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Integrated ASEAN holds strong cards as companies invest closer to key markets

By Krista Angela M. Montealegre,
National Correspondent

AN ECONOMICALLY integrated Southeast Asia stands to gain from increasing global interconnection, but companies must embrace innovation and harness the power of data to thrive and survive in the rapidly changing business landscape.

In a keynote speech at the 15th Management Association of the Philippines (MAP) International CEO Conference on Tuesday in Makati City, Dr. Thierry Apoteker, chairman and chief economist of European research group TAC Economics, said the world is shifting away from globalization — the main engine of growth in the last two decades — and moving towards “globalnection”— a fully interconnected world that is altering most of the common production and distribution practices.

Mr. Apoteker pointed out in the forum co-presented by BusinessWorld that economies have seen a substantial increase in restrictive trade measures since 2009, prompting companies to look less at integrated global value chains and more on investing closer to their market base.

With foreign direct investment and corporate integration challenged by relocation and technological innovation, Mr. Apoteker said Southeast Asia is in a position to capitalize on this emerging trend given the large domestic market in the region and its proximity to China — the main driver of global economic growth.

“ASEAN has a tremendous potential in this new completely changing complex world where people, data and information play a critical role in business,” Mr. Apoteker said.

“If you succeed in moving to further integration while benefitting from proximity to China, it will be a winning recipe, but only if the people see the benefits of this process,” he said.

Digitization of manufacturing, or “Industry 4.0,” is critical for Southeast Asia to succeed, with data, robotics and mechanization fuelling the next big wave of growth, said Richard Skinner, partner in deals strategy at PwC Singapore.

Industry 4.0 is a new paradigm for economic production, riding on automation and data exchange to boost productivity and improve efficiency.

“What we have lost in manufacturing is a bit of that innovation and technological change. We have to address that to enable (gross domestic product) to reach the 10% level,” Mr. Skinner said.

While global trade in goods will not register the same growth pace seen from 1990 to 2010, the exchange of data, on the other hand, is exploding because of the ability of people to get a huge amount of information instantaneously.

“The winners are going to be those guys that hold all our data. They will be the winners of our future,” said Anson Bailey, partner and head of consumer markets practice at KPMG Hong Kong.

Companies must evolve from an omni-channel structure to an omni business model marked by the seamless integration of all functions, enabled by digital technology and with the customer at the center, Mr. Bailey said.

“We are in for an unprecedented level of disruption. The speed is something you can never imagine,” he said.

Mr. Apoteker said it is imperative for ASEAN firms to rapidly upgrade and upscale the type of services they offer to weather the storm caused by disruption.

ASEAN has made so much progress on tariff measures and trade procedures, but the integration needs more work on the areas on services, investment and labor mobility as well as overcoming obstacles in the form of an inefficient business environment and infrastructure gaps.

Marc Dragon, chief executive officer at Singapore-based logistics technology solutions provider Y3 Technologies, said businesses must not be afraid to innovate even if this means greater scrutiny from the government.

In the Philippines, the Land Transportation Franchising & Regulatory Board slapped ride-sharing start-up Uber with a P190-million fine for violating the agency’s July 26 order directing transport network companies (TNCs) to stop accepting and activating accreditation applications. Taxi operators have complained about unfair competition from TNCs.

“Ultimately, what I am encouraged by is I know the government wants the same thing. This congestion is a big issue and so is the pain of commuting in Manila. That’s what we care about, too. It’s just about finding a common ground,” said Chan Park, Uber general manager for Southeast Asia.

Dashboard (09/13/17)

BMW to show latest models, tech in Xpo event

BMW to show latest models, tech in Xpo event

BMW’s annual showcase of its newest models sold in the Philippines will be held on Sept. 15-17 at the BMW Pavilion on 9th Avenue corner 30th Street, Bonifacio Global City.

The brand’s local distributor, Asian Carmakers Corp. (ACC), said this year’s BMW Xpo will feature exhibitions each themed as Visionary, Precious and Thrilling. Included in Visionary is a display of the all-new BMW 5 Series and an augmented reality experience of the Vision Next 100 Concept Car. Precious will showcase the BMW 7 Series, the newest collection of BMW Lifestyle, and apparel and accessories by Hugo Boss. Attractions included in Thrilling are displays of the BMW M2 and M4 Competition Package, as well as select models in M Sport trim.

