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Target scam syndicates, not POGOs — PAGCOR chief

THE Philippine Amusement and Gaming Corp. (PAGCOR) said the government should go after scam syndicates instead of banning Philippine offshore gaming operators (POGOs).

“We do not need to outlaw POGOs; what we need to do is intensify anti-crime operations against suspected alien hackers, against scammers and cybercriminals who are usually hiding in highly secured buildings and compounds,” PAGCOR Chairman and Chief Executive Officer Alejandro H. Tengco said in a statement on Sunday.

“These criminal syndicates are not engaged in offshore gaming at all, and even if they are, they are doing it illegally. So they are the real threat, and we must go after them with everything that we have,” he added.

Some lawmakers are proposing a ban on POGOs, citing concerns about reputational and national security risks, as well as cases related to human trafficking, torture, and other crimes.

Finance Secretary Ralph G. Recto earlier said he is not opposed to proposals to ban POGOs. He also said that he will make his own recommendations to the Palace “at the appropriate time.”

“To us, the real threats are the alien hacking and scam syndicates that operate underground, and they are the ones that our law enforcement agencies are trying to locate and dismantle,” Mr. Tengco said.

“We should not blame and demonize our licensed gaming operators because they are closely monitored by PAGCOR. Our licensees pay taxes, and they help provide legitimate jobs and livelihoods to a lot of people,” he added.

PAGCOR said that legitimate internet gaming licensees contributed more than P5 billion to its gross revenues last year.

The state gaming firm also said it has “imbedded monitoring teams in the physical venues of all licensed gaming operators, including land-based casinos, to ensure compliance with the terms of their licenses.”

“Those found violating the provisions of their licenses are meted fines and penalties and, in the most serious offenses, the licenses are revoked and their bonds forfeited.”

In April, Malacañang ordered the Anti-Money Laundering Council to freeze the assets of a POGO hub in Tarlac province.

The Philippine National Police reported earlier that a total of 4,039 people were victims of crimes related to POGOs in the first half of 2023. — Luisa Maria Jacinta C. Jocson

PHL gaming operators told to prioritize security risks

MICHAL PARZUCHOWSKI-UNSPLASH

GAMING COMPANIES catering to Filipino players should prioritize addressing security risks, including location information, to ensure the integrity of their transactions, app development and mobile security platform provider Appdome, Inc. said.

“Because the Philippines has legalized and regulates online gambling, this is an important revenue stream for the country,” Appdome Mobile App Security Evangelist Jan Sysmans said in an e-mail interview.

“It is critical that operators here are equipped to face security risks, especially around location verification,” he added.

He said that location is fundamental to the integrity of in-app transactions, as it provides transaction traceability and supports know-your-customer (KYC) requirements critical to fighting fraud and scams.

Gambling and lottery apps rely on geographic location data to ensure their mobile applications are accessible only within authorized areas, he noted.

However, there are various risks that attackers could exploit.

“Attackers can tamper with global positioning system (GPS) signals or sensors, providing false location information, which compromises app functionality and revenue generation. These fake GPS apps allow attackers to manipulate authentic location providers via geo-location spoofing, license control bypass, and evasion of geo-fencing requirements,” he said.

“Unauthorized virtual private network (VPN) use also introduces risks by allowing users to hide their true IP (internet protocol) addresses, enabling malicious activities such as bypassing geo-restrictions, accessing restricted content, conducting man in the middle attacks, among others,” he added.

With this, Mr. Sysmans said it is “critical” that gaming companies catering to Filipino players understand their compliance obligations.

“With threat actors getting more sophisticated and the growth in mobile channels, net-net geo-location compliance is essential. Ultimately, this is crucial to fighting against fake GPS apps, fake accounts, unauthorized VPNs, SIM (subscriber identity module) swapping schemes, hooking frameworks, GPS signal spoofing, or manipulating sensors such as the gyroscope or accelerometer,” he said.

“Operators more generally also need to ensure their mobile apps come with comprehensive security features to safeguard sensitive user data and prevent unauthorized access to the app,” he added.

Appdome is an app development and mobile security platform provider. It has over 300 solutions spanning mobile app security, mobile fraud, malware and cheat prevention, and mobile bot defense.

For the first quarter, the country’s gross gaming revenue rose by 18.5% to a record-high of P81.7 billion based on Philippine Amusement and Gaming Corp. data. — Revin Mikhael D. Ochave

Nissan PHL introduces new president

Outgoing Nissan Motor Philippines, Inc. (NPI) President Juan Manuel Hoyos (left) turns over a ‘key fob’ to new President Yasuhisa Masuda. — PHOTO BY KAP MACEDA AGUILA

Mr. Masuda steps up to the plate; Mr. Hoyos moves on to new role

NISSAN PHILIPPINES, INC. (NPI) recently marked the turnover of leadership reins with an event in Grand Hyatt Hotel, Taguig City.

NPI President Juan Manuel Hoyos formally stepped down from his post, moving on to lead the Mexico-based Nissan Importers Business Unit (NIBU) in the Americas. In his place, Yasuhisa Masuda assumes the presidency of NPI.

The handover ceremony was witnessed by partners from the government and industry, dealer network principals, and members of the media. Also at the event were Nissan Senior Vice-President and Global Sales and Infiniti Head Jose Roman, and Nissan ASEAN and Thailand President Toshihiro Fujiki.

Under Mr. Hoyos’ watch, “Nissan Philippines was able to launch multiple products across different segments, contributing to the local expansion of Nissan’s footprint. By the end of the 2023 fiscal year, Nissan grew 31%, achieving strong sales across its product lineup,” said NPI in a release. Mr. Hoyos was appointed to the position in April 1, 2022, succeeding Atsushi Najima.

Said the outgoing executive, “I truly believe that Nissan Philippines will be in good hands under the leadership of Masuda. The years of experience he has gained from working with Nissan are sure to aid the brand in sustaining the growth that we have established in the last few years. I am looking forward to seeing what the future has in store for Nissan Philippines under this new chapter.”

