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Put public health over profit

IDIN EBRAHIMI-UNSPLASH

In April 2024, allegations of an elaborate multi-level marketing scheme involving doctors and a pharmaceutical company sparked a conversation on conflict of interest in medicine. This led to an investigation by the Senate Committee on Health and Demography.

Conflict of interest is defined by the Institute of Medicine (2009) as “a set of circumstances that creates a risk that professional judgment or actions regarding a primary interest will be unduly influenced by a secondary interest.”1

In the context of medicine, doctors may face conflict of interest when their prescribing behavior, which should reflect their primary interest (to promote their patients’ welfare) has the potential of being influenced by a secondary interest (usually financial or professional gains from the pharmaceutical industry). Physicians’ interests in their patients’ welfare fundamentally conflict with the interests of the pharmaceutical industry, which center around profit.

Conflict of interest in medicine is a long-standing, normalized, and complex phenomenon. Pharmaceutical companies influence physician-prescribing behavior through med rep visits, providing medicine samples, sponsoring workshops, conventions, and seminars under the guise of “continuing medical education,” providing honoraria, giving gifts like watches, cars, and luxurious travels, and many other tactics.

Evidence shows that physicians with links to the pharmaceutical industry may be more likely to prescribe branded drugs than generic drugs. This threatens the quality of patient care and increases costs for healthcare, disproportionately affecting the poor, especially in the Philippines where medicine is expensive compared to our regional neighbors.

Studies have shown that eliminating direct industry funding of continuing medical education could increase evidence-based physician prescribing practices, make healthcare spending more efficient, and improve the quality of care.

Numerous doctors have boldly taken a stand on the issue of conflict of interest in medicine. One of them, Dr. Tony Leachon, a public health advocate who championed various causes from the sin tax reforms to addressing the COVID-19 pandemic, has unfortunately been the target of scrutiny and flak from the pharmaceutical industry.

But Dr. Leachon remains resolute in his advocacy for restoring transparency and trust in the healthcare system. As he said in his April 30 speech at the Senate Committee on Health and Demography hearing on the issue: “Each instance of misconduct not only harms individual patients but also damages public confidence in our healthcare system. This crisis of trust, if not addressed, could have lasting repercussions, deterring individuals from seeking necessary medical care and dissuading bright minds from entering the already tired and depleted medical profession brought about by the migration of healthcare workers who seek greener pastures.”

Given that our health workforce is underpaid and overstretched, doctors-in-training in medical schools need role models in the form of senior physicians to normalize ethical practices in healthcare.

A study done by Dr. Katherine Reyes et al2 (2020) showed that physicians deem interactions with the pharmaceutical industry as generally positive, particularly referring to the conduct of roundtable discussions, visits by medical representatives and accepting medicinal drug samples. Physicians consider interaction with the industry as acceptable practice among their colleagues. Thus, the authors recommend “role modeling to institute ethical attitudes and practices in healthcare, and to introduce recognition and management of pharmaceutical industry-related conflict of interest early among physicians through training institutions, hospitals, and professional societies.”

While the road to regulating interactions between healthcare providers and the pharmaceutical industry through legislation will likely be long and difficult, the Section 9.2 of the Philippine Medical Association (PMA)’s Code of Ethical and Professional Conduct is a good starting point. It states that “physicians must not solicit favors from the biopharmaceutical and medical device companies for personal interest and gain.”

Conflicts of interest aren’t only salient to medicine; they can have even graver consequences in the public sector. Our public health system is under threat when conflict of interest exists among policymakers being unduly influenced by industries marketing products harmful to health, such as tobacco and e-cigarettes.

Let’s take a look at a recent event with potential for conflict of interest: On April 16, First Lady Liza Araneta Marcos attended the inauguration of a Philip Morris International (PMI) manufacturing plant for its heated tobacco products, IQOS and Bonds, in Tanauan, Batangas. She was accompanied by Agriculture Secretary Francisco Tiu Laurel, Jr., and executives from PMI and Philip Morris Fortune Tobacco Co. (PMFTC).

President Ferdinand Marcos, Jr. has a record of being pro-tobacco. His links to the tobacco industry have been public knowledge for a while. In 2012, civil society and media called out then-Senator Marcos Jr. for conversing with then Philip Morris executive, Mario Zinampan, during a critical moment of the deliberations for the Sin Tax Reform Law on the Senate floor. Marcos Jr., during his term as legislator, was a chief opponent of tobacco taxation.

A few months into his term as chief executive in 2022, he and his wife hosted a luncheon for PMI in Malacañang, posting photos on the First Lady’s Facebook page.

These actions of unnecessary association with the leading tobacco company, not only in the Philippines but also in the world, are concerning, especially given that the Philippines is a signatory to the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC). The FCTC states that “fundamental and irreconcilable conflict [exists] between the tobacco industry’s interests and public health policy interests.” Article 5.3 of the FCTC states that the government “shall act to protest these [public health] policies from commercial and other vested interests of the tobacco industry in accordance with national law.”

In other words, the President must be sensitive to the conflict of interest that he faces when dealing with the tobacco industry, which he has been linked to in the past. This extends to the First Lady, who, although not officially paid by the government and with no official title, objectively exercises significant power and influence. She spearheads activities and programs as the First Lady (such as her “Lab for All” project), and all her actions in public are seen as having the President’s imprimatur. Thus, her being the guest of honor during the inauguration of the PMI factory may be interpreted as an endorsement of PMI, and her presence at PMI’s major event runs counter to the FCTC.

