA International Trade Challenge Asia Pacific

L-R: Maziar Sabet, president and CEO of JA Asia Pacific; the top 3 winning teams; and Kawal Preet, president for Asia-Pacific at FedEx

Express transportation company Federal Express Corp., together with Junior Achievement (JA), announced the winners of the 2024 FedEx/JA International Trade Challenge Asia Pacific finals held at a live event in Singapore.

This year’s competition attracted over 4,500 students from 10 markets including Hong Kong SAR, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand, and Vietnam.

60 students gathered in Singapore for the Asia-Pacific finals and were tasked to create a market entry strategy for a product that contributes to a circulatory economy, with Turkey being the target market. With growing discourse among consumers on how products affect the environment and the role corporations should play in shaping a sustainable future, the challenge was particularly relevant. Students were paired into teams of two from different markets to foster cross-cultural understanding. The student teams then pitched their idea to a panel of judges made up of Singapore’s leading entrepreneurs and small business owners.

The first-place winners were Team CJ, consisting of Cheryl Lim Xin Yi from Singapore and Julia Jasmine Binti Jufri from Malaysia. They impressed the judges with their innovative idea of creating biofilm from seaweed.

The two runner-up teams were Team Circuvate and Team ONE. Team Circuvate, which included Wesley Ng Yu De from Singapore, developed bioplastic plates funded entirely through advertisements for football stadiums. Team ONE, composed of Rysa D. Sumalinog from the Philippines and Clarisse Chee Qian Ying from Singapore, proposed turning food waste into traditional Turkish carpets.

“We are thrilled to be selected as the winners of the competition. It’s a great honor and privilege to contend with top talent in the region. Taking part in the competition has truly been an eye-opening experience. It helped us understand that any great venture needs bold thinking, thorough planning and great collaboration with peers and industry experts. Winning this competition gives us the confidence to continue exploring what’s possible on our path to becoming future entrepreneurs,” said Misses Yi and Jufri of the winning team.

Judges of the competition, comprised of entrepreneurs and business leaders, were impressed by the organization of the competition and the efforts made by the students.

“The experience has been eye-opening — to see the young minds showcasing their problem-solving skills and presenting their solutions so eloquently. It has been quite thought-provoking and immensely enjoyable,” Alex Fan, co-founder of Sunday Bedding Pte. Ltd., said.

“I was incredibly blown away by the presentations and the thoughtfulness behind each proposal, especially with the knowledge that they were all done in only 2 days. It was also great to see learning and exchange of knowledge between the participants,” said Kloe Ng Co, founder of Out of the Box Education, Inc.

“I am impressed by the students’ presence and poise; especially given the short time they had to complete their analysis and prepare their presentations. They radiate confidence and thoughtfulness. Rather than judging, I see this experience as a co-creation, and through our interactions, I have no doubt they will bring something incredible to the world,” Ryion Pun, co-founder of Guishi Pte. Ltd., said.

“The fact that each participant was paired with someone they didn’t know made this even more impressive. This competition is a boiler room of entrepreneurial experiences and insights. JA Asia Pacific and FedEx did a masterful job facilitating this competition and giving our youth the experience of competing at a regional level,” said Reza Behnam, founder of Digital Direction.

The FedEx/JA International Trade Challenge program is jointly organized by FedEx and JA Asia Pacific, a member of JA Worldwide. In the last 18 years, nearly 50,000 students across Asia-Pacific have been introduced to the world of business, economics and international trade through this program which incorporates classroom learning and practical teamwork exercises.

Kawal Preet, president for Asia-Pacific at FedEx, reiterated the company’s belief that the power of innovation and connectivity can change the world, as epitomized by the International Trade Challenge.

“These brilliant young minds are not just learning about international trade; they are addressing real-world problems with creativity and insight. As these young leaders break down barriers and build bridges across borders, they are exemplifying the FedEx ethos of connecting people and possibilities,” she said.

