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Cebu Air launches direct flights to Kaohsiung, Taiwan

CEBUPACIFICAIR

CEBU Air, Inc. is expanding its international network by launching direct flights to Kaohsiung, Taiwan, it said in a statement on Thursday.

“With the growing interest among passengers to travel to new destinations, we hope that this launch will encourage them to add another destination to their itinerary or cross off one they’ve been looking to visit,” Alexander G. Lao, Cebu Pacific president and chief commercial officer, said in the statement.

Cebu Pacific, which is operated by Cebu Air, will fly its Manila-Kaohsiung flights three times weekly on Mondays, Wednesdays and Fridays starting Aug. 16.

Kaohsiung is the budget carrier’s second destination in Taiwan. It also flies to Taipei twice daily.

The airline said it would offer so-called piso seat sales on May 30 to June 13 for its Kaohsiung flights. The travel period must be from Aug. 16 to Oct. 25 this year.

The company’s seat sale could go as low as P1 for the one-way base fare, excluding fees and surcharges.

Earlier, the company said it was planning to expand its international routes and increase flight frequencies to popular destinations in line with its $12-billion aircraft order. Last week, it said it would announce its supplier for 100 narrow-body aircraft by June.

Cebu Pacific flies to 35 domestic and 24 international destinations in Asia, Australia, and the Middle East.

Cebu Air stocks closed 2% or 55 centavos lower at P27 each. — Ashley Erika O. Jose

The battle against disinformation

Disinformation in the Philippines is a significant and pervasive issue that affects various aspects of society, from politics to public health. The widespread use of social media, political machinations and a fragmented media landscape have contributed to making the country a hotspot for the spread of false information.

Social media platforms like Facebook, YouTube and X are immensely popular and have become a source of primary news for many Filipinos. This high level of engagement, however, makes the platform fertile ground for disinformation campaigns. The Philippines ranks among the top countries in terms of time spent on social media. Disinformation spreads rapidly though these networks which exploit algorithms that prioritize engagement over accuracy.

Social media accounts are used to pump out the same messages or link, or to “like” and reshare posts.

In poor countries, there is likewise a cottage industry for spreader and initiator accounts. They help start and propagate a desired narrative. With artificial intelligence (AI), this process is magnified and can fuel social media algorithms.

According to a recent coverage by The Economist, AI is prevalent, both negative (creating disinformation) and positive (detecting and mitigating it). Social media has taken the cost of information distribution to zero while generative AI has taken the cost of generation to zero. AI made it easy to produce misleading news articles on social media posts in huge quantities

AI, of course, can be used to spot deceptive content through analysis of posts. It can be both “a sword and a shield.” Analysts, however, observe that even if a deceptive medium can be detected, not everyone will believe that a fake video is fake. Thus, The Economist concludes, “the mitigation of disinformation will require much more than just technology.”

Dealing with disinformation requires coordinated action from many sectors of society. One good model is Taiwan. Close coordination between civil-society groups, tech platforms, government and the media are a prerequisite. An observed disinformation material can be tracked, disseminated to tech platforms and acted upon by appropriate government agencies. It is however an approach where there is high degree of trust in the government taking on an observed adversary.

Based on a review of published information, the gold standard appears to be Finland’s fight against fake news. In 2023, Finland topped the international ranking for media literacy. The focus is not just on big tech and on algorithms but an inward introspection of society’s role. The country has developed a comprehensive digital literacy tool kit that raises the awareness of their people on disinformation.

The first line of defense is in classrooms and in the minds of students. Finland teaches kids the skills needed to discern fact from looks-like-a-fact, and it starts in daycare with approaches like discussing fairytales about a wily fox who deceives other animals. Students are taught about advertising, how images can be manipulated and how statistics can be used to mislead through a small sample size, faulty correlation and manipulated graphs. Students are taught to create their own website and to study famous propaganda in world history.

It doesn’t stop in schools. Finland has a media literacy month where civil society and nongovernment organizations are involved. There is a continuous training program for civil servants, citizens, and journalists. Older citizens who are not digitally inclined are also part of the training program. In short, the system aims to psychologically inoculate the population against misinformation.

The views expressed herein are his own and do not necessarily reflect the opinion of his office as well as FINEX.

These days there are many initiatives taken worldwide to fight disinformation. It is a combination of harnessing technology and looking at the psychology of people. But as the Finland model shows, education is an important component of the solution.

Our people must be taught to be more discerning, to ask more questions and to be skeptical of things disseminated in the media. We must start at the basics and begin early. Three key questions need to be asked. Who is the source? What is the motive? And can we verify the information? Our people need to develop these questioning and discernment skills if our society is to progress towards truth and facts.

Disinformation in the Philippines is rampant and multifaceted, influencing the political, social and public health domains. Addressing this issue requires the first step of embedding the consciousness of media literacy through education. In addition, we must enforce regulations on social media platforms and support independent journalism to ensure that Filipinos have access to accurate and reliable information.

 

Benel Dela Paz Lagua was previously EVP and chief development officer at the Development Bank of the Philippines.  He is an active FINEX member and an advocate of risk-based lending for SMEs.  Today, he is independent director in progressive banks and in some NGOs.

The advancement of providing a comfortable and safe driving experience

Photo from Freepik

In 1896, the first recorded automobile accident occurred when a pedestrian was struck by a vehicle in London. The tragic incident highlighted the potential dangers of the early automobile. As car ownership became widespread in the early 20th century, the frequency of accidents increased dramatically.

By the 1920s, car crashes had become a significant public safety issue, prompting the introduction of essential safety measures such as traffic signals and road signs.

In response, governments and car manufacturers began to focus more on vehicle safety. Seat belts, which became mandatory in the 1960s, significantly reduced the risk of fatal injuries for front-seat occupants. The addition of air bags in the 1980s further enhanced passenger protection by cushioning the impact during collisions.

Despite these functional features, the World Health Organization (WHO) said that road traffic crashes kill approximately 1.19 million people worldwide every year. This figure suggested the persistent challenges in road safety, including issues such as distracted driving, speeding, unsafe road infrastructure, and driving under the influence of alcohol or drugs.

