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Coming soon: More Coffee Bean cafés in SM Stores

SM INVESTMENTS Corp. (SMIC) is looking to open 53 more Coffee Bean & Tea Leaf (CBTL) branches in SM Stores by 2026.

In a statement, SMIC said there are currently 25 CBTL cafés located within 25 SM Stores around the country. It plans to roll out 53 more CBTL branches within SM Stores, bringing the total to 78 cafés by 2026.

The first CBTL branch for SM Store was opened at SM North EDSA in Quezon City in December 2022.

“Our decision to introduce coffee shops within SM Stores is driven by our customers’ desire for enhanced shopping experiences. We aim to provide a welcoming environment where customers can relax and enjoy themselves,” SM Store Executive Vice-President Dhinno Francis S. Tiu said.

“CBTL has committed to opening cafés in SM Stores based on their global reputation for exceptional customer service. We choose partners who align with our commitment to enhancing customer experience,” he added.

Mr. Tiu said the move to integrate cafés into retail spaces is a well-established practice among international brands, offering a communal experience.

“Enhancing customer experience is pivotal in retaining and attracting customers. The cafés will serve as spots for customers to recharge during shopping or as meeting places for friends and family,” Mr. Tiu said.

SM Store said that CBTL will also offer discounts to SMAC holders. — Revin Mikhael D. Ochave

Carnival Cruise to expand fleet, targets to hire Filipino seafarers

REUTERS

FLORIDA-BASED Carnival Cruise Lines is adding seven ships to its fleet in the next decade and will hire thousands of staff including Filipino seafarers, its top official said on Wednesday.

The company will add two ships to its Australian fleet in January 2025, President Christine Duffy told reporters in Manila.

Two new Excel class ships are scheduled for delivery in 2027 and 2028, she added. Each ship can accommodate about 6,600 guests.

The cruise operator also expects to take delivery of their largest-ever ships in 2029, 2031, and 2033. Each ship can house about 8,000 guests.

The company has signed a training partnership with STI College and the Philippine Marine Merchant Academy, which seeks to help Filipino seamen move beyond traditional entry-level jobs, Ms. Duffy said.

It would help Filipino seafarers to build careers, excel and advance through Carnival’s ranks, including posts for captain and chief engineers, she said.

Carnival Cruise will grant scholarships to 20 STI students.

“The benefit for us and STI is we are helping them create the curriculum and the training,” Ms. Duff said. “We know that when that crew member, if they’re selected to come and work, they’ve already been through the training that we need.”

“This is a very nontraditional program for us because traditionally, Carnival Cruise Line was solely focused on Italian and European [crews],” Bettina A. Deynes, Global Chief Human Resource officer of Carnival Corp. and PLC, told reporters.

“The bulk of our deck and engine officers today are from Italy or Croatia and for other cruise lines, a lot of northern Europeans from Scandinavian countries,” she said. “We really recognize the Philippines to be a source of talent in the maritime space.”

The partnership is expected to increase Filipino visibility in Carnival’s crew, which employs 12,000 Filipinos. A thousand of them are deck and engine crews.

Ms. Deynes added that they are promoting about 20,000 crew members this year and expect to fill up those vacancies through hiring.

Carnival Cruise Line, under the Carnival Corp. and PLC with eight other cruise lines, employs a total of 50,000 Filipino staff across all nine brands.

Carnival Cruise Line, Princess Cruises, Holland America Line, Seabourn, Cunard, AIDA Cruises, Costa, P&O Cruises (UK), and P&O Cruises (Australia), are the nine brands under Carnival Corp.

Carnival also shifted to a digital mode of application for interested crew members. — Chloe Mari A. Hufana

Court halts bidding for Meralco’s 1,000-MW power supply contracts

MERALCO.COM.PH

By Chloe Mari A. Hufana, Reporter

A TAGUIG CIty regional trial court on Wednesday stopped Manila Electric Co. (Meralco) from proceeding with its bidding process for 600-megawatts (MW) and 400-MW power supply.

“There exists an extreme urgent necessity for the writ as to warrant the issuance of a temporary restraining order (TRO) to prevent further damages to the plaintiffs’ interests, the government and the environment,” Executive Judge Byron G. San Pedro said in a five-page order.

Meralco was also ordered to post a P5-million TRO bond.

