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Tracking the BSP’s journey in embracing sustainable finance

Image from bsp.gov.ph

For more than 30 years, the Bangko Sentral ng Pilipinas (BSP) has been the stronghold of the Philippine economy. Established pursuant the New Central Bank Act of 1993, the BSP promotes price stability, a strong financial system, and a safe and efficient payment and settlement system for Filipinos.

Since its establishment, the Philippines’ central bank has weathered several economic challenges over the decades including the Asian Financial Crisis in 1997, a global pandemic in 2020 and, in the past year, skyrocketing inflation rates. But with growing concerns and pressure to act on other looming problems such as climate change and growing social inequality, the BSP has started to embrace sustainable finance as a measure to ensure long-lasting progress.

The BSP refers to this process as “any form of financial product or service which integrates environmental, social, and governance criteria into business decisions that support economic growth” which may lead to long-term economic projects.

These considerations might include climate change mitigation and adaptation, issues of inequality and inclusiveness as well as management structures of public and private institutions that play a fundamental role in the decision-making process.

In this regard, the BSP has made a few steps to integrate sustainable finance into its policies and practices. A circular released in 2020 states that the BSP’s monetary board had approved a sustainable finance policy framework that set out the central bank’s expectations for financial institutions to embed these principles in their operations.

Circular 1085, Series of 2020, required banks in the country to disclose sustainability strategic objectives and risk appetites, overviews of environmental and social risk systems, products and services aligned with internationally recognized sustainability standards including the issuance of green, social, and sustainability bonds, and other initiatives that promote adherence to sustainable finance in their annual reports. Aside from the items above, the circular also mandates banks to report the progress of these initiatives to the BSP yearly.

In 2021, the BSP, along with other central banks, pledged to facilitate sustainable regulations that will respond to climate change through the collective declaration of the Central Banks and Supervisors’ Network for Greening the Financial System (NGFS) in their commitment to the 26th United Nations Climate Change Conference of Parties (COP26).

“Central banks and financial institutions should recognize their important role in contributing to the transition to a low-carbon economy. As stewards of the financial sector, we should all commit to act with urgency in achieving the desired emissions reduction targets and in promoting the sustainability agenda,” former BSP Governor Benjamin E. Diokno said in a statement.

A year later, the central bank released the Philippine Sustainable Finance Roadmap and Sustainable Finance Guiding Principles. Developed by the BSP’s “Green Force” in 2021, the road map and guiding principles aim to facilitate the mainstreaming of sustainable finance in the country and establish an understanding among stakeholders of economic activities considered “sustainable.”

The document laid out the BSP’s strategic plans to develop sustainable finance in the country. These initiatives seek to establish three pillars in the Philippine financial system that aim to create a conducive environment, mainstream sustainable finance, and develop a sustainable pipeline.

The BSP also launched its 11-point Sustainable Central Banking (SCB) Strategy in 2022. The points are: to conduct a comprehensive vulnerability assessment of the economy and financial system accounting for environmental risks; enhance mandatory disclosures of climate-related financial risks by all banks; issue guidance on mandatory climate stress testing for banks; explore the integration of environmental and social risk into prudential practices.

The 11-point SCB Strategy also includes for BSP to: incorporate macroeconomic effects of climate change into monetary policy analysis; consider incentive schemes for the promotion of green lending by banks; include sustainability considerations in its portfolio and risk management and sign the UN Principles for Responsible Investment (UN PRI); develop a task force for inclusive green finance; to include climate-related financial disclosures in its annual report; adopt sustainable practices for its facilities and operations; and to roll out a capacity-building program for all staff in relevant areas.

“Climate change and other environmental hazards impact the prices of goods and change the risk profile of financial institutions. We are doing what we have to do in line with our mandates of promoting price and financial stability,” then-Governor Felipe M. Medalla said in a press release.

Last year, in an effort to foster the transition toward a sustainable economy, the BSP approved additional incentives for financial institutions in the form of additional single borrower’s limit (SBL) for financing eligible projects and zero reserve requirement rates on sustainable bonds.

The introduction of this set of measures is part of the initiative under the BSP’s 11-point SCB Strategy to mainstream sustainable finance as well as support the achievement of the country’s climate commitments and sustainable development goals.

Recently, the BSP’s monetary board approved the adoption of the Philippines’ Sustainable Finance Taxonomy Guidelines (SFTG) for banks which aims to direct, accelerate, and increase capital flows to economic activities that promote sustainability objectives. The SFTG will use a “traffic light system” to classify bank activity: “Green” for an SFTG-aligned activity, “Amber” for partially aligned, and “Red” for not aligned.

This version of the SFTG focuses on climate change mitigation and climate change adaptation with future interactions expected to emphasize biodiversity and circular economy. The taxonomy provides a simplified approach to assessing the economic activities of micro, small, and medium enterprises (MSMEs).

“The issuance of a taxonomy is a crucial step in our sustainability journey. It provides high level guidance in determining the greenness of an investment. But this is just the first step to what I expect will be a long iterative process of calibrating the document to fully capture the conditions of the Philippine economy,” BSP Governor and Monetary Board Chairman Eli M. Remolona, Jr. said in a statement.

Throughout the years, the central bank has shown its commitment to the Filipino people by proactively responding to the financial crisis that they have faced. By adopting sustainable finance and integrating environmental, social, and governance criteria into its policies and practices, the BSP has paved the way to a more sustainable economy and future for the Philippines. — Jomarc Angelo M. Corpuz

Japan imposes new fees on Mount Fuji climbers to limit tourists

FILIZ ELAERTS-UNSPLASH

FUJIYOSHIDA, Japan — Park rangers on Japan’s sacred Mount Fuji officially started this year’s climbing season about 90 minutes before sunrise on Monday, levying new trail fees and limiting hiker numbers to curb overcrowding.

