The huge difference between crowdfunding in the Philippines and in the U.S.

June 5, 2017 | 9:17 pm

“Crowdfunding is an old concept, really. Pulling a small amount of money so that you can make someone’s business or dreams into reality is basically bayanihan using online platforms,” Chux Daza, one of the co‑founders of Philippine crowdfunding website The Spark Project, said during the Crowdfunding Meetup on May 17 at Penbrothers, Makati. It was a cozy meet‑up of small‑scale entrepreneurs (some with actual products in tow), curious students, potential backers, one reporter, and Spark Project alumni and co‑founders.

Set up in 2013, The Spark Project is the second online crowdfunding platform to be built in the Philippines, preceded by Artiste Connect. Since then, the company has raised ₱4.5 million for 45 projects, with a community of over 2,036 backers.

But how does online crowdfunding in the Philippines differ from the more popular American‑based platforms such as IndieGoGo and Kickstarter?

“Those are mostly online and they’re able to get money online. That’s not the case here,” said Mr. Daza.

“What we’ve learned is that in the Philippines, face‑to‑face interaction is important,” he added. “We need both online and offline campaigns.” They also learned that Filipinos are more comfortable with offline soliciting than online campaigns.

“In the Philippines the trust rating with what you see online isn’t that high as in the United States, and a lot of people don’t have online bank accounts yet,” said Mr. Daza. On the other hand, Filipinos still trust banks more, and prefer giving cash outright for the project after a pitch.

Art Erka Capili Inciong

This isn’t helped by the fact that the Filipinos have a preference for knowing the story behind the project—the “drama,” if you will.

“You wouldn’t usually back a stranger just because they have a good product. Usually you’ll look at why they’re doing this, who they’re helping,” Mr. Daza said. “It’s a factor that we Filipinos look for drama, that extra wow.”

SparkUp also spoke to The Spark Project CEO Patch Dulay after the meet‑up broke into its networking session. With an undergraduate degree in Management Information Systems from the Ateneo and a masteral degree in Global e‑Business from the University of Lille in France, Mr. Dulay started the project in hopes of using his studies to give back to the community.

For a business to successfully seek funding, Mr. Dulay said it could be “at the idea stage but at a mature idea stage, when you’re ready to launch a project that already has a prototype.”

“Let’s say I want to make a bag. I don’t only need to have the design of the bag. I must already have made a bag, sourced my suppliers, know where to have it made—the only thing I’m missing is funds,” he explained. “If you do the campaign, you have to show the people what the bag looks like. They have to see something real.”

There’s also an advantage to established businesses that just need the extra funding to launch a new service or product, like in the case of Murang Liboro Online’s book subscription service. “That way, you don’t need to convince people that you can operate your business because you’re already doing it,” said Mr. Dulay.

The Spark Project has also been used to fund artistic and charity projects. “For artistic projects, the equivalent of a prototype is, for example, if I’m a film‑maker, I’ll show my films from the past or a reel to show people what I can do,” Mr. Dulay said.

How to actually turn your business plans into reality

June 5, 2017 | 9:02 pm

What is your goal for the next five to ten years?

Any dreamer can answer, “I’d like to have a very successful business by then,” BUT: Talk is cheap!

It’s great to have a vision and a goal for everything we want to achieve in life. However, without action, a goal will remain just that—a vision, or worse, an illusion—if we don’t start mapping out the steps in order for us to achieve them. As they say, plans are only as good as their execution. So, how then do we turn all these blueprints into an actual successful business someday?

We’ve listed down five steps to guide you in turning that business plan into a reality:

Before you start planning your business’ short and long‑term goals, think about your personal ones first.

Be clear on those you’ve set for yourself. Similar to how the steps of a ladder lead to the top, these goals will serve as milestones that will eventually lead you to your desired results.

Sharon: Have a money goal and share it with someone close to you. Work on this goal and always keep yourself in check. Make sure that all your small decisions along the way are aligned with the goals you’ve set. Allow the person you’ve shared your money goal with to be your support system. Have him or her keep you in check as well if things start getting difficult and tricky.

Define a budget that is workable and realistic. It may be easier said than done but believe that it is possible.

Sharon: Create a budget and be disciplined enough to stick to it (even if there’s a 3‑day weekend sale or there’s a pair of new trainers that you’ve always had googly eyes for). I know it sounds cliché but live within your means. Trust me, the rewards of being able to do this are manifold.