“BMW has consistently led unique and exciting customer experiences, pushing boundaries through daring and visionary creations that do not compromise the ultimate goal [of delivering] ‘Sheer Driving Pleasure.’ There’s no better way to share our journey and vision than through the BMW Xpo 2017,” said Maricar C. Parco, president of ACC.

Also to be featured at the event are BMW Motorrad models like the R nineT, as well as those belonging in the Adventure and Sport lines. ACC said it would offer limited financing programs on all brand-new BMW vehicles, too.

‘VWorld Weekend’ to feature new Volkswagens

‘VWorld Weekend’ to feature new Volkswagens

SET to go on display at the “VWorld Weekend” are the accessorized versions of the VW Beetle and the Polo Hatchback Club Edition, as well as the new Jetta in Comfortline, Highline, Business Edition and Business Edition + trim levels.

Volkswagen Philippnes said the VWorld Weekend, to take place on Sept. 16-17 at the Glorietta Activity Center in Makati City, will allow motoring enthusiasts looking for world-class vehicles access to Volkswagen models offered at special purchase and financing packages. The company cited that the Polo Hatchback is priced starting from P858,000, the Jetta at P1.1 million, and the Beetle at P1.24 million.

Special financing packages from BPI Family Savings Bank and BPI Auto Loans will also offer all-in down payment options for as low as P80,000 at no interest for up to 60 months, Volkswagen said. It added other attractions at the event include its Junior Driving Course.

Chevrolet offers low down payment options

Chevrolet offers low down payment options

SEVERAL Chevrolet models can still be bought through all-in low down payment schemes, the brand’s distributor in the Philippines said.

Among trucks, the Chevrolet Colorado 4×2 LT A/T is offered at a low down payment of P108,000; the Colorado 4×2 LTX A/T at P138,000; the Trailblazer 4×2 LT A/T at P88,000; and the Trailblazer 4×2 LTX A/T at P168,000.

Smaller Chevrolet models are available with the same all-in low down payment promo. Last year’s Chevrolet Trax LS A/T can be bought at an initial cost of P68,000 and the Trax LT A/T at P78,000; the new Chevrolet Sail LT M/T and A/T at P38,000; the Sail LTZ A/T at P68,000; the Spark LT M/T at P58,000; the Spark LT CVT at P68,000; and the Spark LTZ CVT at P78,000.

Chevrolet Philippines said the promo runs until September 30, and that purchase during the period include free comprehensive insurance coverage and three-year LTO registration and chattel mortgage fees.

Hyundai promotes ‘Fast Track’ service

Hyundai promotes ‘Fast Track’ service

HYUNDAI’S local distributor, Hyundai Asia Resources, Inc., is promoting its Fast Track Service preventive maintenance program in which a car can be serviced by a four-man team in 30 minutes.

The company said customers will not be charged for maintenance work that exceeds 30 minutes. It added Fast Track covers all Hyundai vehicles, including those whose warranties have lapsed but which have complete maintenance job history.

Fast Track is offered only in select Hyundai dealerships.

Rebuilding the troops

The TNT KaTropa are on rebuilding mode. You think?

No doubt about it, more so after they traded away longtime stalwart Ranidel de Ocampo to the Meralco Bolts last Monday.

The latest trade involving TNT saw De Ocampo first traded to the Phoenix Petroleum Fuel Master for big man Norbert Torres and a 2017 first-round pick before being shipped to Meralco for Justin Chua and the Bolts’ 2017 first-round pick.

Chua was then traded by Phoenix to TNT for a second-round pick in the 2019 draft.

The RDO trade was the latest move by TNT to rebuild the troops moving forward, with more emphasis seemingly on adding youth.

Previous moves of the KaTropa saw them trading away Larry Fonacier and Matt Ganuelas-Rosser that netted for them guys like Anthony Semerad and RR Garcia.

Reports have it that they are still not done dealing, cooking something that could possibly get them Gilas Pilipinas player Christian Standhardinger in this year’s draft.

But while TNT is rebuilding, I have to commend it for going about it without necessarily sacrificing competitiveness.

I mean, instead of blowing up the entire roster like what others are inclined to do, the KaTropa are doing it step by step with little “aftershock,” if we can call it that.

