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BoI eyes up to P1.5-trillion investments in 2024

Fireworks are seen over the Makati central business district, Dec. 31, 2023. — MATRIX IMAGES / GEORGE BUID VIA REUTERS CONNECT

THE BOARD of Investments (BoI) is aiming to approve as much as P1.5 trillion in investment pledges this year.

Trade Secretary Alfredo E. Pascual said the BoI’s official target is to approve P1.1 trillion in investment commitments this year.

“But our internal target, of course, is to exceed what we have achieved in 2023,” he said at a media briefing on Friday.

Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo said the agency’s internal target is to greenlight between P1.3 trillion and P1.5 trillion in investment pledges this year.

For 2023, the BoI approved P1.26 trillion in investment pledges, a 73% increase from the P729 billion worth of commitments approved in 2022.

However, this fell short of the BoI’s P1.5-trillion internal target, which was revised upward from the initial P1-trillion goal.

Under the Program Expenditure Classification, the BoI is aiming to increase its investment approvals by 10% this year.

According to Mr. Rodolfo, the investment promotion agency would have been able to hit the P1.5-trillion mark if the projects worth P272 billion were approved during the Dec. 28 meeting.

“These are several projects which still have documentary requirements and transparency requirements,” he said.

Mr. Pascual expressed confidence the BoI will be able to surpass its 2023 investment approvals.

“You will see, the year is just starting but the BoI has around P300-billion investment eyed to be approved this year. So hopefully, we will be able to achieve and exceed what we were able to achieve in 2023,” the Trade chief said.

The BoI approved investment commitments for 311 projects mainly in renewable energy, telecommunication infrastructure, and the export of copper, gold, and other metals.

“Upon full operations, the projects are expected to produce 49,030 jobs for Filipinos,” the BoI said in a press release.

By sector, the renewable energy (RE) and power sector had the biggest investment commitments accounting for P987.12 billion or a 141% increase from P409.02 billion in 2022.

Investor interest in RE projects surged after the Philippine government allowed full foreign ownership in the sector starting November 2022.

Foreign nationals and foreign-owned entities are now allowed to explore, develop and use RE resources in the country such as solar, wind, biomass, ocean or tidal energy. Foreign ownership of RE projects was previously limited to 40%.

Other sectors that attracted investments include information and communication (P96.04 billion), mining (P79.19 billion), manufacturing (P22.05 billion), and infrastructure (P21.47 billion). 

“An important aspect of the BoI approvals is that a bigger proportion of the approvals are actually foreign investments rather than local investments. Two-thirds are foreign investments, which is used to just comprise 20%,” Mr. Pascual said. 

“This is indicative of how the Philippines is becoming attractive for foreign investors,” he added.

Foreign investment approvals accounted for P766.97 billion of the total approvals or 61%, while local investments made up P493.23 billion or 39%.

Germany was the top source of foreign investments last year accounting for P393.28 billion, which mainly went into wind energy projects.

The other top sources are the Netherlands (P333.61 billion), Singapore (P21.45 billion), United States (P3.55 billion), and the British Virgin Islands (P2.13 billion).

Mr. Rodolfo said he expects the RE sector to continue attracting foreign investments.

“Yes, it will be RE, but in addition to RE, we will now be seeing investments in RE equipment manufacturing. Second, mineral processing, which we expect to come out from the previous presidential visits,” he said.

He said that a lot of foreign investments, mainly in RE, are expected to come from Europe. The BoI is also expecting more investments to come from South Korea, US, China and Japan. — Justine Irish D. Tabile

Philippines’ top 1,000 companies post P16.7 trillion in revenues in 2022

By Lourdes O. Pilar, Researcher

THE TOP 1,000 corporations in the Philippines showed resilience in 2022 after posting a combined gross revenue of P16.68 trillion, as economic activity picked up after pandemic-related restrictions were lifted.

The BusinessWorld Top 1000 Corporations in the Philippines report showed the firms’ aggregate gross revenue surged by 21.2% in 2022 from P13.76 trillion posted in 2021.

This was the fastest revenue growth in two years following the 13.2% contraction recorded at the height of the coronavirus pandemic in 2020.

Top 1000 Corporations in the Philippines: Comparison of sectoral performance in 2022

BusinessWorld defines gross revenue as the combination of net sales and nonoperating income.

Meanwhile, the top corporations’ combined net income rose by 3.1% to P1.8 trillion in 2022 from P1.75 trillion in the year prior.

The firms’ financial performance reflected the Philippine economy’s strong rebound in 2022.

In 2022, the country’s gross domestic product (GDP) grew by 7.6% in 2022, faster than the 5.7% growth recorded in 2021 and the highest in more than 40 years or since the 8.8% growth in 1976.

It also exceeded the government’s 6.5-7.5% GDP growth target for the year.

