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FINTQ reports double-digit growth in loan disbursements

FINTQnologies Corp. (FINTQ), the financial technology (fintech) arm of PLDT Group’s Voyager Innovations, Inc., booked a double-digit in the loan disbursements through its online platform in the first quarter.
“Loan disbursements processed through Lendr, FINTQ’s digital lending platform, recorded a double-digit growth in the first quarter from the same period last year,” the fintech firm said in a statement sent to reporters on Thursday.
FINTQ added that the loan disbursements made in the January to March period brought the total volume of loans booked and released through Lendr to over P30 billion since it was launched in 2015. — Karl Angelo N. Vidal

Peso dips after Philippine stocks plummet

The peso weakened against the dollar on Thursday, April 19, as the local bourse dipped intraday.
The local currency ended at P52.10 versus the greenback, three centavos weaker than the P52.07-per-dollar finish on Wednesday.
The local currency opened the session stronger at P52.05 against the dollar. It rose to as high as P52.025, while its worst showing stood at P52.12 versus the US currency.
Dollars traded rose to $654.45 million from the $502 million logged the previous session.
“The peso was still bound within the range of P51.95 and P52.15, but we saw corporate demand pushing it [lower] that’s why we closed a bit [weaker],” a foreign exchange trader said in a phone interview.
He added that the buying of dollar can also be attributed to the weakness of the local equities market.
The Philippine Stock Exchange index closed at 7682.24 points, 1.42% lower than the previous close, as it plunged to a one-year low intraday.
“It went down 3% intraday, but it closed at 1.4%, so we saw some risk aversion in the local market, strengthening the dollar,” the trader added.
Ruben Carlo O. Asuncion, chief economist at UnionBank of the Philippines, shared the same sentiment, as the peso weakened despite that “the US dollar has declined.”
Meanwhile, another trader said that the peso weakened “following the release of upbeat US economic projections by the Federal Reserve (Fed).”
In its periodic “Beige Book” summary of contacts with businesses in its 12 regional districts, the Fed said the overall outlook among businesses “remained positive” as “robust” business borrowing, rising consumer spending and tight labor markets continue to spur the growth of the US economy, Reuters reported.
The Fed report, according to the second trader, “prompted further foreign outflows in favor of the dollar.”
For Friday, the traders see the peso to move between P52 and P52.20, while Mr. Asuncion said he is expecting more of the peso weakness in the coming days.
“I am expecting more of this weakness as [first quarter gross domestic product data] release nears, the anticipation of first quarter corporate results and the decision of the Bangko Sentral ng Pilipinas to [hike or keep its interest rates],” Mr. Asuncion said. “People are looking to position themselves.” — Karl Angelo N. Vidal

