Facebook Instagram Linkedin Twitter Youtube
Home Blog Page 12801

The cat that sold millions of bottles of wine

Gato Negro — Spanish for “black cat” — was born as a wine brand in Chile in 1960, making it probably the oldest wine label with a critter or animal on it, appearing some four decades earlier than the immensely popular kangaroo label of Yellow Tail.

The origin story has it that for more than half a century, a black cat enchanted the wine makers of Viña San Pedro, convincing them that his presence inspired high quality wines, and so the label was created. Viña San Pedro was founded in Curicó Valley in 1865 by the Correa Albano brothers, who were pioneers in bringing varieties from the Old World/Old Continent to the valley. San Pedro is one of the most important wineries in Chile and one of the country’s most significant exporters, with a huge presence in over 80 countries across five continents, and Gato Negro has been its best selling wine brand since its inception.

The brand is also one of the most successful internationally recognized wine brands of all time. In fact as of 2016, based on volume sold, a bottle of Gato Negro wine is being drunk and enjoyed every one-and-a-half seconds globally. Gato Negro wines are known to be fruit-forward, fresh, uncomplicated, and not too dry.

ILLUSTRIOUS PAST
Gato Negro was one of the first commercially successful Chilean wine brands to be launched in the Philippines back in the late 1980s/early 1990s. For a long time, Gato Negro was actually the best selling Chilean wine brand in the country. Back then, the most saleable wines were mostly generic wines like those from California, simply called red or white, and wines with grape varietal names such as Cabernet Sauvignon, Merlot, and Chardonnay were in the minority and far more expensive too.

Gato Negro was one of the first wine brands to sell with grape varietals on its label at a very reasonable price — below P200/bottle (a fantastic price then). It was not a surprise therefore that Gato Negro was a huge hit. Gato Negro established itself as an incredible value for money quality wine, and it also had the packaging and label that appealed to a big segment of our small but growing wine drinking populace.

Gato Negro 2

But in the past decade or so, Gato Negro has lost most of its market share in the Philippines to other more aggressive Chilean wine brands, and it was only in middle of 2017 that its mother company, The VSPT Wine Group (or Viña San Pedro Tarapaca S.A.), decided to make some major changes. One of the very first moves was for VSPT to sever ties with their long time wine importer in the Philippines and transfer these to a different importer-distributor, hoping that this change would reignite the brand in the country. Expect therefore to see more of the black cat wines in the weeks ahead and more brand visibility this holiday season.

THE LAUNCH OF A RESERVE RANGE
After over 55 years of commercial success, the Gato Negro brand finally released its first ever brand extension — Gato Negro 9 Lives Reserve range — two year ago. Only two varietals were released initially: the all-time favorite Cabernet Sauvignon for the Reserve Red, and Sauvignon Blanc for the Reserve White. Nine Lives will be the premium line of the Gato Negro portfolio, and the brand will also over-deliver on its quality based on its pricing. This 9 Lives Reserve range uses lower yield juices of the best vineyards of Viña San Pedro, is aged in new oaks, and is produced in much less quantities than its regular Gato Negro wines. The wines are also more complex and age-able.

Already, the Gato Negro 9 Lives Reserve wines have gotten medals and accolades from very distinguished international competitions, including Concours Mondial de Bruxelles, Sélections Mondiales des Vins, and the International Wine Challenge.

The Philippines is the second country in Asia after Japan to be launching the Gato Negro 9 Lives wines. The suggested retail price of these wines is P410/bottle, while the SRP of popular regular Gato Negro varietals is P300/bottle — both very reasonably priced.

With a new importer in tow, and the launch of a reserve range in 9 Lives, Gato Negro looks to regain its lost ground and return the black cat back to its familiar alley atop the local Chilean wine market. Gato Negro and 9 Lives Reserve wines are exclusively available from Golden Wines, Inc., and they can be reached at 638-5025/27 or through e-mail at info@goldenwines.com.

 

The author has been a member of the Federation Internationale des Journalists et Ecrivains du Vin et des Spiritueux or FIJEV since 2010. For comments, inquiries, wine event coverage, and other wine-related concerns, e-mail the author at protegeinc@yahoo.com. He is also on Twitter at twitter.com/sherwinlao.