The First Lady’s presence at tobacco industry events becomes more controversial in light of the tobacco industry’s recent lobbying (or interference) in policy making.

A bill proposing to grant fiscal incentives to vape manufacturers, known as House Bill 9866 or the proposed Electronic Cigarette Manufacturing Act, was filed in February, and is currently pending at the House Committee on Trade and Industry. We agree with the Marcos Jr. administration’s focus on garnering investments, but unfortunately, it is promoting the wrong investments. We do not want to encourage investments in products, even if exported, that are harmful to public health. Certain kinds of e-cigarettes and heated tobacco products have already been banned in other countries like the United States and the United Kingdom.

Just like how the Filipino people put our trust in our healthcare providers to heal, we also put enormous trust in our government officials to keep public policy at arms’ length from industries that run counter to health. We urgently need stronger legislation to hold our healthcare providers and public officials to account, which will mandate them to serve the people, not private interests.

1https://www.ncbi.nlm.nih.gov/books/NBK22942/pdf/Bookshelf_NBK22942.pdf

2 https://tinyurl.com/3kyuy3yz

 

Pia Rodrigo is strategic communications officer at Action for Economic Reforms.

Visa and Mastercard to face new lawsuits over fees

BW FILE PHOTO

LONDON — Global payments processors Visa and Mastercard must face a new set of lawsuits over fees charged to retailers, after a London tribunal ruled on Friday that collective cases brought on behalf of merchants can proceed.

The two firms already face a long list of lawsuits in London over multilateral interchange fees, which retailers pay when consumers use a card to shop.

Visa and Mastercard are each being sued by hundreds of claimants at London’s Competition Appeal Tribunal, which is managing the various cases together.

Special purpose vehicle Commercial and Interregional Card Claims brought another set of lawsuits against Visa and Mastercard in 2022, seeking damages on behalf of merchants who were allegedly overcharged.

The tribunal initially refused to certify its cases under the United Kingdom’s collective proceedings regime, which is similar to class actions in the United States.

However, the tribunal ruled on Friday that the cases would be certified, subject to any representations by other parties who might have an interest in the cases. — Reuters

Rice tariff cuts not seen affecting ‘core’ RCEF modernization effort

PHILSTAR

By Adrian H. Halili, Reporter

THE REDUCED duties on rice imports will shrink the pool of money available to allocate as farmer aid under the Rice Competitiveness Enhancement Fund (RCEF), but will not affect the core RCEF programs involving farm modernization, analysts said.

Roehlano M. Briones, a senior research fellow with the Philippine Institute for Development Studies, said that the reduced tariffs will be felt mainly in the funding available for assistance to rice farmers.

“But core programs will not be affected, so no effect on production,” Mr. Briones said in a Viber message.

Last week, the Board of the National Economic and Development Authority (NEDA) approved a plan to lower tariffs on industrial and farm goods. This included the further reduction of rice import tariffs to 15% from 35% until 2028.

“What will be affected will be tariff collections in excess of P10 billion which are supposed to fund supplementary programs for farmers such as financial assistance,” Raul Q. Montemayor, national manager of the Federation of Free Farmers, said in a Viber message.

RCEF is supported by rice import tariffs, as authorized under Republic Act No. 11203 or the Rice Tariffication Law of 2019. The law originally allocated P10 billion in tariff money to RCEF for six years, though legislators are working to extend RCEF’s term and expand its allocation.

Under the proposed amendments from the House of Representatives, 53% of RCEF will go to mechanization, 28% to rice seed, and the rest to farm credit and extension services.

The Department of Agriculture (DA) has said that any potential gaps in RCEF funding will be made good by the department.

Leonardo A. Lanzona, an economics professor at the Ateneo de Manila, said that the government needs to find alternate sources of funds to support RCEF.

“The impact of reduced tariffs on RCEF goes beyond simply funding,” he added, citing the possibility of rice and other crops becoming less competitive.

“Industry is disproportionately favored by this policy,” he added.

He said that the government must implement a comprehensive plan to employ any workers who may be displaced by the tariff policy.

“Unfortunately, we have not heard of such plans since the government is leaving much of these movements to markets. The problem is that markets do not perform well in achieving structural transformation,” Mr. Lanzona added.

Former Agriculture Undersecretary Fermin D. Adriano said that the government has allocated sufficient funding to rice farming.

“Tariff collection as of end of May is already P16 billion, more than the sum required by RCEF. The DA’s National Rice Program has a budget of P30.8 billion this year. This is on top of the NIA (National Irrigation Administration) budget of P42 billion — 80% of its water goes to supporting rice farmers for free,” Mr. Adriano said in a Viber message.

Where the tariff policy could be felt the most is in terms of farmgate prices, according to Rosendo O. So, chairman of the Samahang Industriya ng Agrikultura, who estimated that reduced tariffs could bring down the price farmers receive for their harvest to about P17 per kilo.

“If the solution to lower rice prices is to subsidize, why are importers and Vietnamese farmers still being (prioritized)?… Why not instead, buy from local farmers?,” he said.

The government is estimating a P6 to P7 per kilo decline in the rice process following the reduced tariffs on imported rice.

“Ang lens ng NEDA ay sa rice prices lang; bahala na mamatay ang mga rice farmers at magsara na sa negosyo ang mga millers (NEDA is focused on rice prices only and is not too concerned with the livelihood of rice farmers or millers),” Mr. So said.