World’s most unloved stocks pummeled further by rate-hike fears

The problems keep piling up for Philippine stocks, the world’s worst performers this year.
The Philippine Stock Exchange Index fell as much as 3.3% on Thursday, April 19, before partially recovering to close down 1.4%.
The gauge has lost more than 10% this year as mounting inflation pressure and concern the economy is overheating spur speculation the central bank will need to tighten more aggressively than previously thought. The peso, Asia’s worst-performing currency this year, is also worrying investors.
“Investors are having a hard time justifying the Philippine market’s valuation,” said Lexter Azurin, a senior analyst at AB Capital Securities Inc. in Manila. “A lot of analysts are saying the Philippine central bank is already behind the curve.”
“The peso’s weakness is also helping drag Philippine stocks down because foreign investors need to remit their earnings back and they’re booking losses in dollar terms,” said Azurin, who sees the index support at 7,400. The gauge closed at 7,682.24.
Foreign investors have been net sellers of Philippine stocks for 11 straight weeks through April 11, the longest current run of outflows in the Asia-Pacific region, Jefferies said in an April 12 report. Overseas investors have pulled a net $805 million from the nation’s stocks over the period. it said.
Alliance Global Group Inc. and Megaworld Corp. led declines on Thursday, both dropping 4.9 percent.
This year’s slump has caught Philippine bulls off guard. Many of them entered 2018 with a positive outlook following the implementation of a tax reform program that cut personal income taxes, while raising levies on other items to fund President Rodrigo Duterte’s infrastructure program.
But rising costs of oil and rice, a staple food, have added to price pressures and hurt the crude-importing country. The Philippines has the fastest pace of inflation among 17 Asia-Pacific nations tracked by Bloomberg after Kazakhstan. The majority of economists surveyed in February to April predict the central bank will raise the benchmark rate this quarter from a record-low 3 percent.
“It was expensive, it was over-owned,” said Joshua Crabb, head of Asian equities at Old Mutual Global Investors AP Ltd. “Inflation was coming into the system. At the same time, cyclicality was improving on global growth, so other countries were becoming more attractive.”
Attractive Valuations
There are still some bulls left. Credit Suisse Group AG recommends investors consider buying Philippine stocks, given that valuations are already below its five-year average and are approaching the 10-year average, analysts Dan Fineman and Justin Cimafranca wrote in an April 18 report.
Even so, the peso has been under pressure amid concerns over the nation’s widening current-account deficit. The currency has weakened more than 4 percent this year against the dollar to 52.10 on Thursday.
Nomura Holdings Inc. raised its forecast for the current-account deficit and said it does not expect the shortfall to narrow in the coming months, after data last week showed exports in February fell for the first time since 2016.
“Fundamentals are pointing to a weaker peso — worsening current-account, trade deficits and accelerating inflation,” said Teppei Ino, an analyst at MUFG Bank Ltd. in Singapore. “We are seeing a weaker bias for the peso and see a possibility the currency may fall near 53 or even beyond 53 per dollar before the end of this quarter.” — Bloomberg

RFM posts 7% jump in first-quarter profit

RFM Corp. grew its earnings by 7% in the first quarter of 2018, boosted by higher sales from its ice cream, pasta, flour, and milk products.
In a statement issued Thursday, the listed firm said it booked P211 million in the January to March period, higher than the P198 million it generated in the same period a year ago.
This followed a 10% increase in revenues to P2.8 billion, with the company noting a topline growth across both its branded consumer and commodities segments.
“For 2018, we expect to sustain this strong first quarter momentum with the recent launch of our Selecta Fortified Milk TV campaign and upcoming marketing initiatives for our pasta, sauce and ice cream, over the course of 2018,” RFM President and Chief Executive Officer Jose A. Concepcion III said in a statement. — Arra B. Francia