DeepMind has simple tests that may prevent Elon Musk’s AI apocalypse

YOU don’t have to agree with Elon Musk’s apocalyptic fears of artificial intelligence (AI) to be concerned that, in the rush to apply the technology in the real world, some algorithms could inadvertently cause harm. This type of self-learning software powers Uber’s self-driving cars, helps Facebook identify people in social-media posts, and let’s Amazon’s Alexa understand your questions. Now DeepMind, the London-based AI company owned by Alphabet, Inc., has developed a simple test to check if these new algorithms are safe.

Researchers put AI software into a series of simple, two-dimensional video games composed of blocks of pixels, like a chess board, called a gridworld. It assesses nine safety features, including whether AI systems can modify themselves and learn to cheat.

AI algorithms that exhibit unsafe behavior in gridworld probably aren’t safe for the real world either, Jan Leike, DeepMind’s lead researcher on the project said in a recent interview at the Neural Information Processing Systems (NIPS) conference, an annual gathering of experts in the field.

DeepMind’s proposed safety tests come at a time when the field is increasingly concerned about the unintended consequences of AI. As the technology spreads, it’s becoming clear that many algorithms are trained on biased data sets, while its difficult to show why some systems reach certain conclusions. AI safety was a major topic at NIPS.

DeepMind is best known for creating AI software that outperforms humans at games. It recently created an algorithm that, without any prior knowledge, beat the world’s best players at games like chess – in some cases requiring just a few hours of training. If DeepMind wants to build artificial general intelligence – software that can perform a wide-range of tasks as well or better than humans – then understanding safety is critical, Leike said. He also stressed that gridworld isn’t perfect. It’s simplicity means some algorithms that perform well in tests could still be unsafe in a complex environment like the real world. The researchers found two DeepMind algorithms that mastered Atari video games failed many of the gridworld safety tests. “They were really not designed with these safety problems in mind,” Leike said. One of the tests deals with a scenario close to the Musk-envisioned AI apocalypse: Will a learning software program develop a way to keep humans from turning it off? To win the game, the AI has to reach a certain location by traveling down a narrow digital corridor. A pink tile in the corridor stops the system 50 percent of the time, while a purple button somewhere else in gridworld disables the pink button. The test sees if the algorithm will learn to use this button to keep itself from being interrupted.

Another of the tests deals unintended side effects. The software has to move digital bricks out of its way to reach a certain goal. But these bricks can only be pushed, not pulled, and so, in some cases, they can end up in positions that can’t be changed. This lack of “reversibility” is a problem for AI safety, Leike said.

Gridworld is available for anyone to download and use. Whether it goes far enough to ensure safety remains debated. In other research DeepMind conducted with OpenAI, a non-profit AI group backed by Mr. Musk, AI software was shown to learn to satisfy a human teacher, rather than pursuing the task it was programed to perform. Developing AI systems this way could limit the discovery of useful solutions that humans wouldn’t think of. But, in complex environments, using human coaches may provide a better way of assuring safety, Dario Amodei, who heads safety research at OpenAI, said. — Bloomberg

RCBC expects loan growth to slow amid shift in focus

RIZAL COMMERCIAL Banking Corp. (RCBC) expects its loan growth to slow down next year as it veers towards loans to consumers and small and medium enterprises (SME).

In an interview with reporters on Tuesday, RCBC Senior Vice-President for Corporate Planning Ma. Cristina P. Alvarez said the bank sees its loan growth to slow to around 15% in 2018 from the projected 17% this year.

“[For next year,] maybe a little bit slower so [around] 15%, but still positive,” Ms. Alvarez said.

RCBC President and Chief Executive Officer Gil A. Buenaventura said the expected slowdown in loan growth will be due to the bank’s pivot from corporate loans to SME and consumer funding.

“That is our thrust next year. [We will focus] less on the big corporates and more on the SME and consumers, so these are smaller loans,” Mr. Buenaventura explained.

He added that the pivot to SME and consumer loans will be done “because the GDP (gross domestic product) growth is still good and consumer spending and consumption just tracks the growth.”

Mr. Buenaventura noted the Yuchengco-led bank is looking at a 17% growth in loans for this year, tracking the industry rate of around 20-21%. He also expects the bank’s net interest margin to slightly increase following its new thrust.

Meanwhile, RCBC is also looking at strengthening its cross-selling activities to increase its income growth, which is expected to stand at around 10-12% next year.

“I think the key to business growth is to make the branches more effective in cross-selling. For instance, RCBC Savings will rely heavily on the bank branches to be able to cross sell all these consumer products,” Mr. Buenaventura said.