Part of sticking to your budget is managing your expenses well. Exercise control in spending and carefully plan how you will allocate your money.

Clarissa: After each 15th and 30th, pay yourself first. When you receive your income (monthly paycheck, bonus, 13th month pay, etc.), automatically invest 20% and live with the remaining 80%. This one habit will change all your other money habits. You will get to avoid unnecessary spending and this will discipline you when making all your other future financial decisions.

Sharon: Credit cards could be our best friend or worst enemy. Make it a habit of using your credit card only if you can pay it in cash at the same time and only if it’s within your budget. Refrain from impulse buying and follow through on the set budget.

Being a good manager of your personal finances is only step one to becoming a successful businessman. Your personal budget is only training ground for your future business’ budget. Businesses require a lot more understanding and knowledge of the ins‑and‑outs of the financial world. So, be open and push yourself to learn more about it.

Sharon: Investing is only risky if you don’t have enough knowledge about it. Attend classes and read more books. Then, decide to just do it. Nobody started as an expert after all. If ever you fail, fail forward. Do an evaluation of what has happened and get the lesson out of it. In the end, you’d love the freedom and independence knowing that you are capable of growing your money in the different investment vehicles available.

Clarissa: Get out of your money comfort zone. Put an end to an era where you are risk averse and are unconsciously making financial decisions.

Bringing all your plans to fruition will require you to really step out and take the leap. Equip yourself and muster enough courage to Just. Do. It.

Sharon: As narrated in our book, “I Wish They Taught Money in School So I Can Start My Business Right Away”, I started doing business at the age of 10. I sold shirts, rubber shoes, cologne to my classmates at an early age. My knowledge of the business world continued growing in my teenage and college years until I ended up taking advantage of business opportunities that led to my business taking full flight. Had I not started when I did, I wouldn’t have been able to get to where I am now.

While we’ve listed down some how‑to’s, we know that one’s road to building their dream business differs per person. Some people may take 10 years while others may only need 10 months. What matters is that from the very beginning, the goal is clear and the commitment is strong. After all, how a person manages his business is always a reflection of how he manages himself.

Clarissa Seriña‑de la Paz and Sharon W. Que are financial literacy advocates and the bestselling authors of “I Wish They Taught Money in School” and “Money Grows on Trees” Check out their books at www.lifestyleupgrade101.com. Get 10% off, plus a free notepad and bookmark, by sharing this story with the hashtags #MoneyMonday and #SparkUp. Remember to make your post public!

A platform by millennials lets you invest in farms and harvest the returns

June 5, 2017 | 12:58 pm

What can a metropolitan millennial, with some disposable cash, do for the country’s farmers?

Crowdfunding startup Cropital, a social enterprise, pitches that anyone can grow their money while supporting Filipino farmers. The platform matches farmers with investors and lets them share in the profit, on top of the capital returned. Investors can get up to 25% return on investment, dependent on the terms agreed upon by the farm community and the level of risks involved.

Cropital is the brainchild of three millennials—Rachel de Villa, Ruel Amparo, and Lester Pile—who launched the platform in November 2015.

“We improve their productivity, and at the end of the day we bring back [what has been produced] in the farm to everybody who goes [to] the farm,“ Ms. de Villa, who now serves as the company’s chief technology officer, said during a forum organized by QBO Philippines on May 9 at QBO Innovation Hub, Makati City.

From a capital of only ₱20,000, Cropital has already raised $120,000 or ₱5.9 million for more than 600 farmers in four provinces in the country as of April, thanks to more than 500 investors worldwide.

“At first we thought we would only reach those in the Philippines, but we’re so happy that we’re able to reach also those from countries with very high OFW percentage. They know the problems of farmers in the Philippines that’s why they give their hard‑earned money to Cropital for us to manage our farmers.”

A detailed process is explained on the Cropital site. First, you create an account. Once you have your account, you can choose among the list of farms where you want to invest your money in. Cropital offers two types of investment: short’term (three‑to six‑month period until harvest) and long‑term (more than six years).