Philippine companies taking the lead in ESG

Vecteezy

More companies now are beginning to embrace sustainability as well as greater responsibility to the communities they work with, and the environmental, social, and governance (ESG) standard is leading them straight to that path.

With climate risks looming, the business community is stepping up the adoption of ESG into their operations and reporting in the past few years.

In a briefing held by the Makati Business Club last year, SGV & Co.’s Managing Partner Wilson P. Tan noted how sustainability reporting is becoming a significant factor in attracting investors to Philippines companies.

“Global investors are looking at how Philippine companies compete. They put greater importance on the corporation’s ESG performance when it comes to their investment strategy and decision-making. If these institutional investors are looking at ESG as part of their investment strategy and decision-making, how do we compete if we are not up to par with their expectations?”

Such expectations have been rising recently, particularly in terms of investing in ESG programs and in more green projects.

“There is a desire for banks and funds to support projects that are ESG-responsive and slowly a premium on these kinds of projects is emerging as the correlation between sustainable governance and risk mitigation becomes evident,” Valentino S. Bagatsing, president and chief executive officer of Investment & Capital Corporation of the Philippines, was quoted as saying in a statement.

Several companies in the country have been recognized for taking the lead in adopting ESG, setting examples for the rest of the business community to follow.

Metro Pacific Investments Corp. (MPIC) was recognized as an “ESG Industry Top Rated” company by international ratings firm Morningstar Sustainalytics for two consecutive years. Back in 2021, MPIC ranked first among multi-sector holdings companies in the Philippines after receiving an ESG Risk Rating score of 12.8, which placed them in the top 4% of companies in the Sustainalytics Diversified Financial Industry. In March 2022, MPIC received an ESG Risk Rating score of 11.0, which positioned them in the top 3% of companies in the aforementioned industry. It was also recognized as an ESG Top-Rated Regional company in 2022.

According to Sustainalytics, an ESG Risk Rating of 10-20 places a company at the “Low Risk” category of experiencing material financial impacts from ESG factors.

MPIC has adopted a sustainable approach that identifies, measures, and manages ESG risks, policies and regulations, as well as strategies in business operations. Such an approach opens doors for progress and inclusivity, steering the country towards a future driven by sustainable practices.

With sustainability in its core, Aboitiz Equity Ventures, Inc. (AEV), a public holding company by the Aboitiz Group, is making great advancements in ESG-focused strategies and practices, including implementing water conservation efforts by protecting watersheds, rehabilitated rivers, and estuaries in communities, according to AEV First Vice-President and Chief Reputation and Sustainability Officer Ana Margarita N. Hontiveros-Malvar.

The company is also tapping into tech opportunities, utilizing data science and artificial intelligence to streamline operations and minimize carbon emissions. Through Aboitiz Data Innovation (ADI), it is transforming data to produce new products and services.

To date, AEV ranked first in the Industrial Conglomerate Sector of the 2022 S&P Global Corporate Sustainability Assessment (CSA) for the second year in a row, landing in the upper quartile among global peers in the same category. The latest assessment showed that AEV implemented enhanced and accelerated ESG performance and achieved maximum scores in several critical criteria such as environmental and social reporting, risk governance, and climate strategy.

Globe, meanwhile, is raising the bar for sustainability in the telco market as it earned the highest rating (AA) from MSCI ESG Research for a Philippine company in 2023. It made history as the first publicly listed company to commit to science-based targets initiatives and innovating digital solutions in efforts to minimize environmental impact. Since then, it has successfully pivoted to green solutions, focusing and investing on renewable energy and tech, playing a key role in achieving a net-zero future.

MSCI ESG Research provides MSCI ESG Ratings on global public and a few private companies on a scale of AAA (leader) to CCC (laggard), according to exposure to industry-specific ESG risks and the ability to manage those risks relative to peers.

As of 2024, Globe has maintained its “AA” rating for the second consecutive year.

Another top-rated sustainable company, SM Investments Corp. (SMIC) is also known as a major contributor to stable and sustainable growth and development in the Philippines.