On its 37th year, the BusinessWorld Top 1000 ranks private and public stock corporations based on gross revenue using the latest available full-year audited financial statements.

The latest edition of the Top 1000 had a gross revenue cutoff of P2.976 billion, 32% higher than the previous edition’s P2.254 billion.

Out of the 1,000 companies in the list, 827 saw an increase in gross revenue in 2022, higher than the 793 companies in the previous year.

The report showed 631 companies posted a net income growth in 2022, while 369 saw a decline in profit.

There were 70 firms that swung to a profit in 2022 after recording a net loss in the previous year, while 22 companies slumped to a net loss.

Meanwhile, 29 firms remained in the red.

Firms included in the Top 1000 list represented 17 out of the 21 major sectors under the 2009 Philippine Standard Industrial Classification (updated 2019).

Thirteen sectors reported at least double-digit gross revenue growth, with the arts, entertainment and recreation sector’s revenues surging by 116.9% in 2022. The human health sector’s revenues eased to 5.3% in 2022 from 19.3% in the previous year.

On the other hand, revenues of real estate activities declined by 0.8%, while those of the public administration and defense, compulsory social security sector dropped by 10.9%.

The manufacturing sector, which had 290 companies included in the list, accounted for 34.6% of the total gross revenue of the Top 1000 companies in 2022.

The services sector continued to be the main engine of Philippine economic growth, accounting for 51.9% of the aggregate gross revenue in 2022.

Multinational companies included in the Top 1000 list made P5.51 trillion, 17.4% more than in the previous year. They accounted for 33.1% of the Top 1000’s gross revenues.

Exporting firms recorded a 15% increase in revenues to P2.95 trillion, although this was slower than the 19.7% growth in the previous year. The sector accounted for 17.7% of the list’s total gross revenues.

The latest Top 1000 report included 139 corporations, of which 37 are first-time entrants.

Petron Corp. returned as the largest corporation in the Philippines in 2022, ending Manila Electric Co.’s (Meralco) two-year stint as the country’s top-grossing company.

Petron, which last topped the list in 2019, posted P438.87 billion in gross revenue in 2022, which was an 82.1% increase from P240.94 billion the previous year.

The oil refiner and distributor also topped the list in terms of net sales with P430.73 billion, but its net income fell by 4.9% to P2.54 billion. Petron ranked 179th in net income.

Meralco ranked second in the list, as its gross revenue rose by 30.9% to P382.42 billion from P292.09 billion in 2021. It also placed second in net sales with P371.76 billion. The company posted a net profit of P21.69 billion in 2022, up by 1.8% from P21.3 billion in the previous year.

Shell Pilipinas Corp. remained in third spot as its gross revenue jumped by 63.3% to P292.88 billion from P179.39 billion in 2021. The petroleum refinery ranked third in terms of net sales (P291.48 billion) and 109th in net income (P4.08 billion).

Also included in the top 10 were BDO Unibank, Inc. (P209.29 billion in gross revenues); Mercury Drug Corp. (P177.59 billion); PMFTC, Inc. (P176.99 billion); Toyota Motor Philippines Corp. (P173.27 billion); Globe Telecom, Inc. (P158.87 billion); TI (Philippines), Inc. (P154.93 billion); and Philippine Airlines (P145.8 billion).

The Top 1000 magazine also provides a separate table to show how companies compare with each other on a consolidated basis.

With this consolidated table, readers will be able to see how additional revenues com-ing from subsidiaries can boost a conglomerate’s rank.

The top 200 conglomerates list was led by Top Frontier Investment Holdings, Inc. and subsidiaries with P1.58 trillion in gross revenue in 2022, higher by 61.8% from 2021. It is the largest shareholder of San Miguel Corp. (SMC). However, the conglomerate’s net income fell by 45.8% to P23.86 billion in 2022 from P44.06 bil-lion in 2021.

Listed diversified conglomerate SMC and its subsidiaries came in second, with P1.58 trillion in gross revenues, a 61.4% increase from P979 billion previously.

Petron and subsidiaries claimed the third spot with P865.58 billion in gross revenues, a 96.4% increase year on year.

The rest of the top 10 conglomerates included SM Investments Corp. (P557.68 billion); Meralco (P445.34 billion); San Miguel Food and Beverage, Inc. (P360.18); Aboitiz Equity Ventures, Inc. (P335.65 billion); Ayala Corp. (P332.62 billion); JG Summit Holdings, Inc. (P313.98 billion); and GT Capital Holdings, Inc. (P245.31 billion).

The BusinessWorld Top 1000 Corporations in the Philippines can be purchased directly by reaching out to BusinessWorld’s Circulation Department at (+632) 8527-7777 locals 2651 to 2654 or via e-mail at circ@bworldonline.com. The portable document format (PDF) version will also be available for purchase at https://bworld-x.com/.