The power distributor earlier invited bids for a contract capacity of 600 MW, which is set to take effect in September 2025. The bid deadline was set for Aug. 2. It also invited bids for an additional contract capacity of 400 MW, effective September 2025.

Jose Ronald V. Valles, Meralco senior vice-president and head of Regulatory Management, said they had yet to receive a copy of the order.

“We would like to stress, however that all competitive selection processes for our supply requirements are done in accordance with existing rules of the Department of Energy and Energy Regulatory Commission,” he told reporters in a Viber group chat.

“It is our mandate to ensure that we conduct these in a timely manner, as delays will expose our consumers to unnecessary burden in the billions of pesos in the form of higher power rates,” he added.

Members of the Malampaya consortium, Enrique K. Razon-owned Prime Energy Resources Development B.V., UC38 LLC, Prime Oil and Gas, Inc., and PNOC Exploration Corp. had sought the restraining order, saying the bid terms violate the preference given to indigenous natural gas under the law.

The plaintiffs also said the contracts threaten the Philippines’ energy security and sovereignty.

“Imported fuel products are notoriously unstable and extremely subject to external shocks in the market,” they said. “These price instabilities will hence be built into the fabric of our energy situation, resulting in less energy security and less energy sovereignty.”

They said the contracts threaten state revenues because under Service Contract 38, the government is entitled to 60% of the Malampaya project’s net proceeds.

“Allowing the current bidding processes to proceed, resulting in the award of in favor of coal as a fuel source, will subject the country to a 15-year reliance on coal, which would significantly contribute to further environmental degradation and exacerbate the adverse impacts of coal usage on air quality and climate change,” they added.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.

MSpectrum to build solar rooftop project in Laguna

MSPECTRUM, Inc., the solar energy arm of Manila Electric Co. (Meralco), has teamed up with the local unit of United States-based Excelitas Technologies Corp. to build a solar rooftop facility in Laguna.

Under the contract, MSpectrum will install a 116 kilowatt-peak solar facility at Excelitas Technologies Philippines, Inc.’s manufacturing facility in the city of Cabuyao.

The solar power project is slated for completion in December and is expected to generate 165,998 kilowatt-hours of clean energy yearly.

The company said the project would allow the Excelitas unit to cut its carbon footprint by 118.2 metric tons.

“Partnering with MSpectrum is a step in the right direction for Excelitas Technologies Philippines as we do our part in being a good corporate citizen by harnessing the benefits of renewable energy,” Enrique M. Sonoy, Jr., senior director of operations of Excelitas Technologies Philippines, said in a statement. “We look forward to doing more in the future.”

MSpectrum offers tailor-fit solutions for industrial, commercial and residential customers “through an in-depth understanding of energy consumption behaviors and strategic partnerships with world-class technology partners.”

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

Extension of water concessions to benefit public

BW FILE PHOTO

By Sheldeen Joy Talavera, Reporter

EXTENDING the revised concession agreements (RCAs) with Manila Water Co., Inc. and Maynilad Water Services, Inc. could benefit their customers because it would let them recover their investment for a longer period, according to the Metropolitan Waterworks and Sewerage System (MWSS).

“The benefit to consumers is that Maynilad and Manila Water are able to stretch their recovery longer, leading to lower rates,” Patrick Lester N. Ty, chief regulator at the MWSS Regulatory Office, said in a Viber message. “They don’t need to recover all their expenses by 2037 but by 2047.”

Manila Water and Maynilad separate told BusinessWorld the MWSS Board of Trustees had approved the term extension of their revised contracts last year. These were endorsed to the Department of Finance last month.

Both companies are seeking the extension of their contracts by 10 years until 2047, to coincide with their 25-year legislative franchises.

Republic Act (RA) No. 11601, which took effect on Jan. 25, 2022, gave Manila Water a 25-year legislative franchise. Meanwhile, RA 11600 gave Maynilad its 25-year legislative franchise, which took effect on Jan. 22, 2022.

Patrick James B. Dizon, manager of the MWSS water and sewerage management, said the revised concession agreement was first signed in March 2021 for Manila Water and in May 2021 for Maynilad, while the franchise law was approved in December 2021.

“So we need to align the effectivity date of the RCA to the franchise law,” he said in a Viber message.

Juan Paolo E. Colet, managing director at China Bank Capital Corp., said the extension would be a “win-win” for both the concessionaires and their clients.