At 3 a.m., officials opened a newly installed gate at a station placed just over halfway up the 3,776-meter (12,388-ft) peak that is a symbol of Japan and a magnet for tourists, now swarming into the country at a record pace.

Climbers must pay 2,000 yen ($12) and their numbers will be limited to 4,000 a day after complaints of litter, pollution, and dangerously crowded trails flowed in last year.

“I think Mount Fuji will be very happy if everyone is more conscious about the environment and things like taking rubbish home with them,” said Sachiko Kan, 61, who was one of about 1,200 hikers gathered on the first day of the new measures.

The yen’s slide to a 38-year low has made Japan an irresistible bargain for overseas visitors.

They are injecting record sums into national coffers but are also putting strains on facilities for travel and hospitality, not to mention the patience of locals.

Hordes of tourists became a traffic hazard at a nearby photography spot where Mount Fuji appeared to float over a convenience store, driving officials to put up a barrier of black mesh to obstruct the view that had gone viral online.

The climbing season this year on Mount Fuji, which straddles the prefectures of Yamanashi and Shizuoka about 136 km from Tokyo, runs until Sept. 10, after which the weather gets too cold and snowy.

A still active stratovolcano whose last eruption was in 1707, Mount Fuji has been a site of Shinto and Buddhist worship for centuries.

The number of climbers recovered to pre-pandemic levels last year, with about 300,000 annually, the environment ministry says. Hikers typically start in the wee hours to make it to the top in time for sunrise.

For their money, climbers receive a wristband giving access to the trail between 3 a.m. and 4 p.m., excluding those with reservations for mountain huts closer to the peak, to whom the daily limit on visitors will not apply, authorities say.

The new trail curbs were necessary to prevent accidents and incidents of altitude sickness, particularly among foreign “bullet climbers,” or those racing to the top, Yamanashi governor Kotaro Nagasaki said last month.

Japan should focus on attracting “higher spending visitors” over sheer numbers of people, he told a press conference.

Geoffrey Kula, one overseas climber waiting to scale Mount Fuji on opening day, took the restrictions in stride.

“This is not Disneyland,” said Mr. Kula, a visitor from Boston. “Having some sort of access control system to limit the amount of potential chaos is good.” — Reuters

Gov’t makes full award of reissued 7-year bonds

WIKIPEDIA/JUDGE FLORO

THE GOVERNMENT made a full award of the reissued Treasury bonds (T-bonds) it offered on Tuesday at an average rate slightly below secondary market levels after the Bangko Sentral ng Pilipinas (BSP) signaled that it could start its easing cycle as early as next month.

The Bureau of the Treasury (BTr) raised P30 billion as planned via the reissued seven-year bonds it auctioned off on Tuesday as total bids reached P72.954 billion.

The bonds, which have a remaining life of four years and 10 months, were awarded at an average rate of 6.406%. Accepted yields ranged from 6.39% to 6.44%.

The average rate of the reissued seven-year bonds rose by 30.9 basis points (bps) from the 6.097% fetched for the series’ last award on June 20, 2023, but was 9.4 bps lower than the 6.5% coupon for the issue.

This was also 1.2 bps lower than 6.418% quoted for the five-year bond — the tenor closest to the remaining life of the papers on offer — and 1 bp below the 6.416% seen for the same bond series at the secondary market before Wednesday’s auction, based on PHP Bloomberg Valuation Service Reference Rates data provided by the BTr.

The Treasury made a full award of the reissued papers as they fetched an average yield below secondary market levels and as the offered volume was oversubscribed, it said in a statement after the auction.

Tuesday’s award brought the total outstanding volume for the series to P159.7 billion, it added.

The government fully awarded the bonds as it saw strong demand for its offer, a trader said in a text message.

“Looks like investors, especially end-users, are getting comfortable extending duration following the dovish BSP outlook,” the trader said. “They are now comfortable buying longer bonds for yield pickup, from the usual bills to one-year papers and now to four- to seven-year tenors.”

The average yield fetched for the reissued bonds was slightly below secondary market rates  after the BSP signaled it could cut rates as early as August, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort likewise said in a Viber message.

BSP Governor Eli M. Remolona, Jr. on Thursday said the Monetary Board is “on track” and “somewhat more likely than before” to slash rates at its Aug. 15 policy meeting, well ahead of the US Federal Reserve, which has signaled it could begin easing by December.

The BSP could cut rates by 25 bps in the third quarter and by another 25 bps in the fourth quarter, he added.

The Monetary Board’s Aug. 15 review is its only meeting in the third quarter. Meanwhile, its last two reviews for the year will be held in the fourth quarter and are scheduled on Oct. 17 and Dec. 19.

An August rate cut would be the first for the BSP in over three years, which last slashed borrowing costs by 25 bps in November 2020 to bring the policy rate to a record low of 2% during the height of the coronavirus pandemic.

The BSP last week left its policy rate unchanged at a 17-year of 6.5%, as expected by all 15 analysts in a BusinessWorld poll. Interest rates on the overnight deposit and lending facilities were also maintained at 6% and 7%, respectively.

The Monetary Board hiked rates by a cumulative 450 bps from May 2022 to October 2023 to help bring down elevated inflation.

Expectations of easing inflation in the coming months also caused bond yields to go down, Mr. Ricafort added.

Mr. Remolona last week said he expects the consumer price index (CPI) to further ease this semester with the implementation of lower tariffs on rice.