And they have been successful in doing such, coupled with solid draft moves that got them RR Pogoy this season and previous it, Mo Tautuaa and Troy Rosario.

Semerad and Garcia have been fitting in well under the system of Coach Nash Racela and actually made a good account of themselves in their run for the title last conference before bowing to the San Miguel Beermen.

Torres and Chua, along with the picks the team got from the RDO trade, should also be of help albeit it remains to be seen if they get to stay for long with the KaTropa.

Of course this is not bringing down the value of De Ocampo, Fonacier and Ganuelas-Rosser for we all know how big they were during their stay in TNT, with De Ocampo and Fonacier arguably in the top 10 best players in franchise history.

In light of what TNT wants to accomplish at this stage of its PBA existence though, it has been doing quite well relative to what it has lost and gotten in return, and set to get some more.

If you happened to be a TNT fan, it may take some time to get used to seeing the changes and new faces in the team.

But the prospects are undoubtedly high for your favorite team. So make sure to stay stuck and rally behind your troops.

Michael Angelo S. Murillo has been a columnist since 2003. He is a BusinessWorld reporter covering the Sports beat.

msmurillo@www.bworldonline.com

Unilever PHL gives workers 120 days paid maternity leave

UNILEVER Philippines has issued a new company policy granting its employees a minimum of 120 days of paid maternity leave, in line with the consumer goods giant’s new Global Maternal Wellbeing Standards.

The company said in a statement on Tuesday that the initiative is part of its worldwide comprehensive program for the expansion of benefits to working women and families.

Under its Global Maternal Wellbeing Standards, single mothers may avail of up to 150 days of maternal leave, while women adopting children below 12 months of age are entitled to 120 days of adoption leave.

The length of Unilever’s allowed maternity leave follows Senate Bill 1305, or the Expanded Maternity Leave Law of 2017, as well as House Bill No. 4113, both pending in Congress, which seek to extend maternity leave to 120 days and 100 days, respectively.

Under existing laws, women are only allowed 60 days of paid maternity leave, and 78 days for those who underwent Caesarian deliveries.

“We are proud to be one of the few companies in the Philippines raising the standards to support working mothers and their families. Part of the Unilever Sustainable Living Plan is improving the health and well-being of our people, and this policy is part of how we are putting that into practice,” Unilever Chairman and Chief Executive Officer Benjie Yap said in a statement. 

Other than the policy, Unilever’s offices also have breastfeeding, lactation facilities, and day care facilities. Flexible work options, which include part-time agile work or job sharing, further allows mothers more time with their newborn babies.

“We understand the need for mothers to be with their newborn children, so we are introducing innovative schemes for mothers returning to work, such as part-time agile work or job sharing, depending on their roles in the company,” Mr. Yap added. — Arra B. Francia

Feeling the pinch

Psychology or the role of emotions in economic decisions is already accepted. We don’t always buy at the best price. Nor do we maximize benefits when we make our decisions for consumption or investment.

One psychological phenomenon is the effect of rising stock or property prices on the investor. He is apt to spend money he doesn’t really have yet, simply because he feels richer from his paper profits. The green numbers become his go signal to step on the accelerator of his spending motor. This urge to splurge is irrational as the actual cash is still unavailable, and may not even be as much as expected when the asset is sold.

Economists explain the increase in consumer spending during a bull market as the “wealth effect.” When paper (and still unrealized) profits accumulate in one’s stock position, the exuberant, though unfounded, feeling of wealth sets in. This leads to the consumption of luxuries like cars, gadgets, couture clothes, jewelry, and foreign trips. The feeling of prosperity can drive consumption, usually fueled by credit card spending premised on future windfalls.

What if the stock market is volatile and on a downward trend as it can be for long periods, coupled with the recent depreciation of the peso to four-year lows, does this same investor now feel poorer and experience the opposite “poverty effect?” If the investor is trading on margin, the poverty may be more real as his position is sold off and the losses kick in faster.

The poverty effect lies in the realm of emotions. It is quite different from real deprivation, a state where even basic goods like food and taxi fare cannot be purchased or consumed. Still the poverty effect affects both real and imagined reduction of disposable income.

Signs of the poverty effect, whether psychological or real, are hard to miss.

Indifference to good news is pronounced.

