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Pangilinan group’s DigiCo acquires Multipay, 10% of Bayad Center

THE PANGILINAN GROUP, through DigiCo, is expanding its digital solutions platform by signing agreements to fully acquire Multipay Corp. and a 10% stake in CIS Bayad Center, Inc. (Bayad).

“Having both online and offline solutions, Bayad and Multipay are uniquely positioned to accelerate the country’s shift to digital payments. These companies will improve the payment experience for the Filipino consumer and provide partners with integrated solutions,” DigiCo Chairman Manuel V. Pangilinan said in a statement on Monday.

DigiCo is a digital services company owned by PLDT, its affiliate, power utility giant Manila Electric Co. (Meralco), and Metro Pacific Investments Corp.

“Harnessing the data assets of the MVP Group will enable us to deliver a superior, intuitive, and personalized customer experience, backed by insights that can uplift the way we serve our customers across the MVP Group,” Mr. Pangilinan said.

Under the signed agreements, DigiCo is set to acquire a 10% stake in Bayad, which is a bills payment provider serving over 800 utility, financial, and various billers.

Corporate Information Solutions, Inc., a wholly owned subsidiary of Meralco, owns a 95% share in Bayad.

“Meralco has agreed to sell 10% of its share interest in Bayad to DigiCo, subject to closing conditions,” Meralco said in a separate regulatory filing.

DigiCo is also set to fully acquire Multipay, another digital payment platform. It is a wholly owned subsidiary of software company Multisys Technologies Corp.

The agreements are still subject to closing conditions, PLDT said.

First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message on Monday that the digital payment platforms are expected to benefit from the enhanced digital infrastructure of PLDT.

Seedbox Securities, Inc. equity trader Jayniel Carl S. Manuel said both Multipay and Bayad stand to gain significantly from PLDT’s synergies and the company’s extensive network infrastructure.

“This partnership is poised to enhance the customer experience and expand the reach of digital payment services,” Mr. Manuel said in a message.

For PLDT, Mr. Manuel said that the company is poised to become a key player in the digital ecosystem.

“By integrating Multipay and Bayad Center into its portfolio, PLDT can offer more comprehensive and seamless digital financial services. This move not only diversifies PLDT’s revenue streams but also strengthens its market presence in the rapidly growing fintech sector,” he said. 

At the local bourse, shares in the company closed P11 or 0.74% higher to end at P1,498 apiece on Monday.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Ashley Erika O. Jose

Filipino achievements outside the Olympics

AS ALL the focus on Sunday was on how the Pinoys did in the Olympics — with gymnast Carlos “Caloy” Yulo in particular making the all-around final — not to be overlooked are the achievements of other homegrown talents around the world.

KIM CHIU IN SEOUL
In the realm of television stardom, Filipino actress Kim Chiu has been named Outstanding Asian Star by the Seoul International Drama Awards 2024 for her recent role as the complex Juliana Lualhati in the hit drama Linlang.

Ms. Chiu posted the news on her Instagram account on Sunday. “I am lost for words… beyond thankful, grateful, and extremely happy!!! I can’t believe this is happening,” she said in her post. She went on to thank ABS-CBN, Dreamscape, and her co-stars Paulo Avelino and JM de Guzman.

The actress bested five other nominees in the category: Thai actors Blue Pongtiwat Tangwancharoen and Poompat Iam-samang, Malaysian actress Emily Chan, Singaporean actor Desmond Tan, and Indonesian actress Ochi Rosdiana.

Ms. Chiu will receive her trophy at the Seoul International Drama Awards 2024 awards ceremony at the KBS Hall in Seoul, South Korea, on Sept. 25.

BINI AT THE KCON LA
Girl group BINI made history as the first P-pop group to perform at the KCON LA 2024, a three-day music festival in Los Angeles, California. The event is known as the world’s largest K-pop music festival.

BINI performed their newly released single, “Cherry on Top,” on July 28 and drew cheers from the crowd. Maloi, Stacey, Aiah, Sheena, Gwen, Colet, and Mikha also gave a shoutout to Jhoanna, the only member unable to join due to what ABS-CBN described in a statement as “unanticipated health issues.”

The group’s upcoming concert in the Philippines is Grand BINIVerse, which will be held for two nights on Nov. 16 and 17 at the Araneta Coliseum. — BHL

PNB income up 11% in first half

WIKIMEDIA.ORG

PHILIPPINE NATIONAL Bank’s (PNB) net income grew by 11% year on year to P10.3 billion in the first half on the back of its core businesses and amid “challenges” in the operating environment, it said on Monday.

“PNB’s performance has been on an upward trajectory since the start of the year and we attribute this to the sound execution of our strategies and growth initiatives,” PNB

President Florido P. Casuela said in a disclosure to the stock exchange.

“The stronger focus and collaboration of our business groups have enabled us to serve a broader part of the commercial lending and consumer finance segments. We are happy to help these segments grow and it is made more meaningful by the fact that we just marked our 108th founding anniversary as a financial institution that helps Filipinos reach their aspirations,” Mr. Casuela said.