“Manila Water and Maynilad can plan for and execute long-term capital expenditures to expand and improve their services with the assurance that they have a sufficient period to recoup their investments and generate a reasonable return,” he said in a Viber message.

Terry L. Ridon, a public investment analyst and convenor of think tank InfraWatch PH, said any extensions to the agreements “should include provisions recognizing government’s regulatory powers, particularly to ensure the least cost to consumers.”

He said this is “to ensure that any and all rate increases are intimately tied to future development plans within the concession area.”

Manila Water and Maynilad applied for the extension of their RCAs in the fourth quarter of 2023, committing to invest and spend to enhance water and wastewater services to their customers.

Manila Water serves the east zone network of Metro Manila, covering parts of Marikina, Pasig, Makati, Taguig, Pateros, Mandaluyong, San Juan, portions of Quezon City and Manila and several towns in Rizal province.

Maynilad serves the cities of Manila, except San Andres and Sta. Ana. It also operates in Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, and Malabon. It also supplies the cities of Cavite, Bacoor and Imus, and the towns of Kawit, Noveleta and Rosario, all in Cavite province.

Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT, Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls.

Alternergy Holdings set to start construction of Bataan solar farm

ALTERNERGY Holdings Corp. is set to begin constructing its 28 megawatt-peak Solana Solar Power Project in Hermosa, Bataan, it said on Wednesday.

Alternergy and its sub-holding company Solar Pacific Energy Corp., which wholly owns Solana Solar Alpha, Inc., has broken ground on the project, which has an estimated cost of P1.5 billion.

“The ALTER Group is full steam ahead as we break ground for the Solana Solar Power Project, our third project to be completed this year,” Alternergy Chairman Vicente S. Pérez, Jr. said in a statement.

Mr. Pérez said that they will contribute a total of 204 megawatts (MW) of renewable energy capacity to the grid by the end of 2025 with their latest project, along with the expected completion of Alabat and Tanay Wind Power Projects, which have also started construction.

These projects will accelerate its move toward its target to reach 500 MW of total generating capacity by 2026, Alternergy said.

Mr. Pérez said the Solar Power Project is expected to issue the notice to proceed for the construction immediately as it is slated for completion by the first quarter of 2025.

“The host communities of our projects are our immediate stakeholder and support. We look forward to continuing working with the Bataan Province and Hermosa Municipality as we move forward with the construction,” Alternergy President Gerry P. Magbanua said.

Solar Pacific President Michael Lichtenfeld said they are “on the active lookout” for new projects and will be ready to file for new service contracts with the Department of Energy once the moratorium is lifted.

Alternergy aims to develop up to 474 MW of additional wind, solar, and run-of-river hydro projects.

Shares in the company fell by two centavos or 2.82% to close at 69 centavos apiece on Wednesday. — Sheldeen Joy Talavera

The difference between Tanduay rum here and Tanduay rum abroad

The really good stuff is made for export

IF YOUR tito drinks Tanduay rum here, he’d just be any other tippler. If your tito drinks Tanduay rum in the States, he might be a man of taste.

On July 16, Tanduay held a masterclass at Poblacion’s Oto (which is included in The World’s 50 Best Restaurants’ Discovery list) where they showed off their export-quality rums, namely: Tanduay Asian Rum Gold and Silver, Tanduay Double Rum, and Especia Spiced Rum.

If you haven’t heard of any of these before, that’s because most of these are for export, and only limited qualities are available here. Janno Gironella, R&D Head for Tanduay Distillers Inc. told BusinessWorld in a mix of English and Filipino in an interview, “For local, our strategy is more of a value rum. For export, the opportunity for premium products is greater.”

“They’re more receptive to premium products, and they are very eager to try rums and spirits coming from Asia,” he said of their export markets.

GRAPEFUIT, CARAMEL, AND COCONUT TASTES
Silver is only moderately filtered, which gives it a light straw appearance. It’s aged up to five years in ex-bourbon barrels, with a sharp grapefruitaste and a clean finish.

Gold, meanwhile, is aged up to seven years. To our palate, it tasted a bit sharp, like black pepper, and had a hint of burnt sugar. To our nose, it had a caramel note, but the finish was juicier and fruitier than its younger sibling.