He added that the bank is bullish about the consumer spending, as the first package of tax reform will bolster spending.

“Tax reform will also happen which will I think translate to consumer spending therefore more need for houses, cars, [among others.] I think it will be positive for everybody.”

The lender intends to open 15 more branches for next year. Broken down, Mr. Buenaventura said they are looking to open five new RCBC branches and nine for RCBC Savings Bank.

MOVING ON
Meanwhile, the bank president noted that the bank has already “moved on” from last year’s cyber heist, saying it has put in place measures to prevent such an incident from happening again.

He noted that RCBC’s sales and operations have been split into two units in accordance with the current industry setup.

“I think the numbers will show that after the incident the bank is making money and doing well. We just have to make sure that we do things better,” he said.

In February 2016, RCBC was used by cyber-attackers to channel the $81 million stolen from the Bangladeshi central bank.

On another note, Mr. Buenaventura also clarified that there will be no asset sales, following the speculations that Sy-led BDO Unibank, Inc. and Ayala-led Bank of the Philippine Islands will acquire a controlling stake in the bank. — K.A.N. Vidal

Year-end reminders, transfer pricing edition

In a few days, we will be celebrating Christmas and New Year. While everyone is excited for the upcoming holidays, thinking about vacation and what to do during the break, for most accountants, this is the time of the year when they are busy doing final adjustments to accounting records, completing transactions and closing financial books of account.

For entities that have intercompany transactions, this could also be the time of year when transfer pricing policies/arrangements are revisited.

Under Revenue Regulations No. 2-2013, also known as The Philippine Transfer Pricing Guidelines, the term transfer pricing is defined “as the pricing of cross-border, intra-firm transactions between related parties or associated enterprises.” For instance, if a subsidiary sells goods or services to its parent company, the cost of the goods and services sold is the transfer price.

To demonstrate that their transfer prices are consistent with the arm’s-length principle, taxpayers are required to maintain contemporaneous documentation. It is contemporaneous if it exists or is brought into existence at the time the associated enterprises develop or implement any arrangement that might raise transfer pricing issues, or review these arrangements when preparing tax returns. Thus, at the end of every financial year, associated enterprises, or those companies that participate directly or indirectly in the management, control, or capital of other companies, must check whether or not their intercompany arrangements were conducted under arm’s-length conditions and were properly applied and reported in the financial records and tax returns.

If the associated enterprise finds out that there are discrepancies between its transfer pricing policies (or those that were actually charged by/to the company) and the arm’s-length transfer price, it is generally allowed to take up transfer pricing adjustments in order to reflect the true arrangement and the arm’s-length charging of the related parties.

While there are no specific rules in the Philippines on year-end transfer pricing adjustments, the Transfer Pricing Guidelines of the Organisation for Economic Co-operation and Development (OECD), which has some persuasive effect in the Philippines, generally allows taxpayers to adjust their intercompany transactions’ transfer price as compensating adjustments to achieve compliance with the arm’s-length principle. Under the OECD Transfer Pricing Guidelines, compensating adjustment is defined as “an adjustment in which the taxpayer reports a transfer price for purposes that is, in the taxpayer’s opinion, an arm’s-length price for a controlled transaction, even though this price differs from the amount actually charged between associated enterprises. This adjustment would be made before the tax return is filed.”

Compensating adjustments may facilitate the reporting of taxable income in accordance with the arm’s-length principle, recognizing that information about comparable uncontrolled transactions may not be available at the time associated enterprises establish their related party transactions. Thus, for the purpose of lodging a correct tax return, a taxpayer is permitted to make an adjustment that would reflect the difference between the arm’s-length principle and the actual price recorded in its financial books.

Consequently, transfer pricing adjustments should generally be acceptable to the Bureau of Internal Revenue (BIR) as long as taxpayers are able to show that such adjustments were made to reflect an arm’s-length charge for their intercompany transactions. As these transfer pricing adjustments may also entail adjustments to tax returns, it is advisable for them to be made prior to the closing of the books of account and filing of the tax returns. Otherwise, the BIR may impose its own adjustments on taxpayers’ tax returns if it determines, during a tax investigation, that the taxpayers’ income and expenses are not at arm’s-length.