Mr. Masuda has over 12 years of experience with Nissan, joining the brand in 2011. He held various leadership positions in Market Intelligence, Brand and Media Strategy. Prior to his appointment at Nissan Philippines, he held the position of chief marketing officer for Nissan’s Japan Marketing Division.

As he takes on the role of President, Mr. Masuda is expected to sustain the growth trajectory set by Mr. Hoyos. Under his leadership, he plans to strengthen “Nissan’s push for electrification and exciting image, digitization initiatives, and building a strong dealer network — fulfilling the brand’s promise of bringing innovation that excites its customers.”

“I am looking forward to seeing where we can take the Nissan brand in the coming years. The Philippines has always been a promising market for the brand, and we will continue to work to sustain, if not surpass the growth that has been achieved in the country,” said Mr. Masuda.

A chance to meet National Living Treasures  and seeing the crafts they create

A collection of Tausug woven items — ARJALE JAYRIE QUERAL

By Joseph L. Garcia, Senior Reporter

HOW many times do you get several National Living Treasures in one room, and actually hold in your hands what they make?

This is, we believe, the crowning glory of Likha 3, the third iteration of Likha, a project spearheaded by the Office of the First Lady, Liza Araneta Marcos. The project was aimed to bring together just weavers in February 2023, according to Deputy Social Secretary Dina Arroyo Tantoco. The weavers attended workshops and were given free space to showcase their goods. The reception was so great that they decided to hold a second one a few months later, in June, to coincide with Independence Day on June 12.

“It’s actually the biggest one so far,” said Ms. Arroyo Tantoco about the third iteration. “I think that system has been perfected.”

There are over 80 exhibitors, spread over three sections at the Philippine International Convention Center (PICC) Forum. Section 1 is devoted to newcomers, while Section 2 is filled with graduates of the first two Likha programs. “You can see the difference from the first Likha to now. They have more merchandise, more products. You can tell that they’re really learning from this whole experience,” said Ms. Arroyo Tantoco

Section 3, meanwhile, is for more established brands that work with local communities (there’s Artefino’s Hearte Fino, as well as representation from Habi). Other exhibitors include government agencies that provide help to small businesses, and, of course, a special section devoted to Gamaba (Gawad sa Manlilikha ng Bayan) awardees, deemed National Living Treasures, as recognized by the National Commission for Culture and the Arts (NCCA). These include Abina Coguit for Agusan Manobo Embroidery, Estelita Bantilan for Blaan Mat Weaving, Marife Ganahon for Higaonon Mat Weaving, Magdalena Gamayo for Ilocano Textile Weaving, Teofilo Garcia for Katukong Ilocano (Gourd Hat) Making, Bundos Fara for T’Boli Brass Casting, and Barbara Ofong for T’Boli Textile Weaving.

“I think it’s really just to give a chance for people here to meet them directly,” said Ms. Arroyo Tantoco. “I would never have met these Gamaba awardees. It’s our culture, our craft — they are national treasures.”

Co-organizer designer Lenora Cabili said that projects like these help preserve craft for generations to come. “The preservation starts there. It’s the awareness that it actually exists,” she said, while she stood near the WUTHLE (Women United Through Handcrafted Lace and Embroidery) booth. Had we not spotted Ms. Cabili there, we would not have known that there was a community of handmade bobbin lacemakers in Iloilo, first taught by Belgian nuns. “When the awareness happens, I think that’s when people will start buying. That’s one way of preserving it.”

She continued: “There’s just a lot that needs to be done, especially when you want to utilize culture through craft, as a way to build the identity of the Filipino. Craft really plays a central role.” Likha co-organizer Al Valenciano added, “And it goes down to agriculture. A lot of the things they make are from the land.”

A problem with cultural preservation is that, if judging by the age of the Gamaba awardees, there’s a certain chance that traditional crafts will just die with the old guard. The indigenous communities to which these traditions belong get smaller as younger people move to the cities for better pay. Luckily, some hold on. At the T’Boli Textile Weaving booth to be occupied by Ms. Ofong, a younger relative, Ian Christopher Ofong, was there to talk about the craft. There are more than 30 steps to make a yard of fabric, patterns gathered from dreams, and woven for four to six months, he explained. He himself was wearing a jacket made from T’nalak. “Ito iyong identity namin (this is our identity),” he said, asked about the importance of preserving the craft for people his age (he’s in his 20s). For him, a way to encourage young people to pick up their traditional crafts is through recognition: “Kapag marunong silang gumawa ng T’nalak, kilala sila, not just in the Philippines but in the whole world.”

Mr. Valenciano agrees: “The fact that they’re here, when they go here, they’ll be so proud and tell the community: ‘Importante pala ang ginagawa nila (it turns out that what they’re doing is so important).’”

Recognition, yes; but ascribing value (financial and otherwise), is just as important. Ms. Cabili says. “When it’s craft, the value is in the way it’s created. When you look at the process of the craft, there has to be an appreciation, and put a proper value into what they’ve created. It comes at a price.”

“The younger generation would be encouraged, that it’s a career that they can get into. That’s the cycle that needs to be encouraged,” she said.

Likha 3 is now open to the public until June 11 at the PICC Forum, CCP Complex, Pasay City.

Globe says 116 new cell sites to improve service delivery

FREEPIK

GLOBE Telecom, Inc. said it added 116 new cell sites and upgraded more than 800 mobile sites in the first quarter of the year to enhance its service delivery.

“Our plan supplements investments we’ve made in the last 3-4 years, (and) we remain focused on improving service consistency and availability to deliver good customer experience and support traffic across regions and territories,” Globe Senior Vice-President and Head of Network Planning and Engineering Joel R. Agustin said in a statement on Sunday. 

