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Adidas plans cheaper versions of popular shoes

ADIDAS SAMBA — ADIDAS.COM.PH

ADIDAS is launching cheaper versions of its three-striped shoes like the white and black suede Samba as it aims to spread the trend, Chief Executive Officer Bjorn Gulden said on Thursday at the company’s annual shareholders’ meeting in Germany.

“It’s important to understand that not everyone can afford to buy a shoe for 120 or 150 [dollars], but everyone wants to take part in the same trends,” Mr. Gulden told investors in a presentation in Furth, near Adidas’ headquarters in Herzogenaurach.

Adidas will offer similar versions of the Samba and other shoes for $60 to $80, more affordable entry points than the $100 to $150 price tag for the main shoe lines, according to a presentation slide shown by Mr. Gulden.

“What we do at the top, 100 [dollars] and higher, we’re bringing that down. So, for Foot Locker, for Intersport, and for Deichmann, we’ve also got something to offer,” Mr. Gulden said. — Reuters

BSP to require financial firms to set rules on filing of cases vs personnel

THE BANGKO SENTRAL ng Pilipinas (BSP) is looking to require financial firms to come up with guidelines on the filing of legal cases against erring personnel to help mitigate operational risks.

In a draft circular released on its website, the central bank said it is seeking to amend the Manual of Regulations for Banks  and Manual of Regulations for Non-Bank Financial Institutions to mandate BSP-supervised financial institutions (BSFIs) to implement “board-approved policy governing the process and criteria to determine when to file cases against erring personnel, including dismissed directors, officers and employees.”

“This aims to reinforce measures, including filing of legal cases, to deter misconduct and promote discipline in the BSFIs for the protection of the depositors and other financial consumers,” it added.

Under the draft rules, banks must set up an “appropriate” operational risk management framework, which should include guidelines on the management of human resource-related risks, the BSP said.

“One of the major sources of operational risk is ‘people risk.’ In this regard, banks shall embed in their enterprise-wide risk management framework measures to identify, measure, monitor, and control human resource related risks,” the central bank said.

Banks will also be required to implement policies and risk management and control measures in their recruitment and selection separation from service and filing of legal cases.

“The board shall establish bespoke policy, comprised of process, procedures, guidelines and criteria, aligned with the overall framework for managing human resource-related risks, to determine when to file administrative, civil and/or criminal case against erring or dismissed personnel,” it said.

“Also, the policy must clearly indicate the decision-making process and approving authorities for the filing of administrative, civil and/or criminal cases,” it added.

Once the circular is finalized, BSFIs will have six months to comply with its provisions.

The BSP is accepting comments on the draft circular until June 1. — L.M.J.C. Jocson

Libre nga ba mangarap?

AUSTIN NICOMEDEZ--UNSPLASH

Filipinos have a phrase “libre naman mangarap,” which can be translated to “it is free to dream anyway.” I mainly hear people use this remark sarcastically, when they resign themselves to the reality of an unattainable dream. Indeed, there is truth to this saying, especially for many who have limited, or even non-existent, means to realize such dreams. But what if I told you that even if dreaming is free, there are some people who are unwilling to pay that price?

Allow me to tell you a recent experience of mine which revealed this harsh truth.

As part of an ongoing project with the Barangay People’s Council (BPC) in Naga City, we conducted a community consultation to discover what barangay members desire. The rationale behind these interviews was to help the BPC’s leadership gather data on their neighbors’ interests and incorporate these into their five-year agenda. Through this activity, I had the opportunity to engage with BPC leaders and some of their members. Each one I conversed with shared interesting ideas, stories, and perspectives that shed light on the realities of living in our country.

However, I had a particularly memorable exchange with one person. Let’s call her Nanay Bituin. Nanay Bituin is in her late forties, has four kids, and manages her own sari-sari (sundries) store. Following the design of our interview guide, I first asked her what kind of future she wanted for her barangay. Normally people rambled about what they desire — but after giving her a few seconds to respond, it seemed like she had nothing in mind. I then tweaked the question by just asking what her own dream was for herself. She then replied by saying “wala ako maisip.” (I cannot think of one).

At that point, I struggled to decide how best I could continue the conversation. I then thought of asking her what she dreamt of for her children. Suddenly, the floodgates of information opened, and she started sharing. The dream, she explained to me, was for her four kids to finish school and find a job. She believes that being employed will provide her children with a monthly salary and financial stability that can help them live better lives. She does not want any of her children to get stuck managing their small store since its earnings are not enough to sustain their family’s needs. She added that in their barangay alone, there are too many similar stores competing for customers, which makes income volatile and insufficient to make ends meet. As the interview came to a close, we thanked each other and parted ways. She left to pick up her kids from school, while I continued to interview other members of their barangay.