Investing through Cropital, which starts at ₱5,000, can be done through “directly invest” or “pledge.” Direct investing allows users to deposit their investment from a virtual wallet, which they can fill‑in through bank money transfer. Pledge, on the other hand, is for users who haven’t deposited money to their virtual wallets yet. Through this process, users are given three days to deposit the amount of money they opt to invest in their chosen farm. A memorandum of agreement will be sent to users once the farm they have selected completes its funding.

To minimize such risks on the changeable weather and pests, Cropital provides farmers with crop insurance through Philippine Crop Insurance Corp. They also have access to agriculturists for advice to effectively prevent or mitigate pests. High value crops—whose prices are volatile and may drop and spike depending on market supply and demand—are diversified, while different farmers are clustered together to further distribute the risks. Cropital also sets a cap on the amount.

Users are charged with a five‑percent service fee at the start of their investment.

From a series of interviews and visits to local farms across the country, Ms. de Villa said her team were able to determine two factors hindering Filipino farmers from having a good quality of life: lack of funds and low productivity. These factors, she said, “keep them in the cycle of debt,” a kin to tiempo muerto as the dead season is called in the Visayas.

“Where we lie is at the center of the agriculture financing industry, so see there’s a lot of financing institutions available to the farmers, but why are they still poor and in an oppressing system?” she said. “So we are positioning ourselves into the very high accessibility and very low interest rate.”

According to her, funding problem among Filipino farmers is caused by lack of financial sources.

“Do you know that our farmers today don’t like going to banks because they don’t want to change their normal clothes? Going to the bank means they have to wear formal clothes,” she said. This is the contrast to the scene in the metropolis where market vendors show up in the neighbourhood bank in their pambahay attire for their daily transactions. “They don’t want that and, of course, they don’t have the collateral that banks require them to provide.”

Consequently, she said local farmers resort to borrowing money from informal net lenders “who often charge very high interest rate.”

“Most of the time they don’t have the choice but to accept that interest rate and fall into the cycle of death once again.”

“We provide access to formal credit based on a set of unconventional criteria for a significant number of farmers who are qualified to receive funding while maintaining a high payment grade,” she said.

Aside from making farming a more profitable practice, Ms. de Villa said Cropital also aims to make farming appealing to the young generation.

“The average age of farmers today is already 57 years old and by making farming more profitable, we are creating a market that would attract younger generation, so it would no longer be a problem in the next two years,” she said.

More than a high investment return, she said Cropital seeks to involve its users in the company’s goal of creating a social impact.

“People who do not usually invest are now starting to invest even though they don’t know how to fund a farm because we do that for them. We just actually expanded the market of people who invest not only in the Philippines, but also in other countries, and it gives them high return on investment,” she said.

With the company’s overwhelming support from local and global sources, Cropital intends to develop its operation. Among Cropital’s plans is the establishment of a system that will allow the company to “select farmers in an instant using a specific number of factors that would compute their efficiency rate and their chances of success.”

“It would be a game changer since we can already partner with the banks that are often afraid to fund farmers ‘cause they don’t know how to do it,” she said. “And with this algorithm, we will be able to change how farmers spend and how we finance farmers.”

Analysts’ May inflation rate estimates

June 4, 2017 | 11:35 pm

INFLATION likely eased in May on the back of lower food and fuel prices, according to analysts asked in a BusinessWorld poll late last week who added this should enable the central bank to keep borrowing rates steady. Read the full story.

A stock exchange where the trade is beer in Makati

June 2, 2017 | 8:56 pm

The fizzy aroma of malt and hops filled Le Café Curieux, a dim restobar at the well‑lit and lively P. Burgos Street in Makati City, on a recent Saturday night. An electronic board, placed at the forefront of the cafe, projected the prices’ rise and fall. Shrieks and wails among foreign guests—mostly in their mid‑30s—jazzed up the place.

It was the stock exchange’s regular scene, taking place beyond 3 p.m. The stocks? Belgian beers. The traders? Beer lovers.

Known for serving authentic French cuisine and rum—thus reeling in expatriates in droves—Le Café Curieux on May 20 turned into a trading floor. The event was entitled “Belgian Beers Stock Exchange Night” with the tagline: “The price of beers fluctuates according to supply and demand.”

A fairly new concept to the country, incorporating stock exchange in parties and other events is a common practice among business students in Belgium, according to Romain Hotterbeex, sales director of Les Deux Belges that supplies Belgian beer to Le Café Curieux, and who organized the event.