Double Rum is made from a blend of rums aged five and 16 years, which are combined in ex-bourbon barrels for two years. This had a woody scent, akin to cedarwood, and had a warm swallow and more than a hint of fruitcake.

As for our (personal) favorite, Especia, it’s made from heirloom sugarcane and has been infused with spices. It had an interesting scent: we knew someone who was drawn to perfumes that smelled like a loose woman on the beach (her words). That meant sunlight, coconut, and spices, and it smelled exactly like her. That said, the taste was elegant and sweet, with a bit of a cloying warmth.

INCREASE IN LIQUOR SALES
Back to your uncle: in a press release from the Tan-controlled LT Group (which includes Tanduay Distillers, Inc., and sister companies Philippine NatBank and Asia Brewery, Inc., among others), it reported an increase in liquor sales by volume in 2022 to 27.49 million cases from 23.69 million cases in 2021. Statista, meanwhile, reports that Bacardi sold 21.1 million cases in the same year. Forget the Olympics, the Philippines is winning in another game.

“It’s primarily driven by Filipino consumers,” said Mr. Gironella. “That’s why we’re very eager to expand our products outside the Philippines.” He told us that they were expanding their ready-to-drink lines and their light-spirit alcohol, as well as introducing a “super-premium” rum in the export market called the Tesoro.

“We really believe in the quality of our rums. You wouldn’t last that long kung di rin talaga masarap iyong rum (if your rum isn’t really delicious).”

For the record, the rum was first made in 1854 (marking this year as their 170th).

“We pride ourselves that truly Filipino-made iyong products namin,” he said. “We pride ourselves in collaborating with our local farmers, local distilleries. As opposed to (other brands), they couldn’t claim fully that they source their materials locally.” — Joseph L. Garcia

TDF yields inch up on lower bids, inflation worries

BW FILE PHOTO

YIELDS on the term deposits auctioned off by the Bangko Sentral ng Pilipinas (BSP) inched higher on Wednesday as the offer went undersubscribed and amid renewed inflation concerns after a typhoon hit the Philippine capital.

Demand for the BSP’s term deposit facility (TDF) totaled P121.893 billion on Wednesday, lower than the P250 billion placed on the auction block and the P181.978 billion in tenders seen for a P240-billion offer last week.

Broken down, the seven-day deposits attracted tenders amounting to P51.047 billion, lower than the P120-billion offering as well as the P99.977 billion in bids recorded the prior week.

Rates for the one-week papers ranged from 6.4925% to 6.525%, a tad narrower and lower than the 6.495% to 6.53% range recorded in the previous week. This brought the average rate for the tenor to 6.5161%, inching up by 0.63 basis point (bp) from the 6.5098% seen on July 26.

Meanwhile, tenders for the 14-day deposits reached P70.846 billion, below the P130-billion offering and the P82.001 billion in bids last week for the P120 billion placed on the auction block.

Accepted yields were from 6.52% to 6.575%, wider than the 6.53% to 6.565% margin logged a week prior. This brought the average rate of the two-week deposits to 6.5494%, up by 0.48 bp from the 6.5446% logged last week.

The central bank has not auctioned off 28-day term deposits for more than three years to give way to its weekly offerings of securities with the same tenor.

The term deposits and the 28-day bills are used by the BSP to mop up excess liquidity in the financial system and to better guide market rates.

TDF yields were slightly higher week on week on Thursday as the market expects inflation to accelerate due to the impact of Typhoon Carina (Gaemi) and a southwest monsoon that caused torrential rains in Metro Manila and its nearby provinces, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Most BSP TDF average auction yields mostly corrected slightly higher after the typhoon damage by Typhoon Carina that could lead to some temporary pickup in prices,” Mr. Ricafort said.

Latest data from the Agriculture department showed that agricultural damage due to the typhoon and southwest monsoon hit P1.21 billion as of July 31.

Rice was the most affected crop, accounting for 52.47% of the damage or P635.17 million.

The BSP’s month-ahead forecast showed that inflation likely settled within 4% to 4.8% in July. If realized, this would be faster than the 3.7% print in June.

The upper end of the central bank’s forecast would also mark the first time in seven months that inflation breached the BSP’s 2-4% annual target.

July inflation data will be released on Aug. 6.