He added that prior to the NEDA Board’s decision the rice industry and the DA had agreed on a floor price for buying palay (unmilled rice).

Millers and traders were to buy palay at an assured price of P25 per kilo, with the government intended to sell the procured rice at between P35 and 40 per kilo, he said.

Q&A: ‘The brand is the priority’

PHOTO BY KAP MACEDA AGUILA

New Nissan Philippines President Yasuhisa Masuda hits the ground running

Interview by Kap Maceda Aguila

AN AVOWED FAN of the Star Wars franchise (he admits to having more than 50,000 pieces of memorabilia) and punk band Green Day, Yasuhisa Masuda has logged over 12 years of service with Nissan. Since joining the brand in 2011, Mr. Masuda has “held various leadership positions in Market Intelligence, Brand and Media Strategy.” Prior to his appointment to lead NPI, he was Nissan’s Chief Marketing Officer for the Japan Marketing Division. Mr. Masuda used to work in the fast-moving consumer goods business.

“Velocity” had a short chat with the executive right after the formal turnover of the NPI presidency to him from Juan Manuel Hoyos. Here are excerpts from that interview:

VELOCITY: What are your priorities for Nissan Philippines?

YASUHISA MASUDA: Definitely, the brand is the priority. That includes everything: the products, dealerships, and also our communication. Improving the brand is my priority, and I want to leverage the past while trying out something new in order to have a strong brand image to the customer. That’s the my priority.

Nissan has been known for pioneering the electric vehicle space in the Philippines through the Leaf. Can you share with us some of your plans for EVs? Do you think we are ready for a bigger number of electric vehicle buyers?

Yeah, thank you for bringing up that point. I can definitely say we are known as the pioneer in EVs; we are being very positive and proactive in expanding our lineup of EVs. Of course, you know we have the Leaf EV and the Kicks (e-Power). We are looking to expand that lineup but at this moment we cannot share the details. We are seriously planning to expand.

How many dealerships does Nissan Philippines have at the moment? Are you looking to grow this number?

We have 54 dealerships, and we’re trying to think not only about how to expand this number, but also the categories. For example, we want to have both permanent dealerships and pop-up stores. We are very open to have events at the mall, etcetera.

You’re looking to grow the brand and, of course, you will need to sell units of your vehicles. What segments are you seeing promise in — segments that will offer the most growth for NPI?

We see three segments that are growing: Pickups, minivans or people movers, and SUVs — (in the third category) we have quite a good lineup from the Patrol to the Kicks and Terra — and we have an opportunity to deliver more vehicles in these segments.

Chanel’s creative director Virginie Viard to leave brand

CHANEL artistic director Virginie Viard is leaving the label, the luxury brand said on Thursday, kicking off speculation over who will replace her in one of the fashion industry’s most coveted positions.

“A new chapter is opening for Chanel Mode,” Chanel said in a statement, confirming the change, which was first reported on fashion news website Business of Fashion.

The privately owned label, known for tweed jackets, quilted handbags with double-C logos and the No. 5 perfume, did not name a successor as it thanked Ms. Viard for her “rich collaboration of five years.”

Ms. Viard, 62, worked at Chanel for nearly 30 years, alongside Karl Lagerfeld, whose role she took over in 2019 following his death.

She favored relaxed silhouettes with an 1980s flare and took a low-key approach compared to her predecessor, sending models along the Seine River and down a street in Manchester for recent fashion shows, for example — marking a contrast with the showmanship of Lagerfeld, who built towering sets — including a rocket ship and indoor waterfall — for his catwalk presentations.

Her departure comes as the industry adjusts to slower growth and several other labels, including Kering-owned Gucci, Valentino, and Burberry seek new creative direction to reignite sales.

The post-COVID pandemic boom, fueled by pent-up demand for fashion, has tapered off as shoppers spend less due to the rising cost of living.

Chanel teams will ensure the “continuity” of collections in the interim period, and the brand will host its fall-winter haute couture show 2024/2025 on June 25 in Paris, it said.

Rumors of a new designer at Chanel have swirled for years, most recently including talk of industry heavyweights like former Gucci designer Alessandro Michele, who has since been recruited to Valentino.

Chanel Chief Executive Leena Nair last month brushed off talk of a designer change, noting that ms. Viard had overseen strong growth in ready-to-wear fashion sales, which have surged two-and-a-half-times since 2018.

Sales at Chanel were up 16% last year to nearly $20 billion, a slower rate than smaller rival Hermes, which grew sales 21% to 13.4 billion euros, but faster than LVMH’s fashion and leather goods division, which was up 14% to €42 billion euros.

The world’s second-largest label after LVMH’s Louis Vuitton, Chanel is owned by French billionaire brothers Alain Wertheimer and Gerard Wertheimer. — Reuters

Villar warns public vs deepfake video pushing investment scheme

MANUEL B. VILLAR, JR.

BUSINESSMAN Manuel B. Villar, Jr. has warned of a deep fake video on social media showing him discussing an investment scheme aimed at scamming the public.

“A deepfake video has been going around that uses a doctored video of myself talking about an investment scheme. This is a scam. Deceptive individuals used an old footage and digitally altered, using artificial intelligence (AI), what I was saying. I urge the public to disregard that video,” Mr. Villar said in a statement over the weekend.