“People, especially those from business schools, basically want to make something like a night worthy of fun and also related to their studies,” Mr. Hotterbeex told SparkUp.

Indeed, trading nerds could rejoice in the word play, especially as they were required to “invest in drinks wisely,” and “make the biggest profit while [they] can.”

But even a Wall Street layman sitting at the bar would turn into a stock whiz at this event… as long as his alcohol tolerance is high.

Art Erka Capili Inciong

Just like how securities are bought and sold at prices governed by the forces of demand and supply in the stock market, the prices of the Belgian beers that the cafe offers fluctuate depending on the number of bottles ordered by the guests—or the demand. The more popular the beer, the higher the price. The less popular, the lower.

During the event, a bottle that costs ₱120 went up to ₱220. Meanwhile, some of those are normally sold at ₱100 went for as low as ₱80.

“The purpose is for people to come and to start betting and drinking everything,” Mr. Hotterbeex explained. “The end game for those students is to get drunk as cheap as possible, so obviously they’re going to switch from one alcohol to another one or one beer to another one.”

Beer seems like the perfect fit in this informal stock market simulation. And unlike stock trading, there’s not much at risk but the night’s buzz.

“People like drinks, but then if they keep on buying those drinks the price will go up, so they’re going to be forced to switch to something else unless they want to pay the higher price. They get to try a lot of different drinks during the night,” he said.

In bringing the concept to the Philippines, Mr. Hotterbeex said his company aims to introduce Belgian beer to more Filipinos.

“Here for us, the purpose is for people to have fun with our wide range of beers because it’s something special,” he said. “And also for people to go and try different beers that they might have not tried before or that they wouldn’t usually go for.“

“It’s just a fun thing,” he said. “It’s for people to have fun. We combine drinking with having fun.”

Duterte wants ‘more time’ for martial law

June 2, 2017 | 12:09 pm

PRESIDENT RODRIGO R. Duterte on Thursday appealed to Congress to “give him more time” should lawlessness in Mindanao persist when his martial law declaration in the entire southern region reaches the 60-day limit, around the time he is scheduled to deliver his State of the Nation Address.

Mr. Duterte last week declared martial law in Mindanao amid deadly battles in Marawi City involving jihadist Maute militants reportedly attempting to establish a caliphate for the Islamic-State (IS).

“For as long as the military says, ‘sir, di pa talaga kaya (we can’t resolve this yet),’ and it’s beyond 60 days, Congress must understand that I will need more time,” Mr. Duterte said in his speech before newly appointed government officials in Malacañang yesterday.

On the other hand, his defense secretary and martial-law administrator Delfin N. Lorenzana expects the standoff in Marawi to be resolved today, Friday, June 2.

But Mr. Duterte also added: “There’s Jolo which is also bursting and on top of that I am facing three fronts: I have terrorism in Mindanao; I have the drug problem; and itong mga (these) ordinary — mga kidnap-for-ransom and everything,” he added.

“Kaya kung patayin yan sila, wag kayong magtaka (When they’re killed, don’t be surprised).”

Proclamation No. 216, the martial-law declaration in Mindanao, will last 60 days, according to Article VII, Section 18 of the Constitution, but Mr. Duterte said this will continue until security officials give assurance that the entire country is “safe.”

“The earlier we attain the equanimity of the community, the stability; I’d be the first to clamor for the lifting of martial law,” he said.

Both the Senate and House of Representatives have affirmed the proclamation this week.

The Constitution also allows the Supreme Court to review the proclamation of martial law if any citizen challenges the “sufficiency of the factual basis of the declaration.”

Martial law is a sensitive topic in the Philippines because it was used by the late dictator Ferdinand E. Marcos in 1972 to extend his stay in power indefinitely and to persecute his critics. Mr. Marcos was overthrown in 1986 by a “People Power” revolution.

‘PURELY ISIS’
Clashes between government forces and the Maute group erupted on May 23 in Marawi after the military raided an apartment where 15 members of the IS-linked group were holed up in order to serve Maute leader Isnilon Hapilon a warrant of arrest.

The crisis — which has dragged on to its 11th day today, Friday — has taken the lives of civilians and pursuing state forces.

In the same speech on Thursday, Mr. Duterte said the unrest in Mindanao is “not Maute” but “purely ISIS with different branch.”