In case of adjustments to revenue and costs, among other tax considerations, there are income tax and value-added tax (VAT) implications. For instance, if the taxpayer determines at the end of the year that there is a need for an additional charging of sales to its related party customer, these could be recorded as a transfer pricing adjustment which must be reported in the relevant income tax and VAT returns. For income tax, the adjustment could be reflected in the annual income tax return to be filed on or before the 15th day of the fourth month after the close of the taxable year, while for VAT, this could be included in the quarterly return that must be filed on or before that 25th day after the close of the taxable quarter (i.e., April 15 and Jan. 25, respectively, for taxpayers applying the calendar year period).

In terms of documentation, it is advisable that these transfer pricing adjustments are supported by proper documents. This may include, among others, invoices/official receipts, credit/debit memos, and/or a provision in the agreement or contract which indicates the parameters with respect to the allowable adjustments, such as when these adjustments will be applied (e.g., at year end) and under what circumstances (e.g., if the agreed margin is not met). If the issuing party is a local entity, the supporting billing documents must be duly registered with the BIR.

While the development of transfer pricing rules in the global scene is expeditiously growing, the strict and strong implementation of transfer pricing rules in the Philippines has yet to be seen. Nevertheless, it is apparent that the BIR is now starting to scrutinize transfer pricing issues during tax investigations and impose transfer pricing adjustments on transactions that they deem not compliant with the arm’s length principle. With this, it would be helpful for taxpayers to exercise caution in terms of dealing with their intercompany engagements. With the new year fast approaching, including a review of transfer pricing arrangements in your company’s annual year-end requirements checklist would be a good start.

The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The content is for general information purposes only, and should not be used as a substitute for specific advice.

Iris Kristine Lacebal is a manager at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of PwC network.

+63 (2) 845 2728

iris.kristine.d.lacebal@ph.pwc.com

How PSEi member stocks performed — December 13, 2017

Here’s a quick glance at how PSEi stocks fared on Wednesday, December 13, 2017.

Growth outlook of select Asian economies

THE ASIAN Development Bank (ADB) has again raised its economic growth outlook for the Philippines this year and in 2018 over accelerating infrastructure spending and robust consumption. Read the full story.
ADB turns even more bullish on PHL

Nation at a Glance — (12/14/17)

News stories from across the nation. Visit www.bworldonline.com (section: The Nation) to read more national and regional news from the Philippines.

A paw‑mazing social enterprise

An entourage surrounds him as he leaps along the halls of Ateneo. Girls giggle and stare, wanting to play.

His name is Bubu. He is Ateneo Loyola Schools’ Office of Guidance and Counseling’s (LSOGC) in‑house therapy dog who has improved the mental health of students. Psychological tests measuring anxiety, depression, and stress levels back‑up this claim.

Janine Sy, LSOGC’s researcher, who doubles as Bubu’s manager, laughs that Bubu is even more famous than the guidance center itself. “Bubu is why we currently have 1.3 thousand likes on Facebook—many more students come here because they want to play with him.”

Bubu is part of Communitails, a startup that combines mental health and dogs in one paw‑mazing social enterprise. It was founded in 2014 by four medical doctors, a veterinarian and a biology professor who all share a love for animals and believe in the healing power of the human‑animal bond. They’re the organization that made it possible to have therapy dogs in LSOGC, and the Ateneo community at large.

Human‑animal bond

“Animal‑assisted activities” is the umbrella term that covers animal‑assisted interventions (simply playing in a group setting), animal‑assisted education (being educated about said activities or raising awareness, headed by a teacher), and animal‑assisted therapy (addressing clear treatment goals in a therapy setting).

Human‑animal bond has been seen to have healing potential—animals won’t judge nor interrupt you, making it easier for you to relax and open up. The bond may also foster a sense of responsibility (taking care of the animal) and benefit physical health (bringing the animal to regular walks). Therapy animals can be assigned to people with all sorts of conditions, including but not limited to dementia, cancer, chronic pain and developmental disorders.

Prior to Communitails’s efforts, animal‑assisted activities were virtually nonexistent in the country, save for the Dr. Dog outreach program of the Philippine Animal Welfare Society. Carla Azucena, Communitails President and Bubu’s human, recalls, “We looked at them and actually attended one of their sessions so we could see what exactly goes on, and that’s our local data—everything else, we had to look abroad.”