The BSP lowered its average baseline inflation forecasts for 2024 and 2025 to 3.3% and 3.1%, respectively, from 3.5% and 3.3% previously. It also slashed its risk-adjusted inflation forecasts for this year and next to 3.1% from 3.8% and 3.7%, respectively.

Headline inflation averaged 3.5% for the first five months, well within the central bank’s 2-4% goal for the year.

The Philippine Statistics Authority will release June CPI data on Friday (July 5). A BusinessWorld poll of 14 analysts yielded a median estimate of 3.9% for June inflation, within the BSP’s 3.4-4.2% forecast for the month.

The BTr wants to raise P215 billion from the domestic market this month, or P100 billion from Treasury bills and P115 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at P1.48 trillion or 5.6% of gross domestic product for this year. — A.M.C. Sy

Aiming for food security in a challenging environment

PHILIPPINE STAR/RYAN BALDEMOR

When Filipinos talk about putting food on the table, they often consider the cost of bringing food, from the source, through various channels, and finally to the family home for the consumption and nourishment of its members. Food security is knowing that there will always be food available not only for the day but in the foreseeable future, and that the members of the family, while they have had something to eat today, will also not go hungry tomorrow or the days after that.

Many factors affect food security in the Philippines. Climate change is one. The Philippines ranked first in the World Risk Report 2023 for high disaster risk. Rising temperatures, extreme weather events, and disrupted supply chains contribute to food shortages and inflation.

Aside from the immediate damage done by rain, flooding, and destruction, climate change also has longer-term consequences in terms of compromising harvests, destroying crops, thus driving up demand and prices. In a survey commissioned by the Stratbase Institute for Pulse Asia Research, Inc. in September 2023, it was revealed that 95% of Filipinos claimed that they have seen and felt the price increase with food, with rice prices particularly affected. Inflation rate rose to 3.7% in March 2024. A survey by the Social Weather Stations in December 2023 showed that around 72% of Filipinos consider themselves to be hungry, with 35% of them saying that they are experiencing food poverty.

There is another factor that compounds the cost of food: logistics, or how food is brought from source to destination.

The Stratbase Institute published a paper entitled “Analysis of logistics costs for imported and domestic containers in the Philippines” written by Pablo Corralo Llorente of Bluefocus Infrastructure Advisors. The study shows that maritime transportation is costlier in the Philippines than in neighboring countries in Southeast Asia, with destination charges having more weight. Logistics costs for an average imported container are about $5,300, representing slightly over 10% of final stock value.

Given all these, we at the Institute partnered with PHINMA Corp. and the Makati Business Club in holding a forum on June 24 entitled Achieving Food Security: Advancing Investments for Agricultural Sustainability. The event aimed to encourage insightful and collaborative discussions to cultivate a resilient and sustainable food security environment within the country.

Our takeaway was that prioritizing investments and implementing target measures can overcome food insecurity challenges, improve the standard of living for citizens, and pave the way for a resilient and prosperous future.

During the event, Eduardo Sahagun, PHINMA Corp. Director and Executive Vice-President, Construction Materials, emphasized collaboration among the public and private sectors in improving the lives of Filipinos. He also shared his aspirations for sustainability particularly supporting the cold chain industry for food security and safety, having sufficient cold storages to help the health sector, and, overall, having infrastructure resilient to climate change.

Mr. Sahagun also shared figures from a United Nations report that said that last year, nearly 51 million Filipinos faced moderate or severe food insecurity, the highest in Southeast Asia. He also referred to Agriculture Secretary Francisco Laurel, Jr.’s statement that 30% of the country’s agricultural produce is wasted because of poor logistics systems.

Agriculture Undersecretary for Policy, Planning, and Regulations Asis G. Perez enumerated several sector goals: achieving food security for the Filipino people through boosting local agricultural production to ensure accessibility to affordable and nutritious food, developing the agriculture and fisheries sector as a profitable industry for farmers, fisherfolk, and all stakeholders involved in the value chain, expanding and improving available agri-fishery areas for increased production, mechanizing and modernizing agro-fishery and production systems, developing and improving post-harvest systems and infrastructure, developing efficient logistics systems for both input and production output, and improving and expanding local and international market access.

The Department of Agriculture’s Official Spokesperson Arnel V. de Mesa, who is the Assistant Secretary for Special Concerns and for Official Development Assistance (ODA) – Foreign Aid / Grant, emphasized the department’s core function, to construct and establish infrastructure to support agri-fishery industrialization and modernization even as great inefficiencies in the supply chain must be addressed.

Danielle Del Rosario, Chief Operating Officer of Union Insulated Panel Corp., enumerated the social benefits of investments in agricultural infrastructure including cold storage and the cold chain industry.

The discussions last week brought me back to pronouncements made by President Ferdinand Marcos, Jr.: “Food security remains the forefront of our national agenda,” he said on one occasion. “We must invest in facilities, logistics, and systems that bring nutritious food to our people.” Finally, “we must also cooperate to develop technologies that increase the nutritional value of our food and content and prolong their shelf life.”

The executive guidance showing that our government leaders are acutely aware of the food security issue, as well as the unwavering support and commitment offered by the private sector, gives me hope that despite the difficulties we are facing, food security remains a reachable goal. Let us not take our eyes off this aim, because it affects each Filipino and seeps into each aspect of our nation’s life.

 

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.

Jollibee acquires majority stake in South Korea’s Compose Coffee for $340M

LISTED Jollibee Foods. Corp. (JFC) has acquired a majority stake in South Korean value coffee brand Compose Coffee for $340 million, or almost P20 billion, as part of strengthening the company’s coffee and tea business.