Trump hopes for success of N. Korea summit, says he could still walk away

PALM BEACH, Fla. — US President Donald Trump said on Wednesday he hoped an unprecedented summit with North Korean leader Kim Jong Un would be successful after a recent visit to Pyongyang by Central Intelligence Agency (CIA) Director Mike Pompeo, but warned he would call it off if he did not think it would produce results.
Mr. Trump told a joint news conference with Japanese Prime Minister Shinzo Abe that his campaign of “maximum pressure” on North Korea would continue until Pyongyang gave up its nuclear weapons.
He also said Washington was negotiating for the release of three Americans held by North Korea and there was “a good chance of doing it.” He did not answer a reporter’s question as to whether that would be a condition for going ahead with the summit.
“I hope to have a very successful meeting (with Mr. Kim),” Mr. Trump said in Palm Beach, Florida.
“If I think that it’s a meeting that is not going to be fruitful, we’re not going to go,” he added.
“If the meeting when I’m there is not fruitful, I will respectfully leave the meeting.”
‘A GREAT THING’
Mr. Trump said earlier that Mr. Pompeo, one of his most trusted advisers and his pick to be the next US secretary of state, formed a “good relationship” with Mr. Kim when he became the first US official known to have met the North Korean leader.
US officials said Mr. Pompeo met Mr. Kim when he visited Pyongyang over the Easter weekend, which ran from March 31 to April 2, to lay the groundwork for the planned summit, in which Mr. Trump hopes to persuade North Korea to abandon development of nuclear missiles capable of hitting the United States.
“Mike Pompeo met with Kim Jong Un in North Korea,” Mr. Trump tweeted earlier.
“Meeting went very smoothly and a good relationship was formed. Details of Summit are being worked out now. Denuclearization will be a great thing for World, but also for North Korea!”
A senior administration official said Mr. Pompeo brought up the case of the three American prisoners with Mr. Kim in North Korea and that the United States remained hopeful for their release.
Mr. Pompeo’s visit provided the strongest sign yet of Mr. Trump’s willingness to become the first incumbent US president to meet a North Korean leader.
The president said on Tuesday that he believed there was a lot of goodwill in the diplomatic push, which he has said could take place in late May or early in June.
US officials said the visit by Mr. Pompeo was arranged by South Korean intelligence chief Suh Hoon with his North Korean counterpart, Kim Yong Chol, and was intended to assess whether Mr. Kim was prepared to hold serious talks about giving up his nuclear weapons.
They said Mr. Pompeo’s conversations in Pyongyang fueled Mr. Trump’s belief that productive negotiations were possible, but far from guaranteed. They said no site had yet been chosen for a summit.
Mr. Pompeo flew to North Korea from a US Air Force base in Osan, south of Seoul, an official with South Korea’s Defense Ministry said.
AIM
Mr. Pompeo told his Senate confirmation hearing last week for secretary of state that he was optimistic a course could be set at a Trump-Kim summit for a diplomatic outcome with North Korea, but added that no one was under any illusion that a comprehensive deal could be reached at that meeting.
Mr. Pompeo said the aim would be “an agreement… such that the North Korean leadership will step away from its efforts to hold America at risk with nuclear weapons” and that Pyongyang should not expect rewards until it takes irreversible steps.
News of Mr. Pompeo’s trip came as South Korean President Moon Jae-in was preparing for his own summit with Mr. Kim, on April 27, with a bid to formally end the 1950-1953 Korean War a major factor.
“As one of the plans, we are looking at a possibility of shifting the Korean Peninsula’s armistice to a peace regime,” a top South Korean presidential official told reporters in Seoul.
“But that’s not a matter than can be resolved between the two Koreas alone. It requires close consultations with other concerned nations, as well as North Korea.”
STILL TECHNICALLY AT WAR
South Korea and a US-led United Nations force have remained technically at war with North Korea since the Korean War ended with a truce, not a peace treaty. The US-led United Nations Command, Chinese forces and North Korea signed the 1953 armistice, to which South Korea is not a party.
The South Korean official said he did not know if any joint summit statement would include wording about ending the war, “but we certainly hope to be able to include an agreement to end hostile acts between the South and North.”
Mr. Trump said on Tuesday he backed efforts between North and South Korea aimed at ending the state of war.
Such discussions between the two Koreas, and between North Korea and the United States, would have been unthinkable last year when North Korea conducted repeated missile tests, detonated its largest-ever nuclear bomb, and said the United States was now within range of its weapons.
The tests and escalating rhetoric between Mr. Trump and Mr. Kim raised fears of war before the North Korean leader called, in a New Year’s speech, for lower military tensions and improved ties with South Korea.
Amid the diplomatic flurry, CNN reported that Chinese President Xi Jinping planned to visit Pyongyang soon, after Mr. Kim made a surprise trip last month to China, Pyongyang’s sole major ally.
Despite China’s traditional friendship with North Korea, Beijing has been angered by Mr. Kim’s weapons development and backed successive rounds of UN economic sanctions, from which Pyongyang is seeking respite.
On Wednesday, finance ministers from the Group of Seven industrialized countries issued a statement saying they were concerned about North Korea’s evasion of sanctions and its “ability to access the international financial system.” — Reuters