“Itong Marawi [occupation] na ito has long been planned. It would not be just a decision na let’s go to Mindanao. Plano na ito lahat (This is all planned),” the President said, adding that the “insurrection” in Mindanao was funded by drug money.

“I warned you before, I’m warning you now na ang ISIS, walang pera (has no money) and I said, by the time they are pushed back and they lose the landmass, they will scamper to everywhere,” he said. — Ian Nicolas P. Cigaral

Davao flights part of Qatar air deal

June 2, 2017 | 7:07 am

THE PHILIPPINES recently sealed a new air service agreement with Qatar that added more flights to the route and a commitment from Doha to mount direct flights from Davao.

The new deal — signed by Transportation Undersecretary for Aviation Manuel Antonio L. Tamayo and Abdullah Al Subaey of Qatar on May 28 — increased the maximum number of flights between Manila and Doha flown by Qatar Airways to 18 flights per week for the airlines of each country from the current total of 14 flights per week.

“It is perceived that the expansion of traffic rights between the Philippines and Qatar under the new Memorandum of Understanding will enhance the connectivity between the two countries that will enable the further expansion of trade, investment, services and people to people exchange between the two countries,” the Department of Transportation (DoTr) said in a statement yesterday.

“More importantly, the inclusion of Davao in the route structure of Qatar Airways will provide much-needed connectivity for Davao to the major markets of the world, especially with Qatar directly connected to 161 international destinations. This connectivity will support Davao’s emergence as a major economic and commercial hub of the Philippines,” it added.

The agreement was tagged by the DoTr as a “landmark” deal since it included as a condition for Qatar Airways to have flights from Davao “within one year from commencement of the four additional flights to Manila.”

The target for commencement of operations for the four additional flights to Manila is between October and March 2018.

Qatar Airways currently operates 14 flights per week between Doha and Manila, plus seven flights per week to Clark, while Philippine Airlines (PAL) currently operates four flights between Manila and Doha.

PAL and Cebu Pacific Air earlier cited “overcapacity” on Middle Eastern routes, prompting airlines to suspend some of their services.

“[O]ur position is that there should be no additional flights, just like our position during the last air talks,” PAL President Jaime J. Bautista told reporters recently.

Sought for comment on the outcome of the air talks, Civil Aeronautics Board (CAB) Executive Director Carmelo L. Arcilla said the additional flights were in the national interest.

“The exchange of traffic flights shall be based on national interest. The air talks are an opportunity for us to negotiate some additional flights from other hubs outside Manila … to sweeten the pot in Davao… that’s the value for us as we promote other airports,” he said via phone.

“It’s not the first time that we’re using this strategy. It’s like the agreement with UAE, there is a provision that they have to fly to an airport outside Manila. (The) national interest (involves) the development of gateways outside Metro Manila,” Mr. Arcilla added in the telephone interview.

PAL announced it is suspending its Manila-Abu Dhabi flights starting July 8 as it undertakes “route assessment initiatives” although it will continue flying to Dubai, Doha, Jeddah, Riyadh, Kuwait and Dammam.

Cebu Pacific meanwhile said it will suspend its long-haul service from Manila to Riyadh, Kuwait and Doha — citing “oversupply” amid intense competition from Gulf carriers. The airline, however, will continue to fly to Dubai.

Both PAL and Cebu Pacific were not immediately available for comment yesterday.

The CAB executive said the next air talks are with Egypt on June 16, to be held here in Manila. — Imee Charlee C. Delavin

Review of REIT rules focused on PHL reinvestment

June 2, 2017 | 6:32 am

FINANCE Secretary Carlos G. Dominguez III said perks given to Real Estate Investment Trusts (REIT) may not be generating an adequate return for the government, and added that the incentives given to the sector are under review.

REITs promote the development of the capital market by expanding the participation of the investing public in real estate development.

“This is my problem… We are giving people a big tax break. What do we get in return? Are we sure that the money that they will be getting tax-free will really be reinvested here? Or will it be invested in foreign shares or something else?” Mr. Dominguez III told reporters at the Department of Finance headquarters on Monday.

Mr. Dominguez said that he wants to make sure that investor profits from tax-free asset transfers under the REIT will not be taken out of the Philippines.