JFC’s wholly owned subsidiary, Jollibee Worldwide Pte. Ltd. (JWPL), bought 70% in Compose Coffee Co., Ltd. and its roasting facility JMCF Co. Ltd., collectively called Compose Coffee, the company said in a stock exchange disclosure on Tuesday.

Private equity firm Elevation Equity Partners Korea Ltd. will get a 25% stake while Titan Dining II LP (Titan Fund II) will have the remaining 5%.

JFC has a 90% participating interest in Titan Fund II through JWPL. The deal was finalized after the signing of definitive agreements.

“The business that Compose Coffee has built in the past ten years is impressive and we are excited to play a major role in its next phase of growth. We believe that Compose Coffee is a compelling strategic fit for JFC and is on track to becoming the largest, fastest-growing, and leading value coffee player in South Korea,” JFC Chairman Tony Tan Caktiong said.

“Together with Elevation and Titan Fund II, we look forward to working with the Compose Coffee’s accomplished management team to further accelerate the company’s growth in existing and new markets and capture the significant white space in South Korea’s value coffee market,” he added.

JFC has been recently strengthening its coffee and tea business. The company acquired a 10% stake in US-based beverage technology company Botrista, Inc. for $28 million in March.

Botrista holds more than 100 patents worldwide for its proprietary dispense technology, which provides automated solutions to serve cold specialty coffee and tea-based drinks with premium and all-natural ingredients.

With the acquisition of Compose Coffee, JFC expects a 2% increase in revenues, bringing the international business’ contribution to 41% of global revenues.

The company also projects a 12% increase in earnings before interest and taxes and a 34% surge in store count as Compose Coffee has over 2,600 additional stores in South Korea as of June, making it JFC’s biggest brand in terms of store count.

 “It will bring JFC’s store network closer to 10,000 stores, more than 66% of which will be outside the Philippines,” the company said.

 JFC said that Compose Coffee, founded in 2014, ranks first in the industry in terms of the growth rate in the number franchised stores and brand satisfaction among Korean coffee brands. The coffee brand operates the largest in-house coffee roasting plant in Korea.

 “This acquisition is aligned with JFC’s commitment to coffee and tea segment and franchising initiatives. This strategic, rapid growth, financially lucrative investment serves as JFC’s gateway in unlocking the fast-growing international value coffee market in South Korea which ranks third globally in terms of coffee consumption per capita,” it said.

 Compose Coffee’s menu boasts a huge variety of coffee and non-coffee options. Some of JFC’s other brands in the coffee and tea business include Coffee Bean & Tea Leaf, Common Man Coffee Roasters, and Highlands Coffee.

 For the first quarter, JFC saw a 26.9% increase in its first-quarter attributable net income to P2.62 billion as system-wide sales grew by 10.4% to P86.83 billion.

 The company hiked its store network by 5.3% to 6,886 stores as of end-March, consisting of 3,337 in the Philippines and 3,549 international branches.

 JFC shares rose by 0.44% or P1, finishing at P226.20 per share on Tuesday. — Revin Mikhael D. Ochave

Pre-need firms’ Q1 premium income down

THE PRE-NEED INDUSTRY saw its premium income decrease by 2.15% year on year in the first quarter amid lower plans sold, data from the Insurance Commission (IC) showed.

The sector’s premium income went down to P5.61 billion at end-March from P5.73 billion in the same period last year, based on IC data released on Tuesday.

The report was based on the interim financial statements submitted by 17 companies, made up of 11 licensed pre-need firms, four with pending license applications, as well as two servicing companies.

The number of plans sold by pre-need firms declined by 35.71% to 166,286 in the first quarter from 258,677 a year prior.

This was mainly driven by the 35.75% drop in life plans sold in the period to 166,050 from 258,453.

On the other hand, pension plans sold increased by 4.41% to 213 from 204, while education plans more than doubled to 23 from 10.

Still, the pre-need industry’s combined net income surged by 191.01% to P3.25 billion in the first quarter from P1.12 billion a year ago, IC data showed. Only five out of the 17 firms included in the report posted net losses in the quarter.

Investments in trust funds grew by 6.53% year on year to P130.11 billion in the first quarter from P122.14 billion.

Pre-need reserves, which include benefit obligations or payables as mandated by the Pre-Need code, likewise rose by 4.52% to P120.07 billion from P114.87 billion.

As a result, the combined difference between trust funds and reserves per company stood at a P10.05-billion surplus at end-March, up by 38.3% from P7.26 billion a year prior.

Meanwhile, the industry’s total net worth increased by 15.48% year on year to P26.38 billion as of March from P22.85 billion, the IC report showed.

This was driven mainly by the 29.18% rise in retained earnings to P18.22 billion. However, capital stock dropped by 6.19% year on year to P3.5 billion.

On the other hand, the sector’s total assets rose by 5.47% year on year to P152.78 billion from P144.85 billion.

Total liabilities also went up by 3.6% to P126.4 billion from P122.01 billion.

Based on the IC data, in terms of premium income, St. Peter Life Plan, Inc. was the top performer with P5.23 billion as it sold a total of 163,726 plans with a total contract price of P9.5 billion in the first quarter.

This was followed by Philplans First, Inc., which recorded a premium income of P264.54 million in the period, selling 332 plans worth P15.22 million.

Rounding out the top three was Golden Future Life Plans, Inc., which posted a premium income of P52.01 million. It sold 186 plans with a contract price of P18.94 million in the first quarter.