The bank’s financial statement was unavailable as of press time.

PNB’s net interest income went up by 11% year on year in the first semester as its interest earnings rose by 17%, driven by its loan portfolio and treasury assets amid high rates and increased volume.

“Likewise, the bank was able to temper the impact of higher interest expense on deposits by deploying these deposits to assets with better yields,” it said.

As a result, PNB’s net interest margin improved to 4.37% at end-June from 4.14% a year prior.

Meanwhile, the bank’s other operating income declined by 47.73% to P2.3 billion in the first half from P4.4 billion a year prior in the absence of a one-off gain from the sale of properties realized in the same period in 2023.

On the other hand, operating expenses went down by 4% to P14.3 billion “due to prudent spending despite the continued business growth,” PNB said.

It set aside credit provisions worth P2.1 billion in the period, it added.

PNB’s consolidated assets stood at P1.26 trillion at end-June, up by 4% from the end-2023 level, amid increased loans and treasury assets.

“With its income for the period, the bank augmented its total equity by 6%, translating to an improvement in the bank’s capital adequacy ratio to 17.0% and common equity Tier 1 ratio to 16.2%,” the listed lender said.

PNB’s shares dropped by 25 centavos or 1.02% to close at P24.15 each on Monday. — A.M.C. Sy

The 22-year journey of SOX: A testament to Filipino talent and global compliance

FREEPIK

The 22nd anniversary of the Sarbanes-Oxley Act (SOX) prompts reflection on its journey and its profound impact on the global business landscape. This reflection is especially crucial in light of the recent recognition of the Philippines as a leading destination for Business Process Outsourcing (BPO). The convergence of SOX compliance and the burgeoning BPO industry in the Philippines underscores the nation’s pivotal role in global compliance management, showcasing the exceptional talent and expertise of Filipino professionals.

Since its enactment on July 30, 2002, SOX has played a pivotal role in restoring investor confidence and enhancing transparency and accountability in the financial reporting practices of public companies. It has continually evolved to address emerging challenges in corporate governance and risk management, establishing itself as a cornerstone of regulatory compliance not only in the US but also worldwide. One significant development in recent years has been the emergence of the Philippines as a preferred destination for BPO services, including SOX compliance management. With a skilled workforce proficient in English and a robust infrastructure conducive to business operations, the Philippines has attracted numerous US companies seeking cost-effective solutions for managing and testing SOX controls.

The synergy between US companies and Filipino talent extends beyond cost efficiency; it epitomizes a collaborative approach to global compliance management. By leveraging the rich pool of Filipino professionals, US companies gain access to diverse expertise, testing approaches, and methodologies, thereby enhancing the quality and effectiveness of their SOX compliance initiatives.

Moreover, for Filipino professionals, this presents a unique opportunity to showcase their skills and expertise on a global stage. Working on SOX compliance projects for US companies not only enhances their marketability in the Western business landscape but also significantly contributes to the growth of overseas Filipino workers (OFWs), who play a vital role in the Philippine economy through their remittances.

The symbiotic relationship between US companies and Filipino talent underscores the inter-connectedness of the global economy and the transformative power of collaboration in achieving regulatory compliance objectives. It emphasizes the importance of leveraging diverse perspectives and skill sets to navigate the complexities of regulatory frameworks effectively. Nevertheless, amid the success stories and opportunities, challenges persist. As US companies expand their operations in the Philippines and rely on Filipino talent for SOX compliance, ensuring continuous skill development and adherence to evolving regulatory standards becomes paramount. Investing in training and development programs that keep pace with regulatory changes is essential to maintaining the high standards of compliance expected in today’s dynamic business environment.

Furthermore, while the growth of the BPO industry has been a boon for the Philippine economy, it also underscores the need for sustainable growth strategies that prioritize the well-being and professional advancement of Filipino workers. Balancing the demands of global business with the welfare of employees is essential for fostering a thriving and inclusive workforce ecosystem.

As we commemorate the 22nd anniversary of SOX, let us celebrate the achievements made in the realm of global compliance management and recognize the invaluable contributions of Filipino talent in driving these advancements. By harnessing the collective expertise and dedication of professionals from diverse backgrounds, we can continue to uphold the principles of transparency, accountability, and integrity that lie at the heart of regulatory compliance worldwide.

The journey of SOX over the past 22 years serves as a testament to the resilience and adaptability of regulatory frameworks in an ever-changing business landscape. Through collaboration and innovation, we can navigate the complexities of compliance with confidence, paving the way for a more transparent and sustainable future for businesses and economies around the globe.

(This article reflects the personal opinion of the author and does not reflect the official stand of the Management Association of the Philippines). 

 

Lujer P. Danao is a member of the MAP and a partner for Risk Advisory and the Clients and Market Head of MOORE Roxas Tabamo & Co.

map@map.org.ph

lpdanao@roxastabamo.com

Fruitas inks Polland Hopia distribution in Cebu, Zamboanga

LISTED food and beverage kiosk operator Fruitas Holdings, Inc. has secured a deal for the exclusive distribution of Polland Hopia brand products in Cebu and Zamboanga, expanding its partnerships and revenue stream.