The listed Ayala-led telecommunications company said it continues to expand the reach of its network and improve the service delivery after building a total of 116 new cell sites and upgraded about 812 mobile sites to long-term evolution (LTE) in the first quarter of the year. 

It also deployed 19,544 fiber-to-the-home (FTTH) lines of fiber-optic cable that can transmit data at high speeds, Globe said.

“While the figure is lower compared to last year’s rollout, it is a strategic move to maximize the utilization of the company’s existing fiber inventory amid a reduction in capital expenditures,” Globe noted.

For this year, Globe has set aside $1 billion for the company’s expansion plans and to boost its operations.

“Globe’s continuous investments in network infrastructure ensure enhanced connectivity, facilitating a range of digital activities from online learning and remote work to e-commerce and entertainment,” the company said. — Ashley Erika O. Jose

Wilcon Depot opens 95th store in Santa Barbara, Pangasinan

In anticipation of its upcoming celebration of 47 years of excellence, Wilcon Depot launched its 95th store in Santa Barbara, Pangasinan. The long-term campaign of #FlyingHighTo100 is counting down to its finale. With just a few more stores to go in their expansion campaign, Wilcon is continuously committed to enriching Filipino communities and driving economic growth. In photo are (from left) representative from the office of Pangasinan 3rd District Congresswoman Maria Rachel Arenas, Shaian Sotto, Brgy. Ventinilla, Sta. Barbara, Pangasinan Barangay Captain Lloyd Jethro Zaplan, Sta. Barbara Pangasinan Vice-Mayor Rogelio Navarro, Sta. Barbara Pangasinan Mayor Carlito Zaplan Sr., Wilcon Depot SEVP-COO Rosemarie Bosch-Ong, SVP for Human Resource Grace Tiong, HCG Philippines VP for Sales and Marketing David Chang, Limson Marketing CEO Carl Lim, and Wilcon Depot AVP for Sales and Operations Francis Lazaro.

Wilcon Depot brings 47 years of industry excellence in home improvement and building needs in Santa Barbara, Pangasinan on June 7, 2024. Continuing its legacy of “Building Big Ideas,” the leading retail giant successfully opened its 95th store nationwide. With only five more stores before reaching the century mark, Wilcon’s #FlyingHighTo100 expansion campaign is on the cusp of completion.

Santa Barbara was abuzz with the grand opening rites of the Wilcon big-box store led by Wilcon Depot executives and joined by Santa Barbara local government officials. SEVP & COO Rosemarie Bosch-Ong extends her gratitude to the esteemed guests, local government officials, media partners, suppliers, and customers attending the grand opening. She also expresses her joy that Wilcon’s expansion campaign is nearly complete, with just a few more stores to open, making its premium products and services accessible throughout the country.

Wilcon’s store in Santa Barbara, Pangasinan

Wilcon lives up to its name as the leading provider of high-grade supplies and materials that caters to the needs of Filipino communities. The successful opening of Wilcon’s store in Santa Barbara joins Wilcon Depot-Villasis in delivering customer delight through its product offerings and services in Pangasinan. It also opens employment opportunities and other economic benefits to the town. This is a big step to the continuous development of Santa Barbara and has once again put the town in the list of top investment areas in this part of the region.

Santa Barbara is a first-class municipality located in the central plains of Pangasinan, dotted with historic churches and carries a rich historical narrative. The town’s name pays homage to Santa Barbara, the patron saint of the artillerymen and miners. While it exudes a quaint, traditional charm, Santa Barbara is also a potential hub for business and economic growth. It is well-connected by a network of roads and highways, ensuring easy access for goods and people.

As part of its #FlyingHighTo100 expansion campaign, Wilcon is transforming the construction industry landscape through its commitment to sustainability, innovation, quality, and customer service.

Wilcon’s product line has always been remarkable. Its exclusive and in-house products include Pozzi for trusted bathroom solutions; Hamden Kitchen Appliances, an ideal partner for your kitchen needs; Alphalux, an energy-efficient lighting solutions brand; Kaze, an appliance brand that will help you live a healthy space; Hills, a trusted brand for construction and electrical power tools; P.Tech, your partner for reliable building materials; Rocersa, Emigres, STN Ceramica, Stylish Spanish Tiles with a contemporary interpretation of a classic style; Arte Ceramiche, Verona Tiles, and Saigres, Asian tiles for a more sophisticated home; Energie Ker, Gardenia Orchide, and Novabell, Sophisticated Italian Tiles; Grohe and Kohler for bathroom and plumbing solutions; Franke, convenient kitchen solutions; and Rubi a partner when it comes to tile cutting necessities; and among many other brands, are made accessible in the new Wilcon Depot-Santa Barbara, Pangasinan.

Start building big ideas with Wilcon Depot and shop daily at its newest store from 8:00 a.m. to 7:00 p.m. Visit Wilcon Depot Santa Barbara, Pangasinan located at Zone 3 Mc. Arthur Highway, Ventinilla, Santa Barbara, Pangasinan. Valued customers can also shop online at Wilcon by visiting shop.wilcon.com.ph/.

For more information about Wilcon, visit www.wilcon.com.ph or follow their social media accounts on Facebook, Instagram, and TikTok, or subscribe and connect with them on Viber Community, LinkedIn, and YouTube. Or you may contact Wilcon Depot Hotline at 88-WILCON (88-945266) for inquiries.

 

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VinFast Auto lands in PHL

PHOTO BY DYLAN AFUANG

Vietnam’s pioneer auto brand continues global expansion, enters third Southeast Asian market

By Dylan Afuang

THROUGH VINFAST Auto, Vietnam is now present in the global electric vehicle space — competing against makers from North America, China, Europe, Japan, and South Korea. And as part of its global expansion, the Vietnamese electric two- and four-wheeler manufacturer has joined the burgeoning EV market here in the Philippines.

Last week, VinFast Philippines did so with a public showcase of the brand’s local selection of electric cars and motorcycles, and announcement of ambitions for the market.