On the other hand, modern cars, such as connected cars, are equipped with advanced technologies aimed at preventing accidents and minimizing injuries when crashes occur. They have the potential to address road issues by gathering real-time traffic and crash data, alerting drivers to changes in surrounding traffic conditions, road hazards, and upcoming obstructions.

As of 2022, there were approximately 237 million connected cars on the road globally, with 84 million in the United States alone. This number is projected to increase to 400 million by 2025.

Moreover, the global connected car market size is projected to reach US$191.83 billion by 2028, exhibiting a compound annual growth rate (CAGR) of 18.1% during the forecast period.

One of the most notable developments in driver safety technology is the widespread adoption of Advanced Driver Assistance Systems (ADAS). These systems, designed to automate, adapt, and enhance vehicle systems for safety and better driving, are rapidly becoming standard in modern vehicles.

According to the United States’ National Highway Traffic Safety Administration (NHTSA), ADAS encompass a range of features designed to assist drivers in various aspects of driving, including collision avoidance, lane departure warnings, adaptive cruise control, and automatic emergency braking. This technology utilizes a combination of sensors, cameras, and radar to monitor the vehicle’s surroundings and provide real-time alerts and interventions to prevent accidents and enhance overall safety.

Meanwhile, the emergence of vehicle-to-every-thing (V2X) communication technology represents a significant leap forward in enhancing road safety and traffic efficiency.

V2X enables vehicles to communicate with each other, as well as with infrastructure such as traffic signals and road signs, to exchange critical safety and operational information. This technology has the potential to prevent collisions, optimize traffic flow, and pave the way for future autonomous driving capabilities.

An article from Encora said that V2X can be integrated with 5G and edge technologies, allowing for the handling of larger volumes of data from connected devices. This integration expands vehicles’ perception range and enables advanced services, enhancing overall transportation capabilities.

The NHTSA estimates a minimum of 13% reduction in traffic accidents if a vehicle-to-vehicle (V2V) system were implemented, resulting in 439,000 fewer car crashes per year. V2X technology is already used in countries such as China, where different safety information is being communicated between vehicles to reduce road accidents.

As vehicles become increasingly connected and reliant on digital systems, car manufacturers are implementing cybersecurity measures to protect vehicles from potential threats and unauthorized access. A report from an open-access journal Computer Networks said that measures include secure over-the-air (OTA) software updates, intrusion detection systems, and encryption protocols to safeguard critical vehicle systems from cyber-attacks. — Mhicole A. Moral

Global unemployment rate to drop to 4.9% in 2024

The Philippine unemployment rate rose to 3.9%, equivalent to two million jobless Filipinos, in March. — PHILIPPINE STAR/WALTER BOLLOZOS

THE global unemployment rate is expected to drop to 4.9% this year, but the International Labor Organization (ILO) expressed concern over the “large” jobs gap.

“The global unemployment rate is projected at 4.9% in 2024, slightly lower than in 2023 (5%) and a downward revision from the previous projection of 5.2%, but the trend is now flat,” the ILO said in the World Employment and Social Outlook: May 2024 update.

An unemployment rate of 4.9% is equivalent to 183 million persons without jobs this year.

The ILO said the projection was revised to due to the “lower-than-expected unemployment rates in China, India, and high-income countries.”

“The lack of progress in further reducing labor underutilization is worrying as employment deficits are still large. The latest ILO estimates of the jobs gap show that 402 million persons are without a job but wanting to work in 2024,” it said.

For Asia and the Pacific, the ILO projects a 4.2% unemployment rate, unchanged from 2023.

IBON Foundation Executive Director Jose Enrique “Sonny” A. Africa in a Viber message to BusinessWorld said the ILO report mirrors the Philippine situation.

“Lower unemployment rates are insufficient if a large chunk of the population is working in precarious low-quality jobs — the worst being the millions of unpaid family workers — and if large numbers of jobless are not officially counted as unemployed,” he said.

The Philippine Statistics Authority reported the unemployment rate rose to 3.9%, equivalent to two million jobless Filipinos, in March. This was higher than the 3.5% in February, and the 4.7% a year ago.

In the first quarter, the jobless rate averaged 4% compared with 4.8% a year earlier.

However, IBON Foundation estimated that 19.2 million Filipinos or 40% of total employed persons were in openly informal work during the first quarter. This does not include the 16-18 million more wage workers in unregulated informal establishments.

“This implies that over 70% of reported work in the country is actually low-earning, irregular, and informal,” Mr. Africa said.

In the same report, the ILO said gender inequality persists in the global labor market, particularly in developing countries.

According to the ILO, 45.6% of women (aged 15 and above) are employed compared to 69.2% of men, a gap of 23.6 percentage points.

The gap mainly stems from family responsibilities, the ILO said, saying that “women’s disproportionate share of unpaid care work plays a major role in shaping gender employment gaps globally.”

“Even when women are employed, they receive sizably lower labor income than men — especially in the developing world. In high-income countries, employed women earn 73 cents to the dollar compared to employed men. In low-income countries, women earn just 44 cents to the dollar,” the ILO said.

Mr. Africa said the barriers faced by female workers in the Philippines are “exacerbated by poor public investment in social infrastructure such as childcare and eldercare services, because of their bearing a disproportionate burden of unpaid care work.”

He noted the labor and poverty problems won’t be fixed by “band-aid social programs.”

“The root causes of underdevelopment have to be tackled with land reform, national industrialization policy, and significant public investment in social services,” he said.

Mr. Africa said a progressive tax system, expansion of public education, health, housing, social protection, and wage hikes can benefit workers and lessen inequality. — Chloe Mari A. Hufana

Philippine Economic Briefing: Let the good times roll?

RTVMALACANANG YOUTUBE CHANNEL

Some faces were old, some were new, but the message seemed to be positively contagious that good times will continue to roll. For that was where the Philippine Economic Briefing (PEB) last Monday, May 27, was coming from, that the Philippines is already on the go, we just have to fast track economic progress. This is another way of saying challenges remain, there is a whole lot of space for our economic managers to do more. We should maximize our growth potential and keep the good times rolling.