“What the REIT law said, if you create an REIT, whatever transaction you have to transfer the property is VAT (value-added tax) free right? That’s fine. The theory is that the money that will… be reinvested,” he said.

“But how do I know that? How do I know that the tax break will actually generate money that is reinvested here and not brought abroad. We have hardly any control here over investing (the funds) abroad,” he added.

REITs promote the development of the capital market by expanding the participation of the investing public in real estate development including residential projects, hotels, hospitals, malls, power plants and even toll roads.

“I just want to make sure that that money is indeed reinvested in productive enterprises so that they make more jobs. So that’s what they should be thinking about. You are giving somebody a tax break in exchange for what?”

“Its not the government, the money belongs to the people. We are only custodians. We are going to be asking the public to give up so much.”

The REIT Act was signed into law in 2009, and the bourse has long been seeking the amendment of its implementing rules and regulations, as current rules discourage property developers from establishing trusts.

The REIT rules have conflicting provisions, particularly on the minimum public float requirements and taxation on property transfers.

The law states that one third of the investment trust should be publicly owned, while the implementing rules and regulations mandates 40% for the first two years and at least two-thirds thereafter. The government also subjected the transfer of assets into REITs to tax and levies a 12% rate on additional income generated, while the law considers them to be tax-free.

House members last week gave the Finance department two months to come up with amendments to address these issues. — Elijah Joseph C. Tubayan

NEDA asked for guidelines on which infrastructure projects are suitable for public-private partnerships

June 2, 2017 | 6:23 am

THE PPP CENTER has asked the National Economic and Development Authority (NEDA) to come up with guidelines for assessing the best mode to implement infrastructure projects after the government said it favors “hybrid” methods of financing projects instead of public-private partnerships (PPPs).

The PPP scheme — the centerpiece infrastructure program of the previous government that hoped to tap the private sector’s expertise and resources — has taken a back seat under President Rodrigo R. Duterte, who has made infrastructure a centerpiece of his economic program. His officials have said the PPP mode of procurement takes too long to implement such projects.

Instead, the present government prefers them to be funded internally, through official development assistance (ODA), PPP or a mixture of these modes.

“[T]here is no default best option and the choice has to be evaluated on a case by case basis. The PPP Center had requested NEDA to have an interagency group establish the said evaluation methodology,” the PPP Center said in a statement on Thursday.

“Whether a project should be pursued through government funding, ODA, PPP, or hybrid is a matter of finding the solution that best meets the government’s objective given a set of constraints, and the risks presented by each option.”

The PPP Center said if the objective is to build quickly, then public funds will take up the burden. “However, if the capability of a government agency to implement the project is constrained, then PPP or ODA would be the next best options.”

“PPPs bring in the private sector’s expertise while ODAs harness a particular donor’s capabilities,” it added in its statement.

The agency noted that another constraint, should government be the one to build infrastructure, is its ability to raise funds through taxes or borrowing.

“If this constraint exists, then PPP could be a better option. But this has to be weighed against the government further taking on contingent liabilities. The current hybrid model refers to construction of infrastructure using public funds or cheaper financing (local borrowing and ODA) and the subsequent operations and maintenance using PPP,” it said.

The PPP center earlier said implementing infrastructure projects through the PPP scheme “remains a viable option,” especially those that require an integrated approach — design-build-operate-maintain — in order to save on procurement timing, reduce interface risks and avail of the private sector’s technology and efficiency.

The government recently decided to abandon the PPP mode of procurement for regional airport projects, with the implementing bodies — the Department of Transportation (DoTr) and Civil Aviation Authority of the Philippines — deciding they “would be implemented through other modes.”

“If the objective is to deliver public service of the required quality and lowest cost, then either the hybrid model or integrated PPP (build-operate-maintain) would be better options. The hybrid model works if the infrastructure is built and equipped to enable the delivery of the services expected from the O&M (operation and maintenance) provider,” the PPP Center said.

“The active management of this conflict between builder and O&M provider in a hybrid model has to be planned, as soon as a decision to go hybrid is made. Conflict management, if done post construction, could potentially entangle the government, the builder and the O&M provider in costly finger-pointing should problems in the infrastructure or in service delivery later arise. This is in fact already happening in some hybrid projects,” it added.