 “There is no such investment program. I enjoin the public to be more discerning and extra cautious when viewing posts and videos that use AI technologies and that promise easy money or success. There is no such thing as easy money. There is no substitute to good, old-fashioned sipag at tiyaga in achieving success in life,” he added.

 In April, Forbes cited Mr. Villar among the top 200 richest people in the world, as his estimated net worth jumped to a record $11 billion this year.

 At 190th spot, Mr. Villar was the highest-ranking Filipino tycoon in the World’s Billionaires list released by Forbes. He was also the only Filipino who landed in the top 200.

 Mr. Villar is a former Senate president and House speaker. He is currently the chairman of listed companies Vista Land & Lifescapes, Inc.; Golden MV Holdings, Inc.; supermarket chain AllDay Marts, Inc.; home improvement chain AllHome Corp.; and Vista Malls, Inc. — Revin Mikhael D. Ochave

Leveraging UnionBank’s legacy: A Q&A with UnionDigital Bank

By Lourdes O. Pilar, Researcher

UNION BANK of the Philippines (UnionBank) was the first listed bank in the country which secured a digital banking license for its unit, UnionDigital Bank, two years ago.

UnionBank, the banking arm of the Aboitiz Group, believes that setting up another digital bank unit is the more strategic plan, making the bank to “pause and re-create the ideal digital bank that will run differently having a different set of engines.”

The digital bank turned out to be the second engine growth for UnionBank.

With a mission to drive financial inclusion, the bank is dedicated to extend financial services to underserved communities by capitalizing on technology and decades of alternative data from the UnionBank ecosystem.

Since UnionDigital Bank’s launch in 2022, the bank has been focusing on serving the needs of the underserved communities by offering digital deposit and lending products and continue supporting the needs of these customers with additional products over time.

To know more about UnionDigital, BusinessWorld reached out to further explore what the digital bank can offer in the market, and other ventures they plan to have in the Philippines.

What follows contain excerpts of that interview.

As one of the six digital banks in the Philippines and the first and only digital bank backed by a universal bank, what advantages does UnionDigital have against other digital banks in the country?

As a subsidiary of UnionBank, we leverage on our parent’s legacy. UnionDigital draws on the strong heritage and extensive expertise of UnionBank, ensuring reliability and trust in its services.

UnionDigital is the second engine of growth for UnionBank dedicated to financial inclusion. As a digital bank, UnionDigital is uniquely positioned to extend financial services to underserved communities.

Our mission is to improve financial accessibility for underbanked Filipinos who traditionally have limited access to banking services.

We achieve this by:

Making banking services available to the unbanked, thus integrating them into the financial system.

Offering accessible credit solutions to those typically overlooked by traditional banks.

UnionDigital also has the competitive advantage of tapping an extensive customer base through the Aboitiz Group ecosystem.

What security measures have you developed to prevent illicit online banking activities? What are the tools that the Bank uses to protect its clients from fraud and anti-financial crime?

Our dedication to security is fundamental, deeply embedded in our corporate ethos through the principle of Security by Design.

This approach ensures that security measures are integrated seamlessly into every aspect of our banking operations.

We are also moving toward adopting the Zero-Trust Security Framework, a robust security model based on the principle of “Never trust, always verify.”

This model strengthens our protocols for managing data access, further securing our systems against unauthorized use.

UnionDigital builds on the requirements of the regulatory environment and is proactive in monitoring both security and fraud systems.

This ensures not only protection internally, but also and most importantly, for our customers.

According to the Bangko Sentral ng Pilipinas (BSP), digital banks are unprofitable due to higher nonperforming loan ratio at around 21%, compared to the banking sector’s 3.4%. As one of the digital banks in the country, how will you improve the loans you extended and improve your loan collection mechanism?

We continue to leverage data and analytics to gain insights into customer behavior, allowing us to tailor our loan offerings effectively.

For example, we analyze transactional data to understand the needs of our customers better.

Our strong underwriting models are continually improved as we gain more insights into our target customers.

We collaborate closely with other digital banks through the Digital Banks Association of the Philippines, sharing learnings on financial inclusion, particularly in lending to the underbanked segment.

At UnionDigital, the collection process is crucial not only for financial viability but also for maintaining customer relationships. We utilize various tools for collection, including automated systems and our partner agencies.

The central bank earlier said only two digital banks posted a net profit in 2023 and the sector posted a combined net loss. What does UnionDigital need to do to become more profitable in the medium term? For the long term?

UnionDigital is one of the two digital banks that posted net profit in 2023.

Leading market share in loans and deposits

• We closed 2023 with 49% market share in loan portfolio, while in deposit, we ranked second among digital banks with a 25% share.

• 2023 also marked a significant milestone as we achieved profitability, showcasing growth in revenue by 13 times to over P5 billion.

UnionDigital will be further expanding access to credit

Expanding our market reach and enhancing our product offerings will be pivotal.

Advancing our strategy for a deeply integrated “Super Embedded” App.

Concentrate on deepening customer relationships and fostering financial inclusion through our community approach and embedded banking.

• This approach is designed to integrate our services seamlessly into the digital lives of our customers, providing personalized and accessible banking experiences.

• By strengthening our fintech capabilities and leveraging strategic partnerships within the Aboitiz Group ecosystem, we are poised to maintain our competitive edge and foster sustained growth.

What are your plans for the rest of the year? What products and services do you plan to offer in the market, and how would you differentiate these offerings from those provided by other digital banks?