Fruitas Holdings secured the exclusive distributorship through listed subsidiary Balai ni Fruitas, Inc., which signed an agreement with Polland Hopia brand owner D’ Famous Red Box Corp., the kiosk operator said in a stock exchange disclosure on Monday.

“Balai Ni Fruitas is confident that securing distribution rights for Polland Hopia in Cebu and Zamboanga will not only expand revenue stream but also foster deeper consumer loyalty,” Fruitas Holdings said. 

“In addition, Polland Hopia will be available in Balai Pandesal community stores on a non-exclusive basis,” it added.

Since 1966, Polland Hopia offers mung bean cakes or hopia in various flavors such as mongo, black mongo, chocolate fudge, and ube

“These exclusive distribution agreements underscore the trust and confidence that other brands place in us,” Fruitas Holdings President and Chief Executive Officer Lester C. Yu said.

“At the same time, this reflects our unwavering commitment to deliver wholesome, high-quality products that resonate deeply with Filipino consumers, much like Fruitas itself. We look forward to introducing even more innovative offerings from Fruitas in the future,” he added.

Previously, Fruitas Holdings entered into an agreement with Bukidnon Milk Co. (BMC) for the exclusive distribution of the latter’s products in Metro Manila.

BMC sells dairy products sourced from Bukidnon such as premium whole milk, chocolate milk, and yogurt.

“BMC’s offerings complement Fruitas Holdings’ flavorful and fresh fruit juices, providing consumers with an expanded selection of healthy and thirst-quenching drink options,” Fruitas Holdings said.

Balai ni Fruitas, a 75% owned subsidiary of Fruitas Holdings, operates Balai Pandesal, Buko ni Fruitas, and Fruitas House of Desserts.

Fruitas Holdings has over 25 brands in its portfolio such as Buko Loco, Buko ni Fruitas, De Original Jamaican Pattie, Johnn Lemon, Juice Avenue, and Black Pearl.

On Monday, Fruitas Holdings shares fell by 1.28% or one centavo to 77 centavos per share while Balai ni Fruitas stocks rose by 7.79% or three centavos to P0.415 apiece. — Revin Mikhael D. Ochave

Entertainment News (07/30/24)


GMA Public Affairs launches documentary program

GMA Public Affairs yesterday launched its first digital documentary program, Kara Docs, hosted by veteran documentarist Kara David. It aims to give further insight into significant statistics on social issues. For her first story, Ms. David goes to Sitio Iligan where residents fumble in the dark due to a lack of power supply. The first episode, titled “Sitio Lowbatt,” is now available online on the GMA Public Affairs’ YouTube channel.


TikTok star Lottie Bie drops debut single

LOTTIE BIE, known for making millions laugh with her funny TikTok skits and creative directing projects, has released her debut single, “Seryoso.” The track dives into finding your voice and being taken seriously. Inspired by her daily interactions with fans, Ms. Bie wrote the song to showcase a different, more genuine side of herself. “I wanted to say, ‘Hey, I write songs, and I like to sing, so here’s a more serious side of me,” she said in a statement. “Seryoso” is now available on all major streaming platforms.


Netflix announces Bridgerton season 4 lead character

THE STUDIOS behind the hit romance show Bridgerton, Netflix and Shondaland, have announced that the focus for season four will be the second brother of the family, Benedict Bridgerton. The actor playing the character, Luke Thompson, has begun preparing for his turn as the show’s lead, which will see his bohemian life upended as he meets a captivating Lady in Silver at his mother’s masquerade ball. Bridgerton season 4 will have eight episodes.


Harold and the Purple Crayon in cinemas in August

THE NEXT kid-friendly movie in theaters this year will be Harold and the Purple Crayon. The film, directed by Carlos Saldanh and starring Zachary Levi, Jemaine Clement, Alfred Molina, and Zooey Deschanel, is brought to the Philippines by Columbia Pictures. It follows the adventurous Harold (played by Mr. Levi) who can make anything come to life simply by drawing it, at least in the world of his book. After he grows up and draws himself off the book’s pages and into the physical world, he finds that his trusty purple crayon may set off more hilarious hijinks than he thought possible and fall into the wrong hands. Harold and the Purple Crayon is the first film adaptation of the beloved children’s book. It opens in Philippine theaters on Aug. 21.


ABBA tribute concert at Newport World Resorts

FOLLOWING a successful concert last year at Newport World Resorts, the top touring ABBA tribute group is returning to make everyone dance, jive, and have the time of their lives. The concert Mania: The ABBA Tribute will have a performance on Aug. 24 at the Newport Performing Arts Theater. From “Dancing Queen” to “Mamma Mia,” the tribute group Mania will perform ABBA’s greatest hits to take audiences back to the disco era of the 1970s. The group formed in 1999 and has been selling out theaters and concert halls internationally ever since. Tickets to Mania: The ABBA Tribute, ranging in price from P1,500 to P7,200, are now available at all TicketWorld and SM Tickets outlets.