Community competition

Mazda Philippines President and CEO delivers a speech at the awards night. — PHOTO BY ANGEL RIVERO

Season 2 winners of the MSCC Miata Spec Series awarded

THERE’S SOMETHING really beautiful about having a Mazda Miata race series in the Philippines — and I’m not just talking about the spectacle of seeing this many MX-5s. I’m talking about the energy and philosophy behind it. You see, a Mazda Miata race is a gentleman’s (or gentlewoman’s) race — period. Participants race hard, but at the end of the day, they’re all family. So, people have an elevated respect for preserving each other’s vehicles. It’s a very unique dynamic that is birthed out of each Miata owner’s passion for the iconic car, and for driving.

Something magical happens in there because behind the steering wheel of a Miata, enthusiasts not only discover its incredible balance and agility, but they begin to embrace a special ethos — that which is founded on an intangible connection between man and machine, that it basically elevates the driving experience to an art form. Does that sound too profound for you? I can tell you that this energy is real — I’ve hung out with these people myself, and it’s truly something to write about.

It’s therefore been very nice that the MSCC (Manila Sports Car Club) Miata Spec Series has continued on to a second season in 2023. And before the year formally ended, the victors were awarded at the Manila Polo Club.

The MSCC Miata Spec Series Awarding Gala unfolded as a kaleidoscope of automotive enthusiasm. Mazda Philippines President and CEO Steven Tan pointed out during his opening remarks that while one prominent element of the race series is the iconic car, the other element is certainly the driver. He also shared how happy he was to witness how the race series brought different combinations of people together: father and child, husband and wife, and the like.

The race season itself also turned out to be quite exciting, as it was hard to tell until the very end who was going to win. Some were only leading by two points before the last race — so it could have been any driver’s race. And each leg was hard fought.

Windy Imperial attested, “It may not be the biggest, but it is the best race series to join! There is no coincidence that the Miata is the best-selling roadster ever. It’s the most-raced sports car, too!” He also emphasized that not a single Miata has ever retired because of reliability issues — even if it’s racing hard. He went on to say that this is only evidence of “the strength of the car, and also the strength of the organization behind it.”

And as each category winner enjoyed recognition on stage, the energy in the room also exuded the spirit of camaraderie among people united by their shared affection for the charming roadster. The occasion did not just celebrate victories on the asphalt, but the significance of a community bound by a passion for driving.

So it appears that when on the racetrack, each Mazda Miata becomes not just a contender, but also some kind of a conduit for enthusiasts to channel their ardor for driving pleasure into. This way, I suppose, everybody wins!

Congratulations to all the race victors!

Ford Territory: Driving to new ground

PHOTO BY DYLAN AFUANG

We experience the improvements found on Ford’s strong-selling crossover

By Dylan Afuang

THE LATEST Territory crossover that Ford Philippines has said sold 5,000 units since its April 2023 launch — adding to the 20,000 units sold by the nameplate’s first iteration — seemed like the perfect vehicle for road trips.

It had the ingredients for being such, as made apparent during an experiential driving event the company had staged. The event featured the model’s two variants, the Titanium (P1.335 million) and the Titanium X (P1.599 million).

And although this wasn’t the occasion’s deliberate objective, we were also able to observe the improvements of the newest vehicle over its predecessor — even when the former is built upon the same structure of the original, much of which was derived from a Chinese vehicle.

Before setting off, the new Territory already made good first impressions. It dropped Ford’s design touches oddly mixed with Yusheng’s sheetmetal of the previous model, in favor of seamless curves and subtle bulges. The crossover’s cohesive styling is the result of the Chinese-penned “Progressive Energy Through Strength” design language.

While it measures a few millimeters narrower than the old car, this compact crossover’s dimensions are larger elsewhere, which lends to its more sizable road presence — and most notably, opens up more room inside the cabin for five passengers and the stuff they may bring along for the journey.

Aside from being more spacious than before, the interior room feels that it exceeds the class average. The cockpit is roomy even with the wide center console, and two rear occupants can sit cross-legged when the middle seat isn’t occupied. Cargo area is as expansive at 448 liters with a wide opening and accessible loading lip.

In the Titanium X variant, that cargo area can be accessed through a powered tailgate. Shared between the two variants are comfortable power-adjustable driver seats, keyless entry with push-start ignition, digital climate controls, and wireless Apple CarPlay and Android Auto projected upon a 12-inch touchscreen.

On the move, we didn’t find controlling the climate functions and the driving modes through screens neither intuitive nor safe. On the other hand, the sharpest driving mode maximized the already brisk 158hp and 248Nm of torque output of the 1.5-liter turbo engine, and quickened the shifts of the smooth seven speed dual clutch automatic that spun the front wheels.