We will continue to expand our services to the underserved through our loan offerings and very competitive deposit rates. UnionDigital will also be tapping new communities.

There will be new products and features on the app, including an enhanced portfolio of loan options and the introduction of virtual cards.

As early as last year, the BSP has been thinking of lifting the moratorium on the grant of new digital banking licenses to allow more digital banks to operate in the country. How would UnionDigital adapt to remain competitive amid the threat of new players?

This environment encourages existing digital banks, including us, to continuously enhance our offerings, streamline user experiences, and adopt new technologies to remain competitive.

For UnionDigital, the evolving landscape represents both challenges and opportunities. The entrance of new players could pressure existing digital banks to innovate more quickly and efficiently to retain and grow their customer base.

However, it also presents an opportunity for us to differentiate ourselves by leveraging on our existing strengths, particularly our solid foundation with UnionBank as our parent company and the expansive network within the Aboitiz Group supporting us.  

For us, the key to success will lie in our ability to adapt to the changing industry dynamics, invest in technology and innovation, and maintain a customer-centric approach.

This will not only help us navigate the challenges but also seize the opportunities presented by the expansion of the whole Philippine digital banking ecosystem.

What do you think are the biggest risks faced by digital banks such as UnionDigital and what did you or are currently doing to eliminate these risks?

At UnionDigital Bank, we recognize significant risks such as the digital divide within our customer segments, cybersecurity threats, regulatory standards, and operational challenges.

Many of our customers do not have data connections, which limits their ability to engage with digital banking services. To address these risks, we are developing inclusive technology initiatives, such as low-bandwidth solutions, and actively supporting government projects that promote the digitization of the Philippines.

Additionally, we continuously fortify our cybersecurity measures, maintain rigorous communication with regulatory bodies to ensure compliance, and implement robust operational frameworks.

These comprehensive efforts demonstrate our commitment to delivering secure, reliable, and accessible services, empowering every Filipino, everywhere.

To know more about UnionDigital Bank, visit www.uniondigitalbank.io.

What’s in a name

PATRIK MICHALICKA-UNSPLASH

A brand is a “name” that calls forth a “reputation” significantly above the standard expectations of the public for a product or service. The “name” is often made visual by a logo (like a nation’s flag), by a slogan (like a “credo” of an organization), or maybe a musical jingle (like a national anthem of a country).

Yes, a company can become inseparable from its brand. Coca-Cola the soft drink is synonymous with Coca-Cola itself, even though the company now owns Schweppes, Dr Pepper, and Hi-C, among hundreds of other brands.

The top five global brands in 2023 were Apple, Microsoft, Amazon, Google, and Samsung, according to a ranking by Interbrand. Microsoft’s score was up a big 14% year over year.

In marketing, the brand is created through elements of design, packaging, and advertising that, as a whole, differentiates and distinguishes the product from its competitors. The product contributes to the “brand equity” of the company that produces it. It earns “brand loyalty” from consumers. A successful brand provides a huge contribution to the income and profits of a company, giving it a competitive edge over others in the same industry.

There are protection laws for companies and products. Republic Act No. 8293 (the Intellectual Property Code) protects registered patents — any technical solution to a problem in any field of human activity which is new, involves an inventive step, and is industrially applicable, same as trademarks, copyrights, and industrial design.

To protect the consumer, the “truth in advertising” clause in the Consumer Act of the Philippines (RA 7394) prohibits “any person to disseminate or to cause the dissemination of any false, deceptive or misleading advertisement by… (any) medium for the purpose of inducing or which is likely to induce directly or indirectly the purchase of consumer products or services.”

Then there is the Philippine Competition Act (PCA) or RA 10667, the primary competition law of the Philippines for promoting fair competition in the marketplace and protecting the well-being of consumers in the process. The PCA was passed only in 2015, after languishing in Congress for 24 years. Its antitrust rules prohibit mergers, acquisitions, cartels, and cooperative agreements between market operators that would control the market. By limiting the market power of any particular firm, the more normal supply and demand forces will serve the wants and needs of the public.

But is the public still trusting the same brands, the same product/company names today?

What’s in a name, anyway?

The term “brand” is actually an intangible marketing concept that helps people recognize and identify a product and, at best, reach for it instead of one of its competitors. The tangible, physical delivery of a product still would be the role and responsibility of the company that owns the brand/name of the product. For better or for worse, many brands have changed company ownership.

An article in Esquire magazine (April 13, 2021) lists the companies (and their brands) owned by Jollibee Foods Corp. (JFC), the country’s largest food service network, with its 3,211 outlets in the Philippines, and 2,601 stores overseas, a total of 5,812 restaurants worldwide. These are:

1. Jollibee. The flagship brand is the Philippines’ largest fast-food chain, founded by Tony TanCaktiong in 1978.

2. Chowking

3. Greenwich Pizza

4. Red Ribbon

5. Mang Inasal

6. Burger King

7. The Coffee Bean and Tea Leaf

8. Pho 24

9. Panda Express

10. Highlands Coffee

11. Yonghe King

12. Tim Ho Wan (master franchise for the Asia-Pacific region except Hong Kong)

13. Dunkin’ Donuts (franchise for China only)

14. Hard Rock Café (a joint venture between Jollibee and Viet Thai International for Vietnam)

15. Hong Zhuang Yuan (Beijing-based)

16. Smashburger (100% owned, operating in US and some other countries)

Just as a parallel example, here are the companies owned or formerly owned by McDonald’s, Jollibee’s competitor (from mcdonalds.fandom.com):

1. McDonald’s (permanent; primary brand)

2. Ronald McDonald House

3. Weenie Hut Jr’s (2004-present)

4. Krispy Kreme (2010-up to the COVID shutdown)

5. Domino’s Pizza (until 2003)

6. Chipotle Mexican Grill (until 2006)

7. Pret A Manger (until 2008)

8. Redbox (until 2009)

9. Aroma (1999-2002)

10. Boston Market (2000-2007)

11. Firehouse Subs (2001-2005)

Now we continue with more brand acquisitions in the retail food industry in the Philippines.