NIKI releases new single ahead of album launch

JAKARTA-born, Los Angeles-based singer-songwriter and producer NIKI has dropped her latest single, “Tsunami,” the third one so far off her upcoming album Buzz. The 88rising label star uses the song to compare falling in love to a roaring tidal wave, intended as a soundtrack to everyone’s summer romance. NIKI’s album drop on Aug. 9 will be celebrated by a world tour kicking off in the United States, which will continue in 2025, with Manila dates set for Feb. 11 and 12. “Tsunami” is out now on all digital streaming platforms.


Blink Twice coming to cinemas this August

THE ACTION thriller Blink Twice, directed by Zoë Kravitz and starring Channing Tatum, Naomi Ackie, Adria Arjona, Christian Slater, Geena Davis, is coming to Philippine cinemas on Aug. 21. The Warner Bros. Picture film follows tech billionaire Slater King (Mr. Tatum) who meets cocktail waitress Frida (Ms. Ackie) at his fundraising gala. They later go on a dream vacation on a private island, but strange things start to happen and Frida begins to question her reality.

BDO’s Q2 net income climbs by 11.98% on core business growth

BW FILE PHOTO

BDO UNIBANK, Inc. saw its net profit rise by 11.98% in the second quarter amid continued growth in its core businesses and higher fee income, it reported on Monday.

The bank’s attributable net income stood at P20.94 billion in the second quarter, up from P18.7 billion in the second quarter last year, BDO’s quarterly report disclosed to the stock exchange showed.

“BOO’s robust business franchise and strong balance sheet place the bank in a suitable position to capitalize on emerging opportunities to sustain attractive long-term growth and profitability,” the bank said in a statement.

BDO’s second-quarter performance brought its attributable net profit for the first half to P39.44 billion, rising by 12.06% from the P35.195 billion booked in the same period last year.

The growth was driven by “stronger momentum from its core intermediation and fee-based service businesses,” the bank said.

This translated to a return on average common equity of 15.05%, down from 15.1% a year prior, and a return on average assets of 1.73%, steady from the comparable year-ago level.

The bank’s net interest income grew by 9.78% to P50.61 billion in the second quarter from P46.1 billion in the same period last year on the back of a 19% increase in interest earnings, which was mainly driven by higher income from loans and trading.

Net interest margin stood at 4.64% at end-June, inching down from 4.65% a year ago.

BDO’s non-interest income likewise rose by 16.11% year on year to P22.35 billion in the second quarter from P19.24 billion, supported by higher earnings from fees and foreign exchange, among others.

Meanwhile, its operating expenses increased by 15.05% to P43.49 billion from P37.8 billion.

BDO’s gross customer loans expanded by 13% at end-June amid growth across all market segments, it said.

“Asset quality remained stable despite elevated interest rates. Nonperforming loan (NPL) ratio settled at 2.06%, while NPL coverage stood at 169%, better than the industry average,” it added.

On the funding side, total deposits also grew by 13% in the first semester, driven by the 15% growth in demand deposits and the 41% increase in time deposits. Its current account, savings account or CASA ratio was at 69% in the period.

BDO’s total assets went up by 5.24% to P4.71 trillion at end-June from P4.48 trillion at end-2023.

Total equity stood at P547.33 billion.

The bank’s capital adequacy ratio was at 14.81% at end-June, down from 14.97% a year prior, as the growth in risk-weighted assets outpaced the increase in its capital.

BDO’s shares finished at P140.50 each on Monday, dropping by P5.50 or 3.77% from the previous close. — AMCS

President Marcos’ 3rd SONA: What’s in it for PHL property

FANJIANHUA-FREEPIK

PRESIDENT Ferdinand R. Marcos, Jr.’s third State of the Nation Address (SONA) highlighted crucial issues that will have a direct or peripheral impact on Philippine property. From the improvement of the country’s infrastructure network to the upskilling of potential workforce, Colliers believes that these pro-business reforms will play a pivotal role in resuscitating Philippine property post-pandemic. While challenges remain, including business registration bottlenecks, President Marcos’ last SONA infuses much-needed optimism, particularly in stoking the property segment, which is being positioned as one of the key job and livelihood-generating sectors of the Philippine economy. Tourism was also highlighted, which has great potential to employ Filipinos living in the countryside. What’s encouraging is that the president also addressed the country’s costly electricity and measures that can be implemented to plug power shortages. This should play a key role in revivifying the Philippines’ manufacturing competitiveness, which should enable the country to attract much-needed foreign direct investments.