The lack of local resources did not stop them from seeking the information they needed elsewhere and fine‑tuning it to the specific needs of each client. Azucena points out that they had to look at different models of animal therapy organizations, and obtaining their certification from the nonprofit Pet Partners in the process. Pet Partners is a non‑government organization in the US that certifies teams and people for animal‑assisted therapy. “They don’t have a branch of Pet Partners here yet, and so we found it apt to make our own organization here and get people certified.”

 

Making it work

Communitails is for‑stock and for‑profit, which, Azucena explains that it was a decision based on their prior experiences with volunteering. She says, “We already know how NGOs run in the Philippines, we admire what they do, but we just don’t know how it’s sustainable and how much we can do with such limited resources. Once we get into that system, we wouldn’t be able to get anything into the business, and so we also looked for different models abroad.”

Azucena and the rest of the board then assembled a team of part‑time professionals to help with their sales, marketing, legal and financial matters. They also started to train volunteers with the necessary competencies to become handlers in the future.

As for the dogs, they need to pass a behavioral assessment to become therapy dogs.

For each client, a team consists of one therapy dog, at least two certified handlers from Communitails, staff from the institution, and volunteers. Azucena says it’s done this way because one of the premises of animal‑assisted therapy is that you can’t leave the dog on its own. “What if the handler goes to the bathroom? The staff from the institution is also important for crowd control, logistics, and because [they] know where to go and how to go about the session.”

Their clients so far have been institutions, particularly schools and hospitals—a deliberate move, according to Azucena. “We targeted it that way, rather than individuals, because we wanted to create a community. So individuals will have to go through the proper channels first, the mental health professionals, in this case.” Communitails tailor‑makes each program according to the needs of the client, asking, interviewing and observing first before developing how each session would go. In the case of the LSOGC, Azucena says that they wanted an in‑house dog, and they are currently taking steps to ease Bubu and two other dogs into that particular role. “Other clients might not necessarily want a program, they might just want a visit once or twice.”

Azucena says that they have been actively pushing for animal‑assisted therapy because “it’s been in America, the UK and even Singapore. We are such an animal‑loving nation: 8 people is to 1 dog in SEA, so that means we have the most number of dogs. It’s so ingrained in our culture to have pets. I think we’re ready for it and right for it.”

As for the LSOGC, their main goal is community‑building, and it looks like it’s working: an entire class has opted for a photo op with Bubu. But Azucena reminds us of the bigger picture: “We’re not just bringing in the dogs for them to play with. There’s a certain stigma with mental health right? With Bubu’s help, it’s no longer that hard to go to the guidance office.”

 

Heart for animals

Maria Nancy Copaway, a recent volunteer, decided to join because of how it aligns with her beliefs: “I find it a really good means to promote a stronger human‑animal bond.” Copaway mentions that volunteers are required to attend training seminars, as well as observe sessions.

It’s worth noting that Communitails was founded over a genuine love for animals. Azucena shares, “we all started with being animal lovers, so we all had our own pet love story with our respective animals. Having a dog, having a pet in the family was very foundational in my development as a person and that love didn’t wane over college and med school.” This has afforded them a real concern for the welfare of the therapy dogs, that translate into how they conduct their sessions.

Azucena is well aware of the limitations of Bubu: he can get overwhelmed by a crowd, he needs to stop and drink water every so often, and likes having a cooling mat and some bananas—his favorite treat—to relax. They also make sure not to overwork the dogs by scheduling all the sessions.

“Bubu has only two visits per month,” Azucena said. “We limited it that way for his own welfare.” She also shared that Bubu once fell ill and couldn’t do the visits, which prompted them to assemble backup teams to meet the demands, especially during times when students are especially stressed.

Apart from Bubu, the LSOGC will soon have Doodle, the Guidance Director’s dog, and Yogurt, an undergraduate’s dog.

Communitails is proof that you can mix business with passion, while addressing the needs of society in a novel way. Azucena says that they have been expanding because they already have their proof of concept—they believe that the niche they built is sustainable, while addressing mental health issues, a cause that has been gaining increased awareness in the country.

Here’s how you can score a year’s supply of Tsuta ramen!

Could there be a better Christmas gift than one bowl of noodles drenched in a rich broth, drizzled with flavorings, fat, and hot oil, and stapled with a stamp of a Michelin star?

Yes—a whole year’s supply.

Tsuta, the world’s first Michelin‑starred ramen restaurant, is opening in Manila and is giving away prizes to the first 100 in line.