For SMIC, its commitment to sustainability means working to better serve Filipino communities and drive sustainable development. This includes building integrated lifestyle cities, delivering banking services that promote financial inclusivity, modernizing retail, and investing in sectors with high growth potential — all in efforts to cater to every Filipino need.

Recently, the group’s strong adherence to sustainability and corporate governance earned them an ESG Risk Rating of 13.3 by Morningstar Sustainalytics and is listed as one of the Top-Rated ESG Companies in the Asia Pacific 2023. — A.K.S. Brillantes

The future of video streaming in a fast-content world

ALICIA CHRISTIN GERALD-UNSPLASH

By Brontë H. Lacsamana, Reporter

FOR people whose lives shifted online since the pandemic hit, online streaming platforms and video-on-demand (VOD) became a primary source of entertainment. Whether a short video, television, or film, the preference of the average Filipino is now to look for it online.

Even though cinemas have reopened, and theater and concerts are now really back in full swing, streaming platforms have remained big in a world driven by online content.

Media intelligence agency Meltwater’s “Digital 2024 Global Overview Report” has found that the Philippines has the highest number of internet users who watch online video content globally.

“The biggest headline in this year’s Digital 2024 reports is that global social media users have passed the 5 billion mark, with annual user growth still comfortably above 5%,” said Simon Kemp of Data Reportal, the study’s chief analyst, in a statement.

The Philippines in particular was found to be a strong contributor to this growth, with about 97.2% of the population aged 16 to 64 saying that they regularly watch various forms of video each week.

However, this growth is not unlimited. “Overall digital growth has slowed over recent years, but this is to be expected as internet users reach ‘supermajority’ status,” said Mr. Kemp.

The survey, which named Mexico (97%) and South Africa (97%) as the countries in second place in terms of number of online video watchers, was conducted by audience research company GWI in the third quarter of 2023.

Google Philippines’ country director Bernadette Nacario said that there is now a brand new reality in the country. “People are now watching their TV shows online — on YouTube, to be specific,” she said in a statement sent to BusinessWorld via e-mail.

Data from 2022 gathered by Google and Ipsos found that Filipinos consider YouTube as their TV when watching on any device. “The platform recorded reaching over a whopping 50 million people aged 18 and above as of June in 2023,” said Ms. Nacario.

AI AS A VITAL TOOL
As of November 2023, the top three most-used video-centric entertainment apps for mobile phones globally were YouTube, TikTok, and Netflix, according to a report by Data AI Intelligence.

All of these have one thing in common when it comes to future-proofing their platforms: artificial intelligence, or AI. This tool is being used in all video production and streaming touchpoints — from generating parts of the content of videos, to helping users find the types of videos they prefer to watch.

“Our mission is to organize the world’s information and make it universally accessible and useful. Core to this mission is to provide people with trustworthy content, and opportunities for freedom of expression while addressing misinformation,” said Mervin Wenke, Google Philippines’ head of communications, in a statement.

For example, YouTube — a Google subsidiary — now requires all its creators to disclose if their realistic content is produced using altered or synthetic media, including generative AI. “We believe the media and creators do play an important role in ensuring that more Filipinos online can connect to trusted information even on new formats like short videos,” Mr. Wenke said.

TikTok, which boasts of 325 million users in Southeast Asia alone, recognizes how AI-generated content helps content creators reach new creative frontiers, making the job of keeping harmful forms of it off the platform a challenge.

Paolo David, TikTok Philippines’ head for brand growth and partnerships, said that AI-generated content that misleads viewers about the truth of real-world events is prohibited.

“To enforce our policies, we continually evolve our detection methods to keep pace with AI’s own evolution. We detect AI-generated content through a combination of proactive technologies, alerts from experts and fact-checking partners, searches for clips or keywords related to known AI-generated content, and user reports,” he said.

Both video platforms told BusinessWorld that they aim to advance responsible content practices through “new technologies and media literacy initiatives with experts.”