The PPP Center further said that compared with the integrated build-operate-maintain PPP model, “the private partner manages this kind of conflict and assumes responsibility for the performance from construction all the way to operation and maintenance” and that the government only has to deal with one party — an important considerations when choosing between hybrid and integrated PPP.

Among the PPP projects that are completed are: Daang Hari-SLEx Link Road (Muntinlupa-Cavite Expressway) Project, PPP for School Infrastructure Project Phase-I, Automatic Fare Collection System, and the Ninoy Aquino International Airport (NAIA) Expressway Project (Phase II).

PPP projects under construction are: PPP for School Infrastructure Project-Phase II, Mactan-Cebu International Airport Passenger Terminal Building, Metro Manila Skyway Stage 3, Southwest Integrated Transport System Project, MRT Line 7, Bulacan Bulk Water Supply Project, and the Civil Registry System-Information Technology Project Phase II. — Imee Charlee C. Delavin

SL Agritech signs Bangladesh trial planting deal for hybrid rice

June 2, 2017 | 6:20 am

HYBRID RICE producer SL Agritech Corp. has signed a memorandum of agreement with Bangladesh’s EnP Solutions Ltd for trial production there of one of its seed varieties.

EnP Solutions will initially import some 20 to 50 tons of SL-18 hybrid rice for a pilot test.

“We’re happy to collaborate with them. And we’re hoping to target bigger seed production in Bangladesh,” said Henry Lim Bon Liong in a briefing in Makati City on Wednesday following the signing of the deal.

In two to three years, Mr. Lim Bon Liong is hoping to expand the area of seed production to “hundreds of hectares.”

“By that time we can produce 1,600 MT of seed; two tons of seed per hectare,” he said.

“This is our first collaboration. We’re still feeling each other out. But we’re looking for a long business-relationship,” he added.

EnP Solutions mainly provides services for the oil and gas industry in Bangladesh.

This will be the first time the firm will be venturing into agriculture, according to EnP Solutions Chairman Syed Mahmudul Huq.

“We are almost self sufficient in food but Bangladesh like Philippines, is subject to natural calamities and we have drought or floods. We will lose our standing crop and look for imports,” he told reporters on Wednesday.

“Nevertheless, government and the private sector in the eventual long run have to go forth for expansion in agriculture,” he added.

For his part, Ambassador of Bangladesh to the Philippines Asad Alam Siam welcomed the collaboration, saying this move is seen to help Bangladesh face the challenge of feeding its rapidly expanding population.

“We are a small country with a big population. Our farmland is shrinking while our population is [increasing]… This technology, in terms of hybrid rice, that the Bangladeshi companies take to the Philippines, will increase our productivity… and will help us ensure food security,” he said.

SL Agritech currently exports rice seed to the United States and the Middle East. — Janina C. Lim

DMCI restores power supply to Masbate

June 2, 2017 | 6:06 am

DMCI Masbate Corp. has agreed to temporarily restore its power supply with Masbate’s electric cooperative as the two discuss ways to resolve the distribution utility’s debts owed to the Consunji-led company.
“We hope this matter is resolved immediately for the continued progress of Masbate,” DMCI Masbate said in a statement on Thursday.

It said power supply to Masbate Electric Cooperative (Maselco) had been restored effective 8:00 a.m. on Thursday “pending discussions … with [Maselco] as to its firm and acceptable commitment to settle its overdue obligations” to DMCI Masbate as well as the upgrade of the distribution utility’s system “to ensure reliability of the power supply to its customers.”

DMCI Masbate also said it had been negotiating with its creditors and suppliers for “cooperation and support to ensure temporary supply of electricity to Maselco.”

It also said that Masbate Gov. Antonio T. Kho gave its assistance as well as the Department of Energy, the National Electrification Administration and other local government units, which it said had given their assurance “that the necessary reforms to resolve the issues will be implemented.”

DMCI Masbate is among the off-grid power companies of DMCI Holdings, Inc. under subsidiary DMCI Power Corp.

It currently has a 24.4 megawatt (MW) diesel-powered power plant in Mobo, Masbate, a 4.23 MW diesel-powered generation sets in Aroroy, Masbate, 4.23 MW diesel-powered generation sets in Cataingan, Masbate, 1 MW diesel-powered generation sets in Cawayan, Masbate and 0.75 MW diesel-powered generation sets in Balud, Masbate.