The French Baker was founded by Johnlu Koa, then 27 years old, in 1989. He was supplying bread products to SM Supermarket while teaching Strategic Marketing as an assistant professor at the University of the Philippines. One day, Mr. Koa received an invitation from SM to open a store at SM City North EDSA, which was then emerging as the largest mall in the country. Today, French Baker enjoys the dominant market share when it comes to the French bakery-café category for over 25 years. Koa also has the master franchise of Taiwan-based bubble tea chain Chatime in the Philippines and had grown the global brand to 75 outlets prior to the onset of the pandemic.

Knowing the great potential of well-loved food brands sold in malls, of course it followed that Henry Sy’s SM Investments (SMIC) would either develop their own food brand or buy an existing known brand with established consumer loyalty. In 2018, SMIC acquired a 34% stake in Goldilocks, a bakery started by the Leelin sisters in 1966. The deal was for SMIC to eventually fully acquire the bakery chain, but this was scrapped due to “changes in the marketplace (COVID pandemic)” (Rappler, Aug. 4, 2021). In 2021, SMIC proceeded to increase its shareholding in Goldilocks to approximately 74% of the outstanding voting capital stock, making Goldilocks a subsidiary of SMIC.

Goldilocks, one of the most enduring and beloved Filipino brands, continues expanding as it rolled out an additional 30 franchise-owned stores in 2024. Goldilocks has 926 stores as of end-2023, of which 360 are franchised-owned stores. Goldilocks products are sold mostly in SM Supermarkets, which has 66 supermarkets, 54 hypermarkets, and 223 Savemore stores. SM has also acquired Cherry Foodarama and WalterMart supermarkets.

There are other examples of big corporations buying/selling profitable food brands. There is Republic Flour Mills (RFM), known for White King Flour and related products, buying the Royal pasta brand business, and the 1940s Selecta brand of ice cream and milk products. (Selecta bought the ice cream business from the Arce family in 1990.) In late 2012, RFM entered into a trademark and asset purchase agreement with The Pacific Meat Co., Inc., that divided the Swift brand production and marketing/distribution between them.

Just in April this year, listed bakery operator Balai ni Fruitas, Inc. bought the 40-year-old legacy brand Sugarhouse (cakes and pastries). Balai has a retail network of 118 as of end-2023. Its brands include Balai Pandesal, Buko ni Fruitas, and Fruitas House of Desserts.

Note that after Red Ribbon owners Danny and Tessie Moran (also the owners of The Plaza catering) sold it to Jollibee Foods Corp. in 2005, the Moran sons bought Amici, a popular pizza and pasta operation run by the Don Bosco School in Makati City.

A study, “When big companies acquire small ones” by the Small Enterprises Research and Development Corp.-UP ISSI (serdef.org, May 2, 2016), observed the trend in recent years — big companies acquiring smaller ones that are very promising or are already established in the market.

The question that is more often asked is: Why do big companies buy promising startups when they have the resources to put up competitive versions of such firms? Answer: “It makes perfect sense on the part of the big company. When developing a new business, product or service, big companies are bogged down with cumbersome policies, procedures, and protocols. The multi-layers of a corporate organizational hierarchy typically slow down decision making. It takes massive amounts of time, money, and manpower to build a new brand from the ground up.

“On the other hand, small companies, especially today’s young and technology-oriented startups, are much more agile. They can decide on the spot, cut corners, get out of the box or even throw out the box during an innovation run.”

Sam Hogg, a venture entrepreneur and columnist of Entrepreneur magazine, says “big companies have a lot to lose if a new venture fails. The risk is not only financial but also in terms of hurting the corporate image the company has worked so hard to build. On the other hand, the only risk in buying a small established firm is the danger of overpaying for what it acquires.”

For the smaller independent company with a name/brand — it is ever so thrilling to be wanted and wooed! “Name your price,” is the suitor’s irresistible offer.

That’s what’s in a name.

 

Amelia H. C. Ylagan is a doctor of Business Administration from the University of the Philippines.

ahcylagan@yahoo.com

Holzmann cautious on rate view

IT IS TOO EARLY to tell whether the European Central Bank (ECB) has initiated a shift towards lower borrowing costs after it cut its benchmark interest rate this week, ECB policy maker Robert Holzmann said on Saturday.

The ECB cut the rate it pays on bank deposits to 3.75% from a record 4% on Thursday but held back from promising any more easing after a string of disappointing wage and inflation data in recent weeks.

Mr. Holzmann, the head of Austria’s central bank, was the only member of the ECB’s 26-member Governing Council to oppose the rate cut. The bank’s decision had been widely expected after the ECB had telegraphed its intentions ahead of time.

Going forward, the bank would be looking to avoid putting itself in any sort of bind, Mr. Holzmann told Austrian radio. When asked whether the rate cut marked a shift towards lower borrowing costs, or was a step that did not commit the bank toward a particular direction, Mr. Holzmann was cautious.