Even without using AI, Filipinos have been creating as well as watching a multitude of videos in their free time, according to Mr. David, “whether it’s learning foodie hacks, finding DIY recipes, getting inspired by beauty videos, studying topics like finance, or even transforming a carinderia into a nationwide business.”

Meanwhile, Netflix has spent 2024 releasing its simpler navigation interface, to reduce the time users spend choosing what titles to watch. The platform has almost 270 million users around the world.

Pat Flemming, global executive at Netflix, explained that the large amount of content, both on the platform and in other sites and apps, causes users to look around endlessly to find something to watch.

“We now have the technology to make that simpler, more intuitive, easier to navigate,” he said in a statement released worldwide. “Netflix will continue to offer personalized suggestions to each user. It is not making any changes to its recommendation algorithm as part of the redesign.”

He added that users’ engagement time is a key metric from which streaming platforms base their interface.

FROM BROADCAST TO STREAMING
In 2023, the Walt Disney Co. ceased broadcasting its various television channels in Southeast Asia. These included the National Geographic channel, Baby TV, and Star Movies, among many others, following the closure of the broadcasts of Fox channels in 2021.

Filipinos now watch these channels’ contents by subscribing to the Disney+ VOD platform, available across the Asia-Pacific (APAC) region.

“Aside from discovering new favorite content within a single brand or franchise such as Disney, Pixar, Marvel, and Star Wars, consumers are challenged to dive into a world of diverse genres and find content that resonates with them, whether it’s Hollywood blockbusters or Asian originals,” said Disney+ Philippines in a statement in May.

Earlier this year, the platform also raised its subscription rates: from P159 to P249 monthly for a basic plan, and from P369 to P519 monthly for a premium plan. These rates now match those of rival VOD platform, Netflix.

Both platforms have also continuously upped production of regional content. A May 2024 report by Media Partners Asia (MPA) found that Asian audiences are watching homegrown content in their streaming choices, with local entertainment making up 12% of total viewership in Southeast Asia.

“Local content plays an important role in subscriber acquisition in Southeast Asia, particularly in Indonesia, Thailand, and the Philippines, Netflix’s focus markets for local content production,” said Dhivya T., lead analyst at MPA, in a Jakarta press conference in June.

In a press release detailing the new projects revealed in the conference, Netflix’s APAC arm said that it will broaden the range of local content this year. In the Philippines, the most recent releases are the GMA co-production Pulang Araw and the grandfather-grandson buddy movie Lolo and the Kid.

And the largest broadcast networks in the Philippines, GMA and ABS-CBN, have likewise shifted gears. They now nurture their online presence, streaming live and uploading shows on their YouTube channels and have their own streaming services.

In 2023, the biggest evidence of this new direction came in the form of the two networks’ collaboration to offer their programs on the latter’s international VOD unit iWantTFC.

“Our iWantTFC platform is committed to providing the widest spectrum of Filipino content appreciated and enjoyed by our countrymen worldwide,” said ABS-CBN International Managing Director Jun Del Rosario in a statement.

“At the end of the day, the Filipino viewers — our boss — will greatly benefit from this,” he added.

Consultancy MPA explained in its report that, following a challenging period in 2023, the Southeast Asian VOD sector has demonstrated resilience and notable improvements that have continued into 2024.

Vivek Couto, MPA’s managing director, said in a statement: “We’ve observed better monthly customer churn metrics, alongside a robust growth in subscribers and subscription revenues.”

“Investment in local content and marketing has been strategic and for the most part, sustainable while leading platforms continue to invest in local entertainment and sports.”

Four-year agri modernization program focused on upgrading infrastructure

FREEPIK

By Adrian H. Halili, Reporter

DOMESTIC food production has struggled to keep pace with the demands of a growing population and a rapidly changing climate, a trend that the Department of Agriculture (DA) is looking to reverse with four-year plan focused on major new farming infrastructure.

The centerpiece of this plan is modernization and mechanization, Assistant Secretary and Spokesman Arnel V. de Mesa told BusinessWorld.