In the succeeding days, this particular encounter kept coming up in my mind. I was feeling all sorts of emotions. For one, I was touched that she was willing to set aside her personal dreams and work tirelessly for her kids. I witnessed firsthand the selflessness and love of a mother who sacrificed her own personal fulfillment so that her kids would find their own. On the other hand, I could not help but feel bothered by the fact that she was resigned to the idea that she could no longer dream for herself. At this point in her life, she probably feels so powerless to fulfill her own dreams and change her fate. This encounter made me rethink the phrase “Libre naman mangarap.” While we are indeed free to dream, life becomes so difficult for some people that they become cynical and develop a fatalistic perspective. She therefore made me ask myself, “libre nga ba mangarap?” (Is it really free to dream?)

As I ponder this question, I surmise that all roads lead to poverty and inequality. On the surface, dreaming of a better life for oneself does not cost anything. Yet, the story of Nanay Bituin made me realize that to dream has a lot of hidden costs. Living in poverty is so costly that it numbs one’s hopes and aspirations for oneself. Let me paint the picture further. Even if she has a livelihood, Nanay Bituin still does not earn enough to keep her family secure. She is not even certain that she can afford to provide for all her children’s education and her family’s health. This is aggravated by the fact that she does not see a better opportunity for her to choose. If there was, she said that she would happily leave her highly competitive retail business.

In this sense, Nanay Bituin is no longer living to work, nor working to live, but rather working to survive. The poverty statistics of the Philippines tell us that she is not alone. According to the Philippine Statistics Authority, in the first semester of 2023, about 25.24 million Filipinos did not earn enough to meet their basic food and non-food needs. This means there are millions of other Nanay Bituins who are more preoccupied with what they need for today or tomorrow.

It also must be said that our current systems are failing to enable our people to dream. This is a cause for concern — if we allow unjust systems to make it hard for our people to dream, then it is possible that more Filipinos will adopt fatalistic perspectives. According to a scholar named Lawrence E. Harrison, countries that have fatalistic perspectives possess qualities that resist economic development. In countries with these qualities, the majority of their people only work to survive, believe that hard work will not get them anywhere, and are rarely willing to take entrepreneurial risks. These qualities (some of which are already present in Nanay Bituin) lead to low economic progress because people are more inclined to accept their unfortunate fate. In this case, they will no longer strive for better futures, hold decision makers accountable for their future, and at worst, get stuck in a culture of dependency and patronage that further aggravates their disempowered state.

Now, not everyone has adopted a fatalistic perspective in our country, but a sense of urgency is needed. A world values survey conducted in 2019 showed that many Filipinos, despite their harsh realities, still have mindsets that could push a more inclusive economic development — 66.8% of our low-income population said that they agree or somewhat agree with the idea that “hard work” will bring them a better life. Moreover, 61.5% said that they have a great deal or somewhat have control over their destiny. These data points showcase Filipinos’ resilience against all odds.

However, we should not be too comfortable with this noteworthy “resilience” of Filipinos. We have to ask ourselves: for how long can “resilience” keep the hopes of our people alive? How much suffering can millions of Filipinos really bear until their aspirations for a better life crumble?

If you are looking for answers, I am not here to provide them because this problem is much bigger than me or any institution. Instead, I wrote this piece for those of us who can still dream, with the hope that we can imagine a better life for most Filipinos and collectively act on this crisis of disempowerment staring right at us. So, whether big or small, I hope each of us can find ways to empower our people to no longer just “dream to live” but instead “live to dream.”

 

Carlo Lopa is currently taking his Master’s in Futures Studies at the University of Houston.

XPEL expels some car-paint protection myths

From left are XPEL Asia’s Christine Pu, XPEL Asia Vice-President Chris West, Hart International President Renault Tan, and XPEL Product Manager for Architectural Window Film Boon Khee Yeo. — PHOTO BY KAP MACEDA AGUILA

By Kap Maceda Aguila

A BRAND-NEW CAR is a definite source of much joy and satisfaction for its owner and his or her loved ones. Of course, it’s a big-ticket item that represents a substantial outlay for its acquisition — regardless of who buys it and what is bought — and obviously becomes an important part of a family’s mobility tale.

It’s but natural then for the new owner to take more-than-usual care of the vehicle, and nothing can be more distressing than finding the first scratches or nicks on it.

Several executives of XPEL, a leading and premium global manufacturer of automotive protection solutions, were in town recently to meet with several members of the media to talk about the brand’s paint protection film (PPF) product — specifically designed to save a car’s clear coat and paint from the effects of sunlight, nicks and scratches, and other risks and challenges such as, yes, bird droppings. “XPEL leverages (its) core strength in research and development that resulted in (a) series of innovations such as proprietary formulation for films that features stain resistance and self-healing technology, among many others,” said the company in a release.