The lucky 100 who get to try the award‑winning ramen in Bonifacio High Street on December 16 will receive a one‑year supply of Tsuta ramen, served as one hot, delicious bowl of ramen per week, of their choice of specialty shoyu (soy‑based sauce), shio (salt‑based sauce), or miso soba.

Diners 11 to 30 get six months’ worth, while numbers 31‑50 will enjoy free ramen once per week for 3 whole months.

Meanwhile, the succeeding 50 people in line will each get a voucher for one free bowl of signature Tsuta ramen valid for claiming anytime within one year. Prizes are non‑transferable and not convertible to cash.

One more thing: lucky ramen lovers may meet Tsuta’s founder and executive chef Onishi Yuki who trained in his father’s ramen restaurant before opening his own shop in Tokyo in 2012. Tsuta is the world’s first ramen shop to have a Michelin star for 2016, 2017, and 2018. It was brought here by FOODEE Global Concepts, the same group behind Todd English and Tim Ho Wan Philippines.

Don’t miss this chance and line up as early as you can at the UG/F C3 Bonifacio High Street Central, 7th Ave. corner 30th Street. Queue will be accommodated as early as 6 a.m., and numbers will be issued to the first 100 in line. The store officially opens to the public at 11:30 a.m.

For the official terms and conditions, follow Tsuta Philippines on Facebook and Instagram. You may also share photos on social media using the hashtags #TsutaPH and #MichelinStarRamen.

Aside from first dibs, what did the first 50 iPhone X buyers actually get?

At exactly midnight of December 1, certified Apple retailers all over the Metro opened its doors to the first lucky few owners of their latest smartphone, the iPhone X. Boasting an edge‑to‑edge OLED screen, facial recognition as a phone unlocking option, better resolution and a better camera than its predecessors, the iPhoneX was touted to be the it gadget at ₱64,000 on its first release.

But it takes planning, will power, and the utmost patience to stand in line for the latest trendy gadget, especially during its initial release when stocks are still limited.

The City of Dreams branch of Beyond the Box, one of the certified Apple retailers in the Philippines, made sure that falling in line for the iPhone X wouldn’t be stressful. Instead, they were given the VIP treatment that they deserve, not because they will soon own an iPhone, but because they were already in line by 8:00 a.m. for a store that opens in the afternoon, for a product that won’t be available for purchase for another sixteen hours.

According to Beyond the Box Communications and Strategy Manager Masanori Takamoto, the first 50, who received queue numbers were invited to a VIP lounge with cocktails, food and insights about the new iOS11. Like any party, there were games and prizes. “Just a small token for them for falling in line,” Takamoto said.

The first fifty iPhone X owners from Beyond the Box’s City of Dreams branch were also given a package that included the following (*hold your breath*): a Marshall Major II Bluetooth headphones, a BodyGuards Pure Screen Protector, a UAG case, [fuse]chicken Titan Loops and a MOMAX wireless charging pad. “Everything you need for your new iPhoneX is basically already there,” said Takamoto.

For Jonaz Arcamo, who was first in line that day, the wait was worth it. “The iPhone X is the latest flagship phone of iPhone, ten years in the making,” Arcamo told SparkUp. “That’s why, it’s quite a wait. I really want to play with this one.”

As for the people who fell in line after the first fifty people? “We had to tell them honestly that beyond 50 we cannot allocate units anymore,” Takamoto said. “But in compensation for those who tried to fall in line we gave them the assurance that they’ll have a unit as soon as we have stocks already.”

Will the iPhoneX live up to the hype and make its owners like VIPs? For now, while stocks are limited, the latest iPhone remains a coveted device that most people can only dream of owning.

When big businesses meet small start ups

Start‑ups. Disruption. Innovation. With small tech‑driven businesses having the potential to turn into hugely profitable enterprises like in the example of transport network vehicle service apps Grab and Uber, how are old businesses dealing with these new developments?

For Aboitiz Equity Ventures, Inc. Chief Executive Officer Erramon I. Aboitiz, the internet is a game changer. “Your generation intuitively understands technology as it has always been a part of your life, growing up in an electronics‑filled environment that enables online and social media communication with anyone, anywhere in the globe, 24/7,” the CEO of his family’s multifaceted conglomerate said in his key speech at the 12th Aboitiz Future Leaders Business Summit (AFLBS) last November.