The Territory also steered a tad sharper than it used to, the cabin better insulated the outside noise, and the ride exhibited a serene quality. Even though the laid-back crossover is better suited to highways than on back roads, there’s a newfound quality in its driving experience.

Once driving ended, proximity sensors and a 360-degree camera made parking easier, or we relegated the task to Ford’s Active Park Assist technology (standard on both variants), while the Titanium model features blind-spot warning and standard cruise control, and lane-keeping assist, frontal collision avoidance, adaptive cruise control are found on the X.

All of these — and the Territory’s five-year warranty or up to 150,000 km, whichever comes first — make it an attractive choice for roads short and, quite possibly, long, too.

PSE told to explain trading halts much sooner

REUTERS

By Revin Mikhael D. Ochave, Reporter

THE Philippine Stock Exchange (PSE) should promptly disclose the cause of trading halts to ensure confidence in local financial markets, analysts said at the weekend after the bourse halted trading for two hours on Jan. 3 due to a technical glitch.

“Prolonged trading halts are disruptive, so hopefully we do not see any recurrence,” Juan Paolo E. Colet, managing director at China Bank Capital Corp. said in a via Viber message. The PSE should have explained the glitch “much sooner.”  

“They should have explained the situation much sooner. Timely disclosure of information is essential to financial markets, and this is something we have to keep in mind if we want to ensure confidence in our local stock market,” he added.

The PSE provided more details about the glitch in a statement two days later.

It said the Jan. 3 trading halt from 9:32 to 11:55 a.m. was due to a glitch encountered by its mobile trading application and its process of authenticating all accounts. This affected at least a third of trading participants.

The main index closed 0.8% lower.

“The technical problem encountered was the inability of at least one-third of the trading participants to connect to PSE’s front-end order management system and for some of these the trading participants, the inability to send orders to the trading system,” the PSE said.

The front-end order management system sends buy-and-sell orders for processing to the trading system.

The PSE said the issue happened in one of the four silos in the system, which experienced stalled processes given the iterative authentication steps.

The bourse and front-end order management system developer have implemented a design optimization on the mobile trading application and were working on further enhancements to prevent the issue from happening again, it added.

“The PSE remains steadfast in its commitment to engage with all stakeholders and service providers towards continuously improving and future-proofing its products, systems, and services for the investing public,” the market operator said.

Any disruption in the local bourse does not look good “especially from the point of view of international professional fund managers,” Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp. said in a Viber message.

“Reliability of the trading infrastructure is one of the criteria of international investors, especially the ability to freely buy or sell stocks during trading days,” he said. “This is also part of their market risk and operational risk assessment for investing in the local stock market.”

“The reliability, security, and integrity of the local stock market trading system and overall infrastructure would also determine the level of international investor confidence,” he added.

Technical issues also caused the PSE to open late in January 2023 and to cancel trading for an entire day in January 2022.

The bellwether Philippine Stock Exchange index on Friday gained 0.41% or 27.12 points to close at 6,629.64. The broader all-share index added 0.48% or 16.76 points to close at 3,502.52.

Shell, NEO unveil EV charging hub in Taguig

From left are Shell Real Estate Program Manager Pol Atuelan, Shell Real Estate EV Portfolio Asia Manager Millicent Ngo, Shell Engineering Manager Ronald Gatbonton, Shell Head of E-Mobility and Innovations Jolo Valdez, Shell Mobility Vice-President Randy Del Valle, NEO CEO Raymond Rufino, NEO President Charlie Rufino, NEO Co-Managing Director and Chief Sustainability Officer Gie Garcia, and NEO Co-Managing Director Carlo Rufino.

SHELL PILIPINAS CORP. and real estate firm NEO revealed the latest Shell Recharge electric vehicle (EV) facility late last year. Located at Seven/NEO Bonifacio Global City in Taguig, the charging service (as we go to press) is free of charge. This is the latest addition to the Shell Recharge network which now has ultra-rapid charging stations at Shell SLEX Mamplasan and at the recently opened Shell TPLEX exit in Rosario, La Union.

The Shell Recharge charging station has AC22kW charging points capable of charging two vehicles simultaneously. The EV charging location is 100% renewable as it is fully powered by geothermal energy — the first-ever for Shell globally.

At the opening event, the first EVs to be charged were Shell’s very own service vehicles used to transport Shell staff from Shell Business Operations Manila. Said Shell Vice-President for Mobility Randy Del Valle, “Shell is already a global leader in the EV space, and we are happy to work with our customers and partners across private and public sectors as we decarbonize mobility and power progress in the Philippines. NEO is a leader in sustainable real estate and shares Shell’s vision of a lower-carbon future.”

NEO has the country’s first net-zero portfolio of buildings certified by the Philippine Green Building Council’s (PhilGBC) Advancing Net Zero Philippines and the International Finance Corp.’s EDGE Zero Carbon. NEO is led by its CEO Raymond Rufino, who also sits in the Urban Land Institute FY24 advisory board.