XPEL Asia Vice-President Chris West advised against excessive detailing work, particularly buffing done on one’s automobile exteriors which would progressively scrape away the clear coat. “The clear coat shouldn’t be polished off,” he stressed. “It protects the paint.” PPF will protect the clear coat and, ultimately, the paint. Buffing, he maintained, isn’t needed even when preparing a car for PPF. A preferred alternative is to use a clay bar, which lifts foreign matter from the surface. The ideal protective process for a vehicle is to apply PPF, then ceramic paint protection on top of it.

As for bird droppings, they should always be removed as soon as possible, as they will eat away even the film, but it definitely buys time before the excrement even reaches the precious clear coat. The price for XPEL PPF’s protection isn’t cheap — treating a Toyota Land Cruiser, said Renault Tan, who heads XPEL importer and distributor Hart International, will set a customer back around P280,000 — but is definitely worth it. There’s also a 10-year warranty on the adhesive.

“We’re today the largest provider of window tint and PPF at the dealership level in North America,” declared Mr. West. “While China is the largest market, I see opportunity here in Asia-Pacific, where there is window tint in every car. I’m really excited to figure out how to attack this market more, because for PPF, whatever country we’re in in APAC, XPEL is generally considered the premium brand.”

Interestingly enough, XPEL started in 1997 as a software company, Mr. West said. PPF was a relatively new concept in those days — first used on helicopter blades and NASCAR vehicles. When it filtered down to the mainstream, it was applied by people using a vinyl knife to trim the material. “Guys would get the paint cut,” the executive recalled.

To prevent this, XPEL founders made a software to generate a specific pattern for each brand and model, which would then be plotted on a cutting machine for a more efficient and perfect PPF fitment. This technology was applied for 3M film, before the company decided to do the product by itself.

“Since then, we’ve just continued to grow, eventually becoming listed on the Nasdaq and New York Stock Exchange. Through acquisitions, we have over 1,000 employees now,” added Mr. West, who revealed that the gross revenue for the international brand now breaches US$500 million. XPEL has also continued to work on its cutting patterns — today numbering over 80,000 via what is called the Design Access Program (DAP).

He continued to anticipate “rapid growth,” particularly in Asia-Pacific markets. That bullishness extends to the Philippine market, where the brand is becoming the choice product for owners of premium vehicles. Mr. West also believes there is business to be realized even among mid-tier automobiles as more people become fastidious about their rides.

Invited Mr. Tan, “XPEL offers you the very best when it comes to preserving and enhancing the aesthetics of your vehicle. We have it all, and we’re more than ready to serve your needs with genuine XPEL protective products.” XPEL also offers a host of other products including automotive window film, architectural film for buildings or homes, ceramic coating, marine coating, marine PPF, airplane coating, and even coating and tints for helicopters.

Official XPEL dealers are located in Metro Manila, Pampanga, and Cebu. An installer will open soon in Davao for genuine XPEL products and services. 

Space data fuel India’s farming innovation drive

REUTERS

BENGALURU — Lokeswara Reddy, an Indian farmer with two decades of experience, has seen his crops flourish after lean years, thanks to earth-observation satellites.

Shifting climate patterns, high input costs, a scarcity of labor and erratic weather began to disrupt his earnings about 10 years ago, said Mr. Reddy, 52, currently a contract farmer with global giant Syngenta.

Satellite data, gathered and crunched by Indian startup Cropin and provided to him by Syngenta, now gives him optimal sowing times, weather warnings, and better use of irrigation and pesticides, he said.

Mr. Reddy said that over the last decade he has increased his net profit to 20,000 rupees ($240) per acre on corn at his farm in the southern Indian state of Andhra Pradesh, up from 5,000 – 10,000 rupees.

“We are on a surer footing when it comes to agricultural practices; (using satellite data) safeguards us from climate change, pest and disease, problems with irrigation scheduling,” he said.

The Indian government, which just relaxed foreign investment rules for the space sector, is leaning heavily into the use of satellite data to solve problems on the ground, with agriculture a key focus.

Reuters spoke to 11 experts and farmers, six startups in the industry and three NGOs who said space technology and big data were primed to help Indian agriculture reach new heights.

“India’s path to leadership in the new space race lies in utilizing the power of data, and applications within the agricultural sector offer immense potential,” said Pawan Goenka, chairman of the Indian National Space Promotion and Authorization Centre, the country’s space regulatory body.

Market Research Future, an India-based data analysis firm, says the global space agriculture market will be worth $11.51 billion by 2032, up from $4.99 billion in 2023.

Although China holds the largest market share, the sector is growing faster in India than anywhere else in the Asia-Pacific region, it said.

Cropin, founded in 2010 and backed by both Google and the Gates Foundation, recently signed a deal with Amazon Web Services to crunch satellite data to solve for global food insecurity.

Cropin’s partnership with farmers, the World Bank and the government of India in 244 villages digitized more than 30,000 farm plots, covering 77 crop varieties across climate zones, a company project analysis in 2019 showed.

The study showed 92% of the farmers involved increased their average yield by 30% and their farm revenue by nearly 37%. The company got similar results in Africa.