Meanwhile, in terms of net income, St. Peter Life Plan also ranked first with P3.13 billion, followed by Philplans First with P55.01 million and Sunlife Financial Plans with P48.06 million. — A.M.C. Sy

Albania’s best-known novelist Ismail Kadare, 88

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RESTLESSBOOKS.ORG

BELGRADE — Ismail Kadare, an acclaimed Albanian novelist and playwright who defied his country’s longtime Communist rulers through his writing, has died in a Tirana hospital after having a heart attack, local television cited his editor as saying. He was 88.

Mr. Kadare, a prominent figure in Albanian and international literature, gained recognition in 1963 with his novel The General of the Dead Army, which drew praise from literary critics around the world.

Prime Minister Edi Rama paid tribute to Mr. Kadare in a message on Facebook, hailing him as a “monument of Albanian culture.”

Mr. Kadare received numerous global awards, including the Man Booker International Prize in 2005, the Prince of Asturias Prize for the Arts in 2009, the Jerusalem Prize in 2015 and the America Award in Literature for a lifetime contribution to international writing in 2023.

He also produced poems, essays, and screenplays, and was nominated for the Nobel Prize in Literature 15 times, once saying that media reports tipping him as a potential winner meant “many people think that I’ve already won it.”

Mr. Kadare, who split his time between Albania and France, was the Balkan country’s best-known novelist and his works have been published in 45 languages, but he repeatedly irked his homeland’s former Communist rulers.

In 1975, after publishing a satirical poem called “The Red Pasha,” which took aim at Albania’s Communist bureaucracy, Mr. Kadare was sent to do manual labor in a remote village in central Albania.

Three of his books fell foul of Albanian censors, and in 1990 he sought political asylum in France after receiving threats following his criticism of the government and calls for democracy.

Last year, French President Emmanuel Macron awarded him the title of Grand Officer of the Legion of Honour.

Born in the town of Gjirokaster in 1936, in the-then Kingdom of Albania, Kadare was the son of a post office employee and a housewife. After World War II, he graduated in languages and literature from the University of Tirana.

He is survived by his wife, the author Helena Kadare, and their two daughters. — Reuters

BSP’s latest strides in educating and protecting consumers

BSP Monetary Board Member Romeo L. Bernardo (third from left) turns over financial education modules for civilian and uniformed personnel of the Armed Forces of the Philippines to Deputy Chief-of- Staff LTGEN Charlton Sean M. Gaerlan (second from left) during the “Financial Education Stakeholders Congress” held last November in Pasay City. Also in the photo are (from left) BDO Foundation President Mario Deriquito, and BSP Deputy Governor Francisco G. Dakila, Jr., Officer-in-Charge Charina B. De Vera-Yap, and Acting Director Arnel Adrian C. Salva. — Photo from bsp.gov.ph

Budgeting, saving, investing, managing debt, and understanding financial products are knowledge and skills essential in making individuals make informed financial decisions and improve their quality of life.

However, the Bangko Sentral ng Pilipinas’ (BSP) 2021 Financial Inclusion Survey shows that only two percent of Filipinos correctly answered all six basic financial literacy questions posed to them, while 69% correctly answered at least half. The central bank also revealed that the Philippines ranked in the bottom 30 of 144 countries, with only 25% of Filipino adults considered financially literate.

Mandated to undertake policies and initiatives aimed at financial inclusion and education of the general public, the BSP has been proactive in its advocacy to educate and protect Filipinos financially.

The BSP continues to promote awareness of critical economic and financial concepts through its several learning programs. The BSP established the Economic and Financial Learning Program (EFLP) to provide stakeholders with timely and apt learning activities. The EFLP includes bank-initiated and client-requested lectures from various schools, government agencies, private institutions, and other interested parties and collectively drew and engaged more than 120,000 participants.

The central bank also hosted an event last year that showcased the BSP and its institutional partners’ financial education advocacy milestones called the Financial Education Stakeholders Congress. Part of the congress were five online financial literacy and consumer protection learning sessions for the public which reached a total of 195,996 viewers via the Zoom and Facebook livestream platforms.

By producing bespoke financial education modules rolled out alongside the training sessions, the BSP conducted training-of-trainers (TOT) sessions for other government agencies as well.

The beneficiaries of these modules include: the Civil Service Institute (CSI) which conducted financial literacy sessions for 1,703 employees from various government agencies and 710 Civil Service Commission (CSC) employees; the Department of Migrant Workers (DMW) which facilitated the PiTaKa (Pinansyal na Talino at Kaalaman) financial literacy training to more than 2 million Overseas Filipino Workers (OFWs) before they went abroad; and the Department of Education (DepEd) which regularly holds personal financial management sessions for its teachers.

Last year, the BSP announced that financial education will also be included in the curriculum of the Technical Education and Skills Development Authority (TESDA) and the training of cadets from the Armed Forces of the Philippines. The e-learning program has an array of topics on managing finances such as budgeting and saving, investments, and debt management.

The BSP reaffirmed its commitment to strengthen financial education for students and teachers at a meeting with the Department of Education (DepEd) and the BDO Foundation at the DepEd Central Office in Pasig City. In photo are (from left) DepEd Undersecretary Gina Gonong; DepEd Undersecretary and Chief-of-Staff Michael Wesley Poa; BSP Deputy Governor Bernadette Romulo-Puyat; BDO Foundation President Mario Deriquito; and DepEd Undersecretary Wilfredo Cabral. — Photo from bsp.gov.ph

The central bank of the country has even made financial and economic education accessible to Filipinos by making educational resources and learning materials available online. Their website alone allows Filipinos to easily access financial topics from basic budgeting and saving tips to more complex subjects like investing and retirement planning.