“We need to improve our road system, our transport and logistics and distribution systems, to bring down the cost of inputs… eventually consumers will also feel a drop in food prices,” he added.

Performance of Philippine AgricultureAgriculture Secretary Francisco P. Tiu Laurel, Jr. said that the projects are aimed at improving production, thereby lowering the price of food, and increasing the income of farmers and fisherfolk.

The program includes the construction of solar irrigation projects, farm to market roads and bridges, logistics modernization, and post- harvest facilities.

Mr. Laurel said one benefit of raising productivity is to reduce the need for imports.

With domestic production unable to meet demand, the Philippines is forced to import commodities like, rice, meat, sugar, and dairy.

According to the US Department of Agriculture, the Philippines is the world’s top rice importer, projected to ship in about 4.7 million metric tons of rice this year amid increasing demand and lowered tariffs.

The government lowered the tariffs on imported rice to 15% from 35%, until 2028 through Executive Order No. 62. The order took effect last month.

Mr. De Mesa said that the farm industry needs to improve its production systems, with the DA providing the required inducements to increase harvests.

“We also need to improve our production systems by providing the necessary impetus for mechanization. Other measures being looked at are enhancements to land preparation, crop development, and cold storage systems,” he added.

The DA is seeking to build a network of cold storage facilities to minimize post-harvest losses and allow commodities to be stored during periods of oversupply.

“There is an opportunity in cold storage (which will allow farmers to) release the product slowly and ensure good income,” he added.

Agriculture Undersecretary Jerome V. Oliveros said the DA is also seeking to add to the farm-to-market road and bridge network.

“Because there’s a disconnect. The farmers, even with the farm-to-market roads, do not have usable bridges. So, they cannot bring in their goods either,” he added.

The DA’s Bureau of Agriculture and Fisheries Engineering estimates that it could take about a century to complete major infrastructure items for agriculture in the absence of funding and private-sector investment.

The government constructed around 67,328.92 kilometers (km) of farm-to-market roads in 2023, more than halfway to its goal of building 131,410.66 km in six years.

MARKET ACCESS
University of Asia and the Pacific (UA&P) Center for Food and Agribusiness Executive Director Marie Annette Galvez-Dacul said advanced technology and digital integration could increase the productivity of crops.

“Restructure the extension system from municipal (a result of the local government code) to provincial level where a critical mass of experts can be gathered,” Ms. Dacul said via Viber.

She added the government should free the market for land acquisition to allow for bigger and more efficient farms.

Land dedicated to farming has been declining since 1980, when farmland was 9.73 million hectares, according to the Philippine Statistics Authority (PSA).

Conducted every 10 years, the PSA’s Census of Agriculture and Fisheries counted 5.56 million farms across 7.19 million hectares, for an average area of 1.29 hectare per farm in 2012.

The Department of Agrarian Reform has distributed 43,617 land titles covering 53,860 hectares to 39,853 agrarian reform beneficiaries in the seven months to July, ahead of last year’s pace, when it distributed 69,899 land titles to 73,399 beneficiaries. This covers about 84,043 hectares of farmland.

Foundation for Economic Freedom President Calixto V. Chikiamco said that any plans to modernize agriculture will fail unless the Philippines tackles its land fragmentation problem.

“Capital, mechanization, scientific and technical knowledge, and management can’t be applied with average land sizes of one hectare or less,” he said.

The DA’s Mr. De Mesa said archipelagic geography remains a challenge to boosting production.

Ms. Dacul backs a strategy of diversifying land use, with the market determining which high-value products with high export potential are planted.

“Promote value-adding through agro-processing and packaging,” she added.

Danilo V. Fausto, president of the Philippine Chamber of Agriculture and Food, Inc., said that the government should target vulnerable farmers for its interventions.

“We have to look regularly and monitor the basic agricultural data, because without data, it is difficult to plan, focus, and target limited funds,” Mr. Fausto added.

Part of the DA’s plan is to digitalize its systems to make farming “smarter,” in the process reducing waste in seed and fertilizer.