Cropin and others are tapping into a burgeoning sector. The use of satellite data for crop insurance and horticulture has a market potential of about $1.35 billion over the next 5 years, Deloitte said in a report.

Baring Private Equity-backed SatSure, another Indian startup, crunches earth observation data to inform loan analysis. Chief Executive Officer Prateep Basu said there are about 70 million active farmer bank accounts in the country, representing roughly 38% of the total pool. That makes up about $200 billion of all lenders’ loan books, he said.

India has 2,743 agricultural tech startups, many of which incorporate satellite data or other space technology. Funding hit a high of $1.3 billion in 2021; companies gathered $394.4 million in 2023 and $136.7 million so far in 2024.

But there are barriers to large-scale adoption of space technology in agriculture. The average landholding size for farmers in India is just 1.08 hectares. That fragmentation, coupled with poverty and low levels of literacy, pose challenges for tech adoption, industry experts said.

“Agriculture has never been a tech-forward sector and often farmers want to rely on traditional practices, or the wisdom of their forefathers,” said Raghunath Reddy, a Syngenta manager.

In India, McKinsey says agricultural technology has the potential to grow farmers’ incomes by 25% to 35%.

Indian Finance Minister Nirmala Sitharaman, in her 2023 budget speech, announced a 703 million rupee ($8.42 million) accelerator fund to boost agritech startups. In March 2023, the government said the fund was supporting 1,138 such companies.

For farmers like Mr. Reddy, agriculture tech has meant better living standards — over the past few years he has bought a car and bought a new house in town.

“This increase in earnings also means better education for my son, who has plans to be a software engineer abroad, in the US or London. At the end of the day, we want a better future for our kids,” Mr. Reddy said. — Reuters

Gov’t debt yields go down

BW FILE PHOTO

By Abigail Marie P. Yraola, Deputy Research Head

YIELDS on government securities (GS) traded in the secondary market went down last week following US consumer inflation data and the Philippine central bank’s decision to keep borrowing costs unchanged and signals about potential rate cuts as early as August.

Bond yields, which move opposite to prices, fell by 12.54 basis points (bps) on average week on week, based on PHP Bloomberg Valuation Service Reference Rates data as of May 17 published on the Philippine Dealing System’s website.

Rates mostly fell last week. Yields on the 182- and 364-day Treasury bills (T-bill) edged down week on week by 0.75 bp and 5.09 bps to 5.9006% and 6.0242%, respectively. Meanwhile, the 91-day T-bill went up by 1.73 bps to yield 5.7991%. 

At the belly of the curve, yields on the two-, three-, and four-year Treasury bonds (T-bonds) declined by 6.93 bps (to 6.3587%), 8.55 bps (6.4016%), 10.48 bps (6.4335%), respectively. The five- and seven-year T-bonds also went down by 13.73 bps to fetch 6.468% and by 23.23 bps to 6.5373%, respectively.

At the long end, the 10-, 20-, and 25-year debt papers likewise saw their rates fall by 23.95 bps (to 6.6117%), 23.42 bps (6.6712%), and 23.53 bps (6.6706%) respectively.

GS volume traded rose to P29.05 billion on Friday from P8 billion a week earlier.

Bond yields moved lower as April US consumer price index (CPI) data were within market expectations while the US retail sales report fell short of estimates, a bond trader said.

“[These] data sent UST (US Treasury) yields lower, helping support the local GS market as it tracked the movement,” the bond trader said in a Viber message. 

A second bond trader said the market responded positively to the government’s partial bond award last week as it showed some restraint on the Bureau of the Treasury’s (BTr) part to keep yields within market range. 

The BTr raised just P11.528 billion from the reissued 20-year bonds it auctioned off last week, lower than the P30-billion program, despite total bids reaching P36.703 billion.

The bonds, which have a remaining life of 14 years and eight months, were awarded at an average rate of 6.95%, while accepted yields ranged from 6.7885% to 6.994%

“With US CPI coming out lower than expected, this bolstered the market’s resolve and drove yields to rally by as much 30 bps,” the second trader said in a Viber message.

US consumer prices increased less than expected in April, suggesting that inflation resumed its downward trend at the start of the second quarter in a boost to financial market expectations for a September interest rate cut, Reuters reported.

Hopes of the Federal Reserve starting its easing cycle this year were further bolstered by other data on Wednesday showing retail sales were unexpectedly flat last month. The reports suggested that domestic demand was cooling, which will be welcomed by officials at the US central bank as they try to engineer a “soft landing” for the economy.

The consumer price index rose 0.3% last month after advancing 0.4% in March and February, the Labor department’s Bureau of Labor Statistics said.

In the 12 months through April, the CPI increased 3.4% after climbing 3.5% in March. Economists polled by Reuters had forecast the CPI gaining 0.4% on the month and 3.4% year on year. The annual increase in consumer prices has slowed from a peak of 9.1% in June 2022.