There is little appreciation for statements on the drivers of growth remaining intact and unappreciated. The rallying cry of infra spending “build, build, build” seems a mockery of the personal mantra of shrink-shrink-shrink. Property marketers use the malls to give away brochures on unsold inventory “for investment.” Pre-selling of condo units on a three-year delivery are not stoking interest, as seen from their flat prices, even with no-down-payment installment offers.

Even large corporations tend to hang on to cash and extend their payments to suppliers like security services and landscape architects. This postponement, if not deep discounting, of bills creates the illusion of having more cash on hand from de facto suppliers’ credit. The poverty effect also applies to companies after all.

Business swings involve an outlook and a mood.

Since a rise in foreign direct investments or the opening of a major call center by a foreign company is not easy to arrange, some other kind of psychological lift is needed to perk up the economic mood and overcome the poverty effect. Political infighting, Senate investigations, and rising body counts add to the distraction on positive business news.

Preventing the poverty effect in taking root entails showing more than GDP numbers and the usual economic metrics like inflation within the BSP range, although in the upper levels. There is an emotional component similar to a recently wealthy individual feeling uncomfortable he will continue to live in his new house.

Still, there’s nothing really wrong with feeling a little pinched. It may turn cash (and savings) into a viable portfolio component again. However, it is consumption and the feeling of wealth that truly spurs the economy, as Keynesian economists will argue.

It is good to remember when the market is down that it is not what you lost but what you still have left that counts. For the “buy and hold” followers of the philosophy of Warren Buffet, declining stock prices are just paper losses.

Even optimists though soon stop advising the strategy of “averaging down” or buying the same stock at declining prices. Less popular as a strategy is “averaging up” or selling as the price rises and not waiting for the target price to be breached. Somehow, the latter may be there for the longer haul.

The poverty effect takes hold when it is time to cut losses and sell the stock. Even emotional states can turn real when the cash balances turn a different color… like the eyes of an insomniac.

A. R. Samson is chair and CEO of Touch DDB.

ar.samson@yahoo.com

Davao tourism stakeholders to launch six-point agenda

REELING FROM the impact of the martial law declaration in Mindanao, but encouraged by the visitor turnout during the Kadayawan Festival last August, tourism stakeholders led by the Davao Tourism Association (DATA) will launch a six-point Davao Turismo Agenda during the Davao Turismo Conference (TCON2017) on Sept. 22 at The Pinnacle Hotel. The agenda focuses on marketing, product development, service, financing, government relations, and industry support. “We want to come up with a Davao Tourism vision and this will somewhat give us the right direction and all of the tourism players will be guided by this direction,” said Renator Gatchalian, Jr., DATA president. “We have to prepare Davao City for any eventuality. The recent martial law declaration really affected all of us in the industry. With being resilient we did a lot of things and we were so happy (that) the Kadayawan sa Davao turned out to be a very successful one,” Mr. Gatchalian said. Cherry B. Al-ag, president of the Wellness Association, said the tourism industry is composed of not only the hotels and the restaurants, but also tour operators, the wellness industry, transportation, academe, allied services, and shopping malls, and it is important to consolidate action plans. “We even have a member in DATA, the dog lovers association, because they bring people to our city,” said Ms. Al-ag. — Maya M. Padillo

Australia takes aim at major banks

SYDNEY — Australia’s corporate regulator on Tuesday took aim at the nation’s four major banks, saying they suffer from “a lot of hubris” and are not used to being taken on by regulators who have recently stepped up scrutiny of the scandal-hit sector.

Australian Securities and Investment Commission (ASIC) Chairman Greg Medcraft said improving the culture and conduct of the biggest banks is one of his “unfinished businesses” as he prepares to step down in November.

“I think the big banks are extremely powerful in this country,” Medcraft said at a Reuters Newsmaker event in Sydney.

“When I became chairman I decided we need to build a war chest to take on big cases…I am not scared of anybody.”

One of the emerging problems in the sector is loan fraud in the mortgage market, Medcraft said.

A UBS survey released this week found factually accurate mortgage applications fell to 67% in 2017, from 72% in 2016. There are now approximately A$500 billion in what UBS calls “Liar Loans” on Australian banks’ books.

Medcraft did not comment on the accuracy of that report but said loan fraud was “quite a major problem” in Australia.

Australian regulators have been pushing banks to tighten mortgage lending standards on worries a debt-fuelled bubble and bust in the country’s red-hot property market could destabilise the financial system and hurt the broader economy.