“BSP TDF auction yields also corrected slightly higher after lower total bids compared to the previous week,” Mr. Ricafort added. — Luisa Maria Jacinta C. Jocson

New quay cranes at ICTSI’s Manila port now operational

ICTSI PHOTO

RAZON-LED International Container Terminal Services, Inc. (ICTSI) on Wednesday said its three new quay cranes at Manila International Container Terminal (MICT) are now operational, boosting its capacity.

“The acquisition of these new quay cranes represents a significant step forward to MICT’s expansion and modernization. Their addition enables us to handle cargo loads more efficiently, leading to faster vessel turnaround times and better operations overall,” MICT Chief Executive Officer Christian L. Lozano said in a statement.

Operated by ICTSI, MICT is one of the three terminals in the Port of Manila. It has the largest quay crane fleet with 18 units to date.

“The operational efficiencies contributed by the new cranes enable the terminal to better manage peak periods and high cargo volumes, ensuring smoother and more predictable operations for all stakeholders. These improvements enhance the overall customer experience, providing shippers and consignees with more reliable and timely services,” ICTSI said.

It added that the commissioning of the three cranes “underscores MICT’s commitment to providing the highest levels of port services and boosts the terminal’s capacity to handle the increasing demands of modern container shipping.”

Meanwhile, the Manila terminal has also started the second phase of its Berth 8 expansion, which would include the construction of a 300-meter wharf and 10-hectare container yard, ICTSI said.

Once completed, the expansion will increase MICT’s capacity to 3.5 million twenty-foot equivalent units (TEUs), boosting its current capacity by 200,000 TEUs.

The Berth 8 will be equipped with three quay cranes for handling large capacity vessels with a capacity of up to 18,000 TEUs, ICTSI said. The new cranes are expected to arrive in 2027.

Last year, the company said adding a new berth in Manila is expected to cost P15 billion and would allow it to serve more large foreign vessels.

ICTSI operates 33 terminals in 20 countries across six continents.

Its shares rose by P3 or 0.85% to end at P356 apiece on Wednesday. — Ashley Erika O. Jose

Bacolod Rum Fest, a toast to Tanduay’s 170th year

By Chelsea Visto

TOP RUM producer Tanduay Distillers, Inc. marks its 170th anniversary with the return of the Rum Festival at the Bacolod City Government Center from Aug. 10 to 18.

Now in its fourth installment, the festival is a testament to how Bacolodnons love their booze, food, and tunes.

Flairtending competitions, culinary exhibits and competitions, rum masterclasses, parades, and street dancing are in store during the nine-day celebration. There will also be Rum and Music Nights every day at the Food Park of the Bacolod Government Center where most of the events will be held.

The festival highlight is the annual concert, where original Pilipino music (OPM) powerhouses like Sandwich and Ely Buendia have previously performed. This year, Tanduay promises to kick the party up a notch by inviting two headliners to the show — rock band Juan Karlos and hip-hop quartet ALLMO$T.

Bacolod is once again expecting a swarm of tourists, after drawing a record-breaking attendance of 35,000 people during Arthur Nery’s set in 2022.

The rum festival has historically only been staged in Bacolod, the sugar capital of the Philippines. Its province, Negros Occidental, cultivates over 190,000 hectares of sugarcane, the ingredient essential to rum production.  “Bacolod is one of the provinces or cities that has the biggest consumption, compared to all other branches in Visayas and Mindanao,” said City Councilor Em Ang during a press conference announcing the event on July 30 at the Century Park Hotel in Manila.

Today, Tanduay is the best-selling rum brand worldwide, said Lucio Tan III, President and Chief Operations Officer of Tanduay Distillers, Inc., and that is a title they’ve held for seven consecutive years he said. Their consistently high demand has allowed them to expand to other Southeast Asian countries, the United States, and Europe.

“Many rum drinkers do not know that most of the Tanduay rum they drink is produced in Bacolod. For a long time, the rum production in Bacolod has been there. It should be celebrated, just like many other things that we celebrate in the city,” Ms. Ang said.

Much like how the famous Oktoberfest is held yearly in late September through early October, the rum festival is typically slated in August. Thanks to the festival, Bacolod enjoys an economic boost and bustling tourism at that time, said the city’s Chief Tourism Operations Officer Ma. Teresa Manalili during the press conference. “The tourism arrivals now in Bacolod City, year 2023, is around 780,916, contributing to around P7 billion in tourism receipts. That is a bigger impact to our local community, especially with revenues, livelihood, and job generation in Bacolod City,” she said.