A separate report from the Commerce department’s Census Bureau showed retail sales unchanged in April after increasing 0.6% in March. Economists had forecast retail sales, which are mostly goods and are not adjusted for inflation, gaining 0.4%. Sales rose 3% year on year in April.

The first trader added that the Bangko Sentral ng Pilipinas’ (BSP) “less hawkish” tone at its meeting last week boosted buying interest, which resulted in lower GS yields.

The second trader said the market became more bullish after the BSP chief’s hints on rate cuts potentially starting by August, which would likely be ahead of the US Federal Reserve.

The Monetary Board on Thursday kept benchmark rates steady for a fifth straight meeting but signaled a “less hawkish” tone amid slower-than-expected inflation, with BSP Governor Eli M. Remolona, Jr. saying their easing cycle could begin with a 25-bp cut as early as August.

The BSP left its target reverse repurchase rate unchanged at a 17-year high of 6.5%, as expected by 17 out of 19 analysts in a BusinessWorld poll. Interest rates on the overnight deposit and lending facilities were likewise kept at 6% and 7%, respectively.

Mr. Remolona said they could cut rates by the third or fourth quarter this year. He said they expect one or two 25-bp rate cuts within the second semester.

The Monetary Board’s only meeting for the third quarter is scheduled for Aug. 15. Meanwhile, in the fourth quarter, it will hold reviews on Oct. 17 and Dec. 19.

For this week, the first bond trader said the market will look for more catalysts as the Fed has kept its cautious stance on rates following mixed data out of the world’s largest economy.

“We should see yields establish a range after the recent rally and take its cue from the BTr’s 20-year bond auction [this] week,” the second trader said.

The government will offer P30 billion in new 20-year T-bonds on Tuesday. — with Reuters

Victoria’s Secret fashion show set for a comeback after six-year gap

THE POPULAR annual runway show from Victoria’s Secret, featuring supermodels with jewel-encrusted bras and angel wings, will be back this fall season after a gap of nearly six years.

The lingerie retailer announced in an Instagram post on Wednesday that it would be bringing back the show without specifying a date, and hinted at some changes to the format of the event.

The show, known for its extravagant stage setups, intricate costumes and bras valued at millions of dollars, has seen some of the biggest models like Adriana Lima, Naomi Campbell, and Bella Hadid walk its runway, along with musical performances from artists including Rihanna, Taylor Swift, and Justin Bieber.

“The 2024 Victoria’s Secret Fashion Show will deliver precisely what our customers have been asking for — the glamor, runway, fashion, fun, wings, entertainment — all through a powerful, modern lens reflecting who we are today,” the company told Reuters.

In 2019, the retailer, which was a subsidiary under parent company L Brands, canceled the show saying that it was “important to evolve the marketing of Victoria’s Secret.”

At the time, L Brands was battling a series of issues including falling sales for its pricey lingerie, activist investor pressure and growing criticism for an outdated brand image and for lingerie that was not inclusive of all body types.

In 2021, L Brands split into two public units — Bath & Body Works and Victoria’s Secret. Sales at the lingerie retailer have continued to decline post the spin off.

After halting the show in November 2019, Victoria’s Secret unveiled a documentary called the Victoria’s Secret World Tour last year on Amazon Prime.

The first ever Victoria’s Secret Fashion Show took place at the New York City Plaza Hotel in 1995. — Reuters

The Philippine startup ecosystem grows deep roots to nurture future success

SNOWING/FREEPIK

THE VIBRANT Philippine startup ecosystem demonstrated resilient performance in 2023, raising $956 million in funds despite strong global headwinds.

While this figure represents a modest 14% dip year on year in deal value from 2022, it compares favorably to the 62% year-on-year decline the Global Private Capital Association assessed across the wider Southeast Asia region.

With 96 deals completed, the Philippines also hit a record high in deal volume in 2023, a 16% year-on-year increase from 83 deals in 2022. This buoyant ecosystem is outlined in Boston Consulting Group’s (BCG) latest report, “Philippines Venture Capital Report 2024,” created in partnership with Foxmont Capital Partners.

Alongside growing deal volumes, there are encouraging signs of diversity, with sectors seeing interest beyond traditional e-commerce or financial technology (fintech). Emerging opportunities in business-to-business (B2B) software-as-a-service (SaaS), direct to consumer brands, health technology (healthtech), and impact/ESG reveal a maturing ecosystem with broad appeal.

The Philippines’ share of Southeast Asian funds raised also grew to 13% in 2023, almost doubling from 7% in 2022. The nation also attracted prominent regional investors such as DSG Consumer Partners, Softbank Ventures Asia, Cercano, GSR Ventures, and ACA Investments, all making maiden investments in 2023. The local startup ecosystem is undeniably on the rise.

NATIONAL ADVANTAGES PUSH GROWTH POTENTIAL
The Philippines boasts clear economic and demographic advantages that will drive further growth in a maturing startup ecosystem. The nation posted the highest growth (5.6%) in gross domestic product (GDP) of regional peers in 2023.