JLL expects more property conversions this year

By Sheldeen Joy Talavera, Reporter

MORE Philippine real estate may be converted into housing and retail spaces this year as property developers repurpose out-of-date buildings, according to JLL.

“With many buildings now out of date — if not yet out of use — and others simply failing to generate suitable yields, conversions are increasingly on the cards,” Walid Goudiard, JLL head of project and development services, said in an e-mailed reply to questions last week.

Developers might diversify more property assets because of the conversion, JLL said.

Sean Coghlan, JLL’s global head of capital markets, said the diversification “will take different forms” depending on location. “Even for those sectors which are currently out of favor, we still see a place for global diversified portfolios.”

In a report, JLL said the conversion of existing office real estate into housing in the Asia-Pacific region is driven by high demand for urban living.

“We will see easing interest rates — estimated Q3 onwards — and construction costs should trend down in 2024,” JLL Philippines head of capital markets P. Ryan Isip said.

Construction prices in Metro Manila at the wholesale and retail levels fell by 1.7% and 1.1%, respectively, in November, data from the Philippine Statistics Authority showed.

Growth in the wholesale and retail segments remained steady for at least two straight months.

“We can expect expansion in both retail and residential property in 2024,” Mr. Isip said.

Juan Paolo E. Colet, managing director at China Bank Capital Corp. expects the residential and retail segments to perform well this year.

“Potential tailwinds for residential properties are lower borrowing costs, higher remittances from overseas Filipinos, and continued economic expansion,” he said in a Viber message.

“Meantime, malls and other retail real estate will benefit from increased foot traffic due to lower inflation and more experience-based offerings to attract consumers,” he added.

Philippine inflation eased to 3.9% in December — the slowest in 22 months — thanks to slower increases in the prices of key food items and utility costs.

December inflation was the slowest reading in 22 months or since the 3% print in February 2022.

A better year ahead for new hairdressers

NHELYRESSA DE GUZMAN

L’Oreal’s Beauty for a Better Life (BFBL) program gives hope

SOME people are entering 2024 in much better shape than they were in last year.

Ailene Solitas was spiraling into depression after her mother died, spending days in isolation. Then, as she told BusinessWorld in an interview, she heard about a program which was looking for applicants — L’Oreal’s Beauty for a Better Life program (BFBL), a free expert hairdressing training program given to people in vulnerable social or economic situations.

Pinalangin ko sa Diyos na may instrumento na gagamitin ang Panginoon na may darating sa akin na ganito (I prayed to God that there would be an instrument from the Lord that would come to me),” she said. “Answered prayer.”

Even before graduating, Ms. Solitas — the 2023 program’s Marikina valedictorian — has already found employment and further training with the Aura salon chain.

A WILLINGNESS TO LEARN
Last month, L’Oreal presented its BFBL graduates at a ceremony in Marikina. There were 54 graduates in total that year, 27 from Marikina and an equal number from Manila.

The pilot program was launched in 2017, in partnership with Philippine Business for Social Progress (PBSP). It has since had 423 graduates from various cities in Metro Manila, including Quezon City, Marikina, Taguig, Navotas, Manila, and Pateros. L’Oreal Philippines provides the materials, resources, knowledge, and training while PBSP coordinates with local government units (LGUs) to seek out the people most able to benefit from the program, and it runs the workshops.

Khairon-Niza Magundacan, Manager for Corporate Citizenship and Corporate Social Responsibility for PBSP gave BusinessWorld the profile of people joining BFBL: mostly women and LGBTQIA+ citizens apply for entry (but some men join as well); they are mostly unemployed, and they must be 18-45 years old (though some exceptions are made for some at 50); have a willingness to learn, and have the dedication to finish the program.

Elvin Uy, Executive Director for PBSP, explained why it’s important to focus particularly on women for the program. “The challenge for the Philippines is, overall, girls do better than boys in school,” Mr. Uy. said. By this he means that girls “learn better” compared to boys, and that they stay longer in school. However, “Despite their education — elementary, high school, maybe even college — not all of that translates to productivity in the workforce.”

According to their research, only about half of women and girls actually end up working, or look for work. “A lot of that would be (caused) not just because of a lack of training and education. There are other barriers to women and girls participating in economic opportunities,” he said.

CHANGED LIVES
Previous graduates from the program told BusinessWorld how much their lives have changed since receiving training from L’Oreal.

Nhelyressa de Guzman, a graduate from 2018, said that she had been a housewife since the store where she had worked closed. Then she joined the program. After training for three months, she first did house calls as a hairstylist, but found the guts to apply to David’s Salon, one of the biggest beauty salon chains in the country. She was accepted as a junior stylist and has since been offered an assistant manager position. But she told BusinessWorld that her heart was in hairstyling, so she’s currently training as a senior stylist.