“Modernization is fine, but it must ensure that the farmer’s inputs are considered. It is not a matter of simply offering them modern technology but also getting their agreement to use these innovations,” Leonardo A. Lanzona, Jr., an economics professor at the Ateneo de Manila, said via Messenger chat.

“Unless the farmers know what these innovations are and are convinced that these are improvements to their existing processes, such improvements will be unsustainable,” Mr. Lanzona added.

CLIMATE RESILIENCE
The Philippines experiences an estimated 20 storms per year, which has caused untold damage to agriculture, especially in areas vulnerable flooding and heavy rain.

Mr. De Mesa said that the DA is seeking to climate-proof its agricultural infrastructure.

UA&P’s Ms. Dacul cited the need to invest in research to develop climate-resilient crop varieties, and digitalization that integrates climate-smart farming technology.

During the first half of 2024, the country faced dry spells and drought due to El Niño.

This caused about P15.3 billion worth of crop damage and livestock and fisheries losses. The estimate for lost volume of farm goods was 784,344 MT.

According to the PSA, agricultural output in the second quarter fell 3.3% due to El Niño damage.

It was the first decline in agricultural output since the 0.2% drop in the third quarter of 2023, and the biggest drop since the 3.4% contraction in the first quarter of 2021.

El Niño ended in early June, but dry conditions are expected to continue, according to the government weather service, known as PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration).

Mr. Chikiamco said technology must be harnessed to manage the effects of climate change. However, small farmers may lack access to these technologies, with the answer to this predicament lying in farm consolidation, which will allow farmers to share resources and achieve efficiencies, he added.

UnionBank, DLS-CSB launch Innovation Garage

L-R: UnionBank President and CEO Edwin R. Bautista; DLS-CSB VP for Advancement Brother Agustine Boquer, FSC; UnionBank SVP — Head of Corp. Reputation & Media Management James Ileto; UnionBank CHRO, Sustainability & CSR Head Michelle E. Rubio; and DLS-CSB Vice-Chancellor for Academics Angelo Marco U. Lacson during the ribbon-cutting ceremony at the Innovation Garage

Union Bank of the Philippines (UnionBank), through its UBPXcellerator Program led by the bank’s Human Resources team, has crossed another milestone in its advocacy of “teching-up” Filipinos with the launch of the UB Innovation Garage in partnership with the De La Salle-College of Saint Benilde (DLS-CSB).

Located at The Atrium DLS-CSB Campus, the Innovation Garage is a learning facility where students can learn from experts and gain knowledge on topics ranging from emerging technologies to management skills and design thinking and everything in between, so that they can thrive professionally in the digital world.

As part of the partnership, DLS-CSB and experts from UnionBank’s learning and development team will be running the classes to be conducted in the Innovation Garage. UnionBank’s Human Resources team will also work with DLS-CSB for student mentorship opportunities and placements, and even help top-performing students become part of the UnionBank family as professionals, where they can further improve their knowledge and skills.

During the ribbon-cutting ceremony for the learning facility last July 17, UnionBank President and Chief Executive Officer Edwin Bautista said that when the bank was looking for a partner for the Innovation Garage, DLS-CSB was a clear candidate as the school was a popular choice among students looking to get into creative and/or digital-leaning careers.

“With the innate creativity of the Filipinos, we could be among the best in Southeast Asia if not the world, and this is one area where we can compete with the very best. And so, when we thought about who we can help, DLS-CSB felt like a natural choice,” Mr. Bautista said. “I hope that with this [Innovation Garage], you can be the Center of Excellence not just for the La Sallian schools, but a Center of Excellence for the country.”

The launch of the Innovation Garage is the latest development in UnionBank and DLS-CSB’s long-running partnership that started in 2018. Other notable efforts borne from the partnership include numerous Xcellerator courses offered to DLS-CSB students, as well as an elective in Data Science and Artificial Intelligence inspired by UnionBank’s participation at the Singapore Fintech Festival.

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