Established in 2017, VinFast is the mobility arm of Vietnam’s Vingroup conglomerate that operates in fields of education, real estate, and technology, among many other industries. The auto brand touts itself as one of the first of its kind to switch to producing only pure-electric vehicles, when it did so in 2022.

“We don’t only produce EVs, but also electric buses for public transportation, electric motorbikes for adventurers, and electric bicycles for those who love the outdoors,” Deputy CEO for Sales and Marketing of VinFast Philippines Jude Racadio explained during the brand’s public launch in Pasay City.

As the company believes that widespread adoption of EVs can enable the world to achieve sustainability, it’s “this mission (that) motivates us to expand into vibrant markets like the US, Canada, as well as promising Southeast Asian markets like Thailand and Indonesia, and now, the Philippines,” the executive added.

In this particular region, the Philippines is the third country VinFast is entering.

For her part, VinFast Philippines CEO Nguyen Thi Minh Ngoc explained to the media on the sidelines of the launch program that the “Philippine government giving supportive policies for EVs” led the brand to choosing the archipelago as its next market.

In Republic Act 11697 or the Electric Vehicle Industry Development Act (EVIDA), import duties on battery-, plug-in hybrid, and hybrid-electric vehicles (BEVs, PHEVs, HEVs), electric motorcycles and bicycles, as well as the importation of electrified vehicle parts and related production equipment, are reduced to zero.

“We also believe that the Philippines is a promising market,” Ms. Ngoc added, “so we’re bringing our (vehicles) with accessible prices. And with the quality of our four- and two-wheeled vehicles, Filipinos can join the race to green mobility.”

The brand’s four-wheel lineup consists of the VF 5, the VF e34, the VF 7, and the VF 9. As of writing, the brand has not yet revealed these models’ prices, although they’re slated to go on sale by the end of June, and will be delivered to customers by the third quarter.

VinFast Philippines is also “exploring the (local) introduction” of the VF 3 mini-SUV and is “researching the potential for electric motorbikes and bicycles,” it said in a release.

The brand has named EV Solutions; K1 Prestige Bay Motors, Inc.; and Autoflare Corp. in Metro Manila; and MNV Auto Group, Inc. in Iloilo City as its initial dealership partners. In Manila, the first VinFast dealership is eyed to open by month’s end.

In a release, the brand claimed that it will offer car purchases with batteries and a unique battery subscription policy. With the latter promo, buyers can essentially lease the car’s battery instead of purchasing the car outright, in order to theoretically lower the EV’s initial purchase price.

In terms of after-sales programs, the VinFast EVs will come with warranties spanning from seven to 10 years. For units acquired through subscription, the brand could replace these cars’ batteries for free should their capacities fall below 70%.

With thistles and tartan, Dior pays tribute to Scotland in cruise collection

DIOR.COM

LONDON — French fashion house Christian Dior paid homage to Scotland at a catwalk show in a Perthshire castle, with tartan designs and thistle motifs adorning its cruise 2025 collection.

Celebrities, including Hollywood actresses Jennifer Lawrence and Anya Taylor-Joy, gathered in the picturesque gardens of Drummond Castle in central Scotland for the show last week, where designer Maria Grazia Chiuri peppered kilts for the womenswear line with some punk nods. (Watch the show here: https://tinyurl.com/ytujatt8)

Models wore an array of tartan asymmetric dresses, cropped and belted jackets, shorts, and corsets, as well as argyle knits, capes, and lace or velvet frocks varying in length and volume.

Some of her designs bore fringes, embroidered thistle motifs or the map of Scotland. Others were festooned with pictures of founding designer Christian Dior’s 1955 fashion presentation at the nearby Gleneagles Hotel.

Voluminous layered bodice dresses appeared to be a nod to Tudor styles, while some short frocks seemed armor-like.

Ms. Chiuri cited a book about Mary, Queen of Scots and her embroidery work as an inspiration. A white shirt tucked under a white corset were embroidered with various words in red, including “fierce,” “hysterical,” “emotional,” and “bossy.”

Ms. Chiuri, who often works with female collaborators for shows, teamed up with Scottish designer Samantha McCoach, of the brand Le Kilt, for some creations.

The looks were accessorized with chunky black boots, long black gloves and chokers with pearls.

“Scotland is an important reference in the fashion world and I wanted to interpret it in a different way,” Chiuri told fashion magazine Vogue ahead of the show.

“For my generation, it’s so associated with punk, but there is another way to go into it, and that’s through the textiles.”

Cruise, or resort, collections — produced by stylists in addition to twice-yearly seasonal collections — are often held in different cities or countries. — Reuters

DoTr turns to ADB support for EDSA Busway

PHILIPPINE STAR/ MICHAEL VARCAS

By Ashley Erika O. Jose, Reporter

THE Department of Transportation (DoTr) said it is engaging the Asian Development Bank (ADB) for technical support for  the Epifanio de los Santos Avenue (EDSA) Busway project.

This comes after Megawide Construction Corp.’s (Megawide) unsolicited proposal was returned, Transportation Secretary Jaime J. Bautista told reporters last week.

“We actually returned the proposal to them [Megawide] because there are information that we wanted to know more and clarify, and maybe because we see that it will be faster to do a solicited rather than unsolicited,” he said.

“It will be faster if we do solicited rather than unsolicited because if we do unsolicited based on the new PPP (Public-Private Partnership) Law, it prescribes a longer period for review of the proposal and then there is Swiss Challenge,” he said.

If the government opts for a solicited proposal, the terms of reference will already be defined, Mr. Bautista said, citing the bidding process for the operations and maintenance of Ninoy Aquino International Airport, which is considered the fastest PPP project to progress from submission to an investment coordination committee for approval and concession agreement signing.

“Like we did with the airport, it took us less than a year from approval of the project to the award unlike if we take the unsolicited proposals, the Swiss Challenge alone takes 90 days to a year,” Mr. Bautista said.