Another online initiative by the BSP is their financial education simulation game called “Fish N’ Learn”. The game aims to capacitate over 1.9 million Filipino fishers nationwide and simulate real-life events that influence the financial behavior of fishermen and their families.

“Fish N’ Learn is meant to give our fisherfolk the primacy that they deserve by focusing on improving their financial health and overall quality of life, which helps to foster a financially healthy citizenry. Strong public-private partnerships are instrumental to achieve sustainable and scalable programs such as this one,” former BSP Governor Benjamin E. Diokno said.

Likewise, the central bank also launched the KITA (Kapital at Ipon Tungo sa Asenso) Mo Na! financial education game for agricultural workers, college students, and overseas Filipino workers (OFWs) last year.

To engage Filipinos on a much wider scale, the BSP has utilized social media through their PisoLit and EkoLit programs “to allow flexibility and agility in posting financial education content that fits the communication style of Filipino netizens.”

Available on Facebook, Instagram, and X, PisoLit posts are focused on topics and tips related to financial planning, saving, budgeting, managing debt, and investing while EkoLit helps improve consumers’ understanding of economic issues and concepts in the platforms. The materials posted in these accounts come in various formats, including infographics, short videos, and electronic learning tools offering valuable content to followers daily.

The central bank also has the duty to protect and advocate for the welfare of financial consumers. Under Republic Act No. 11765, the Financial Products and Services Consumer Protection Act (FCPA), the BSP was given the power to perform market conduct supervision and ensure financial consumer protection.

Through Circular No. 1169, Series of 2023, the BSP announced that the rules of procedure governing the consumer assistance mechanism (CAM) regarding complaints escalated to the central bank. The circular also clarified that BSP-supervised institutions (BSI) should establish its financial consumer protection assistance mechanism which will serve as the first level of recourse for aggrieved financial consumers.

Unresolved concerns in the first level will then be escalated to the BSP after being filed to the CAM for assistance facilitation. The mechanism, as the second level of recourse, acts as a venue for financial consumers and BSIs to communicate and resolve their issues.

Last year alone, the BSP received and processed over 43,000 new complaints from financial consumers through various CAM channels, about a 95.0% increase in volume from more than 22,000 complaints processed in the previous year.

The BSP also protects consumers by supervising the market conduct of BSIs. In partnership with the Cambridge SupTech Lab, the central bank created a prototype solution that can surf and analyze financial consumer sentiments across various social media platforms. Once fully operational, this prototype aims to alert the BSP of emerging financial consumer issues on social media and online news sites.

Additionally, the BSP implemented capacity-building programs for their officers by conducting two workshops with the World Bank where the two organizations were able to develop a Financial Consumer Protection and Market Conduct Supervision Framework. The framework aims to direct the central bank in conducting risk-based supervisory evaluations of BSIs’ business conduct and practices.

Through its accessible and comprehensive financial literacy programs, the BSP is addressing the crucial need for financial knowledge among Filipinos. With its robust consumer protection programs, the central bank ensures that consumers are well-protected and informed.

These initiatives show that the BSP has made significant steps not only in educating and protecting Filipino consumers financially but also in making their lives a little more livable. — Jomarc Angelo M. Corpuz

Election distress

PHILIPPINE STAR/EDD GUMBAN

Comelec Chair George Garcia, the former campaign manager of President Ferdinand Marcos, Jr., has gone on television to explain the features of the Korean-brand of vote-counting machines. However, I did not quite understand from his explanation if we are buying or leasing them. The Smartmatic brand machines which we used in past elections were purchased outright, and we had to deal with problems due to storage in warehouses of the delicate IT equipment which we do not have the capability to maintain. I wonder how much of our taxpayer money had to be spent on maintenance of these voting machines stored for years in warehouses (including the cost of electricity and air conditioning, and security plus repairs). I hope this time we have learned our lessons and just lease them so the Korean suppliers are responsible for maintenance.

Mr. Garcia proudly disclosed that this time, the counting machine would print a “receipt” detailing the candidates voted for, to give to each voter. If these receipts are not destroyed within the precinct before the voter leaves, this will guarantee candidates who buy votes the certainty that they are getting their money’s worth!

As the mid-term election nears, I worry more and more about the composition of our Senate. With no less than three Dutertes running*, and another Tulfo rumored to be interested, it is becoming a truly family business. Today, 25% of the Senate is composed of senators who are relatives, namely two Villars (mother and son), two Cayetanos (siblings), and two sons of Erap. If our voters are still inclined to vote for family names they already know, then we will possibly have three more Dutertes (father and two sons), and one more Tulfo sibling. That makes up almost half of the next Senate! These will represent our over 100 million Filipinos in the making of national policy.

As long as our educators continue to focus on depositing more and more information in students’ brains, rather than sharpening their critical thinking skills, we will continue to have voters who do not look at the qualifications of candidates who want to be our leaders. It will take a radical change in our “teaching” methods. Instead of the “banking” (deposit and withdraw knowledge) approach, we will have to focus on “learning” methodologies, in which the emphasis is on sharpening skills: the students’ ability to think independently. This also calls for lessening the burdens on our teachers so that they can prepare properly for their real work.

I have taught in high school, college, and graduate school. In high school, I prepared each day to give quizzes in order to have numbers as the basis for giving grades. In order to make it easy to check tests and record grades, I had to make most of the questions answerable in multiple choice or True and False. This does not help sharpen critical thinking in the learners. I really believe the grading system at the graduate school where I taught which gives only three options (Pass, Fail, Distinction) encourages more discussion among the learners and learning facilitators (“teachers”). This can help sharpen critical thinking, especially since our poor students have to communicate in Tagalog (the National Language), English (still a foreign language in most communities), plus their own mother tongue. No wonder we rate so poorly in international learning competitions.