Banko Sentral ng Pilipinas (BSP) Governor Eli Remolona, Jr., in his taped welcome remarks, delivered the opening salvo by delivering one extremely important piece of news, that the BSP is beginning to tame inflation after facing “unusual” and large supply shocks in the last two years. He cited the decline of inflation from a peak of 8.7% in January 2023 to April 2024’s 3.8% “which is within our target range.” Inflation, without question, has been so stubborn that for years it has consistently topped Pulse Asia’s “most urgent” national concern, even higher than fighting graft and corruption in government and enforcing the law. Inflation is an elephant, and it is a gut issue.

Remolona’s news was also true for the first four months of the year. Inflation averaged 3.4% with a risk-adjusted forecast of 3.8% for 2024 and 3.7% for 2025. Non-monetary measures are critical here, especially in agriculture and logistics. The BSP should also remain engaged in sufficiently restrictive monetary policy until actual and projected inflation rates are firmly within the target, and avoid telegraphing an early easing. We want to see Pulse Asia’s surveys showing a reordering of concerns away from high inflation. Finally, it was no less than the International Monetary Fund (IMF) Resident Representative Ragnar Gudmundsson who, during the briefing, pointed out the need for close monitoring of the US Fed action on interest rates. An earlier easing by the BSP could result in a smaller interest rate differential and abet capital outflows, weaken the Philippine peso, and fire up inflation again.

Successful inflation management could very well help extend the good times.

High inflation last year slowed down private consumption, tempered public spending and shaved not a few percentage points off gross capital formation. We continued to lose external competitiveness. Despite the rise in the minimum wage rates from P512 in 2017 to P610 in 2023, higher inflation caused real wage rates to dip from P529.50 to P505.23.

Unlike in the past where each of the economic managers spoke in turn, only Finance Secretary Ralph Recto delivered the one single presentation with 33 slides. His comprehensive presentation was an excellent take-off point for the three panels that dwelt on, one, the macroeconomy; two, growth constraints and competitiveness; and, three, investment in the Philippines.

What was the key message of the finance secretary?

His concluding slide summed up everything, that “we have all the makings of a prosperous economy.”

Secretary Recto first argued that our economic outlook is the brightest it has ever been. His basis is the affirmation by multilateral organizations that the Philippines’ economic growth could be the frontrunner in the Association of Southeast Asian Nations (ASEAN), topped by the ASEAN+3 Macroeconomic Research Office projecting 6.3% growth for 2024 and 6.5% for 2025. The IMF and the Asian Development Bank (ADB) are not too far behind. But the World Bank expects the Philippines to show less than 6% growth for both years, or less than the target of at least 6% for 2024 and 6.5% for 2025.

The World Bank’s less optimistic expectation reflects the BSP’s latest Monetary Policy Report, issued after the May meeting of the Monetary Board. The report says that while the gross domestic product (GDP) growth outlook remains intact over the medium term despite the relatively tight financial conditions, growth “could settle below the government’s target as higher global crude oil prices and positive interest rates temper domestic demand.” With an estimated negative output gap, the economy could be operating slightly below potential. The BSP is looking at possible deflationary pressure.

Citing S&P (2023) and IHS Markit (2022), the finance secretary also claimed that we are poised to become a trillion-dollar economy, “joining the ranks of economic giants like China, Japan, India, and South Korea.” Asia’s leading lights will be powering global growth in the next few decades. This may be conditional because the health pandemic, with all the prolonged lockdowns, set us back a few years. Unless we grow by much more than the downgraded growth targets through 2028, a trillion-dollar economy may remain aspirational.

This seems to be the gist of the recent pronouncement by the Regional Agenda, Asia-Pacific of the World Economic Forum that “we feel that the most exciting chapter of the country is yet to come.” It will come, but not yet because the opportunities are there and the interest is robust in the private sector, but it takes time for both opportunities and interest to translate into actual growth dividends.

Based on a 2022 Goldman Sachs forecast, the Philippines is expected to grow by an average of 3.9% between 2020-2075 against Asia’s 2.6% and the world’s 2.2%. This should be enough to catapult the Philippines to becoming the 14th largest economy behind the likes of China, India, and the United States, and even beating France. Nigeria, Pakistan, and Egypt would be among the biggest economies, but we didn’t quite see Malaysia, Singapore, and Thailand among the Top 15.

How do we engineer this?

Secretary Recto cited the excellent platform for growth provided collectively by good inflation prospects, strong consumer demand supported by a vibrant labor market, huge domestic capacity to allow local and foreign businesses to thrive, strong overseas remittances sustaining domestic consumer demand, as well as resilient tourism and business process outsourcing.

The Philippines has very little baggage in aspiring for a higher growth path. Its external debt-to-GDP ratio is one of the lowest and its foreign exchange reserves level is one of the highest in terms of adequacy. Very few would argue against the strength and stability of the Philippine banking system. Fiscal consolidation is in full swing even as public spending continues to build infrastructure and provide social services. Over time, Secretary Recto correctly argued that the Philippines should be able to outgrow its debt. Its access to the capital markets remains excellent, with tight credit spreads.

We have what it takes to keep the good times rolling.

If we invest well in education and social services, this will allow the Philippines to reap the so-called demographic dividends. This could provide upskilling intervention that, as correctly stressed by Riza Mantaring of the Private Sector Advisory Council to the President, can mitigate the serious skills deficiency. The Build Better More Program is making available 185 big-ticket infrastructure projects for physical connectivity and health, among others. To top it all, investment policy has never been more open and more liberalized, with no less than the President himself as the investment champion. Based on Finance’s monitoring, the President’s world engagements have yielded $72.2 billion worth of investment pledges as of end-2023.

Of course, it is one thing to solicit investment pledges, and another thing to get them to actually come and invest their money here. For these to materialize, Secretary Recto reported that the Philippines is now aggressively addressing various bottlenecks. Game-changing reforms are being put on stream to address the issues of red tape and ease of doing business.