“Actually we have already engaged the ADB to prepare the project. To prepare the business case, like we did in airport,” Mr. Bautista said.

Megawide Chief Executive Officer Edgar B. Saavedra said, however, that the company is still interested in the project.

“Potentially [we are interested] because it will complement [Parañaque Integrated Terminal Exchange],” he said.

PITX is the country’s first landport. It is operated by Megawide’s MWM Terminals, Inc. under a 35-year build-transfer-operate contract.

The EDSA Busway Project involves the financing, design, construction, procurement of low-carbon buses, route planning, and operations and maintenance of the busway.

Nigel Paul C. Villarete, senior adviser on PPP at the technical advisory group Libra Konsult, Inc., said a solicited scheme for public transportation is always a preferred option.

“Public transit always requires a considerable public investment component especially the roadways which do not have revenue potentials,” he said in a Viber message on Sunday.

“Whether solicited or unsolicited, it would need government subsidies and this is better managed if it’s the government who conducts the procurement through solicited mode.”

Rene S. Santiago, former president of the Transportation Science Society of the Philippines, said the DoTr has already “boxed in” its route by engaging the ADB.

“DoTr has boxed itself into solicited mode, when it requested ADB assistance to formulate the bid documents.  I will be surprised if a bidder comes in — without requiring guaranteed fares and subsidy,” he said.

Why (some) Filipinos cling to online lenders

FREEPIK

By Abigail Marie P. Yraola, Deputy Research Head

NOT ALL are qualified for bank loans.

But the need for financial assistance is ever present for some people. And to address these financial needs, some individuals prefer to use lending apps.

Frankie Garcia, 52, a manager at an information technology company, and Ruby, 23, a working student, are among those who turn to loan apps when they need money.

Mr. Garcia said that people borrow money due to urgent needs, limited budgets, and sometimes delayed salaries or incentives.

In his case, he applied for loans in multiple lending apps, but these apps charge much higher interest rates than banks.

Despite this, he opted to use these platforms due to their minimal requirements, easy access, and fast approval and disbursement of loan amounts.

The same goes for Ruby, who finds instant loans from lending apps less time-consuming compared with bank loans or traditional lending.

She also appreciates its minimal requirements and convenience.

However, sometimes this proves otherwise.

Robert Dan J. Roces, chief economist at Security Bank Corp., said that online lending platforms in the country have been growing alongside the increasing popularity of online commerce.

“However, while they offer quick and convenient credit, the higher interest rates, attributable to the ease of accessibility, can lead borrowers into debt traps,” he said.

He suggested that it is important for regulators to find a balance that promotes innovation through measures like interest rate caps and transparent disclosures, while also safeguarding consumers through financial literacy campaigns.

REGULATORY COMPLIANCE
According to the Securities and Exchange Commission (SEC), the regulatory agency supervising the corporate sector, there are 140 recorded online lending platforms (OLPs) in the country which are allowed to operate and be used for online lending.

The list (https://tinyurl.com/298jrxdc) helps borrowers in making informed decisions by ensuring that they choose authorized OLPs.

These platforms are required to comply with its Memorandum Circular (MC) No. 19 series of 2019, mandating the (1) disclosure of necessary information in their advertisements and OLPs; (2) registration of all their OLPs as business names; and (3) reporting to the SEC of all their existing and/or prospective OLPs within the prescribed period.

Noncompliance or submission of false or fraudulent information may result in fines, suspension of lending activities, or revocation of the certificate of authority to operate as a financing or lending company.

“The continuous rise or operation of unregistered OLPs can largely be attributed to the lack of consumer understanding regarding the significance of borrowing from platforms that are registered and licensed and the need to cater to their financial needs,” SEC said in a Viber message.

Given this, the SEC actively monitors the lending companies, encouraging responsible lending practices and fair competition among platforms through clear guidelines and oversight to ensure consumer safety and transparency.

It prioritizes consumer education programs to enhance borrowers’ financial literacy and decision-making abilities.

The SEC explained that compared with conventional lending, digital lending platforms — or OLPs — cater to a wider range of borrowers by providing quicker and easier access to loan applications.

“Although both digital and traditional lenders are subject to regulatory scrutiny, the laws governing online lending are continually changing,” the SEC said.

According to the regulator, there are various reasons why people would opt to use lending apps even if some platforms charge exorbitant interest rates.

These digital lending companies offer quick approval and fund disbursement, which is crucial for addressing emergency financial needs.

Also, these lending apps have less stringent standards which allows them to serve borrowers with limited credit history who are not qualified for regular bank loans.

“As its core, digital lending platforms differentiate themselves by leveraging automation and proprietary algorithms to streamline the decision-making process,” Ryan Carlos T. Pahignalo, data protection officer at Digido Finance Corp., said.

Digido is part of the Singapore-headquartered UnaFinancial Group (formerly Robocash Group).

Compared with traditional lending in which process executions take longer, interaction between the lender and borrower is significantly cut when it comes to digital lending.

Mr. Pahignalo mentioned that lenders offering credit options, such as digital lending apps, cooperatives, and banks, use different scoring and risk models.

As a result, they vary in terms of interest rates, amount of credit provided, and methods of disbursement.

UPSIDES AND DOWNSIDES
Borrowers apply for loans at conventional lending institutions and encounter lengthy processes and waiting times, uncertainty, personal inquiries, credit checks, and extensive documentation requirements. What is supposed to be a quick transaction may turn out to be a challenging process for borrowers.

“Employing the point of view of borrowers, services of digital lending platforms are advantageous to them because human interaction is reduced to bare minimum,” Mr. Pahignalo said.

In digital lending apps, procedures are already digitally streamlined to make it seamless for the borrower. And borrowers feel they are in control and dignified knowing they can access credit even with limited documentation available.

Digital platforms provide quick processing timeframes, allowing borrowers to apply for loans online anytime and from any location. However, without appropriate security measures, borrowers using online platforms risk identity theft and data breaches, SEC said.