This growth is supported by expanding labor force participation and consumer demand, as high fertility rates push a demographic advantage. The Philippine population has the youngest median age amongst neighboring countries at just 24.5, compared against a global median of 30.3.

By 2030, the Philippines is projected to overtake the global average share of working age population, reaching two-thirds (66.2%) of the total population by 2050. This demographic dividend is a major reason why investment firm Goldman Sachs predicts the Philippines will rank among the 15 largest economies by 2075.

Digital evolution is also powering up economic potential. The Philippines has reached an inflection point in key digital transformation levers, mirroring trends observed in the past in countries like Indonesia, China, and India.

These levers include:

• Strong government support with the launch of policies such as the Ease of Doing Business Act, Revised Corporation Code, and Innovation Startup Act.

• The rise of homegrown tech giants such as fintech success stories Maya and GCash has provided champions that uplift the quality of the wider ecosystem.

• Accelerating smartphone and internet adoption is also unlocking opportunities, spurred by mass adoption during the COVID-19 pandemic. The share of digital payments, for example, increased from 10% of all payments in 2018 to 50% by 2023.

• The deepening presence of international investors frames the final opportunity in this landscape. There has been growing international interest in the Philippines’ startup ecosystem, with a transaction value exceeding $1 billion raised for the first time ever in 2021.

EVOLVING CONSUMERS MEAN AN EVOLVING ECOSYSTEM
Our report states that startup companies will need to adapt to win with customers in this vibrant, but evolving, national ecosystem. Filipino customers have their own unique characteristics that must be catered to.

These consumers are comfortable with digital activities, but prefer offline purchases, with two-thirds (64%) preferring to touch or see the products before buying. Hesitation around online purchasing is driven largely by questions over security and quality of online purchases.

Local consumers also rely heavily on personal recommendations, with 91% of Filipinos trusting word-of-mouth recommendations from friends and family.

There are already several emerging operational strategies in the e-commerce space that provide an effective template to drive purchases and engage customer loyalty.

• Social and live commerce leverages a social approach akin to personal recommendations, and benefits from the significant 3.5 hours that Filipinos spend on social media — over an hour more than the global average.

• Omnichannel approaches such as “click-and-collect” provide an effective model that combines online convenience with real-world purchase assurance.

• Direct-to-consumer (D2C) strategies are being employed in areas such as fashion, footwear, and cosmetics, providing direct access to reliable products backed by consistent user experience.

• Innovative tech tools such as machine learning (ML) and artificial intelligence (AI) are also being used to power up customer experience, delivering hyper-personalization at scale.

• Finally, rewards programs provide a trusted pathway to increase brand loyalty with exclusive member discounts and rewards.

E-commerce is not alone in evolving to meet changing customer needs. We also see signs of fintech expanding and adapting its offerings, with increasing verticalization and product expansion to offer tailored customer value propositions.

DEVELOPMENTS FROM CRADLE TO EXIT
The Philippines Venture Capital Report 2024 also demonstrates that the Philippines’ buoyant startup ecosystem has seen significant transformation over the last decade. A diverse group of venture capital firms, angel investors, incubators, accelerators, startup competitions, technology and business incubators, and support programs — both public and private-led — have emerged to support startups and catalyze the ecosystem.

The Philippine Government has thrown significant support behind startups, with the Startup Venture Fund run by the National Development Co. offering a prime example of ecosystem support which invests directly into local startups. There are already signs of entrepreneurial growth within this fertile ecosystem. New business registrations per 1,000 people grew by 55% in the decade from 2009-2019, up from 0.2 business registrations per 1,000 people to 0.31 per 1,000 people.

While many startups are still in their early stages, numerous developments are underway to support successful exits for alternative investments. Collective efforts are apparent to boost retail participation and empower startups to reach public markets.

On the policy front, the Philippines is implementing the same initiatives that have historically proven to help propel regional peers like Indonesia and Vietnam with a buoyant public capital market, such as the T+2 settlement system to enhance the settlement cycle, preferred shares-only listings, short-selling, the easing of lock-up rules, and volume weighted average price trading.

To encourage greater participation of small- and medium-sized enterprises (SMEs) in the stock market, IPO listing rules have been relaxed, overseen by the dedicated SME Board.

Further support was delivered through the Philippine Stock Exchange Listing Engagement and Assistance Program (PSE LEAP) program. This program was introduced to offer advisory and learning sessions, tools, and access to a relevant network of prospective list applicants, and has supported 76 companies to date — 70% of which are SMEs.

The Philippines’ startup ecosystem has seen encouraging development over the last decade, and the signals for future growth are positive. The outlook remains a continuously thriving ecosystem bolstered by an increasing number of players and expanding policy support, creating an energized startup landscape.