Counselling, not crocodiles: Indonesia anti-drug czar flags new strategy

JAKARTA — Indonesia’s new anti-narcotics chief Heru Winarko called for an expansion of rehabilitation centers across the country on Wednesday, flagging a new approach in contrast to the blood-soaked war on drugs underway in its neighbor, the Philippines.
More users, addicts and even minor dealers would be diverted into centers run by medical professionals and counsellors rather than heading straight into an over-crowded prison system, Mr. Winarko told Reuters in an interview.
“With the rehabilitation approach, we cut the demand,” he said. “If there is no demand, the supply will not come or reduce.”
Mr. Winarko took over as head of Indonesia’s anti-narcotics agency in March, replacing Budi Waseso, a former top police officer who advocated surrounding prisons with moats filled with crocodiles and piranhas to stop drug convicts escaping.
Rather than wildlife, Mr. Winarko said he planned to set up rehabilitation facilities near prisons.
“It is better if there is a rehabilitation center located close to a prison,” he said, noting that a former mental hospital near a correctional facility in Bali was being converted into a center for offenders to tackle addiction.
“When we do it like this, it will be amazing. The prison becomes a place for guiding people.”
Indonesia’s president, Joko Widodo, has long warned that the country was gripped by a “drugs emergency” amid assertions by officials — challenged by some experts — that there were more than 6 million users.
Mr. Widodo has said drugs posed a bigger danger than Islamist militancy and he intensified a drugs war that has included the execution of drug traffickers, including some foreigners.
Mr. Winarko said there needed to be rapid growth in assessment centers which determine if drug convicts would benefit from therapy rather than incarceration.
The country’s 127 rehabilitation centers were inadequate for a population of 250 million, and more should be built and existing facilities better integrated, he said.
David McRea, a researcher from the University of Melbourne, said Mr. Winarko’s enthusiasm for rehabilitation needed to be treated cautiously.
Indonesia’s criminal justice system already allowed for some offenders to be rehabilitated but the option was rarely used.
“For years, there’s been talk in Indonesia of a shift to rehabilitate people but people are still being sentenced to prison for petty drug crimes,” he said.
Methamphetamine, known as shabu, is the most popular drug, according to Mr. Winarko.
More than two tonnes of methamphetamine was seized off the coast of Sumatra island in February in two separate, record busts.
Law enforcement officials would maintain their “stern” approach to traffickers and their “shoot to kill” policy if suspects were armed and resisted arrest, said Mr. Winarko.
But he added Indonesia would not mimic the violent policies of President Rodrigo Duterte of the Philippines, who was praised by his predecessor, Mr. Waseso.
“We have our own standard operating procedures,” Mr. Winarko said.
More than 4,100 people have died during police anti-narcotics operations in the Philippines since July 2016. Another 2,300 have been killed by unidentified gunmen.
Philippines authorities say their actions are lawful and the deaths occur when suspects threaten police.
However, human rights groups and United Nations officials have accused Philippine anti-drugs agents of extrajudicial killings. Police deny that.
According to Amnesty International, Indonesian police killed 98 drug suspects in 2017, up from 18 the previous year.
It said the deaths were rarely investigated.
Mr. McRea from the University of Melbourne said the trend of rising drug-related slayings continued in Indonesia this year and was “disturbing.” — Reuters