Regulatory uncertainty raises concerns about consumer protection and compliance.

For Digido’s Mr. Pahignalo, borrowers may perceive digital lending as impersonal, significantly reducing human interaction.

“Platforms may make errors in processing loan applications due to some inherent technical limitations, especially when data submitted is inaccurate, of poor quality, or cannot be verified with available technical resources and tools,” he said.

HIGH INTEREST RATES
For working student Ruby, she avoids lending apps that charges with high interest rates for it is costly.

This was also the case for Mr. Garcia who said that at first, some lending apps’ advertisements were misleading and interest rates were high.

He advised that when choosing a lending platform, one should consider factors such as low interest rates, long repayment terms, and high loanable amount, as well as its minimal requirements and fast approval.

For various reasons, people often opt to use lending apps instead of traditional bank loans, even if some platforms charge higher interest rates, the SEC said.

The regulator highlighted that it is important for borrowers to be aware of the risks associated with different lending arrangements and that regulatory oversight is crucial in addressing these concerns and ensuring consumer protection.

SEC also said that it seeks to enable borrowers to make informed financial decisions and protect themselves from potential risks associated with varying interest rates by promoting consumer education and awareness.

“When choosing a preferred lender, we advise borrowers to carefully consider all available options and ensure they understand all costs associated with a loan,” Mr. Pahignalo said.

He also added that interest rates are just among many factors to consider but it is not the ultimate measure.

“Interest rates are always risk-based and can be a good indicator of risks, financial position of the borrower as viewed by the creditors, and/or liquidity of the debt,” Mr. Pahignalo said.

REGULATORY MEASURES
But not all lending platforms provide “comfort” and have a good corporate reputation. In some cases, borrowers appear to fall trapped by illegal and predatory lending apps.

The SEC uses several strategies to stop predatory lending activities and safeguard borrowers in the lending sector.

Among these regulatory measures are the implementation of Financial Products and Services Consumer Protection Act (RA 11765) and its rules and regulations, the licensing and monitoring institutions to ensure transparency of their loan products and overseeing their compliance with laws and regulations.

“Institutions that violate the law may face fines, penalties, or license suspension or revocation as enforcement measures,” the regulator said.

For Digido’s Mr. Pahignalo, he said that regulators have been active in cracking down unauthorized and abusive online lending activities.

“The [central bank] has implemented measures to protect borrowers against predatory lending practices while encouraging a vibrant and dynamic credit market,” Mr. Pahignalo said.

The SEC said that giving regulatory advice is one way to assist lending platforms in adhering to compliance standards and conducting business openly and legally.

“By fostering competition and innovation in the lending sector and providing capacity-building initiatives to improve platform operators’ competencies, the SEC fosters market development,” SEC added.

The regulator also works with consumer advocacy organizations, business associations, and governmental organizations to address issues and gather input as stakeholders is crucial in these efforts.

CREDIT BEHAVIOR
“Consumers’ attitudes toward credit applications are influenced by things including need, ability to pay back debt, and knowledge of alternative options,” SEC said.

To understand the borrowing habits of Filipinos, one should consider the socioeconomic factors and personal preferences that influence their credit decisions.

For Mr. Pahignalo, as inflation surges and stagnating salaries continually affect ordinary Filipinos, especially low-income earners, it is reasonable to expect that demand for formal credit will continue to rise across all socioeconomic segments.

Based on Digido’s data, borrowers apply for loans primarily as supplementary capital for small to medium business, assistive funding for bills, education, medical expenses, and tech upgrades.

“The period of online loans being primarily used for emergencies is over,” Mr. Pahignalo said. “Regardless of the underlying reasons of the borrower, we always espouse to them our belief in responsible borrowing.”

In a survey by consumer finance firm Digido, it showed that formal credit options have been more accessible for Filipino consumers in 2023.

By type of formal credit, personal loans were the highest formal credit choice, followed by BNPL (Buy Now, Pay Later), credit cards and then business loans.

The report also showed other data like the application process of credits and the behavior of borrowing from both formal and informal sources, among others.

“Aside from high perception of access, data from our commissioned survey is indicative of customers’ sustained trust of formal credit options — personal loan services in particular — for various use cases,” Mr. Pahignalo said.

He also added that borrowers who turn to informal sources may face higher interest rates from unregulated entities and be vulnerable to predatory lending and abusive collection practices.

“This signals to us that the consumer lending industry needs to continue efforts to mainstream the availability and viability of accessible formal credit options such as duly registered digital lending platforms,” he said.

For the Bangko Sentral ng Pilipinas (BSP), the formal credit market in the Philippines remains dynamic and multifaceted with banks, nonbank financial institutions and government lenders providing credit-related services to the diverse financial needs of Filipinos.

The BSP added that most Filipinos obtain loans from banks, which are the main credit providers in the domestic economy.

Banks offer a wide range of loan products through traditional and digital platforms, with flexible payment terms and market-driven interest rates for individual borrowers.

The central bank also added that other retail credit providers include nonbank financial institutions such as lending corporations, microfinance institutions, credit cooperatives, and government lenders.

“The latest results of various BSP surveys also point to increasing consumer loan demand driven by income and employment,” the central bank said.

There is an extensive list and wide range of credit providers in the country; one must pick or apply for a loan that aligns with their interest and needs and with the ability to repay on time.

Maximizing digital opportunities in the energy sector

The ERC, in partnership with the USAID Energy Secure Philippines (ESP), launched the ERC LINKod last July 2023. The event was attended by Senator Sherwin T. Gatchalian and Energy Secretary Raphael P.M. Lotilla.

Many industries face the simultaneous push for digitalization and decarbonization, and our energy sector is not spared from this. Leveraging digital technology is even found to be a significant way to enhance clean energy adoption and improve energy efficiency.