IMPROVEMENT OF PHYSICAL AND DIGITAL INFRASTRUCTURE
President Marcos committed to infrastructure development that is ‘sustained, strategic, and on schedule.’ We expect the president to continue allotting 5% to 6% of the country’s GDP to infrastructure. Previously, he ordered ‘full speed ahead’ to amplify his administration’s goal of ramping up and hastening infrastructure implementation across the country. This is basically a continuation of the level of spending implemented under the previous administration. The strategy is definitely not just Metro Manila-centric. Based on the projects mentioned by the president, among the provinces likely to benefit from this infrastructure program are Bulacan, Cavite, Laguna, Batangas, Pampanga, Zamboanga, Lanao del Norte, and Misamis Occidental.

Colliers previously highlighted the importance of infrastructure projects in raising the attractiveness of office and residential projects, especially outside Metro Manila. This is likely to be supported by decentralization, which the president previously stressed. We also highlighted the importance of infrastructure in raising land and property values as they improve people’s mobility. We believe that this infrastructure blueprint will play a crucial role in guiding developers’ landbanking and expansion plans. Hence, developers should be on the lookout for the progress of these projects.

UPSKILLING OF FILIPINO STUDENTS
The president emphasized the need to focus on technical-vocational education and training (TVET). This is important in ensuring that the Filipino workforce is globally competitive. The Department of Education, Commission on Higher Education, Department of Labor and Employment, and Technical Education and Skills Development Authority have incorporated TVET into the Senior High School curriculum to further boost the employability rate of students. This should be complemented by the president’s earlier push to use English as our medium of instruction. In our view, these are important in retaining our edge in the outsourcing sector, especially for higher value services or Knowledge Process Outsourcing. This should also support the government’s goal of attracting more BPO investments and generating more employment opportunities. More BPO investments could potentially raise the demand for office space in Metro Manila and other key urban areas such as Cebu, Iloilo, Bacolod, Davao, and Clark in Pampanga.

The new Education Secretary should ensure the implementation of a curriculum that will help bridge job mismatch and ensure that college graduates are equipped with skills that will make them employable after graduation.

MULTI-FACETED STRATEGY IN PROMOTING TOURISM
President Marcos highlighted the important role that tourism plays in generating jobs, especially in the countryside. He stressed the need to improve roads and international airports to enable the Philippines to accommodate more tourists. In 2023, the tourism sector contributed about 8.6% to the country’s GDP, lower than the pre-pandemic level of 12.8% in 2019 — the year when the Philippines attracted the most number of foreign tourists at about 8.2 million. Colliers believes that the gradual recovery of tourism augurs well for the country’s economy, including property players that have established their own leisure-related businesses. In our view, the modernization of airports and development of access roads should guide developers that are planning to build hotels and Meetings, Incentives, Conferences, and Exhibitions  facilities outside the capital region. The improvement of infrastructure should also boost the Philippines’ international travel and tourism competitiveness, and this should entice more foreign investors to invest in the country’s leisure sector.

CONTINUED SUPPORT FOR OFWS
President Marcos also highlighted his administration’s programs for Filipinos working abroad. During his SONA, he mentioned that partnerships with like-minded states have resulted in increased investments and strengthened national security, but also quality jobs for Filipinos seeking employment overseas. This should support the continued deployment of migrant workers and sustain the inflow of remittances.

Colliers sees the growth in remittances partly supporting the demand for horizontal units, particularly projects that are within the affordable to mid-income (P2.5 million to P7 million) price segments, and projects located within the Central Luzon and Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) regions, which accounted for about 29% of deployed overseas Filipino workers (OFWs) in 2022. We have observed sustained take-up for house-and-lot and lot-only units in provinces including Pampanga, Bulacan, Cavite, Laguna, and Batangas.

EASE OF DOING BUSINESS AND ADDRESSING COSTLY AND INSUFFICIENT POWER
President Marcos highlighted that the government’s efforts to improve the ease of doing business through the digitalization, integration, and streamlining of government services have produced ‘multiplier effects’. The government has also set in place policies and programs to create a conducive business environment through reforms in the capital markets and the implementation of ‘green lanes’. These measures should enable the country to attract greater interest from foreign firms, including manufacturers that take up space and warehouses in industrial parks.

We recommend that developers highlight the advantages of locating within an industrial park to potential locators. Industrial parks are flexible or easily reconfigured and have zoning regulations tailored for industrial uses. They also have modern infrastructure design such as well-maintained road networks. Locating in an industrial park could also be more cost-efficient as utilities, including water and electricity, are managed systematically.

According to the Department of Energy, electricity rates in the Philippines continue to be some of the most expensive in Southeast Asia. In our view, this will likely be a challenge, especially in attracting locators from power-intensive industries such as data centers.

BANNING OF POGOS
President Marcos has ordered the banning of POGOs. This created a lot of noise, especially in the property market, given that some developers aggressively chased the additional demand from this sector from 2017 to 2019. As my colleagues from Colliers Philippines’ Office Services-Tenant Representation team highlighted through their latest release ‘PBBM bans all Philippine Offshore Gaming Operators’, the share of office space occupied by the POGO sector has been dwindling. At the peak of POGO demand in 2019, these offshore gaming firms from China occupied about a tenth of the total leasable office space in Metro Manila. This is down to only about 3.5% as of this writing. The latest office deals from POGOs have been ‘sporadic’ at best. It appears that the POGO sector is no longer a major player in terms of office space take-up in Metro Manila, with the latest Colliers Philippines commentary stressing that future absorption will likely come from IT-BPM firms, MNCs, and traditional occupants including government agencies.