“I think it’s a step in the right direction,” he said. “I hope — I don’t know — that there won’t be a need to raise rates again,” he added, saying future decisions would depend on data.

Among factors to consider would be the rate differential between the ECB and its US counterpart, the Federal Reserve, Mr. Holzmann said in the interview.

If, as US policy makers have intimated they would this year, the Fed does not cut rates three times, that would affect exchange rates to the euro’s detriment against the dollar, which could fan inflation in the single currency area, he noted.

The ECB could only declare victory on inflation once it had eased to the bank’s target of 2%, he said. — Reuters

Kanlaon agri damage estimated at P104.8M

INTERAKSYON/PNA FILE PHOTO

AGRICULTURAL damage from the Kanlaon Volcano eruption was estimated at P104.8 million, according to initial reports from the Department of Agriculture (DA).

In a bulletin, volume of crops lost was 3,947.3 metric tons (MT) across 842.3 hectares, affecting 1,706 farmers in the area.

The DA said high-value crops sustained the most damage from ashfall and lahar flow following the eruption on Negros Island. The volcano is entirely within Negros Occidental but is near the border with Negros Oriental.

It added that in volume terms, damage inflicted on high-value crops amounted to 3,890.5 MT, valued at P101.2 million. Farmland affected by ash fall was 816.7 hectares.

Last week, Mount Kanlaon started erupting with a 5,000-meter ash plume, according to Phivolcs, the government volcanology service.

Phivolcs had placed Mt. Kanlaon under Alert Level 2, signifying a moderate level of volcanic activity.

Damage to the rice crop was valued at P1.37 million, with the volume of lost crops at 56.8 MT. Damage to the corn crop was P122 thousand, while damage to livestock was P2.17 million.

The DA said its Western and Central Visayas offices will provide seed, planting materials and bio-control measures to affected farmers. A quick response fund will also be tapped to rehabilitate farmland.

The DA said the Agricultural Credit Policy Council will lend farmers up to P25,000, payable in three years at zero interest. — Adrian H. Halili

What we know about the next-gen Tamaraw

Next-gen Toyota Tamaraw iterations were previewed at the recent Road Trek in Davao. — PHOTO BY ANGEL RIVERO

Toyota’s iconic workhorse gets an all-new platform and more

THE TOYOTA TAMARAW, once an ubiquitous part of the automotive scene in the country, is scheduled to make a comeback this year after a long absence. Not only will this be good news in terms of providing more options to those seeking a flexible commercial (or even family) vehicle; the Toyota Tamaraw will ultimately be healthy for the economy as it will be manufactured in the Toyota Motor Philippines (TMP) plant in Santa Rosa, Laguna — leading, we expect, to more jobs.

Except for a November launch, TMP is keeping details of the next-gen Tamaraw very close to its chest. However, “Velocity” managed to get some information from a reliable source.

Everyone knows, of course, that the Tamaraw will be platformed on Toyota’s so-called IMV (Innovative International Multipurpose Vehicle) 0, a ladder frame chassis that is highly configurable. The final product in people mover (utility van) guise will measure 5,305-millimeter (mm) long, 1,795-mm wide, 2,100-mm tall, and with a wheelbase stretching 3,085mm. In summary, it is said to be “class-leading” in its category, and Toyota hopes this Tamaraw will allow the brand to even more thoroughly corner the market.

It remains to be seen what is to become of the Lite Ace badge, but it’s safe to assume that it will eventually be eased out of the market. We’ve heard this much from our sources, as well.

The Tamaraw has several crucial safety features such as air bags for both the driver and front passenger, along with anti-lock brakes and electronic brakeforce distribution. TMP also stresses that it is easy to service the Tamaraw as its “maintenance item access” is conveniently realized through the hood, unlike competitors which call for the front seats to be yanked upward.

Speaking of the hood, underneath the new-generation Tamaraw’s bonnet is either a 2.4-liter diesel or 2.0-liter gas mill. The diesel serves up 150ps at 3,400rpm; the gas delivers 139ps at 5,600rpm. Torque is pegged at 400Nm/1,600rpm for the higher grade, 343Nm/1,400rpm for the long-wheelbase (LWB) diesel, and 183ps/4,000rpm for the short-wheelbase (SWB) gas. Drivers realize the performance promises via a six-speed automatic (for the higher grade) or five-speed manual for the LWB and SWB. The diesel gets 16-inch alloy wheels, while the gas receives 14-inch steelies.

Other configurations (at least when the Tamaraw debuts in November) will be a dropside pickup, and aluminum van. As for the pricing? We hear that the dropside pickup will be priced from P850,000, while the utility van will be priced from P1.031 million. — Kap Maceda Aguila

Giving dads the gift of time

FEW things are more precious than a father, and here is a lineup of precious timepieces just waiting to be unboxed by dear old dad, from everyday selections from Seiko to cutting-edge tech by IWC Schaffhausen.

SEIKO: A WATCH FOR EVERY DAD
In celebration of Father’s Day, Seiko presents a carefully curated selection of timepieces to complement every father figure. Celebrate the man of the house with a timepiece that reflects his unique personality and passions in life.

To the dad who loves to dive, the Seiko Marinemaster series offers ideal choices. Each Prospex model — SJE097 featuring a white patterned dial, SJE099 with a light blue frosted dial, and SJE101 with a dial inspired by dark water is crafted for durability and precision underwater. With up to 200 meter water resistance, these watches are for adventurous dads into water sports.