We were delighted to see Mr. Recto’s last few slides because all these growth-enhancing strategies are supposed to “harness the talents of our young workforce and build a nation where every Filipino can thrive, secure decent jobs, and create better lives for themselves. We agree with the ultimate metrics, and this is to reduce poverty incidence to 9% by 2028, or sooner. With actual poverty incidence for the first semester of 2023 at 22.4%, that is a tall order, and perhaps incredibly difficult to deliver on, without a more fundamental change in governance and political order.

A good way to conclude this piece is to link a conducive macroeconomic landscape to availability of cheap and reliable supply of energy. San Miguel’s Ramon Ang was more than correct to comment during the Q&A portion of the first panel that we have a big reserve of crude oil, and, actually, natural gas too, in the disputed West Philippine Sea. We can very well explore and drill offshore only if we could have access to the disputed territories. Ang possessed the wisdom to declare that “we should protect our territory.”

Patriotism can, without question, help keep the good times rolling.

 

Diwa C. Guinigundo is the former deputy governor for the Monetary and Economics Sector, the Bangko Sentral ng Pilipinas (BSP). He served the BSP for 41 years. In 2001-2003, he was alternate executive director at the International Monetary Fund in Washington, DC. He is the senior pastor of the Fullness of Christ International Ministries in Mandaluyong.

Policy rate cuts to boost credit growth

A RATE CUT by the Bangko Sentral ng Pilipinas (BSP) in the third quarter would spur growth in lending among financial institutions, the top official of FinTech Alliance.Ph said.

“I think the industry would anticipate that the favorable policy adjustments would come in sometime third or fourth quarter this year, and this would definitely further redound to the benefit of our consumers,” FinTech Alliance.Ph Chairman and Rizal Commercial Banking Corp. (RCBC) Executive Vice-President and Chief Innovation and Inclusion Officer Angelito “Lito” M. Villanueva told reporters on the sidelines of an event on Wednesday.

Monetary policy easing would help borrowers “further optimize or leverage on their credit,” he added.

Mr. Villanueva said lending is expected to be one of the drivers of financial institutions’ growth this year, which could spill over to the broader economy.

“[It] would have the most revenues and, of course, impact, considering that we are even promoting access to credit, especially for MSMEs (micro, small, and medium-sized enterprises),” he said.

Rate cuts are seen to make lending easier, Credit Information Corp. (CIC) President and Chief Executive Officer Ben Joshua A. Baltazar said at the same event on Wednesday.

“The way it works is if interest rates go down, then the cost of money goes down — so lending becomes easier,” he told reporters.

However, a policy rate cut in itself won’t help drive lending growth significantly, he said.

“We don’t think that it will have a primary or outsized effect on credit,” Mr. Baltazar said. “Credit will still be driven primarily based on the needs of borrowers, the general projection of lenders as to the market, the likelihood of repayment, and alternative ways to park their money.”

BSP Governor Eli M. Remolona, Jr. this month said the Monetary Board may kick off its easing cycle by the second semester, with a 25-basis-point (bp) cut possible as early as their Aug. 15 meeting and one or two rate cuts expected this year.

This would mean that they could ease ahead of the US Federal Reserve, which they expect to begin cutting rates by September, Mr. Remolona said.

The Monetary Board this month kept its policy rate at a 17-year high of 6.5% for a fifth straight meeting following cumulative hikes worth 450 bps from May 2022 to October 2023 to help bring down elevated inflation.

Finance Secretary and Monetary Board member Ralph G. Recto on Monday said the central bank could reduce the policy rate by as much as 150 bps in the next two years, adding that the BSP has room to cut starting next quarter.

Meanwhile, digital payments could also help drive economic growth, Mr. Villanueva said.

“Amongst the financial services, payments would have the biggest volume,” he said. “We’ve seen exponential growth of the payments volume via InstaPay and PESONet.”

This is why FinTech Alliance.Ph seeks to ensure “responsible and responsive” lending, insurance, investments, and savings, he said.

“That’s why we support these initiatives of various fintech players on creditworthiness or credit scoring, education on credit risk, and how we can further promote financial education and digital literacy,” Mr. Villanueva said.

“I think we’re seeing very positive indicators that would really propel the country to greater heights,” he added.

Philippine gross domestic product (GDP) expanded by 5.7% in the first quarter, faster than 5.5% in the previous quarter but slower than 6.4% a year ago.

This was below the government’s full-year growth goal of 6-7%.

Financial and insurance activities contributed 1.1 percentage points to last quarter’s growth.

Transactions done via payment gateways InstaPay and PESONet hit P3.81 trillion as of end-March, latest BSP data showed, jumping by 32.8% from P2.87 trillion in the same period a year prior.

In terms of volume, transactions coursed through the clearing houses soared by 69.5% year on year to 309.3 million as of March from 182.5 million.

The central bank wanted 50% of the total volume and value of retail transactions done online by the end of 2023.

The BSP earlier said they are confident they met the target amid growing use of e-wallets and online banking platforms.

In 2022, the share of online payments in the total volume of retail transactions rose to 42.1% from 30.3% a year earlier, central bank data showed. — B.M.D. Cruz

MAP urges House to renew Meralco franchise

PHILIPPINE STAR/ MICHAEL VARCAS

THE MANAGEMENT Association of the Philippines (MAP) on Thursday urged congressmen to approve the franchise renewal application of Manila Electric Co. (Meralco) to ensure reliable electricity for people and companies.

“We urge the House of Representatives committee on legislative franchises to favorably consider Meralco’s positive impact and approve its franchise renewal, thereby ensuring stability in the power sector and ultimately serving the best interests of the Filipino people and the Philippine economy,” the business group said in a statement.

MAP President Rene D. Almendras and MAP Energy Committee Chairperson Ruth Y. Owen, signed the statement.

Albay Rep. Jose Maria Clemente “Joey” S. Salceda earlier filed a bill that seeks to extend the power distributor’s franchise, which will expire in 2028. House Bill No. 9793 also aims to expand Meralco’s franchise area.

“MAP recognizes Meralco’s commitment to green energy as it actively champions the government’s renewable energy (RE) goals by supporting programs under the RE Act of 2008,” the group said.

“Its franchise area boasts a remarkable 64% share of the Green Energy Option Program’s total energy consumption,” it added. “It prioritizes operational efficiency and resiliency, meeting or even exceeding standards set by the Energy Regulatory Commission.”