Lately, Alice Guo, the suspended mayor of Bamban, Tarlac, has been confirmed to be a foreigner and therefore not qualified to be in her position. According to an ongoing Senate investigation, Guo was born in China from Chinese parents, and somehow obtained a Filipino birth certificate, a Filipino passport, and Comelec endorsement as a candidate and as elected Mayor.

It is very alarming that in some of the POGO quarters in Bamban, Chinese military uniforms were discovered! If I remember correctly, Sun Tzu, in his Art of War, states that the great general is the one who can take over a territory without resorting to warfare. I also recall somewhere Sun Tzu justifying the use of falsehoods as part of a winning “war” strategy. I hope our security officials have read Sun Tzu to better understand what China is doing, and know better how to deal with it.

Meanwhile, I continue to think that we really should consider changes in our election laws. Perhaps we should not have direct elections for national offices. Local government executives (elected mayors and governors) can vote for the President, and locally elected representatives to legislatures can select a Prime Minister from among their peers. The power sharing can be determined in a new Constitution. The Prime Minister leads the legislative/policy making body; and the President leads the execution of such policies all the way to the community levels. This way, we have better chances of ensuring that national leaders are chosen by peers who know better what kind of people should be their (and our) leaders. Perhaps political party memberships will then make more sense.

Ah, but so much for wishful thinking. The current Senate members, especially those who have been in jail, or belong there, would never agree to the idea of abolishing their cushy jobs. They are able to brag publicly about their privates, and still be addressed as “Honorables.”

*This according to Vice-President Sara Duterte, though her father, former president Rodrigo Duterte, has denied this according to the Philippine Star yesterday. “Duterte said people should not believe everything his daughter says, as sometimes she has the tendency to make jokes,” said the front-page story. — Ed.

 

Teresa S. Abesamis is a former professor at the Asian Institute of Management and fellow of the Development Academy of the Philippines.

tsabesamis0114@yahoo.com

Next phase of Villar City dev’t set to begin — chairman

MANUEL B. VILLAR, JR.

THE Villar group on Tuesday said it is launching the next phase of development for its 3,500-hectare Villar City integrated development to meet future demand.

The next phase of development covers the institutional and recreational needs of the future communities in Villar City, the Villar Group said in an e-mailed statement.

“One year after we launched Villar City, we are now firming up plans for two golf courses, a church, an events arena, a prestigious university, an integrated entertainment complex with a casino, a partnership with a renowned hospital, and more road networks to cut travel time across Cavite and Metro Manila, among other features,” Villar Group Chairman Manuel B. Villar, Jr. said.

“These components will be spread throughout Villar City to cater to the evolving needs not only of today’s market but also those of the next generation of homeowners,” he added.

The Villar Group said that close to 900 hectares out of the 3,500 hectares in Villar City have been activated or developed by its property arm, Vista Land & Lifescapes, Inc. The developed areas consist of neighborhoods, shopping complexes, and offices.

“We’ve only just begun our work. This will take many years—even decades—to complete. But we’re already laying the groundwork, filling up this beautiful blank canvas to create the new center of gravity of Metro Manila,” Mr. Villar said.

Launched in August 2023, Villar City is an emerging megalopolis that links 15 towns and cities across Metro Manila and Cavite. It is planned to be an integrated development that will converge economic, lifestyle, cultural, and leisure activities.

Villar City will feature modern districts including a central business district, a tech valley, university town, and a premier lifestyle hub with leisure and recreational facilities. It will feature 10 million trees, 100 cafes, and pocket parks.

To improve accessibility to Villar City, the Villar Group opened the 10-kilometer, 10-lane Villar Avenue last year that connects Las Piñas, Bacoor, and the university district of Dasmariñas City in Cavite.

Villar-led power and infrastructure conglomerate Prime Asset Ventures, Inc. also previously completed the P3.8-billion acquisition of the four-kilometer Muntinlupa-Cavite Expressway.

 Last year, the Villar Group also unveiled the 119-hectare Forresta ultra-premium residential project in Alabang. It is being developed by Vista Land’s Brittany brand. The property offers lot sizes from 857 square meters to 1,461 square meters.

The group also opened the Brittany Hotel Villar City in March, catering to the upscale boutique hotel segment. — Revin Mikhael D. Ochave

Filipino firms find cybersecurity measures daunting

THOMAS-PIXABAY

PHILIPPINE businesses are reluctant to adopt advanced cybersecurity because they find it “complex and daunting,” according to Yondu, Inc.

This reluctance is why 99% of Filipino companies could not defend themselves from cyberattacks, the Globe Telecom, Inc. unit said in a statement.

Businesses should overcome this hesitation and be more proactive, said Dennis S. Sanchez, Yondu’s chief information security officer.

“Stay informed about the latest threats,” he said. “Understand what hackers are doing and apply those methods to your own defenses. Instead of just waiting for attacks, you should test your own systems and use up-to-date techniques.”

Cisco’s Cybersecurity Readiness Index for 2024 found that only 1% of organizations in the Philippines could ward off modern cybersecurity risks, compared with 3% globally.

Intelligence sharing between the private and public sectors can help improve everyone’s cybersecurity acumen, Information and Communications Technology Assistant Secretary Renato A. Paraiso told a BusinessWorld Insights event on June 25.

“That should be the focus of collaboration — voluntary information sharing [by] providing a safe space for everyone to improve their cybersecurity capacity through the experience of everyone else,” he said. “If we mandate it, it becomes regulatory. It’s counterproductive.”