While she credits L’Oreal for teaching her everything that she knew, a lesson that stood out was what her trainer said about earning money. The trainer told her that if somebody paid her P50 for a haircut, she’d have enough to buy some rice, and another haircut would mean P50 more for a dish to go with it. “Hindi ka magugutom (you will not go hungry),” she said. She recalls that when her husband was the household’s sole earner, his pay only went to paying off their debts. Now, they both have enough to save a little after every month.

Myra Binson, a graduate from the 2019 program, was emotional as she told BusinessWorld her story. A former street vendor, Myra now works with Toni & Guy, a salon chain known for serving celebrities. “Ito po ang una ko talagang trabaho (this is my first real job).”

Asked how her life has changed since graduating from the program, her voice broke as she answered: “Nagkaroon po ako ng pag-asa (I gained hope).”

She told us about raising her children in the same squatter’s area where she grew up. “Iyong mga bata po minsan makakakain, minsan hindi (Sometimes the children eat. Sometimes they didn’t).”

She had had a gambling problem, and had lost her way. Now she credits L’Oreal and PBSP for her new life.  Nagbago ang sarili ko. Iyong ugali ko; naging disiplinado po ako (I was changed. My character; I became more disciplined).

Binigyan ako ng opportunity para magbago ako ng buhay. Hindi lang ang sarili ko, pati pamilya ko (I was given an opportunity to change my life; not just my own, but my family’s too).” She has been able to get one of her children into college. Their house, once patched up with sacks and tarpaulins, has been renovated and will soon have a second floor. The other women around her in the group interview applauded after she told her story.

Kailangan mo mangarap (You need to hope),” said Ms. Binson. —  Joseph L. Garcia

‘Honor 911’ to pay tribute to iconic Porsche

Porsche Lifestyle Group Chairman of the Executive Board Stefan Buescher (left) and Honor CEO George Zhao — IMAGE FROM HONOR

TECHNOLOGY BRAND Honor and luxury lifestyle brand Porsche Design announced a strategic partnership to “create cutting-edge smart devices that combine exceptional design and advanced technology.”

“Honor’s human-centric design melds with Porsche Design’s brand philosophy to create intelligent luxury products that will accelerate the mobile lifestyle of tech enthusiasts and Porsche aficionados alike. This long-term collaboration between Honor and Porsche Design opens exciting new opportunities to bolster our growth in markets around the world,” said Honor Chief Executive Officer George Zhao.

News of the collaboration came with a teaser poster showcasing Professor Ferdinand Alexander Porsche, the original designer of the iconic Porsche 911, who also created the world’s first all-black wristwatch. According to Porsche Lifestyle Group Chairman of the Executive Board Stefan Buescher, the exclusive partnership with Honor is a milestone for the further expansion of Porsche Design’s iconic electronics product portfolio as Porsche and Honor share the same goal to become leaders in the modern luxury segment of smart devices.

Honor and Porsche Design will introduce their first jointly developed smart device in China this month. For more information, visit www.hihonor.com or Honor’s social media platforms on Facebook (HonorPhilippines), Instagram (honorph) and TikTok (honorphilippines). To check out Honor’s complete list of retail stores, go to https://www.hihonor.com/ph/retailers/.

Fashion’s plastics problem isn’t about packaging

REUTERS

UNTIL the rise of online retail, you might have been forgiven for thinking that all apparel was shipped in burlap sacks. Those wanting their garment spending to be sustainable these days can take comfort in reusable wooden hangers, paper shopping bags, and recycled fibers. The only glimpse of plastic in many fashion stores is the electronic equipment at the checkout.

Below that surface, however, the fashion industry is built on a mountain of artificial textiles. Global production of cotton and wool has barely increased since the early 1990s. Manufactured and synthetic fibers such as viscose, nylon, and, above all, polyester have roughly tripled.

That contradiction lies behind the sales-season fight between two of the rag trade’s biggest players. Inditex SA, the Spanish company that owns Zara, is at a stalemate in a battle over plastics with one of its biggest distributors, German online fashion giant Zalando SE, Bloomberg News reported last month.

Inditex is trying to cut its emissions in half by 2030 and wants to eliminate single-use plastics this year — but Zalando is balking at demands to stop distributing its clothing in polybags. These synthetic sacks are ubiquitous in the fashion trade, where they’re used to prevent items getting damaged on the way from the factory to the consumer. Brick and mortar retailers typically remove them before products are laid out in stores, so until recently you’d have been forgiven for not knowing they exist. It’s only the rise of online retailers searching for quicker, cheaper ways of doing business that’s forced them into customers’ consciousness.