Meralco’s electricity rates are “reasonable” and when adjusted to inflation, the average has fallen since the power industry was deregulated in 2001, the business group said, citing a report from Independent Energy Consultants (IEC).

“This focus on efficiency translates to cost savings for consumers.”

MAP said that the power distributor has “consistently improved its system loss, achieving a rate below the mandated cap and ranking among the lowest nationwide.”

Meralco also achieved almost 100% electrification within its franchise area, the business group said.

Meralco is the main power distributor for Metro Manila and nearby areas covering 39 cities and 72 municipalities.

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

Digital economy as fuel for PHL’s development

L-R: BusinessWorld Reporter Luisa Jocson (moderator); Carlos O. Barrera of Lazada Philippines; Mitch Padua of Maya; Jerry G. Ngo of East West Banking Corp.; and Grace Vera Cruz of Grab Philippines — Photo by Walter Bollozos | The Philippine Star

By Angela Kiara S. Brillantes, Special Features and Content Writer

Digitalization, at this point, is not just a fleeting trend. As the Philippines becomes more digitalized, the shift is propelling industries to adapt and evolve to progress in an ever-changing digital world.

In the panel discussion themed “Digital Economy: A Vital Engine for Future Growth” in this year’s BusinessWorld Economic Forum, experts and executives representing various aspects of the digital economy, such as e-commerce, digital banking, and even mobility, explored the vast potential of the Philippines’ digital economy and how it is expected to steer the overall economy in the years ahead.

The digital economy has emerged as a powerful force in bolstering economic development. For Mitch Padua, group chief product officer at Maya, this is evidenced by 77% of Filipinos found to be already connected online; coupled with P5 trillion worth of money transfers made through InstaPay transactions in 2023; and e-commerce sales projected to reach $24 billion by 2025.

Also witnessing this shift, Jerry G. Ngo, chief executive officer at East West Banking Corp. has noticed the rise towards digital transactions, which has been fueled by increased consumer spending over the years.

“The digital economy is a big enabler to the more robust real economy. For the first time, more than 50% of the transactions have shifted to digital. A lot of it has shifted beyond financial inclusion into financial deepening. If we strip our GDP (gross domestic product), a lot of it is around consumption,” Mr. Ngo said.

East West Banking Corp. CEO Jerry G. Ngo — Photo by JLCG Creative and Digital Solutions

“Consumption is not necessarily bad,” he continued. “Consumption is something that happens to you when you’re in a particular life stage; you will consume more because you are young, because you need to build wealth for the next level; and that’s what we need to do. We need to help consumption convert that into wealth and capital that we can then put back to the economy to grow.”

Speaking on the e-commerce side of the digital economy, Carlos Barrera, chief executive officer at Lazada Philippines, said the digital shift has changed the game for e-commerce. Businesses are adopting to digitalization, making more services and products available online.

“Filipinos have that talent to go online, and they are very proficient with using these devices. They are totally native and in many ways are better than people in western countries,” he said.

This demonstrates how people are enamored with the convenience and reliability of e-commerce, as it provides them with effortless means for their needs.

Lazada Philippines CEO Carlos O. Barrera — Photo by JLCG Creative and Digital Solutions

“It has already changed, and people are using online a lot more,” Mr. Barrera added. “People are also flocking towards a lot of the new mechanics online (free shipping, vouchers, etc.) They learned how to optimize all the discounts. The average users of half an hour a day using these apps, [but] they’re not shopping. They check on promotions, add to their cart, share with their friends, use reviews, and watch videos. People are spending more time, even though they are not buying.”

Grace Vera Cruz, country head of Grab Philippines, saw how they can utilize technology to create mobility services and solutions that are affordable and accessible to all, adapting to the ever-changing needs of consumers and the economy.

“For Grab, our solutions are very simple: make every Filipino embrace digital property and infrastructure for their personal growth and the collective progress of our [regime]. Our goal is to push affordability and ensure we reach more consumers on our platform,” she said.

“One of the biggest things we’ve done is make things more affordable, and that’s a key thing we’re trying to do across all of Grab,” the country head added. “We want to make sure that we develop the right sources and solutions that our drivers, merchants, consumers that they can use.”

LEVERAGING TECHNOLOGY

In recent years, a big push for digital innovation is seen in the Philippines, leading to significant progress. This has paved the way for more opportunities and efforts to boost digitalization in the country. One important step to further strengthen this digitalization is by leveraging and investing in technology.

Digital-enabled platforms like Grab and Lazada, for instance, are leveraging artificial intelligence (AI) technology, as their representatives in the panel shared.

Grab, for its part, is using AI in optimizing operations and making its services more efficient and affordable. By embracing emerging technologies like AI, for Ms. Vera Cruz, the Philippines can unlock greater opportunities and enhance economic value in the coming years.

Grab Philippines Country Head Grace Vera Cruz — Photo by Walter Bollozos | The Philippine Star

“We’re doing a lot in AI. In Grab, we’ve adopted AI. That’s something we lived by; it’s something required of us. We should be preparing for it and using it to our advantage. Given that a lot of us are digital natives, we all have inherently affinitive towards digital technology, and if we can use that opportunity to learn and win in a world where AI is prevalent, then, that is something we can use to needle in for our economy,” Ms. Vera Cruz said.

Similarly, Lazada has embraced AI and automation in streamlining operations. According to Mr. Barrera, AI will play a significant role in shaping the market and enhancing personalization in the platform. He also mentioned that Lazada is committed to investing in innovative applications like AI to further enhance automation and standardization in its platform.

EXPANDING INVESTMENTS

Meanwhile, in the banking sector, Mr. Ngo of EastWest Bank pointed out the need to ramp up investments to enhance digitalization in the country.

“A lot of innovation is around money and investments,” he explained. “The tech scene is undergoing funding winter. We always follow smart money, and it is out now. We need a fully functioning capital market in order for investors to come in. We need investors, because the amount of money that we need in order to catch up is a lot. We need to understand that we don’t have enough investors locally, we need to open up.”