 

Joey Roi Bondoc is the director and head of Research of Colliers Philippines.

joey.bondoc@colliers.com

What is wrong with the Universal Health Care Act, and why it made PhilHealth a colossal mess

FREEPIK

Since the declaration of health as a fundamental human right is in the 1948 constitution of the World Health Organization (WHO), the members of the United Nations set, on Sept. 25, 2015, the goal of the achievement of universal healthcare (UHC) by the year 2030.

UHC means people receiving timely medical attention to save their lives or to maintain their good health without ruining them financially. It is about providing whole-person care for health needs throughout life, not just treating a set of specific diseases.

Primary healthcare is the most efficient and cost-effective way to achieve universal health coverage. It ensures people receive comprehensive care, ranging from promotion and prevention, to treatment, rehabilitation, and palliative care as close as feasible to people’s everyday environment. It addresses comprehensive and interrelated physical, mental, and social health and wellbeing.

UHC is not only about individual treatment services, but also includes population-based services such as public health campaigns, adding fluoride to water, controlling mosquito breeding grounds, and so on.

UHC, however, does not mean free coverage for all possible health interventions, regardless of the cost, as no country can provide all services free of charge on a sustainable basis. UHC was not conceived for advanced medical science, miracle drugs, open-heart surgeries, and organ transplants.

In his State of the Nation Address last year, the President mentioned the multi-specialty center being built in Pampanga which will specialize in cardiology, kidney, and cancer treatment. The estimated cost of the multi-specialty center is P10 billion. The President said in his address that similar centers will be built in other regions. That plan goes against the concept of UHC.

For UHC to achieve its goal, several factors must be in place.  They are:

• A strong, efficient, well-run health system that meets priority health needs;

• A sufficient capacity of well-trained, motivated health workers to provide the services to meet patients’ needs;

• Access to essential medicines and technologies to diagnose and treat medical problems;

• Affordability — a system for financing health services to prevent people from falling into bankruptcy.

Quality healthcare makes UHC a large expense for governments. It is usually funded by general income taxes and/or payroll taxes. There are three models for financing UHC: single payer, social health or mandatory insurance, and national health insurance.

In a single-payer model, the government provides free healthcare paid for with revenue from income taxes. Healthcare facilities are government-owned, and healthcare providers are government employees. Every citizen gets the same quality of healthcare.  The United Kingdom developed the single-payer system. Cuba has the same system. But whichever financing system is chosen, it will take some time to design and staff the organization that will administer the system.

The World Health Organization estimated that developing economies would take 15 years to put in place a strong, efficient, well-run, and sufficiently funded healthcare system. That is why it advised our legislators to target the achievement of UHC by 2030.

But many of our legislators rushed the enactment of a law instituting universal healthcare so that they could present UHC in the elections of 2019 as their gift to the Filipino people. Almost all of the members of the House of Representatives and Senators JV Ejercito, Sonny Angara, Nancy Binay, and Cynthia Villar were running for re-election.

On July 23, 2018, the 17th Congress passed Republic Act No. 11223, An Act Instituting Universal Health Care for All Filipinos, Prescribing Reforms in the Health Care System, and Appropriating Funds Therefor. It is better known as the Universal Health Care Act.  President Rodrigo Duterte signed the bill into law on Feb. 20, 2019, enabling members of Congress running for re-election to tell the electorate in their campaign sorties that they have made available quality healthcare at reasonable cost.   

Section 2 of RA 11223 declares that it is the policy of the State to protect and promote the right to health of all Filipinos and instill health consciousness among them. Towards this end, the State shall adopt:

a.) An integrated and comprehensive approach to ensure that all Filipinos are health literate, provided with healthy living conditions, and protected from hazards and risks that could affect their health;

b.) A healthcare model that provides all Filipinos access to a comprehensive set of quality and cost-effective, promotive, preventive, curative, rehabilitative and palliative health services without causing financial hardship;

c.) A people-oriented approach for the delivery of health services that is centered on people’s needs and well-being, and cognizant of the differences in culture, values, and beliefs.

Section 3 states that the Act seeks to:

a.) Progressively realize universal healthcare in the country through a systemic approach and clear delineation of roles of key agencies and stakeholders towards better performance in the health system; and,

b.) Ensure that all Filipinos are guaranteed equitable access to quality and affordable healthcare goods and services, and protected against financial risk.

The policy and objectives of RA 11223 are in line with the goals of UHC. But as to be expected of politicians, they are long on promises, but short on delivering the goods. RA 11223 was premature. The hard fact is that UHC cannot be achieved in the Philippines until 2030 or even beyond because the healthcare delivery system is acutely inadequate.