 

Anthony Oundjian is the managing director and senior partner of the Boston Consulting Group while Bea Mantecon is director, Value Creation at Foxmont Capital Partners.

Electric Vehicle Owners Society draws record attendance in meetup

Electric Vehicle Owners Society members and supporters are growing in number. — PHOTO FROM THE ELECTRIC VEHICLE OWNERS SOCIETY

THE ELECTRIC VEHICLE Owners Society (EVOS) held its 11th meetup, marking the first gathering of the year for the EV community. The group got together at Caltex Mamplasan and Lakeshore Batangas, bringing together a record 30 electric vehicles (EVs) of various makes and models.

The regular meetup serves as a platform for EV enthusiasts to connect, share experiences, and discuss the latest developments in the electric vehicle industry. Among the distinguished guests was Department of Energy Director Patrick Aquino, emphasizing the government’s commitment to supporting sustainable transportation initiatives.

EVOS President Ferdi Raquelsantos expressed his excitement about the record-breaking turnout, stating, “We are thrilled to see the EV community come together in such large numbers for our 11th meetup. This event underscores the growing interest and enthusiasm for electric vehicles in the Philippines.”

Representatives from prominent automotive brands and distributors, including BYD, MG, Autohub, Ecomax, Evoxterra, Autoaccess, and PESIN, were also in attendance, reaffirming their commitment to advancing electric mobility and engaging with EV owners.

The meetup commenced at Caltex Mamplasan, where participants gathered before embarking on a scenic convoy to Lakeshore Batangas. Electric Vehicle Association of the Philippines (EVAP) Chairman Rommel Juan and EVAP President Edmund Araga co-organized the event, highlighting EVAP’s dedication to promoting sustainable transportation solutions.

“We are proud to co-organize this event with EVOS and showcase the collective efforts of our organizations in driving the adoption of electric vehicles. Together, we are working towards a greener and more sustainable future,” said Mr. Juan.

Naer Pizarro, alongside Rommel Juan, served as hosts for the event, ensuring that participants had an enjoyable and enriching experience throughout the meetup.

The 11th EVOS meetup not only celebrated the growing EV community but also served as a testament to the collective efforts of stakeholders in promoting sustainable transportation solutions.

China probes agri minister for suspected ‘disciplinary violations’

REUTERS

BEIJING — China’s agriculture minister is being investigated for suspected violations of law and discipline, the anti-graft regulator watchdog said Saturday.

Tang Renjian, 61, is under investigation for “serious violations of discipline and law” by the Central Commission for Discipline Inspection (CCDI) and National Supervisory Commission, CCDI said.

The term is CCDI’s typical euphemism for corruption. The notice gave no further details. It is uncommon for an official of Mr. Tang’s rank to be placed under investigation without first being removed from the post.

He most recently appeared in public on Wednesday at a conference on rural talent, where he gave a speech, according to a post on the agriculture ministry’s website.

Mr. Tang was governor of the western province of Gansu from 2017 to 2020 before being named minister of agriculture and rural affairs, according to official biographies. — Reuters

US project acquisition, MSCI rebalancing lift ACEN shares

AYALA-LED ACEN Corp. shares rose last week after announcements of US asset acquisition and Morgan Stanley Capital International (MSCI) rebalancing.

Data from the Philippine Stock Exchange (PSE) showed a total of 313.75 million ACEN shares worth P1.58 billion were traded from May 13 to 17.

Shares closed at P4.9 apiece last Friday, up 8.6% from its P4.51 close on May 10.

Year to date, the stock rose by 11.9%.

In a disclosure on Monday, the listed energy company announced the approval of its acquisition of a 165.6-megawatt wind energy project in Shackelford County, Texas, USA.

The acquisition is still subject to the finalization of commercial terms, fulfillment of agreed-upon conditions, and execution of definitive documentation.

Arielle Anne D. Santos, equity analyst at Regina Capital Development Corp., said in an e-mail that the disclosure affected ACEN’s stock performance, as the acquisition aligns with the company’s goal to establish itself in international markets and expand into the renewable energy sector.

“The market reacted positively to this news, reflecting investor confidence in the company’s growth trajectory and its ability to execute large-scale, high-potential projects,” she added.

Jervin De Celis, equity trader at Timson Securities, Inc., said in a separate e-mail that the impact of the announcement might be seen in the stock’s future price movement. He added that the acquisition could lead to ACEN’s strengthened presence in the US renewable energy sector, a prospect that could be attractive to investors.

The transaction will be made by UPC Power Solutions LLC, the US joint venture company of ACEN USA LCC, along with PivotGen and UPC Wind and Solar Investments, LLC.

Meanwhile, it was announced that ACEN is one of 233 additions in MSCI’s Small Cap Index, an index designed to measure the performance of small-cap stocks. This rebalancing is set to be implemented on May 31, 2024.

The MSCI rebalancing played a crucial role in ACEN’s stock performance, Ms. Santos said.