Fed report: US economic growth on track despite tariff concerns

WASHINGTON — “Robust” business borrowing, rising consumer spending, and tight labor markets indicate the US economy remains on track for continued growth, the Federal Reserve reported on Wednesday, with the risks of a global trade war the one big outlier.
In its periodic Beige Book summary of contacts with businesses in its 12 regional districts, the Fed said the overall outlook among businesses “remained positive,” but that many were worried about the Trump administration’s use of tariffs.
“Contacts in various sectors including manufacturing, agriculture and transportation expressed concern about the newly imposed and/or proposed tariffs,” the central bank said in its report, which covered the period from March to early April.
POTENTIAL CONCERN
In fact, the word “tariffs” appeared 36 times in Wednesday’s report after not appearing at all in the previous Beige Book published March 7.
It was referenced as a factor affecting prices or as a potential concern for the outlook in 10 of the 12 regional banks’ activity summaries.
But otherwise the economy appeared to be motoring along, with some evidence that the tax cuts approved in December may have begun filtering through to business spending and investment.
Several Fed districts reported a jump in commercial and industrial lending, from a “robust” 17% year-over-year increase in St. Louis to “solid” growth in Atlanta and “healthy” demand in Cleveland.
“Markedly stronger growth in loan volumes was seen in commercial and industrial, and commercial real estate,” the Dallas Fed reported.
CREDIT DEMAND
That dovetails with other Fed data showing commercial and industrial (C&I) loan growth, a closely watched gauge of business credit demand, has picked up pace in the last two months after slowing sharply through 2017 and into the start of 2018.
Year-over-year C&I growth for all US banks accelerated to 3.4% in early April — its fastest in more than a year — after falling to near zero at the end of last year.
Demand has been strongest among lenders outside of the top 25 largest banks, according to Fed data.
Small banks registered year-over-year C&I loan growth of 6.2% in early April, the largest in more than two years.
The jump in business borrowing could be a precursor to the sort of investment boom that Fed officials hope would follow from the recent steep cut in corporate taxes.
That would likely support the core view among Fed policymakers for at least two and perhaps three more interest rate increases this year.
The Fed raised rates at its March policy meeting but is not expected to do so when it meets again in about two weeks.
Price increases nationally were described as “moderate,” with steel costs rising “dramatically” in some areas due to the Trump administration’s announcement of tariffs on imports of the metal.
Businesses repeated recent frustrations with labor shortages across a variety of sectors including high-skilled jobs in engineering, information technology and health care. There were also shortages seen in construction and transportation.
In some cases that is leading to long-anticipated wage increases, though overall wage growth remained “only modest.”
“Businesses were responding to labor shortages in a variety of ways, from raising pay to enhancing training to increasing their use of overtime and/or automation,” the Fed reported.
“Upward wage pressures persisted but generally did not escalate.”
The Beige Book was prepared by the Federal Reserve Bank of Dallas based on information collected on or before April 9, 2018. — Reuters

Mexico operations may expose ICTSI to trade war risks — Razon

International Container Terminal Services, Inc. (ICTSI) is keeping a positive outlook for the year, while being cautious on the effects of the looming trade war between the United States and China.
ICTSI Chairman and President Enrique K. Razon Jr. said its operations in Mexico may be affected should the ongoing conflict between the US and China grow into a full-blown trade war.
“The outlook globally is okay, unless of course there’s some disruption with this trade war that could break out…Our only exposure will be Mexico. Because a lot of the goods going through Mexico come from China,” Mr. Razon told reporters after the company’s annual shareholders’ meeting in Solaire Resort and Casino in Parañaque City on Thursday, April 19. — Arra B. Francia

Gabby Lopez steps down as ABS-CBN chairman

ABS-CBN Corp. chairman Eugenio “Gabby” L. Lopez III has stepped down from his position, making way for Martin “Mark” Lopez, who served as the company’s chief technology officer.
Gabby Lopez was elected chairman emeritus during the organizational meeting of the company held on Thursday, April 19. He was chairman of the board of directors since 1997, and also served as chief executive officer from 1997 to 2012.
Mark Lopez, cousin of Gabby Lopez, held the position of vice-president and chief information officer in Meralco. He concurrently served as CIO in Meralco and as the president of e-Meralco Ventures until 2010. — Patrizia Poala C. Marcelo