DMCI Power provides off-grid power to missionary areas through long-term power supply agreements with local electric cooperatives. It currently operates and maintains bunker-fired power plants and diesel generating sets in parts of Masbate, Oriental Mindoro, Palawan and Sultan Kudarat. — Victor V. Saulon

Central bank bolsters finance sector against hacking, cybercrime

June 2, 2017 | 5:20 am

Oxford Business Group

THE CENTRAL BANK has stepped up efforts to protect the banking industry from hacking and theft by approving a series of new authentication regulations, which come as part of a broader push to strengthen the sector against cybercrime.

In late April the monetary board of the Bangko Sentral ng Pilipinas (BSP) ratified changes to existing regulations, mandating that banks and other financial institutions adopt multi-factor authentication (MFA) techniques for certain transactions.

The measures are aimed at countering cyberattacks that target fund transfers, payments and other transactions through online channels. In addition, they are part of an ongoing program undertaken by the BSP and the financial sector to increase bank and client security as the industry adopts EMV technology, the chip-based system developed by Europay, MasterCard and Visa.

The technology uses a chip — contained as a component of bank cards — to store information about the cardholder, a development considered to be more secure than existing magnetic strip technology.

Under the new MFA regulations, scheduled to come into effect by Sept. 30, users will be required to deploy two or more authentication factors before a transaction can be conducted. These security factors include a password or PIN, or something unique to the user such as a fingerprint or retinal pattern.

The enhanced MFA barriers will also protect users against cybercrime involving card-not-present transactions, such as those conducted online, by using stronger authentication controls.

BSP has highlighted that the new regulations will reinforce the bank’s existing stringent security controls.

“In particular, MFA is mandatory for those transactions considered as sensitive communications and/or high-risk, such as enrolment in transactional e-services, payments and fund transfers to third parties, online remittance, account maintenance and use of payment cards in e-commerce websites, among others,” it said as part of a media release in April.

While the new requirements will add to banks’ expenses, the investment required to improve security barriers as demanded by the BSP should be more than compensated by the reduction in losses stemming from cybercrime.

GOOD PRACTICE AND DIGITAL AMBITIONS
Many banks have already upgraded their MFA systems to firewall against cyberattacks, according to Nestor Espenilla, Jr, deputy governor of the BSP, who told local media last month that key industry stakeholders had undertaken the measure as a prudent business decision.

“This is a preemptive response to the potential increase in card-not-present fraud as cyber criminals try to look for other opportunities, since card fraud has become harder due to EMV chip migration,” he told media.

The push to ensure banks bolster their MFA defenses comes amid an increased likelihood of further regulatory updates in the future, particularly following the May 9 announcement that Espenilla will be the BSP’s next governor.

Though not taking up the position until July, Espenilla has immediately set out his priorities, which include further digitalization of the financial system, boosting market liberalization and strengthening safeguards such as the MFA upgrades.

In his current role, Espenilla has overseen the still-to-be completed policy initiative mandating banks shift their cards from a magnetic to a chip-based system, part of the BSP’s drive to raise the security bar.

While the shift was initially earmarked for January, some banks are still working to achieve full compliance.

The broader digitalization drive has been welcomed by many in the industry, as the process reinforces efficiency of services, according to John Cary Ong, senior vice-president and head of transaction banking at Union Bank of the Philippines.

“Digital platforms can streamline highly manual processes and make delivery of services efficient and error-free,” he told OBG. “In addition, information from these platforms provides the bank and the customer with relevant insights that enable them to make the right decisions.”

STRENGTHENING REGULATIONS MAINTAINS RATING
Ongoing efforts to strengthen the banking sector’s regulatory framework were cited by ratings agency S&P on April 28 as one of the factors behind maintaining the Philippines’ investment grade rating of “BBB” with a stable outlook.

The banking sector represented a plus in the ratings assessment, the S&P statement said, with the BSP having strengthened oversight of the financial sector. This, along with modest growth in private sector liabilities and of real estate prices, has contributed to improved system stability in recent years.

The ratings agency said it remained positive about the BSP’s capacity to help sustain strong domestic expansion, while at the same time ensuring economic and financial shocks are prevented.

“This reflects the central bank’s sound record in keeping inflation low and its history of independence,” S&P said. “The BSP’s new monetary policy measures will improve the effectiveness of monetary policy transmission.”

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