Medcraft also censured the banks on mortgage loan pricing. Banks have jacked up home loan rates for existing customers while offering discounts to entice new borrowers, even though the official cash rate has been steady at a record low 1.50% since August 2016.

“Basically it really just feeds on inertia and I think that is, frankly, wrong, and I do think it feeds in to that lack of trust,” Medcraft said.

A CULTURE PROBLEM
Australia’s highly profitable banks have been rocked by a slew of scandals recently with the latest and potentially the worst being allegations of money laundering against the Commonwealth Bank of Australia (CBA).

When asked how long ASIC’s investigation into CBA might take, Medcraft said, “depends on the level of cooperation. We’ve not had a great experience with banks. It’s a culture problem.”

A 2014 Senate Inquiry stated that ASIC is perceived to be “timid” and “hesitant”. It is also seen as weaker compared to Western regulators in terms of the small fines it levies and other penalties it imposes.

ASIC is now trying to rebuild confidence, in part by taking three of Australia’s biggest banks — ANZ Banking Group, Westpac Banking Corp. and National Australia Bank — to court after failing to reach a settlement over allegations of benchmark interest rate rigging.

Local media has speculated that Medcraft will be heading to Paris when he finishes up at ASIC in November, likely as a special adviser to the Organization for Economic Cooperation and Development secretary general.

The former investment banker lived in Paris for three years in the late 1980s when he worked for Societe Generale.

“I will be moving on somewhere else,” Medcraft said, without elaborating. — Reuters

29Rooms, the exhibition created for social media

NEW YORK – Visitors were touching the art, wearing it and even jumping on it at the popular immersive exhibition 29Rooms held in a Brooklyn warehouse.

Artists, companies and nonprofits have come together for the interactive event hosted by the Web site Refinery29 which closed on Monday after a four-day run.

In stark contrast with traditional museums, visitors to 29Rooms were encouraged to physically engage with the installations, said executive creative director and cofounder Piera Gelardi.

The event, she explained, takes “the fun and interactivity of a fun house” and pairs it with “the cultural relevance of a museum” – with the 29 spaces relating to topics covered on the Web site.

Instagram posts and selfies are encouraged.

“We know people are craving experiences in real life but that they also want to fuel their digital lives,” Gelardi said.

“Art can be very intimidating and we wanted to create a different experience of art that was very interactive,” she said.

“We started focused on style but we have grown to be covering everything from style and beauty to politics, body image,” she said.

All 20,000 tickets, costing $19 each, were snapped up before the event opened for its third year on Friday.

Exhibits included a creation by actor Jake Gyllenhaal which invited visitors to write a personal worry on a piece of paper before destroying it with a manual shredder.

Another room, created by American artist Alexa Meade, saw visitors wear painted clothes and accessories, blending seamlessly into a wall also painted by Meade as they posed for a photo.

Meade is best-known for painting living subjects, but she tweaked her successful formula to “bring more people into the experience and allow other people to physically become the artwork and the painting.”

There were also rooms promoting social messages, such as one in collaboration with family planning organization Planned Parenthood, which invited visitors to listen to the stories of people it has helped.

“We want to create an experience that is fun and joyful but that is also thought provoking and that taps what’s happening in culture right now,” said Gelardi.

Seven of the 29 rooms were done in partnership with a brand, according to the exhibition’s Web site. – AFP

China backs Myanmar’s ‘safeguard stability’ efforts

BEIJING — China said Tuesday it backs the Myanmar government’s efforts to “uphold peace and stability” in Rakhine state, where a military crackdown has sent more than 300,000 Rohingya Muslims fleeing for Bangladesh.

Foreign ministry spokesman Geng Shuang made the comments as the United Nations Security Council prepared to hold an urgent meeting on the crisis on Wednesday.

Rohingya militants attacked police posts in late August, prompting a military backlash that has sent nearly a third of the Muslim minority population fleeing to Bangladesh.

International pressure on Myanmar’s government has increased as UN rights chief Zeid Ra’ad Al Hussein said the violence seemed to be a “textbook example of ethnic cleansing.”

But UN diplomats have said China, one of Myanmar’s main trade partners, has been resisting involvement by the top UN council in addressing the crisis.

“We condemn the violent attacks which happened in Rakhine state in Myanmar,” Mr. Geng told a regular news briefing.