Maya’s Mr. Padua agreed, noting the need to connect more people and get more industries to digitalize.

Maya Group Chief Product Officer Mitch Padua — Photo by JLCG Creative and Digital Solutions

“Everyone and everything must be connected,” Mr. Padua pointed out. “There’s still a lot of people and areas that do not have connections. In terms of sectors, there’s still many industries that are still not using digital payments, do not have digital process or websites. We need to invest in innovations. Startups should be thriving. Unfortunately, in the Philippines, access to capital is just not there yet.”

Closing the discussion, the panelists called for continued efforts to unleash the great potential of the digital economy in the Philippines as the country is found to be on the verge of breakthrough.

“There’s a bright future ahead. In the next few years, digital will accelerate and we will see a lot of opportunities coming. The Philippines is at a good position to grow and develop, and we need to continue supporting the growth of economy,” Lazada’s Mr. Barrera said.

Tech brain drain fuels Philippines’ cybersecurity skills gap

REUTERS

MANILA — Nurses, engineers, doctors — now cybersecurity experts. As the Philippines counts the cost of brain drain, a surge in malicious cyber activity has highlighted the country’s digital security skills gap.

U.S. cybersecurity firm Resecurity reported a 325% jump in hacking and other digital intrusions targeting the Philippines during the first quarter of 2024 amid rising tensions with China, largely over disputed territory in the South China Sea.

That prompted President Ferdinand Marcos, Jr. to launch a cybersecurity strategy to beef up the nation’s cyber defenses to combat attacks and digital crimes. Its military said last year it would create a cyber command.

But industry analysts say such plans could struggle due to big shortages of skilled “cyber warriors” in the Philippines, which is estimated to need tens of thousands of digital security professionals.

Whether targeting ordinary people, journalists or activists, online threats from doxxing to domain blocking and digital surveillance are rising in the Philippines and other Southeast Asian nations, highlighting a lack of resources and expertise to fight them, experts say.

“What the government doesn’t recognize is we’re having a brain drain not only in the healthcare sector but also in cybersecurity,” said JM Cipriano, a cybersecurity professional who has worked for a multinational company in the Philippines.

Despite a higher salary than other careers in IT, he said Filipino cybersecurity experts are being lured abroad by companies offering more money, better working conditions, and relocation packages.

Practitioners in the Philippines can expect a monthly salary of between 40,000 and 90,000 pesos ($690-$1,560) — up to six-times the minimum wage, Mr. Cipriano told the Thomson Reuters Foundation.

But he said the Philippines was still losing cybersecurity talent to US companies with offshore offices in Manila, or companies in Singapore, the United Kingdom, and the Middle East that offer more competitive salaries.

Globally, the shortage of cybersecurity professionals reached a record last year, with some four million vacancies around the world, according to cybersecurity nonprofit ISC2, with the gap growing fastest in developing countries.

‘ENORMOUSLY EXPENSIVE’
While part of the problem is migration from the Philippines, a major global exporter of labour, domestic shortages are also linked to inadequate training opportunities and policies to boost recruitment at a national level, experts say.

The need for cybersecurity professionals “is not well communicated to the different parts of the country,” said Angel Redoble, founder of the Philippine Institute of Cyber Security Professionals, a nonprofit pushing for a secure Philippine cyberspace.

Filipinos can study cybersecurity in only a handful of private universities with high tuition fees, and are often encouraged to pursue certifications for specific training and courses for 15,000 to 20,000 pesos.

Such barriers led 27-year-old former teacher Jaevik Madayag to abandon his plans of working in the field.

“Cybersecurity certifications are enormously expensive for Filipinos and having a certification doesn’t guarantee that you could enter that workforce,” he said.

With cybersecurity threats and data breaches on the rise, the government is taking steps to boost recruitment.

In January, it launched a new set of cybersecurity standards that schools and training centers can use for their program curriculum.

Under the new national cybersecurity strategy, there are plans for more specialist degrees and programs to upskill or retrain existing professionals.

Fostering accessible career progress will be vital, said Madayag, who now does IT support for a leading global tech company.

“Cybersecurity is a niche job in the IT industry,” he said. “You have to go through many paths and prerequisites and cannot jump ahead to practice.” — Thomson Reuters Foundation

Sands plots entertainment-focused expansion in Singapore

MARINABAYSANDS.COM

LAS VEGAS Sands Corp. plans another development in Singapore to complement its casino resort there, including more space for live entertainment.

The company will give more details later year, Chief Executive Officer Rob Goldstein said Wednesday at an investor conference. It will have fewer rooms than the existing Marina Bay Sands resort, but will have a casino, restaurants and an arena.

“Singapore is going through a growth spurt,” Mr. Goldstein said. “All of a sudden Singapore’s become a hugely important market.”

Sands, which shares the market with rival casino operator Genting Singapore, said first-quarter revenue in the country increased 37% to $1.16 billion.

Based on current trends, Singapore could see $7 billion in gambling revenue overall this year, on its way to $10 billion in the near future, Mr. Goldstein said.

Sands said last month that construction on the expansion could begin in July 2025. Drawings show a new hotel tower and a 15,000-seat performance venue. The project is separate from a $1.75 billion refurbishment of the existing property.

The company is interested in hosting concerts from the likes of Taylor Swift and Bruno Mars, as well as Asian acts, Mr. Goldstein said.

“Entertainment is a very important part of the mix,” he said. “We’re proposing to build a very big part of that into our new building in Singapore.” — Bloomberg

Leaving millions behind

MAREK PIWNICKI-UNSPLASH

IT IS OFFICIAL: The United Nations announced that the Paris Agreement’s long-term goal of limiting global warming to 1.5°C has not been met. Worse, this failure has been exacerbated by a triple planetary crisis of climate change, nature and biodiversity loss, and pollution. The impacts are particularly severe in the Asia Pacific region. Our survival now hinges on two major imperatives from the Paris Agreement: to radically and swiftly transform how we operate our economy and to ensure that these transitions are fair, inclusive, and just for everyone1.