Although the rum festival is popular locally, Tanduay aspires to also promote their flagship event to foreign visitors. They hope to achieve the same commercial success as Bacolod’s Masskara Festival, one of the largest festivals in the country, attracting thousands of local and international visitors yearly.

BPI shortens SEED Bonds offer period

BW FILE PHOTO

BANK of the Philippine Islands (BPI) has shortened the offer period for its 1.5-year Sustainable, Environmental, and Equitable Development (SEED) Bonds amid strong investor demand, it said on Wednesday.

“Following overwhelming demand across institutional, high-net worth and retail clients, the Bank of the Philippine Islands has decided to shorten the public offer period for its 1.5-year peso-denominated fixed-rate BPI Sustainable, Environmental, and Equitable Development Bonds,” BPI said in a disclosure to the stock exchange.

“The offer, which was originally set to run from July 19, 2024 to Aug. 2, 2024, will now close early on Aug. 1, 2024. The bank expresses its gratitude to the investing public’s strong support for the offer,” it said.

BPI is looking to raise at least P5 billion through the 1.5-year papers with an option to upsize.

It earlier said that net proceeds from the BPI SEED Bonds will be used to finance or refinance new or existing eligible green and/or social projects consistent with its Sustainable Funding Framework.

It added that it will use the offering as an opportunity to promote projects that contribute to the United Nations’ Sustainable Development Goals.

The Securities and Exchange Commission on July 18 confirmed that the BPI SEED Bonds qualify as ASEAN Sustainability Bonds.

The papers are priced at 6.2% per annum payable quarterly. The bank is selling the bonds for a minimum investment amount of P500,000 and additional increments of P100,000.

BPI will issue the SEED Bonds and list them on the Philippine Dealing and Exchange Corp. on Aug. 9.

The bank tapped BPI Capital Corp. and Standard Chartered Bank as the joint lead arrangers and selling agents for the bond offer.

BPI’s net income grew by 17.5% to P15.3 billion in the second quarter on the back of higher revenue growth.

Its shares dropped by 80 centavos or 0.66% to end at P121.30 apiece on Wednesday. — A.M.C. Sy

​Disclosure of AI use to boost consumer trust in PHL brands

REUTERS

BRANDS’ disclosure of how their data is used for artificial intelligence (AI) is expected to increase consumer trust and revenues, consumer engagement platform Twilio said.

“Their ability to move beyond personalization will lead to greater trust being built in those brands. By default, what should flow from there is increased revenue and profits,” Nicholas Kontopoulos, vice-president of marketing in Asia-Pacific and Japan at Twilio, told BusinessWorld on July 18.

Mr. Kontopoulos said informing users on AI use could signal responsibility and be a differentiator for the brand, as this would build rapport, transparency, and accountability.

Twilio’s 2024 State of Customer Engagement Report showed 77% of Filipino consumers demand transparency on how their data is being used in AI, which was the highest percentage among 18 countries surveyed.

This stems from digital maturity among customers and businesses, which shows the importance of data and how these will affect businesses going forward, Mr. Kontopoulos said.

However, the report showed that only 53% of local brands are meeting this expectation. These brands are also less likely to inform consumers when interacting with AI (41%) and disclose with whom customer data is shared (30%).

Twilio’s study also showed that 33% of consumers surveyed will spend more if AI improves customer service. Meanwhile, 78% reported they are likely to stop using a platform that doesn’t personalize engagement.

Among brands, e-commerce retail store Zalora employs Twilio’s AI-powered customer data platform Segment to provide its users with a personalized shopping experience.

Meanwhile, logistics application Lalamove uses AI in its chat system to connect its delivery drivers with customers without compromising personal data, Twilio added.

For entities planning to disclose their use of AI to consumers, Mr. Kontopoulos said they should also consider how they do it.

“There’s no one-size-fits-all approach, but I would start thinking about developing a framework like the Nutrition AI Guide, making sure a customer is aware that they’re talking to an AI when they’re engaging with a chatbot,” he said.

Firms should also include their AI use policy, he added.

Twilio’s survey covered 4,750 business-to-consumer executives and 6,300 consumers. Its platform is used by over 300,000 global enterprises, digital disruptors, and more than 10 million developers worldwide. — Aubrey Rose A. Inosante

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