Organizations can contribute to a safe cyberspace by following the law, said Aubin Arn R. Nieva, director of data security and compliance office at the National Privacy Commission (NPC).

“In case of a breach, you have 72 hours to report it to the NPC, and then you have the obligation to notify data subjects that their data have been breached,” he said. “If corporations do not comply with that, are they not ruining the policies that are there to govern for good measure?”

Know the importance of how to respond to a breach, Alexis Bernardino, field chief information security officer and head of enterprise consulting practices at PLDT Enterprise, said.

“In the event of a successful cyberbreach, it is not only the operational disruption that is catastrophic but also the reputational damage,” he told the June 25 event. “You cannot put a monetary value on that.” — Patricia B. Mirasol

Marubeni PHL shifts focus to RE as coal contracts near end

SHIGERU SHIMODA

By Aubrey Rose A. Inosante

AS the 25-year contracts for the coal-fired power plants of Japanese firm Marubeni Philippines near their end, Shigeru Shimoda, the company’s president and chief executive officer, leads a transition towards renewable energy (RE).

The objective is to reduce coal reliance by 2025, aligning Marubeni with global sustainability goals, he said in an interview with BusinessWorld.

“Currently, our power generation is in Pagbilao (Quezon) and Sual (Pangasinan), both of which are large coal-fired power plants, but the build-operate-transfer (BOT) contracts (will expire soon),” he said.

The BOT contracts for the Sual and Pagbilao plants will expire in 2024 and 2025, respectively.

A BOT contract refers to a financing model commonly used for large-scale projects, typically infrastructure projects developed through public-private partnerships.

TeaM Energy Corp., a joint venture between Japanese companies Marubeni Corp. and JERA, functions as an independent power producer that owns and operates the 1,218-megawatt (MW) Sual Power Station in Pangasinan and the 735-MW Pagbilao Power Station in Quezon. In collaboration with Aboitiz Power Corp., it also operates the 420-MW coal-fired Pagbilao Unit 3.

“We need alternatives. It’s not straightforward, but we are exploring floating solar and offshore wind projects alongside other players,” he said, adding that San Miguel Corp. and Aboitiz Power Corp. will take over Sual and Pagbilao.

Mr. Shimoda said that the company is keen on maximizing the San Roque Multi-Purpose Dam and Hydroelectric Plant in Pangasinan but is still in discussions with the Department of Environment and Natural Resources.

Marubeni, which began operations in the Philippines in 1909, is also exploring opportunities in solar farms, but it is hindered by foreign restrictions in terms of land ownership.

Nevertheless, the company is determined to identify a suitable location and establish partnerships with reliable local entities, Mr. Shimoda said.

“Mr. President says solar is fine, however, we always have to take into account the land competition among the farmers as you try to develop. Let’s say developing gigawatts of solar, it could take thousands of hectares,” he said.

“Looking at the whole Marubeni, the power division developed a huge size of the solar power generation in the Middle East. Marubeni, as one of the leading Japanese companies, we have to do [these] to tackle global warming,” he said.

Mr. Shimoda also noted Marubeni’s interest in the operation and maintenance of the North-South Commuter Railway, which spans 147 kilometers and is currently being developed as a commuter rail system in Luzon.

Besides renewable energy initiatives, he highlighted the company’s healthcare involvement through a joint venture with LSI Medience Corp. and Metro Pacific Hospitals.

“Last year, we invested in In Vitro Fertility (IVF) services in Quezon City,” he said, noting that Marubeni and Towako Repro Bio Cell, Inc. operate through a joint venture company Conceive IVF Manila, Inc.

PATH TO LEADING MARUBENI PHL
Mr. Shimoda began his journey with Marubeni in 1988, opting for a different path from his father who held a position at Mitsubishi Corp.

He initially ventured into wood chip plantation development and progressed to the role of president director at P.T. Musi Hutan Persada, overseeing a tree plantation in Indonesia.

Reflecting on his assignment as president and CEO of Marubeni Philippines, he acknowledged his prior experience with Southeast Asian countries despite never having visited the Philippines before.

As the pandemic disrupted normal business operations, Mr. Shimoda assumed his role in the Philippines in April 2020, navigating virtual interactions from his condo.

Recognizing the challenge of establishing his presence remotely, he said he endeavored to introduce himself through digital platforms to Filipino business counterparts already familiar with Marubeni.

He said his integration into the local business community began gradually through invitations from Mr. Edgardo Puyat Reyes, whom he met at the Manila Golf Club.

Mr. Reyes, who recently passed away, repeatedly invited Mr. Shimoda for golf sessions, providing opportunities to engage with other club members and gain insights into Filipino customs, history, and business practices.

“We talked, and he introduced me to other members. I learned a lot about the customs, history, and business background of the Philippines from Mr. Ed Reyes. I appreciate what he did for me,” he said.

Mr. Shimoda, alongside his role at Marubeni, serves as vice-president of The Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI), having previously held the position of president until last March.

He views his involvement in JCCIPI as crucial for enhancing Philippine-Japan economic relations and representing around 680 members.

In discussing the competitive landscape, Mr. Shimoda underscored the Philippines’ need to attract foreign investment more aggressively, highlighting the country’s advantages such as its youthful workforce and growing mid-income population.

He stressed the importance of creating jobs and enhancing incentives to compete effectively with countries like Vietnam, Indonesia, Malaysia, and Thailand, which have robust manufacturing ecosystems and established supply chains.

“That’s what I keep telling to the government. I think in this country, the only thing to concentrate on is to create a job, then we need foreign investors as more labor force will be available due to young workforce,” he said.

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