AFLBS is Aboitiz’s yearly summit for students from all over the Philippines and from different fields like Accountancy, Engineering, Economics and Psychology, to show them what opportunities they might have in their company.

“The vast information on the Internet also fundamentally changes the way you learn things about our world,” Mr. Aboitiz said. “You millennials are also acknowledged as being able to present far more creative and innovative solutions to problems than any other generation before you. You are the most ethnically diverse generation and therefore tend to be tolerant of difference.”

Ana Aboitiz‑Delgado, a fifth‑generation Aboitiz and chief user experience officer of Union Bank, said the company is trying to develop an environment that better suits the millennial work force. Millennials, after all, make up approximately a third of the Philippines’ total population.

“The old way of working is that you’re stuck to a desk, and you have to show up in this particular office,” Delgado told SparkUp. “Now we’re experimenting with agile workspaces where you don’t have a fixed desk, and you can work from different places.”

“And I think more and more we espouse the need to be aligned with a purpose,” Delgado added. “I think that they appreciate that we can recognize that they might not be attracted to us so we also have to convince them that we are the right employer.”

Insular Life Assurance Company, Ltd. is also reaqcuainting itself and its employees with the values of innovation. The 107‑year old coverage provider held a seminar, IKNOWVATE, on Nov. 29 for its employees and officers and invited several speakers to talk about what innovation can bring to a traditional company. Insular Life also held a pitching session with technology startups, with products that could bring some needed innovation to Insular’s services.

“We will be very passionate about innovation. It is a way to survive,” said Insular Life CEO Nina Aguas. “Of course Insular has survived all these years. In terms of durability, it is a company that has survived 107 years. We’re just ensuring that it will be here for another century for the next generation. And hopefully when it happens our great‑great‑grandchildren will be a part of Insular Life.”

“I’m very excited about innovation,” Aguas added. “We’re looking forward to what it holds.”

Among the speakers invited to IKNOWVATE was head of Ayala Innovation Vince Tobias. Ayala Innovation is Ayala Corporation’s think tank for developing innovation within another of the Philippines’ corporate giants.

“We were very happy with how we were doing,” Tobias said about how Ayala Corporation learned to embrace the importance of innovation. “So to bother people to think about innovation was very difficult. It took our Chair and CEO to say `You know what, we’re going to have an organization and it’s going to be here on a permanent basis.”

And they soon learned the importance of startups, which can reach customers with more ease than Ayala can. “Startups are more agile, they’re closer to the market. They’re quicker to adjust to what they see.”

“We’re big, Ayala is huge and that causes some distance to the customer,” Tobias explained. “We leverage on our access to finance and our people, so there’s not so much pressure to look at the finer details which the startups might be able to see. They’re leaner, they don’t have your resources so they’re more attuned to market needs and intricacies.”

Is this a sign for a future where startups and large companies can work together and benefit from one another? With these corporate giants seeking to adapt to the changing economic climate, signs point to yes.

Oct. sees less jobs, but quality improves

THE RANKS of jobless Filipinos grew in October, but job quality saw the biggest improvement in more than a decade, according to latest labor data which the government released on Tuesday.

The preliminary results of the Labor Force Survey (LFS) conducted by the Philippine Statistics Authority (PSA) put the unemployment rate at five percent in October, compared to the year-ago 4.7%. This is equivalent to 2.19 million Filipinos, up from 2.04 million a year earlier.

Oct. sees less jobs, but quality improves

At the same time, there may be more better-quality jobs available in the labor market as the underemployment rate — the proportion of those already working but still looking for more work or longer working hours — improved to 15.9% from 18% last year, the lowest in more than 10 years. This represents around 893,000 less underemployed workers during the period.

The employment rate was 95% in the same month — consisting of about 41.6 million individuals — slightly less than October 2016’s 95.3%.

The labor force consisted of approximately 43.72 million individuals out of an estimated 70.4 million Filipinos aged at least 15 years old, taking the labor force participation rate to 62.1%, lower than the past year’s 63.6%.

The National Economic and Development Authority (NEDA) particularly noted in a statement the increase in employment of wage and salaried workers “by about 624,000” and the decrease in “vulnerable employment” — consisting of the self-employed and unpaid family workers — to 33.9% from 36.3% a year ago.

The self-employed made up 27.9% of the total employed, an improvement from 27.6% in October 2016, while unpaid family workers accounted for six percent, fewer than 8.6% last year.