DBM sets project spending priorities

THE DEPARTMENT of Budget and Management (DBM) will only prioritize new “implementation-ready” infrastructure projects and social services programs for funding under the 2019 national budget, amid limited fiscal space.
The National Budget Memorandum No. 130 dated April 13 outlined the budget priorities framework for the preparation of agency budget proposals under Tier 2 or new and expanded projects.
The total disbursement program for 2019 is set at P3.78 trillion, 12.2% higher than the P3.37 trillion this year. Excluding the P313.3 billion set aside for obligations made in previous years, this would translate to a cash-based appropriations of P3.468 trillion.
Out of the P3.468-trillion cash-based budget ceiling, about half or P1.85 trillion will be earmarked for Tier 1 or ongoing projects, while P1.26 trillion will be allocated for automatic appropriations and special purpose funds.
“This leaves a fiscal space of P362.3 billion for expanded and new projects under Tier 2, which will account for 10.4% of the total cash-based budget ceiling,” the DBM said.
Under the memorandum, the DBM said the Tier 2 budget proposals of the departments and agencies should focus on the government’s priorities of infrastructure development and social spending.
The DBM said implementing agencies should ensure their infrastructure programs are considered in the 2017-2022 Public Investment Program; approved 2019-2021 Three-Year Rolling Infrastructure Program; and for projects at least P2.5 billion, approved by the Investment Coordination Committee.
To prevent implementation delays, the DBM said the agencies should already conduct feasibility studies, detailed engineering and planning for early procurement, among others, for the projects.
“Only shovel-ready projects for implementation shall be considered in the 2019 National Budget in order to maximize the limited fiscal space,” the DBM said.
The budget department also noted infrastructure project proposals should also be climate change and disaster risk resilient, promote convergence programs, and improve farm-to-market and local roads.
Proposals for social service projects, meanwhile, should provide support to senior high school graduates, ensure financial sustainability of education programs, intensify provision for quality nutrition, implement the Tax Reform Cash Transfer Project, and create a consolidated registry for indigenous people and persons with disabilities.
The DBM will also take into account the Tier 2 proposals’ implementation readiness, agency’s absorptive capacity, consistency with the government’s priorities, and its indicative annual procurement plan.
At the same time, the DBM cited several “funding pressures” that will compete for a share of the fiscal space, such as the P12-billion Tax Reform Cash Transfer Project as the P200 monthly transfers to beneficiaries would be raised to P300; the P33.9-billion payments for military pension following the lifting of pension indexation next year; and the P60.1 billion transfer of coco levy funds to farmers upon ratification of the Coconut Farmers and Industry Development Act.
“With these funding pressures, the expenditure directions and considerations for Tier 2 proposals… become even more crucial to ensure that the fiscal space is allocated strategically only to priority and implementation-ready programs and projects,” the department said.
The DBM will shift next year to a cash-based budgeting system wherein allocations can be spent only during the fiscal year, with an extension period of three months to settle payments for goods and services delivered and accepted within that year. — Elijah Joseph C. Tubayan

Sales of sugar-sweetened drinks slump in Feb. amid higher taxes

By Krista Angela M. Montealegre
National Correspondent
ALREADY REELING from a shift in consumer preference to healthier options, sales of sugar-sweetened beverages weakened in February following the implementation of higher excise taxes, according to performance management company Nielsen.
The Nielsen Retail Index data showed a more notable sales drop in sari-sari stores, with sales of all five sugar-taxed beverage categories falling by an average of 8.7% in February compared to 4.4% in the same period last year.
Sales of powdered juice decreased by 15.4% in February from 1.7% a year ago, and powdered tea slumped 18.1% from 3.4%. Carbonated soft drinks sales dipped 7% from 4.1% last year.
Nielsen Retail Index tracks product sales in defined retail outlets, serving as the industry currency in measuring a brand’s market share.
“This reaction from consumers is a normal and expected behavior immediately following a price increase. Over time, some consumers may go back to old buying habits while some will adopt their new buying patterns,” John Patrick Cua, managing director of Nielsen in the Philippines, was quoted in the statement as saying.
Sugary drinks succumbed to the impact of higher taxes as a result of the Tax Reform for Acceleration and Inclusion (TRAIN) Law, which aims to raise funds for the government’s P8-trillion infrastructure spending plan.
The decline in sales in supermarkets is less substantial compared to sari-sari stores, slowing down by 9.4% in February from 14.7% in the prior year. Among the seven categories, energy drinks and ready-to-drink juice displayed significant declines of 10.7% and 8.8%, respectively.
“Impact is lesser and not as immediate in supermarkets because shopping trips and baskets are typically planned. In our (focus group discussions), (middle) and upper class shoppers claimed that their shopping behaviors will not change as much, despite the higher prices,” Mr. Cua said.
“In comparison, declines in sales in sari-sari stores are more apparent since most impulse purchases happen in these neighborhood stores that also mostly cater to the low income segment,” he added.
As of February this year, prices across five categories carried by sari-sari stores climbed 20.6% from year-ago levels, while prices across the seven sugar-taxed categories in supermarkets jumped 16.6% on average.
A chat with some listed beverage companies showed that sales in January were “a little bit strong” because of front loading but sales have started to soften in February because of higher prices, COL Financial Group, Inc. Vice-President and Head of Research April Lynn L. Tan said in a phone interview.
“If you look at the restaurants, prices have increased by only 1-2% so this is acceptable for consumers. But for the sugary drinks, an increase of six pesos is too much and in fact if you go to convenience stores you’ll see even higher prices. This may impact volumes,” Ms. Tan said.
While higher excise taxes may affect revenues, beverage companies also have to contend with consumers ditching sugary drinks for other healthier alternatives.
“Our outlook remains positive since these companies had ample time to adjust their product portfolios in anticipation of the excise taxes as well as the change in consumer preferences,” PNB Securities President Manuel Antonio G. Lisbona said in a mobile phone interview.
A Nielsen syndicated qualitative study, “Kamusta si Juan at Aling Nena,” found that consumers, while continuously purchasing these taxed drinks, will adjust their consumption habits ranging from lessening the frequency of consumption, extending the use of products, and even taking items off their grocery baskets.
Consumers may also tweak purchases across their whole grocery basket, not just for beverages, so manufacturers and retailers should take note of these changes to stay relevant in these challenging times, Nielsen said.