“We support Myanmar’s efforts in upholding peace and stability in the Rakhine state. We hope order and the normal life there will be recovered as soon as possible,” he said.

“We think the international community should support the efforts of Myanmar in safeguarding the stability of its national development.” — AFP

DBP looking to unload MRT-3 interest

THE Development Bank of the Philippines (DBP) is interested in exiting its investment in the Metro Rail Transit (MRT)-3.

“..It is in our books and we will be very interested to unload it,” DBP President and CEO Cecilia C. Borromeo told reporters on Monday at the sidelines of the signing of a memorandum of understanding between the DBP and the Department of Transportation (DoTr) for the funding for the Public Utility Vehicle Modernization Program (PUVMP).

Ms. Borromeo said however that as a corporation under the supervision of the Department of Finance (DoF), the bank will be awaiting official guidance from the agency.

“The DoF is taking the lead now… We defer to DoF,” Ms. Borromeo said.

Landbank and DBP own a combined stake of about 80% in the MRT-3.

Ms. Borromeo said the banks will study how to exit the investment without incurring losses.

“There are various ways of unloading it. Of course there is an option for a haircut or loss and we will want to avoid that. But there are other options that will make us [realize a gain]. That is what we are trying to pursue together with the DoF,” Ms. Borromeo said.

Operations and maintenance may soon be privatized, with the Light Rail Manila Corp. (LRMC) consortium having submitted to the government a comprehensive rehabilitation proposal for the MRT-3. Currently, MRT operations are run by the government, while maintenance is handled by the private sector. Filipino-South Korean joint venture Busan Universal Rail, Inc. currently has the contract with government to maintain the MRT-3.

LRMC, a consortium of AC Infrastructure Holdings Corp., Metro Pacific Infrastructure Corp., and Macquarie Infrastructure Holdings (Philippines) Pte. Ltd., included in the proposal provisions for the planned buyout of the government stake and offers the services included in the concession agreement with the government.

LRMC CEO Rogelio L. Singson recently said the LRMC hopes that its proposal is approved in four to six months. — Patrizia Paola C. Marcelo

Local shares to track Wall St. amid lack of leads

TRADING at the Philippine Stock Exchange was suspended on Tuesday as clearing and settlement operations were halted after the government closed its offices because of bad weather.

Yesterday would have been the first trading day after the United Nations (UN) voted on new sanctions against North Korea, which was short of an oil embargo. Analysts have been saying the actions of Pyongyang have left investors nervous in the past days.

“These may put pressure on North Korea to ease tensions and may calm markets, including (the) Philippines,” said Luis A. Limlingan, business development head at Regina Capital Development Corp.

Bloomberg reported on Tuesday that the UN Security Council approved new sanctions aimed at punishing North Korea for its latest missile and nuclear tests after the US dropped key demands in order to win support from Russia and China.

The 15-member Security Council passed the resolution unanimously on Monday after a week of talks that began when Kim Jong Un’s regime tested its most powerful nuclear bomb.

The resolution seeks to cut imports of refined petroleum products to 2 million barrels a year, ban textile exports and strengthen inspections of ships that are believed to be carrying cargo in breach of sanctions.

“I think it will be a nonevent for Philippine stocks. I expect our market to be strong on the back of a rebound in US stocks as Hurricane Irma weakened by the time it hit Florida,” said Miguel A. Agarao, vice-president of Philequity Management, Inc.

2TradeAsia, online arm of F. Yap Securities, Inc., earlier said investors would focus on the UN members’ vote on whether to support the sanctions against Pyongyang after its “unabated” missile tests.

On Monday, the Philippine Stock Exchange index climbed 26.56 points or 0.33% to close at 8,049.31. The broader all-shares index also rose by 15.31 points or 0.32% to 4,778.61. Except for financials and the mining and oil counter, all the other sector indices finished on the positive side.

Regina Capital’s Mr. Limlingan said: “Local optimism may also be underpinned by Hurricane Irma delivering a less forceful hit on Florida than expected and North Korea failing to conduct another nuclear missile test over the weekend.”

“However this may change depending on how US once again performs tonight,” he said on Tuesday.

Irma, once a Category 5 hurricane, hit the Florida coast over the weekend. It has gradually lost strength and has been downgraded to a tropical storm while moving its way across the land.