Who’s right? Inditex is to be commended for its efforts to improve its carbon footprint — but Zalando isn’t wrong to smell hypocrisy in this crusade. Packaging of every type comprises only about 5% of the carbon footprint of Inditex competitor Hennes & Mauritz AB, according to its 2014 sustainability report, the last time it put a number on it. That figure is unlikely to be very different at Zara, or to have changed much since. More than 70% of H&M’s total carbon footprint comes from producing the clothing itself, according to its 2020 report, with about 8% coming from non-garment goods including packaging.

Polybags are popular because they stop all those emissions going to waste when moisture or dirt spoils clothing en route to the consumer. Patagonia, another climate-focused retailer, decided to keep using polybags in 2014 after an internal study found 30% of items that weren’t bagged became damaged to the point they were unsellable. Inditex itself isn’t planning to eliminate plastics, either — instead, it’s promising to reuse and recycle all its bags.

The Zara owner isn’t the best-placed company to cast the first stone. The biggest contributor to fashion’s rising carbon footprint is that we’re buying more clothes more frequently. Until the recent debut of online giants Shein and Temu, there was no company on the planet that had done more to advance that trend than Inditex itself.

Its fast-fashion philosophy focuses on matching catwalk trends within weeks, using rapid stock changes and cheap materials that are easier to throw away than repair. Zara offers dozens of new collections every year, compared to an average of two among European apparel companies in 2000. Per-capita production of textile fibers rose 82% between 1995 and 2018 as fast fashion rose to prominence, inducing consumers to view clothes as disposable.

It’s particularly ironic that the fight between Inditex and Zalando should be breaking out into the open now. The post-Christmas sales season has long been an emblem of the industry’s struggles with sustainability. Even before fast fashion encouraged consumers to fill their wardrobes with surplus clothes, retailers were filling their stores with excess inventory that needed to be cleared out in an orgy of discounting.

Across the industry, only about 40% of clothing is retailed at full price, with half of the remainder getting marked down and the rest never being sold at all. Reducing that wastage would do far more to cut carbon footprints than getting into fights with distributors to sustain the pretense that you don’t use polybags.

Fast fashion is often treated as the scapegoat for all the rag trade’s problems. That’s not entirely fair. Our mountain of clothing waste would probably be markedly smaller if Inditex’s competitors could match its legendarily efficient just-in-time supply chain. Inventory turnover, a measure of how much stock is sitting around on shelves unsold, is markedly better than at its major rivals.

Still, the best way to encourage a more sustainable garment industry will come from everyone buying a smaller amount of higher-quality apparel which can be mended rather than thrown away. In a world where more than half of clothes are made from cheap polyester, the disposable plastics you wear are a far bigger problem than the bags they’ve been delivered in.

BLOOMBERG OPINION

PISA 2018 and 2022

PHILIPPINE STAR/EDD GUMBAN

In March of 2012, Brother Armin Luistro, then the Secretary of the Department of Education (DepEd) was the Keynote Speaker at the Annual Membership meeting of the Philippine Business for Education. The theme was “The State of Basic Education: Gaining Ground.” In his speech, he articulated as his Vision for the Department of Education was that by 2030, the DepEd would be globally recognized for good governance and for developing functionally literate and God-loving Filipinos. Moreover, his mission statement read: “To provide quality basic education that is accessible to all and lays the foundation of lifelong learning and service for the common good.”

To achieve his vision and mission, he launched a reform program called, the Basic Education Sector Reform Agenda (BESRA) with five Key Reform Thrusts (KRT), namely: School-Based Management (SBM), Teacher Education and Development; National Learning Strategies, Quality Assurance and Accountability; and lastly, Organizational Development.

Of the five Key Reform Thrusts, Brother Luistro considered the 5th KRT, Organizational Development as the Key Reform Thrust which would determine the success of the first four KRTs. More specifically, under the 5th KRT, the DepEd must change its institutional culture towards greater responsiveness to the key reform thrusts of BESRA. If we may quote extensively from his speech, “If these reforms are to advance, take root, blossom and bear fruit, the institutional culture of DepEd will need to change… DepEd will need to move out of its worst centralized, bureaucratized, mechanistic, and simplistic mindsets and habits… for reforms to occur. The central insight of this reform thrust is that the culture of the institution behind the reform policies must change if the policies were to have a chance of eventually succeeding.”

Six years later in 2018, the DepEd joined the PISA Survey. The Program for International Student Assessment (PISA) is a triennial survey of 15-year-old students around the world that assesses the extent to which they have acquired the knowledge and skills in the core subjects of reading, mathematics, and science.

The results for the Philippines were devastating. Of the 79 countries participating, the Philippines ranked dead last (ranked 79) in reading and second to dead last in Mathematics and Science (ranked 78). More importantly, scores were rated at six levels of achievement with Level 1 being the lowest and Level 6 the highest. The Philippines scored 340 in Reading (Level 1a), 350 in Mathematic (Below Level 1), and 357 in Science (Level 1a).