In response to these challenges, the concept of a circular economy (CE), defined by the UN as “a sustainable system where resources are used efficiently and waste is reduced through a continuous cycle of reuse and regeneration”,2 has gained prominence in development policy and investment arenas. However, to ensure this new approach to economic planning is equitable, CE must address the concerns of the workforce likely to be disrupted during the transition.

The Asian Development Bank (ADB) is a major convenor and financier of poverty reduction, climate action, and circularity with a commitment to making transitions just for vulnerable sectors3 as a pillar of its operational strategy “to leave no one behind.” To date, however, its 2009 Safeguards Policy, designed to avoid and mitigate the negative impacts of its development projects, has yet to encompass the rights of the informal workers, constituting 1.3 billion persons or 65% of the world’s informally employed workforce4.

Resource conservation, particularly in developing countries, heavily depends on informal waste workers with waste pickers occupying the lowest and most impoverished rung of the waste value chain. Waste pickers are characterized as individuals who collect items and materials from public spaces, open dumpsites or landfills, and/or waste bags and bins on streets and sell the recyclables they find to traders. Often unsung heroes, they play a pivotal role in climate action by reintroducing used resources back into the economy for human consumption, despite enduring harsh working conditions, health risks, social stigma, harassment, low income, and limited access to social services. Most waste pickers in the Asia Pacific region hail from traditionally marginalized communities or minority groups.

Just how many of them are in the region to warrant attention? In India, nearly 3 million informal waste workers are responsible for recycling almost 20% of the country’s waste5. In Vietnam, these workers purchase 30% of waste in cities and carry out more than 90% of recycling activities6. Indonesia has around 3.7 million organized waste pickers, who, in Jakarta alone, contribute to the reduction of the volume of waste by 30%7. Hordes of informal waste workers appear in various studies: In China (6 million) 8, Thailand (1.5 million)9, and the Philippines (100,000)10 which are underestimated given the lack of government-led databases. A development bank without an agenda for this sector is massively failing millions of poor people in the transition.

Four types of ADB projects are harming informal waste workers. First, the unabated promotion and financing of fossil-based waste-burning technologies such as waste-to-energy (WtE) incinerators and Refuse-Derived Fuel (RDF). Financing these false solutions brazenly tagged as “zero emissions,” “clean energy,” or “recycling technologies,” not only steals the livelihoods of waste pickers but also stifles the potential for climate action. Instead of benefiting from high-value waste materials, waste pickers are sidelined, undermining the entire informal waste economy. ADB does not seem to learn from funding the Timarpur-Okhla Waste Management Plant which it eventually withdrew after communities protested the pollution coming from it in 2010. It continues to burn tons of Delhi’s recyclables, effectively wiping out emissions savings from approximately 962,133 tCO2e through the waste pickers’ recycling efforts.

ADB has not monitored the impacts of its support for WtE incinerators in Vietnam (Binh Duong11 and Can Tho12), Indonesia (Solo and South Tangerang), Thailand (Songkhla13), Malaysia14, China, Marshall Islands15, and the Maldives16. The Bank was also instrumental in creating profitable and risk-free operations for industry polluters in emerging markets through technical assistance projects. The TAs in Cambodia17, Indonesia18, and Bangladesh19 are all designed to deliver reports that end up justifying the deployment of WtE and RDF or to facilitate partnerships20 with WtE corporations, even in a country like the Philippines where legislated bans are in place. ADB supported one of the world’s leading plastic polluters, Procter & Gamble, in crafting feasibility studies for establishing WtE incinerators in Angeles21, Cabuyao22, and Dagupan23. In a world where global leaders are already tackling a treaty to address plastic pollution, ADB’s support for false solutions is extending the lifelines of polluters.

Second, waste infrastructure projects often require the closure of landfills or construction of new ones such as those funded by ADB in Cambodia24, Uzbekistan25, Mongolia, Myanmar26, and India27 which also poses harm to this sector. Contrary to safeguards appraisals claiming these projects only have “limited” involuntary resettlement and “temporary” economic impacts, waste pickers face permanent losses in income and social services when displaced. Whether it is the state or a corporation, project proponents often flag occupational hazards for outlawing the access of waste pickers, thereby gaining monopoly ownership to the city’s waste. Waste pickers are then exposed to bribery, harassment, and violence just to regain access.

Compensation schemes for the displacement of waste pickers in landfill closures also exploit the systemic structures that cause their poverty. In the Bank’s project in Myanmar, child waste pickers were not paid for loss of income from forcible resettlement as a result of the landfill closure because they are children while the adults were given entitlements. Waste pickers were also not compensated for their loss of homes as they did not own official land titles.

Third, large-scale privatized recycling projects without integrating the participation of the sector are also pernicious. Recycling is often thought to yield only positive results but with new policies incentivizing initiatives for recycling, businesses saw a lucrative field in competition with the existing informal waste sector. The $300 million loan for Indorama Ventures28 in Thailand aimed at directly recycling 50 billion plastic bottles until 2025 did not assess the potential economic displacement of waste pickers, on top of the environmental breaches of the two recycling plants which include the presence of around 120 hazardous chemicals, fires, spillage, impacts on workers’ health, and absence of community engagement. Privatized recycling projects only target high-value materials, like PET bottles or cardboard, reducing waste pickers’ incomes and leaving behind an unsustainable value chain of only low-value recyclables, which will eventually collapse as seen in developed economies.

Fourth, the introduction of waste collection models that are exclusionary of the existing systems that waste pickers have built. The ADB has been hailing the use of digital technologies in the collection and sorting of plastic waste as “modernizing,” “efficient,” and “innovative”29 — without fully assessing how the new collection system can either assist or displace the vulnerable sections in the waste value chain.

From seeing the role of the informal workers in the waste sector and the harms they face to consulting them meaningfully in the development of policies, projects, and roadmaps — the sector has been missing and neglected in the Bank’s agenda.

The ADB has the opportunity to improve millions of lives through the ongoing revision of its safeguards policy30 by finally recognizing the fundamental human dignity and protecting the rights of informal workers as leading agents in the circular economy. The ILO Recommendations 193, 204, and 20531 guide member-states on ensuring a just transition. Sustainable and inclusive waste management systems established by waste pickers in Vietnam, the Philippines, India, etc. can provide insight on operational mechanisms for ensuring such a just transition.