AI seen to help nations build inclusive future

ARTIFICIAL INTELLIGENCE (AI) holds a lot of promise in helping nations build an inclusive future where technology is harnessed in a way that empowers the work force and reduces inequality.
During the Asian Forum on Enterprise for Society in Pasay City, Stephanie Sy, founder of data science firm Thinking Machines, said AI has accelerated inequality in the last five years, translating to lost jobs in developing nations.
“We need new business models for how we can build a better future with AI,” Ms. Sy said.
Featured in this year’s Forbes “30 Under 30” list for Asia, Ms. Sy stressed the need for a shift in imagination and a closer collaboration among stakeholders that will be crucial in developing technology that will allow humans to use AI to augment what they do instead of taking away their jobs.
“If you give the task to a technologist and you define it purely by reducing this metric such as bringing down call time per person by 30 seconds, they will build a tech that does that. But if you want us to build a system that integrates humans, you need to work with us,” she said.
The impact of the applications of AI today has barely scratched the surface of its potential, but much of the fear and uncertainty of the technology are caused by misconceptions and lack of understanding, particularly of decision makers, about what it is and what it does, said Erika Fille T. Legara, data scientist at the Asian Institute of Management.
“It is not necessarily humans versus machines. The future, to me, is humans working together with machines to address the challenges we are going to face,” said Kathy Gong, co-founder and chief executive officer of China-based WafaGames.
Data and AI will fuel the next wave of technology, and Ms. Sy said the Philippines must address the disconnect between the skills of its graduates and the requirements of businesses to thrive in the rapidly changing environment.
She said the BPO sector needs 200,000 people with a background on information technology and engineering, but the Philippines only produces 150,000 graduates of these courses annually.
To equip today’s work force with the demands of the future workplace, education must be focused on exercising intelligence, developing thinking and building skill instead of just transmission of knowledge, said Derrick Latreille, chief learning officer at AC Education, Inc.
“The world of education today must not be content-driven anymore. It should be driven by skills and competency. We should not be teaching our kids what to know. We should be teaching them how to know,” Phinma Education Holdings President Chito B. Salazar said.
The fear is, Mr. Salazar said, that the poor may not have access to these new learning systems, leading to more of them being left behind by advancement in technology.
Vice-President Maria Leonor G. Robredo, in her keynote address, stressed that businesses “must not make the mistake of measuring success in terabytes and instead refocus on the human condition.”
“We must increasingly make sure that the human agenda is not subsumed by the tech agenda. The fourth industrial revolution should not be about machines — it should keep the focus on our humanity,” Ms. Robredo said. — Krista Angela M. Montealegre

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