In the Philippines, the Energy Regulatory Commission (ERC) is reinventing energy regulation through digital innovation, ensuring that the Philippine energy sector meets the needs of the growing economy.

This innovation comes in the form of ERC LINKod, which seeks to make the processes of its services more efficient through the use of digital technology.

“[ERC LINKod is] a suite of consumer-centric digital programs aimed at enhancing efficiency, transparency and accessibility in ERC provision of public service fortified by an information security management system,” ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta explained in her remarks during the launch of ERC LINKod last year.

Services currently offered and accessible to the public under ERC LINKod include Billing and Revenue System — Cashiering System (BRS-CS), Consumer Complaints Ticketing System (CCTS), Online Filing and Application System (OFAS), Online Uniform Reportorial Requirements System (OURRS), and Competitive Retail Electricity Market — Monitoring and Reporting System (CREM-MRS).

BRS-CS, according to the ERC’s website, streamlines financial transactions for stakeholders by facilitating the online issuance of billing statements and revenue collection.

CCTS, meanwhile, facilitates the management and resolving of consumer electricity-related issues.

OFAS makes it convenient for stakeholders to file applications seamlessly through electronic submission of required documents.

By simplifying the submission of reportorial requirements and streamlining confirmation process, OURRS seeks to reduce regulatory lags and volume of cases filed and pending before the ERC.

Lastly, expediting monitoring and analysis of data within the competitive retail electricity market, CREM-MRS enables better insights into the retail market, including a score card for reference of contestable customers.

Also accessible under the ERC LINKod tab on the ERC’s official website (https://www.erc.gov.ph/) is the Energy Virtual One-Stop Shop (EVOSS) system. The EVOSS, its own website explains, is a Web-based filing and monitoring system for energy-related applications and a repository of information and permits issued for energy projects, which is shared by all agencies and entities involved in the approval process.

Also part of the ERC LINKod initiative is the enhanced ERC website, which now provides stakeholders with relevant and real-time information in more transparent and accessible means.

Amid a growing need for a more responsive energy landscape, handling consumer complaints remains a challenge, sometimes even hindering the progress of services. In response, ERC LINKod aims to reduce 50% of processing time for all services, ultimately enhancing efficiency and saving time for both the organization and its consumers.

“ERC LINKod is just the first set towards a future of shared success and progress in the Philippine energy sector,” Ms. Dimalanta said.

“As the ERC LINKod advances the ERC into the digital age, the electricity consumers can look forward to a more transparent and responsive energy landscape,” she added.

Secured platforms

Moreover, a significant aspect of the ERC LINKod initiative is the focus on cybersecurity, with the ERC implementing robust global security measures across its digital platforms. The digital platform is supported by the recent Information Security Management System (ISMS), ensuring a better and more secure cyberspace in the ERC platforms.

According to US Agency for International Development (USAID), the ERC has achieved ISO certification ensuring a higher level of security and strengthened security measures in all transactions, making the commission well-equipped to deploy ERC LINKod.

“ERC LINKod also aligns with the government’s priority areas of digitalization, safe cyberspace, citizen-centric governance, digital inclusion and innovation-driven economy as we confront our enormous challenges that remain and those that are yet to arise in the coming years,” ERC’s Ms. Dimalanta said during the launch.

“We hope to add more programs to ERC LINKod as we continue to pursue with all of you the energy sector’s journey towards more efficient, transparent and accessible services,” the ERC chief added.

As the ERC embarks on its own digital journey, it adopts a new regulatory paradigm that leverages digital tools and transform the Philippine energy sector that meet its energy and power needs.

“It is therefore imperative for the commission to adopt a new paradigm in regulating the power sector. One that optimizes the utilization of digital tools. Hence, this digital transformation journey begins with ERC LINKod,” Ms. Dimalanta said.

Partnering with USAID

In forming ERC LINKod, the commission has partnered with the USAID, with the goal to improve energy regulation that will drive the adoption of cleaner energy in the Philippines.

“It is great to see that as public servants, we are all moving forward in providing greater service to the people of the Philippines,” Ryder Rogers, director of the Environment Office of USAID Philippines, remarked during the launch of ERC LINKod. “This will strengthen energy governance and will ultimately advance consumer welfare and energy democracy.”

Factoring in the transformation of the energy sector to a more secured, competitive, reliable and more affordable landscape for Filipinos, the USAID will continue supporting the ERC to enhance its capacity and advance reforms in the sector.

“USAID will continue… to provide assistance to ERC to help strengthen the institutional capacity of the regulator to respond to the emerging challenges of the energy sector and the continuing implementation of the power sector reforms,” the agency was quoted as saying in a BusinessWorld report last December.

The ERC and USAID have a long-standing partnership that dates back to 2001. The USAID recognizes the Philippines as a key partner for sustainable and inclusive development. According to the USAID, it invests approximately $120 million yearly to support development programs in the country.

“The Philippines is a key partner in promoting sustainable and inclusive development in the region. USAID is among the largest bilateral donors to the Philippines and invests approximately $120 million annually to promote inclusive, market-driven growth,” it said. — Angela Kiara S. Brillantes

Why we missed the industrialization wagon: can we still catch it?

A WORKER adjusts a machine at a manufacturing facility in Manila, Dec. 10, 2008. — REUTERS

IN A PREVIOUS ARTICLE (https://tinyurl.com/2xp6ug29), we argued that manufacturing and exports are the “magic bullet” that developing countries like the Philippines need. We are not unveiling here anything new: nihil novum sub sole. This is how countries have managed to overcome the middle-income trap, then become upper-middle- then high-income countries.

But if the way forward is clear, why is it so difficult to get it right? Here comes to our mind the start of Leo Tolstoy’s famous novel, Anna Karenina: “Happy families are all alike; every unhappy family is unhappy in its own way.” Whereas successful industrialization stories are very similar in their core elements, every developing country has its own set of historical and current obstacles for development.