We highly recommend the proactive creation of consultation spaces for the informal waste sector in the formulation of the Bank’s policies, programs, projects, and investment roadmaps in pursuit of hearing the voices of those who are at great risk of being left behind.

Finally, the ADB should complement these efforts by committing to a phase-out from false solutions and directly investing in upgrading and protecting livelihoods within the informal waste economy. The ADB must shift its financing to transformative and equitable climate solutions, embracing zero waste alternatives.

(The authors are part of GAIA, a network of grassroots groups as well as national and regional alliances representing more than 1,000 organizations from 92 countries. GAIA envisions a just, zero waste world built on respect for ecological limits and community rights, where people are free from the burden of toxic pollution, and resources are sustainably conserved, not burned or dumped.)

 

Mayang Azurin is GAIA Asia Pacific’s Deputy Director for Campaigns. Harshad Barde is the Informal Recycling Sector & Plastic Waste Management Director of the SWaCH Pune Cooperative, India’s first autonomous cooperative of informal waste-pickers. Contact the authors through miriam@no-burn.org and harshadbarde@gmail.com

1 https://climatepromise.undp.org/news-and-stories/what-just-transition-and-why-it-important

2 https://www.undp.org/philippines/blog/ce-inclusivity-empowering-informal-waste-workers-sustainable-future-international-human-solidarity-day

3 https://www.adb.org/news/adb-joins-mdbs-support-just-transition-toward-net-zero-economies

4 https://www.ilo.org/asia/media-centre/news/WCMS_627585/lang–en/index.htm#:~:text=population%20in%20…-,More%20than%2068%20per%20cent%20of%20the%20employed%20population%20in,work%20and%20decent%20working%20conditions.

5 https://sprf.in/informal-waste-workers-the-issue-of-formalisation/

6 https://earthjournalism.net/stories/meet-vietnams-waste-warriors

7 https://journals.sagepub.com/doi/full/10.1177/0734242X231199938

8 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC10693742/

9 https://www.bangkokpost.com/opinion/opinion/1984063/plastic-waste-still-an-issue

10 https://www.no-burn.org/igniting-change-waste-workers-in-the-philippines-unite-for-rights-and-recognition/#:~:text=Various%20estimates%20place%20the%20number,this%20is%20a%20gross%20underestimation.

11 https://www.no-burn.org/urging-the-adb-to-withdraw-proposed-financing-for-waste-to-energy-incineration-in-viet-nam/

12 https://www.adb.org/sites/default/files/project-documents/50371/50371-001-esmr-en.pdf

13 https://www.adb.org/projects/49067-001/main

14 https://southasia.iclei.org/news/iclei-south-asia-iclei-southeast-asia-adb-and-imt-gt-joint-business-council-malaysia-join-hands-to-prepare-and-implement-green-city-action-plans-in-malaysia/

15 https://www.adb.org/projects/53082-001/main

16 https://www.adb.org/projects/51077-003/main

17 https://selfservice.adb.org/OA_HTML/OA.jsp?OAFunc=XXCRS_CSRN_PROFILE_PAGE&csrnKey=2D727751DACFCBAD97507A404C0192BE5B70B4D47C5170F0C0ADA71D046D6D6F&fromDER=Y&refresh_csrn=true

18 https://www.adb.org/projects/40009-013/main

19 https://www.adb.org/projects/49102-001/main

20 https://ap3f.adb.org/our-activities/ap3f031-pp008-project-preparation-assistance-cebu-solid-waste-management-ppp-project

21 https://www.adb.org/projects/documents/phi-46927-012-dpta-1

22 https://www.adb.org/sites/default/files/project-documents/46927/46927-012-dpta-en_8.pdf

23 https://www.sunstar.com.ph/more-articles/dagupan-city-to-open-asias-first-modern-solid-waste-facility#google_vignette

24 https://www.adb.org/sites/default/files/project-documents/42285/42285-013-sddr-en.pdf

25 https://www.adb.org/sites/default/files/project-documents/51034/51034-002-sddr-en.pdf

26 https://www.adb.org/sites/default/files/linked-documents/48175-002-rpab-01.pdf

27 https://www.adb.org/sites/default/files/project-documents/56286/56286-001-pam-en.pdf

28 https://www.indoramaventures.com/en/updates/other-release/1737/indorama-ventures-wins-best-regional-loan-for-the-first-ever-us300-million-blue-loan

29 https://development.asia/summary/opportunities-applying-digital-solutions-plastic-waste-management-viet-nam

30 https://www.adb.org/documents/environmental-social-framework-draft

31https://www.wiego.org/sites/default/files/resources/file/A%20Just%20Transition%20for%20Workers%20in%20Informal%20Employment.pdf

GoTyme Bank launches multi-currency time deposit product

GOTYME BANK has launched a multi-currency time deposit product, with US dollar support now available as an initial offering, it said on Thursday.

The digital lender’s Multi-Currency Time Deposit product requires a minimum deposit of just $1 and guarantees returns of 3% for three months and 3.5% for six months credited daily, GoTyme Bank said in a statement.

The product is available on the GoTyme Bank app.

Clients may deposit in Philippine peso, which will be converted into dollar via the app.

“This enables Filipinos to earn in dollars while keeping their hard-earned cash safe and secure,” the lender said.

“And unlike with other banks, GoTyme does not implement penalties for early withdrawals, so you can take your money back whenever you need it. Accrued interest, however, will be forfeited,” it added.

More currency options for the product will be available soon, GoTyme Bank said.

GoTyme Bank President and Chief Executive Officer Nathaniel D. Clarke previously said the lender is looking to launch more investment products and rewards and benefits for its GoTyme Bank Visa debit card holders this year.

The online lender is a partnership between the Gokongwei group, which holds a 60% stake, and Singapore-based digital banking group Tyme, which has 40%.

It is one of the six digital banks licensed to operate in the country by the Bangko Sentral ng Pilipinas.

The online lender began commercial operations in October 2022 and is targeting to grow its customer base to five million by the end of this year. It also expects to turn a profit within the next three years. — AMCS

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