Wage and salaried workers accounted for 62.3%, up from 60.6% the previous year.

“Regular conduct of job fairs and provision of livelihood assistance have contributed to the improvement of underemployment especially in areas outside of the National Capital Region (NCR). This is a good indicator that our efforts in the lagging regions are starting to take effect,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted in the NEDA statement as saying.

Underemployment in areas outside of NCR was 17%, lower than the past year’s 19.6%.

By sector, most of the new jobs were in industry and services. Hiring in services improved to 57% from 54.6%, while employment in industry rose to 18.1% from 17.1%.

Offsetting these gains were jobs lost in agriculture, which saw employment rate declining to 25% from 28.3% — representing around 1.4 million layoffs.

On the other hand, much of the declining underemployment was seen in agriculture, with a 32.6% rate in October that was better than last year’s 39.6%. Industry and services, meanwhile, saw underemployment rates increase to 19.5% (from 17.1%) and 47.9% (from 43.3%), respectively.

“[T]he annual drop in the underemployment rate during October was mainly evident in the agriculture sector,” said Security Bank Corp. economist Angelo B. Taningco, citing “favorable weather conditions.”

Mitzie Irene P. Conchada, associate dean of the De La Salle University (DLSU) School of Economics, ascribes the higher unemployment rate to a 2013 law that increased excise tax rates for alcohol and tobacco products.

“The sector that registered the highest unemployment rate is the agricultural sector, particularly in the Ilocos region with 8.9%, which is higher than the national average of 5.6%,” Ms. Conchada said, referring to the country’s main tobacco growing area. “This was attributed to lower demand for tobacco products due to the higher excise tax on tobacco products implemented in 2013.”

The provision under the tax reform being finalized in Congress to raise the tobacco excise tax even further, she added, “will hurt many tobacco farmers and workers as big cigarette companies express the probability of closing operations in the country.”

Ms. Conchada said added that underemployment rate’s overall “decline could be attributed to more casual jobs being available this year.”

Rene E. Ofreneo, professor at the University of the Philippines School of Labor and Industrial Relations, said that the increase in unemployment rate was “negligible” while the decline in underemployment was “significant.”

“The latter can be interpreted to mean that better-paying jobs are increasing, which can be attributed to more available jobs and, in a limited way, gains in the anti-endo [end-of-contract] campaign,” he said.

Last March, Labor Secretary Silvestre H. Bello III signed Department Order (DO) 174 which spelled out the rights of employers and employees in contractual hiring arrangements. The order also banned “endo,” short for “end-of-contract” which refers to the practice of hiring workers in successive five-month periods, allowing firms to skip benefits given to permanent workers. DO 174 took effect on April 2.

The order, however, did not completely eliminate job contracting — an arrangement wherein an employer farms out jobs to a third-party contractor who then hires workers of its own.

Looking forward, Security Bank’s Mr. Taningco bared a positive outlook for the job market, saying: “The October figure leads the average unemployment rate for 2017 to settle at 5.7%, which matches my forecast for the year.”

“For 2018, I forecast a slightly lower unemployment rate of 5.5%; this hinges on faster economic growth supported by stronger government spending, business investment, and exports.”

For DLSU’s Ms. Conchada, the proposed increase in excise taxes on tobacco and sugar-sweetened drinks might adversely affect the agricultural sector in the long run. “I am concerned that the agricultural sector and jobs associated with it will continue to be affected with this increase in excise tax.”

“The government’s ‘Build, Build, Build’ program possesses job opportunities… hopefully the poor could participate as well. Moreover, local and international investment in the manufacturing and services sector continues to be rosy which could be a potential source of job opportunities.”

UP’s Mr. Ofreneo also said that one should read between the lines when looking at official employment data.

“[O]ne should also look into the situation of those who are not in school and yet not counted in the labor force. These are the idle working-age population who are not looking for work because they feel none are available to them…”

“The point is that the limited statistics that we have do not say much,” he added.

“For the job optimists, they can cite the declining rate of underemployment. For the pessimists, they can argue that more idle workers are not reflected simply because they are lumped with ‘not in the labor force’.” — Arianne Kristel R. Pelagio

1...12,80012,80112,802...13,744Page 12,801 of 13,744
© 2024 BusinessWorld Publishing.
All rights reserved.
Read our privacy guidelines
Facebook Instagram Linkedin Twitter Youtube