Other Southeast Asian stock markets inched up on Tuesday, with Malaysian shares hitting their highest in over two months, tracking a rally in Asian peers as Hurricane Irma weakened and concerns over North Korea eased.

MSCI’s broadest index of Asia-Pacific shares outside Japan  rose as much as 0.3% to their highest in nearly 10 years. — Victor V. Saulon with Reuters

How government can help expedite entry of electric cars

Last week, I attended the global launch of the second-generation Nissan Leaf in Japan. As Filipino journalists were invited to the event, I won’t fault you for assuming that the world’s best-selling all-electric car is on the way to our market. I hate to burst that bubble, but no, it isn’t.

As you read this, there isn’t even an official facility to accommodate fully electric private cars. Electric public-utility transport vehicles have been allowed on our roads, but we have yet to see a single legitimately registered private EV. Save for Manuel V. Pangilinan’s Tesla Model S and perhaps a handful of demo units used by industry players, these environment-friendly movers remain an electric dream in a country notorious for expensive electricity.

So, when might Nissan Philippines bring in the Leaf? The company’s president and managing director, Ramesh Narasimhan, allowed an almost imperceptible smile that looked like both optimism and despondence. “Before we could even think of selling the Leaf, the country needs to first address the basic challenges of motoring,” he pointed out.

Those challenges — typical observations in the eyes of an expatriate living in Metro Manila — are the lack of driver education, overpopulation (in the National Capital Region) and the abysmal infrastructure. I gather that what Mr. Narasimhan was saying is this: Until the Philippines fixes these motoring problems, car companies won’t even entertain inquiries about their electric offerings.

Not that Nissan Philippines has any to begin with. The executive answered in the negative when asked if his dealership network had relayed to him any customer interest in the Leaf. “No, not really,” he replied matter-of-factly. “But our desire to bring the car in doesn’t depend on market demand, but on our belief that it’s truly good for everyone.”

It’s easy to see why electric cars fail to stir any excitement in a nation obsessed with digital and wireless devices. The Philippines still doesn’t have the two crucial requirements needed to make EV models moderately accepted in any market. “For an electric car to be viable, you need government incentives and infrastructure,” stressed Nissan Thailand president Antoine Barthes, who made Filipino journalists drool (and their Thai counterparts rejoice) by announcing that the all-new Leaf was coming to Thailand.

Without incentives or tax breaks from government, green vehicles will be unreasonably prohibitive alongside conventionally powered cars. A smallish Toyota Prius C hybrid hatchback already costs P1.65 million, and it doesn’t even have fully electric propulsion. For that price, I’d get two units of the Nissan Juke instead. To hell with hydrocarbons.

Also, we still don’t have accessible charging stations for EVs. Meralco showed off a prototype four years ago, and Bonifacio Global City has installed a couple of EV charging slots in one of its green buildings, but that’s about it. Sure, the new Leaf now has a single-charge driving range of 400 kilometers, but with the kind of traffic gridlock we have in Metro Manila, we will need charging stations located at Jollibee parking lots to make it through a workweek.

But even without these two requirements for now, government can already start preparing Filipinos for the arrival of electric cars with something as simple as an awareness campaign. There already exists a group called Electric Vehicle Association of the Philippines, which has been relentlessly lobbying government agencies for a concrete EV framework, but lawmakers need to match the group’s enthusiasm.

“The government has to show the way,” Mr. Narasimhan told me. “They can begin with the airport, for instance. Make the airport fleet all-electric. Make it an EV showcase for everyone to see. Or the President can make Davao City an EV hub. You can’t accomplish anything with just 10 units or so running around here and there. People want to see real-world results in concentrated areas.”

To be fair to the Philippine government, overall global EV acceptance isn’t that high either. With the exception of the United States, Japan and some European countries, electric vehicles continue to struggle popularity-wise next to regular cars equipped with internal-combustion engines. I asked Nissan Motor Company executive Daniele Schillaci, in charge of global marketing and sales for the automaker’s zero-emission vehicles, how many more years before EVs are widely embraced by car buyers around the world. “The tipping point will be around 2025,” he estimated.

That’s still eight years from now. Plenty of time for our politicians to stop their petty squabbles and start laying the groundwork for an EV future.

You may e-mail the author at vbsarne@visor.ph.

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