“The inclusion or exclusion of a stock in the MSCI index can significantly impact investor sentiment, as it directly affects the stock’s exposure to global investment funds tracking the index. Investors typically position themselves in stocks slated for inclusion prior to the implementation date, anticipating further price appreciation upon inclusion,” she said. 

“Inclusion in the index generally brings positive attention and attracts investments from foreign investors. Being added to the index typically sends the stock price of a company higher,” Mr. De Celis likewise said.

Foreign investors have been interested in ACEN shares as of late, possibly because of the earnings announced made by the company earlier in the month, he said.

In the first quarter of the year, the company’s attributable net income grew by 34.3% to P2.72 billion from P2.03 billion in the same period the previous year.

Ms. Santos said they expect increase in profitability in the second quarter brought by new high revenue projects and strategic acquisitions.

“ACEN’s focus on renewable energy is likely to yield strong financial results given the growing demand and favorable regulatory environment for green energy initiatives,” she added.

Early this week, she expects the stock price to decline as the stock remains in the “overbought region.”

Ms. Santos placed her support level at P4.56 and resistance at P5.28.

Mr. De Celis sees support in the P4.60-P5.00 range and resistance in the P5.20-P5.30 range. — Karis Kasarinlan Paolo D. Mendoza

Style (05/20/24)

Muji Philippines gives prizes for anniversary

LAST April, Muji Philippines’ marked its 7th anniversary, and it is expecting to open its 7th store in June at the Uptown Mall, Bonifacio Global City (BGC). Muji is continuing the celebration with a raffle and seven prizes. The brand will be giving away a trip to Tokyo via Philippine Airlines and a four-day and three-night stay at the Muji Hotel in Ginza, Tokyo. Until July 31, a minimum single receipt of P3,500 at Muji stores and online catalog at mujiph.com will earn the shopper a chance to register and join the raffle. Two Muji customers will win a trip for two. Muji is also giving away P2,000 worth of gift certificates to five raffle winners. To join, customers must be Muji members. If they are not a Muji member yet, they can sign up for free at https://woobox.com/vhqgji. For more details visit mujiph.com or visit facebook.com/muji.ph or follow @muji_ph on Instagram.

Uniqlo celebrates 40 years with gifts, sales

UNIQLO Philippines will be holding its Thank You Festival from May 24 to June 2, celebrating the brand’s global 40th anniversary. During the festival, new services, promotions, and limited-edition novelty items will be available at Uniqlo stores nationwide and on uniqlo.com/ph. There will be discounts of up to P200 on selected items from the Airism line, as well as on items such as the Cotton Relaxed Ankle Pants and the Women’s Rayon Skipper Collar Sleeveless Blouses. As for gifts, for every P3,500 single-receipt purchase from any Uniqlo store and online store from May 24 to May 30, customers will receive a free Packable Duffle Bag. To avail of this limited-edition item, customers must scan their Uniqlo App upon payment in any physical store. Another gift is the Upcycled Pouch made from upcycled denim scraps from the brand’s alteration services. Those who shop during the first two hours upon store opening can get this item for free with any amount purchased at a Uniqlo store and through Click & Collection from May 31 to June 2. These pouches were made together with Bukas Palad Foundation, a non-profit NGO that provides sustainable development, education, and livelihood to children, the elderly, the urban poor, and victims of calamities. From May 24 to June 2, all stores will feature “Thank You Mirrors,” where customers can take selfies in their favorite Uniqlo outfits. By posting their selfies on Facebook, Instagram, or TikTok with the hashtag #UNIQLOThankYouFestival, the customers will have a chance to win P5,000 worth of Uniqlo items. They are also expanding the UTme! service to SM Seaside City Cebu and SM Lanang Premier. This service allows customers to create personalized T-shirts by combining photos, images, and text. New designs available with UTme! include some from Potato Corner and Studio Dialogo. Just for the festival, in collaboration with Disney Philippines, UTme! is releasing limited edition T-shirts and tote bags featuring Mickey Mouse, to be available in select Uniqlo stores starting May 24. Check out www.uniqlo.com/ph for updates.

Sustainable fashion with Bb. Pilipinas

ARANETA City presented REINVENT: A Sustainable Fashion Show at the Quantum Skyview, New Gateway Mall 2 on May 16. Done in partnership with local designers, Araneta City tapped former Binibining Pilipinas queens, reigning titleholders, and the 2024 candidates to strut the runway in outfits crafted from eco-friendly materials. The fashion show showcased the sustainable designs of Jean Alta, Don Cristobal, Russ Cuevas,
Adam Balasa, James O’Briant, Rannel Espaldo, Doms Abusta, Uly Marquez, Mark Comb, and Allan Lasern. All models wore accessories from Christopher Munar. The fashion show opens the series of public events and activities of the 60th Binibining Pilipinas Pageant at Araneta City in Cubao, Quezon City, leading to the coronation night in July.

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