According to the Department of Health (DoH), as of 2022 there are 721 public hospitals. The number of hospital beds is a good indicator of health service availability. Per WHO recommendation, there should be 20 hospital beds per 10,000 population. Almost all regions have insufficient beds relative to their population. The insufficiency of public hospital beds is unspeakable.

The occupancy rate of DoH-managed hospitals is over 100%. That means there are more inpatients in the hospital than there are beds available. Some inpatients are made to lie on benches in waiting areas, others just have to be treated on visitor chairs. There are instances when two patients share a bed. Such instances occur during the dengue season, when many of those infected are children.

So, many patients are turned away. Poor folks denied admission just go home to their shack or hut, treat themselves with herbal remedies or consult the neighborhood arbolaryo (herbalist). Income earners seek medical attention in private hospitals. Most of these hospitals were established for profit. Their payment system is independent of the strict guidelines observed in government-owned hospitals.

As the physician-stockholder of private hospitals enjoys full discretion in using the hospital’s facilities, his practice is influenced by the incentives available to him. He may recommend more diagnostic tests, longer hospital confinements, and surgeries much more than necessary. For every procedure, for every service, the physician charges a fee. Depending on the doctor’s assessment of the patient’s capacity to pay, he may even order high-tech diagnostic tests the equipment for which he has right in his office. He prescribes the newest and therefore more expensive medicine, for which act he is rewarded by the manufacturer with a fully-paid-for vacation abroad disguised as attendance of a medical convention.

That is the reason why PhilHealth members pay out of pocket in spite of universal healthcare. According to a study conducted by a group of researchers from the Philippine Institute for Development Studies, PhilHealth pays an average of only 40% of total hospital cost.  According to them, the elderly, women, rural, and poor Filipinos are more likely to spend more.

Republic Act No. 11223 law enrolled all Filipino citizens in the National Health Insurance Program administered by PhilHealth. In effect, the legislators who drafted the law chose the social health insurance model of financing UHC. Just as the Philippine healthcare system is unable to service UHC, PhilHealth is incapable of performing the enormous task suddenly thrust upon it — financing UFC, a task made more difficult by the enrollment of 38 million indigent Filipinos.

Based on the law that established it, PhilHealth is a hodgepodge of a healthcare provider/insurance company/ healthcare program administrator. Contrary to its formal name of Philippine Health Insurance Corp., it is definitely not:

• organizationally structured as an insurance company;

• managed by a team of people academically trained for and experienced in running an insurance company, particularly a health insurance company;

• fully staffed by health insurance adjusters (claims processors).

The Universal Health Care Act was poorly conceived and prematurely put into effect.

 

Oscar P. Lagman, Jr. is a retired corporate executive, business consultant, and management professor. He had extensive exposure to the healthcare field in each of those  three capacities.

UAE tour operator Holiday Factory enters Philippine market

HOLIDAY FACTORY, a tour operator from the United Arab Emirates (UAE), officially launched its operations in the Philippines on Monday.

The company offers comprehensive packages that include hotel stays, flights, transfers, tour guides, and insurance for both local and international destinations.

“With our German background, we stand for quality and make sure you get more for less money. Just as we transformed the travel industry in the UAE approximately ten years ago, we are aiming to change travel habits in the Philippines,” Sandra Daemmrich, general manager at Holiday Factory, said at the launch on July 29.

Holiday Factory differentiates itself by providing packages at prices reportedly 50% lower than the market rate. These packages can be booked online with flexible travel options, eliminating the need for multiple providers.

Prior to this launch, Holiday Factory’s services were limited to the UAE and Georgia.

The company has had a presence in the Philippine market for several years but is now formally expanding its operations.

“We noticed that the Philippines has a rapidly growing mid-income segment, more than a third of which is looking for affordable holiday packages,” said Hakan Bagar, Holiday Factory’s business development director for international markets.

Holiday Factory said it is not a reselling agency but a direct package tour operator. The company manages its own package offerings, which are designed to simplify the holiday booking process.

“We have people who personally go there, handpick the hotels, airlines, and transportation partners, negotiate prices, and commit to them a high number of guests. From this, we get the significantly lower rates,” Mr. Bagar said.

In conjunction with its market entry, Holiday Factory will conduct a giveaway campaign offering free sign-ups on its website to 100 lucky travelers.

The company’s Philippine offerings include destinations such as Boracay, Siargao, and Puerto Princesa, as well as international locations like Bangkok, Hong Kong, Dubai, and the Maldives. For example, the Boracay package starts at P3,699 for an overnight stay, including flights, accommodations, transfers, insurance, and tour guides. The Bangkok package ranges from P11,899 for a two-star accommodation to under P14,899 for a four-star option.

Holiday Factory’s Philippine website is available at holidayfactory.ph. — Brontë H. Lacsamana

Striking video game actors use Comic-Con as platform for a new deal

DANIEL-ROBERT-UNSPLASH

SAN DIEGO — While pop culture fans from around the world eagerly returned for the first San Diego Comic-Con since last year’s dual writers and actors strikes, video game actors arrived to air their grievances about artificial intelligence (AI).