For dads who thrive on the track or trail, the Seiko Speedtimer series is a top pick. SSC933 has a striking dark green design and black sub-dials, offering a sporty yet relaxed sophisticated look, while SSC935 features a sporty yet more polished style, showcasing a pale blue dial and sunray finishing. Both models have robust chronograph functions, making it a thoughtful present for dads who embrace the thrill of running. Designed for the sophisticated golfer dad, the Seiko Alpinist SPB409 offers a striking aesthetic with its white sunray dial and blue and red accents. It has wedge-shaped markers and stylized numerals and hands, which enhance readability and add a touch of elegance to the watch. Overall, the model — which comes in a white 110th Anniversary collector’s box — embodies elegance and brings functionality in one.

For mountain-climbing dads who seek resilience and adaptability at high altitudes, the Seiko Landmaster SPB411 is made to conquer any terrain. This limited-edition model, which shows a sunburst gray dial, faithfully embodies the classic sports design and compact dimensions of its 1968 predecessor. Those who have career-driven and ambitious dads can opt to gift the classic and utilitarian SPB379 which features a matte black dial and band, or the modern and fancy SPB377 with a blue dial and strap. Both watches are great for those who balance business ventures with everyday pursuits. To the dad who suits any adventure, the Seiko Speedtimer SSC813 can be his ultimate day-to-day companion. Its white dial with a sand-blasted texture and black sub-dials makes it a versatile watch that keeps him ready for anything life brings his way.

Visit a Seiko store or shop online at shop.seikoboutique.com.ph.

TUDOR: NOW IN BRONZE
Tudor presents a bronze version of its famous Black Bay Fifty-Eight model, featuring for the first time a bronze bracelet fitted with a new clasp with rapid adjustment system. A new color palette, based on a rich “brown-bronze” tone, adorns the dial and bezel of a divers’ watch whose naval inspiration can be seen in every detail.

The watch has a 39 mm satin-brushed bronze case whose color evolves to match its user’s habits, as well as a shaded matte brown-bronze dial with applied hour markers and Arabic numerals at 3, 6 and 9 o’clock. It’s powered by Manufacture Calibre MT5400, certified by the Swiss Official Chronometer Testing Institute (COSC) with a hairspring in silicon and a 70-hour power reserve. Snowflake hands, one of the hallmarks of the Tudor divers’ watches introduced in 1969, with grade A Swiss phosphorescent Super-LumiNova coating, adorn the timepiece.

A bronze bracelet with a Tudor T-fit clasp secures the watch, with rapid adjustment and a complimentary brown-bronze jacquard fabric strap is included.

A NOVELTY TO WATCH: IWC SCHAFFHAUSEN UNVEILS LUMINOUS CERAMIC TIMEPIECE
IWC Schaffhausen has developed a proprietary luminous ceramic technology called Ceralume. Based on a highly engineered and patent-pending process, developed by IWC’s engineering division XPL, the technology enables IWC to produce fully luminous ceramic watch cases for the first time.

Lorenz Brunner, Department Manager Research and Innovation at IWC Schaffhausen, said, “With the first fully luminous ceramic case rings, we underscore our role as a pioneer and innovator in ceramic watches. The development of Ceralume took several years. The main challenges we faced were producing watch cases with maximum homogeneity and meeting our exacting quality standards. To achieve these goals, we engineered a ground-breaking new manufacturing process — tailored to the unique combination of ceramic powders and Super-LumiNova pigments.”

The glow effect is achieved by adding high-grade Super-LumiNova pigments to the ceramic raw materials. Engineered by Swiss technology company RC Tritec, Super-LumiNova is a high-tech ceramic compound that behaves like a light storage battery. The material absorbs light energy from sunlight or artificial light, stores it temporarily and then emits the absorbed energy as visible light. This cycle can be repeated an infinite number of times without ever causing the material to age or diminishing its light storage capacity. In dark chamber tests, Ceralume watch cases have emitted a bright blueish light for more than 24 hours.

Conventional white ceramic is made by mixing zirconium oxide with other metallic oxides. These powders are shaped into a so-called green body, machined close to the final case geometry and then sintered at high temperatures in a kiln. For the white ceramic to glow in the dark, Super-LumiNova pigments are added to the mix of raw materials.

One of the main challenges in the development of Ceralume was achieving a perfectly homogeneous mix of raw materials despite their different particle sizes and avoiding particle accumulations. To achieve this, IWC’s engineers reverted to a dedicated ball milling process, which had to be customized to the raw materials used. In addition, the parameters of the sintering process and the grinding of the sintered ceramic body also needed to be specifically adapted to the luminous ceramic.

Using the new Ceralume technology, IWC’s experimental division XPL has manufactured a fully luminous ceramic concept watch for the first time. In addition to its Ceralume case, the concept watch in a Pilot’s Watch Chronograph 41 design features a white luminescent dial and a white luminescent rubber strap. The dial and the strap have also been enriched with Super-LumiNova pigments. The dial’s brass base is sprayed with a Super-LumiNova solution before the printing is added on top of the luminescent layer. Manufactured in an injection molding process, the white rubber strap is likewise enriched with Super-LumiNova pigments. Developed by IWC Schaffhausen, the patent-pending Ceralume technology will form the foundation of future developments and releases.

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