The initial reaction of the DepEd was then Secretary Leonor Briones demanding — and getting — an apology from the World Bank for prematurely releasing the results of the survey. Talk about punishing the messenger!

Honor satisfied, the DepEd launched a program to improve our scores in the next PISA Survey.

On Dec. 3, 2019, the DepEd announced that it would lead the national effort for quality basic education through Sulong Edukalidad by implementing aggressive reforms in four key areas: 1.) K to 12 review and updating, 2.) Improvement of learning facilities, 3.) Teachers and school heads’ upskilling and reskilling through a transformed professional development program; and, 4.) engagement of all stakeholders for support and collaboration.

Ahead of the release of the PISA 2022 results and anticipating no significant improvement over the 2018 scores, DepEd Spokesperson Michael Poa said they had asked to realign the proposed P150 million in confidential funds to the National Learning Recovery Program (NLRP) to improve students’ skills in reading, mathematics and science — subjects covered by PISA and other global assessments.

As dreaded, the 2022 PISA results showed that the Philippines ranked third from the bottom in science with an average score of 356 (357 in 2018), sixth from the bottom in mathematics with an average score of 355 (350 in 2018), and sixth from the bottom in reading with an average score of 347 (340 in 2018).

When a crisis occurs, or in this case persists, certain principles of management apply.

In the first place, you do not assign the person or organization under whose watch the crisis occurred to solve the crisis. The fact that the crisis occurred under their watch is prima facie evidence of managerial incompetence. Secondly, assuming, without conceding, that there exists a modicum of managerial competence to deal with the crisis, if given the responsibility to solve the crisis, the organization will spend half the time explaining why they are not responsible for the crisis. The other half will be spent arguing that given more money and time they will solve the crisis.

Thus, one of the excuses for poor performance is a classroom shortage, 159,000 classrooms to be exact. The proposal is to be given a yearly budget of P100 billion for the next eight years and the crisis will be solved. This proposal would entail building schools over five years, costing twice as much as a private school and accommodating students who will learn less than in the private school. Using school vouchers will remove the need to spend P800 billion, cost half the price per student (public schools cost twice as much as private schools to teach students) and result in higher levels of learning.

School vouchers will also solve the other education crisis. The PISA survey highlights the poor performance of our students who are presently studying. The other education crisis is the out-of-school youth whose learning levels PISA does not measure. The Bergen Project shows that the Philippines has the highest drop-out rate in the ASEAN. For every 100 students who enter Grade 1, only 51 finish Grade 12.

Outstanding educators such as Brother Andrew Gonzalez, Dr. Edilberto De Jesus, and Brother Armin Luistro who served as DepEd Secretaries sought to reform DepEd, a lumbering bureaucratic behemoth of a million employees from within — to no avail.

The National Learning Recovery Program (NLRP) is the third attempt of the DepEd to solve the education crisis. The second attempt was the Sulong Edukalidad under Secretary Briones, and the first attempt was the Basic Education Sector Reform Agenda under Secretary Luistro. The first two attempts failed miserably, giving us no confidence that the third will succeed.

The DepEd seems to share our view. In 2019, when it launched Sulong Edukalidad, they promised improvement in the 2022 PISA scores. Now they are making no promises on the upcoming PISA surveys in 2025 and 2028. According to DepEd Undersecretary for curriculum and teaching Gina Gonong, “We may only start being at par with other Southeast Asian countries by 2029 onwards.”

In dealing with the education crisis, the Department of Education is the problem, not the solution.

As stated in our previous column (“LGUs: Dealing with the education crisis,” BusinessWorld, Sept. 3, 2023), the public elementary and high schools should be devolved to local government units. Transfer responsibility for solving the education crisis to them. Admittedly, some will perform poorly, but many will perform exceedingly well. We prefer islands of excellence to a vast ocean of mediocrity.

As also stated in our previous column (“From FAPE/PEAC to PhilEd,” BusinessWorld, Nov. 13, 2023), it is time to separate the financing of education from the DepEd by creating the Philippine Education Development Fund or PhilEd. This again involves transferring the responsibility for the crisis to another organization, in this case PEAC (Private Education Assistance Committee). PEAC has been the bright spot in the management of our school voucher program. The management of PEAC should be the incoming management of PhilEd.

As further stated in our previous column (“Senator Sherwin Gatchalian and the ARAL Bill,” BusinessWorld, Dec. 12, 2023), we plead with our business taipans to rescue the children of their employees from learning poverty.

 

Dr. Victor S. Limlingan is a retired professor of AIM and a fellow of the Foundation for Economic Freedom. He is presently chairman of Cristina Research Foundation, a public policy adviser and Regina Capital Development Corp., a member of the Philippine Stock Exchange.