The Philippines has its own unhappy story. Despite the significant progress in the last decades, its gross national income per capita is still very low, not even $4,000. It is low because wages are low. This is the result of policy mistakes, in the form of not doing what our neighbors did decades ago: industrialize and export. This is also what catapulted China, and more recently, Vietnam. Of course, firms were the ones that ultimately invested in manufacturing and produced goods to export, but the government pushed them in that direction.

We shall not forget that China and Vietnam were not blessed with better “cards” than the Philippines, both in economic and political terms. In 1962, China’s gross national income per capita was less than one third that of the Philippines. China’s economic miracle is well known. Between 1980 and 2010, GDP growth averaged 10% year-on-year, which is by all means extraordinary. This “big push” made it possible for China to match the Philippines gross national income per capita in 2003 — not so long ago. Today, it is over three times that of the Philippines’ ($12,850 in 2022).

Let us look at Vietnam, a much closer success story. Its gross national income per capita was just a meagre 13% of the Philippines’ in 1991. It recently surpassed the Philippines, and in 2022 its income per capita stood at $4,010, 2022. Such a large change in just 30 years is even more remarkable.

How were these two very poor countries — at that time — able to catch up and even surpass the Philippines? How was this possible, especially since the Philippine economy has been registering uninterrupted growth since the 2000s (except for 2020)? We cannot but recall here the understandable reaction of a prominent Filipino politician to this bitter reality: “bobo ba tayo na tatalunin tayo ng lahat, ha?” (Are we so dumb that everyone will beat us, huh?). The difference is not that workers in nations on the other side of the West Philippine Sea are more hard working. It is about a clear public focus and ambition on manufacturing and ultimately exports.

A key difference between the Philippine government and the governments of its neighbors has been the former’s weakness when it comes to directing the private sector to do what is good for the nation.

To understand this, let’s recall The Bell Act of 1947 which rehabilitated the sugar industry and provided the free entry of American products into the Philippines. These made it difficult to develop national industries and, more generally, a manufacturing sector. It can be said that the Philippines’ history after independence is a case of a country that developed “extractive” institutions and was dominated by a landed oligarchy of great families who fought for economic and political power and took over the House of Representatives, Senate, and other important political positions. This has been so since the first Constitution in 1898. This, naturally, led to a weak state. Government capture (powerful landowners are congressmen) prevented change. Countries like the Philippines have developed self-reinforcing mechanisms that perpetuate socially suboptimal institutions. Some initial adopters chose these institutions at some point in the past because they suited their interests, but then the whole system became “locked in.”

One may wonder why these institutions have not changed. The answer would seem to be that powerful vested interests make institutional change politically difficult in terms of distributive conflicts and asymmetries in bargaining power. The tenacity of vested interests, the difficulty of mobilizing collective action to bring about institutional change, and the differential capacity of different social groups for mobilization and coordination are long-lasting barriers to economic progress.

The wealth of politicians derived for a long time from agricultural land. While this is still important, its role has declined as landowners moved to commercial, real estate, or industrial enterprises. This led to a shift during the 1990s from a rentier mentality of the rural agrarian elites to a more urban-based entrepreneurial and competitive mindset. Today, it must be said, the Philippines is more open to competition and to new entrants than agricultural landowners ever were.

To understand the difference between the private sectors and the states of the more successful Asian economies and those of the Philippines, it is important to appreciate the role of rents, i.e., returns over and beyond the economic opportunity earnings, such as extra earnings obtained from enjoying a favorable location, created out of state intervention operating through social processes of political positioning. Given that the successful Asian governments intervened much more than that of the Philippines, it follows that these other economies created more rents as a share of GDP. The difference lies in how rents were used and the type of firms that dominate in each type of economy.

While the successful Asian countries had profit-seeking firms that operated in a more or less competitive atmosphere and were driven to innovate to lower costs, the Philippines was dominated by a few large firms that lived on capturing rents through political influence and then applied those rents to retain or expand their standing. The same economic elite that preached the paramount benefits of liberalism and no public interventionism flourished thanks to monopolistic structures protected from competition, domestic and foreign. The state was not powerful enough to either turn their investments to contribute to the social interest or to intervene to open the market to other firms.

Today, the large firms thrive in the non-tradable sectors of the economy (real estate, banking, tollways and airports, telecom, energy, malls, etc.), do not export and hence do not compete in the world economy. They are convinced that they contribute to the nation’s development as they associate their businesses with the idea of development. This is a self-serving statement that shows that they have little understanding of what “development” is really about.

We are convinced that firms — especially the big conglomerates — are called to be essential characters in a successful development story, but they cannot replace the protagonist, which is the State. There is a widespread ardent belief among the business elite about what we may call “market-driven development,” which actually means minimal public intervention in the economy. Looking again toward China and Vietnam, while embracing a market economy was absolutely necessary for their development, the State remained strong and held the reins of the economy, as in any advanced economy in the world. Firms cannot be game-changers, they are (only) players.

Sadly, all this has led us to a piecemeal development model according to which things are fine because the labor force is still growing (and it will continue growing for some time), several million workers send remittances, and tourism is the future. This is an anti-development strategy. We doubt it will take us to a high income in the coming decades.

The Philippines desperately needs firms that manufacture (the main source of productivity growth) and export (learn and compete). The country has hardly industrialized. The share of manufacturing employment in total employment is very low, less than 10% (although the number of workers in manufacturing is increasing), and we are not a powerhouse exporter. The sad reality is that we do not have firms that manufacture, export, and compete in world markets.

Manufactures and exports are the magic bullets that will trigger the investment that the country needs, both firm-specific equipment and large-scale infrastructure. Reforms that do not focus on these two tickets should not be a priority because they will not deliver what this country needs the most: a significant economic transformation that produces higher wages.

 

Jesus Felipe is distinguished professor of Economics, De La Salle University while Pedro Pascual is a board-certified economist with Spain’s Ministry of Economy and a Partner at MC Spencer (Philippines).

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