“After 18 months and still getting proposals back as recently as this past week that do not cover all our members and protect all their performances from the unethical use of artificial intelligence,” the chief contracts officer of SAG-AFTRA, Ray Rodriguez, told Reuters at San Diego Comic-Con.

“You know, at a certain point, you can’t just keep doing what hasn’t been working up until now. And we’ve reached that point where it was time to take this action,” he said.

Videogame voice actors and motion-capture performers called a strike starting on Friday over failed contract negotiations focused around AI-related protections for workers, bringing about another work stoppage in Hollywood.

The SAG-AFTRA strike of the Interactive Media Agreement follows months of negotiations with major videogame companies, including Activision Productions, Electronic Arts, Epic Games, Take-Two Interactive, Disney, Character Voices and Warner Bros. Discovery, and WB Games.

Fans at the convention, meanwhile, celebrated a restored Comic-Con brimming with A-list stars and writers once again.

“I’m really happy because now Hall H is back, exhibitions are back, so it’s going to be great this year and I hope I’m going to see somebody — I don’t know — famous or something,” said Paola Guerrero from Mexico.

SAG-AFTRA and the National Association of Voice Actors hosted panels at the convention to discuss the urgency of the issues they face with AI.

“When you bring a performer in to render a performance, you take their data, you take their likeness, you take their voice and you use a computer to then be able to digitally replicate that to generate new performance that that performer would have otherwise been brought in to do,” Mr. Rodriguez said.

“You are taking their career away. You are alienating from them something that is essential to their personhood and something that is irreplaceable from a career perspective,” he added.

Despite the dispute, major video game companies proceeded with their convention panels. Notably, EA Games announced the voice cast for the next installment of the popular Dragon Age videogame franchise Dragon Age: The Voices of the Vanguard.

The panel, held the day before the strike began, included voice actors Ali Hillis and Ike Amadi, both known for Mass Effect 3, Nick Boraine, known for Call of Duty: Modern Warfare, and others. — Reuters

UnionBank posts P3.1-B net income for Q2

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UNION BANK of the Philippines, Inc. (UnionBank) booked a net income of P3.1 billion in the second quarter amid strong revenues, it said on Monday.

This was 55% higher than the P2-billion net profit it posted in the first quarter, UnionBank said in a disclosure to the stock exchange.

However, this was below the P3 billion in attributable net earnings that it recorded in the second quarter of 2023, based on its quarterly report for that period.

Its latest financial statement was unavailable as of press time.

“We continue to post strong topline revenues. Now that we have completed the integration of the acquired Citi consumer business, the parent bank’s expenses have naturally declined. As a result, our net income in the second quarter of the year is at P3.1 billion, which is up by more than 50% from the P2 billion booked in the previous quarter. Our focus on the higher margin consumer segment and continued expansion of our customer base will allow us to sustain this growth momentum in the years to come,” UnionBank Chief Financial Officer Manuel R. Lozano said.

UnionBank’s acquisition of Citigroup, Inc.’s Philippine consumer banking business was completed in August 2022. The transaction was valued at P55 billion.

The bank’s second-quarter performance brought its net income for the first half to P5.07 billion.

This was likewise lower than the P6.34-billion attributable net profit it recorded in the same period last year.

UnionBank said its revenues grew by 8.3% year on year to P37.3 billion in the first semester.

“The growth in net revenues is driven by the bank’s expanding consumer business, higher net interest margin, and growing transaction fees,” it said.

Net interest income also increased by 14.8% to P27.497 billion in the first half. Interest earnings stood at P40.876 billion, while interest expenses totaled P13.379 billion.

The bank’s net interest margin improved by 55 basis points to 5.7%, it said.

“The bank’s net interest margin is among the highest in the banking industry at 5.7% coming from the higher proportion of consumer loans to total loans. Consumer loans now account for 59% of its total loan portfolio, which is nearly three times higher than the industry average,” UnionBank said.

Non-interest income stood at P9.814 billion.

Meanwhile, the lender’s operating expenses inched down by 2.4% year on year to P21.568 billion as of June.

“Following the successful migration of the acquired Citi consumer business into UnionBank’s system in March, the bank’s IT (information technology) expenses have declined by close to P1 billion quarter-on-quarter,” it said.

“The decline in IT expenses was partly offset by inherent costs related to customer acquisition and revenue growth. New-to-bank customers more than doubled versus last year’s monthly average. As a result, the bank now has over 15 million total customers,” UnionBank added.

Provisions for credit losses amounted to P8.988 billion in the first semester.

The bank’s net loans and other receivables stood at P514.77 billion in the first half.

On the funding side, total deposits stood at P666.05 billion. Its low-cost current account, savings account or CASA deposits were at P427.8 billion.

UnionBank’s assets were at P1.1 trillion at end-June, while total capital was at P187.14 billion.

The bank’s shares went down by five centavos or 0.14% to end at P36.05 apiece on Monday. — AMCS