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Brands embrace social media influencers as modern-day advertisers

PIXABAY

By Justine Irish D. Tabile, Reporter

VANEZZA GAIL V. HERNANDEZ, 24, bought a Squad Cosmetics eyeshadow palette from Shopee after it was recommended by a Filipino fashion influencer with 1.6 million followers on YouTube.

“Watching YouTube became a pastime for me during the pandemic, and I thought I should practice makeup,” she said in a Facebook Messenger chat. “I came across Rei Germar’s YouTube channel and got instantly hooked.”

Influencer marketing was limited to celebrities a decade ago, and you had to watch them on TV. These days, social media influencers from YouTube and Facebook to Instagram and TikTok have risen and enjoy a strong following from their tight-knit communities.

Influencers have revolutionized marketing strategies, with brands now embracing them as a major advertising tactic, consumer research and data analytics company Milieu Insight said.

The global market for influencer marketing was valued at $16.5 billion in 2022 and is expected to multiply 12 times to $199.6 billion by 2032, growing at a compound annual growth rate of 28.6%, according to Allied Market Research.

In the Philippines, 68% of Filipinos follow influencers for all sorts of advice, Milieu Insight said in a study in July. YouTube drew the most interest in the Philippines.

Beauty products were the top-selling category driven by influencer content, which is skewed toward females (56%) and Generation Zs or those aged 16 to 26 (46%).

“Many of [the influencers] subtly leverage their influence, seamlessly incorporating product placements into everyday content, such as makeup tutorials, get-ready-with-me videos or travel vlogs,” Milieu Insight said.

Carl Drexler D. Mendeja, a 24-year-old engineer from Manila, bought an umbrella and earphones endorsed by separate TikTok influencers.

“Influencer Jomar Yee said it’s durable. The way he advertised the umbrella was too much, swinging it back and forth like that. I couldn’t help but be enticed to buy it,” he said via Messenger chat.

Mr. Mendeja said he also buys products based on comments from other consumers on social media. Influencers also offer promotional codes that buyers can use while shopping online.

Milieu Insight’s study showed that Filipino women mostly buy beauty (41%), fashion (38%) and food and beverage (37%) products. Men buy tech gadgets (41%), food and beverages (36%) and fashion (30%).

“There are a ton of influencers now out there that are helping brands, especially the smaller ones, get exposure to a larger, more mainstream market,” Erik Paolo S. Capistrano, who teaches business at the University of the Philippines, said via Messenger chat.

Many of these smaller brands that can’t afford big celebrities rely on these social media influencers with loyal followers to help them sell their products, he said.

Granted, there could be trust issues with some influencers.

“Key reasons for lack of trust could be due to lack of knowledge and expertise about the products they endorse,” Sonia Elicia D, associate marketing director at Milieu Insight, said in an e-mailed reply to questions.

TRUST ISSUES
Some consumers also question the authenticity of a review, deceptive practices and inconsistent opinion on the part of some social media influencers.

“Many influencers are perceived as promoting products solely for monetary gain, leading to skepticism about their true feelings and experiences with the product,” Ms. D said.

Some influencers also fail to disclose whether some content is sponsored, blurring the line between genuine recommendations and pair promotions, she said.

There’s also a concern about oversaturation of sharing and the final return on investment from influencer marketing.

“This leads to audience fatigue, and many brands are still concerned about the final return on investment, which is not so easily measured,” she added.

To counter this, brands and influencers should practice effective audience targeting, stick to relevant content, diversify and use data.

Mr. Capistrano said legitimacy and credibility are the biggest issues with influencers, unlike well-known celebrities.

“It’s hard to say who is legit or not across different spectrums,” he said. “Celebrities have some degree of established credibility because they need to be good in their craft first before brands consider them for endorsements. Influencers, not so much. Anybody can be an influencer with enough content.”

“It’s much easier to lose credibility as an influencer especially in this era of ‘Cancel Culture,’” he said. “One incident, one bad PR, and you’re done or at least it’s very hard to bounce back.”

Since celebrities have established their reputations spanning years of hard work, it’s easier for them to bounce back, or it’s easier to brush aside controversies that hound them, Mr. Capistrano said.

“Influencers do gigs and stuff, but they’re still freelancers and project-based workers, working in environments that are so fragmented it’s hard to establish for sure who are the industry leaders,” he said. “With celebrities, you know who the A-listers are.”

The effectiveness of influencer marketing in driving direct sales is not significant, despite the rising number of influencers and 56% of survey participants following them, Milieu Insight said, based on a survey of 2,500 people in Southeast Asia.

Still, influencers’ sponsored content aids brand awareness and plays a pivotal role in the buyer’s journey, it added.

“Influencers have become trusted sources of information and recommendations for consumers across various niches,” the market research firm said. “When influencers authentically promote a product or service, they create a bridge of trust between brands and potential buyers.”

Ms. D said brands should pick influencers who have strong trust relationships with their audience.

“Use of data to monitor campaign effectiveness is also key, and adaptability to switch strategies quickly will also be important factors for success,” she added.

Mr. Capistrano thinks influencer marketing could boost short-term sales, but doubts it helps in the long term.

“Here’s the thing: For every good, legitimate and credible influencer, there are a hundred bad ones,” he said. “That alone is more than enough to make people pause about what brands and products to purchase.”

Some celebrities have learned to use vlogs and are very active on social media platforms.

Brands should hire influencers who are borderline celebrities — influencers who have established credentials. “Why? Because it’s a major sign of trustworthiness,” Mr. Capistrano said.

“The influencer market honestly needs a hard look in the mirror. My biggest beef with influencers is that a ton of them pretend that they are experts in life and that the entire world revolves around what they’ve experienced,” he said.

“Consumers also need to wake up and stop blindly following influencer suggestions and be more scrutinizing. Their bubbles and corners of the world are different from the majority,” he added.

Tight power supply expected to persist next year

EVENING_TAO-FREEPIK

TWO of the country’s largest electricity distributors expect the tightness in power supply to continue next year, although some relief may be provided by the completion and return to operation of some power plants.

“It’s still gonna be tight kasi wala naman bagong planta (because there is no new plant) except maybe the Excellent plant of San Miguel. It’s scheduled to be completed by the end of next year so ang pasok nun (it will come online by) 2025 pa,” Manila Electric Co. (Meralco) Chairman and Chief Executive Officer (CEO) Manuel V. Pangilinan told reporters last week.

Excellent Energy Resources, Inc. — a subsidiary of San Miguel Global Power Holdings Corp. (SMGPH), the power arm of conglomerate San Miguel Corp. — is putting up a 1,750-megawatt (MW) power facility in Batangas City.

Asked if the plant will be able to keep pace with the expected growth of the economy, Mr. Pangilinan said: “It’s always good to have surplus power.”

“If you don’t have a surplus capacity, you will face bouts of tightness which we don’t want to see,” he said about putting “permanent pressure on prices downward.”

“As a distributor, we want to see good margins of supply to demand,” he said.

Currently, Meralco is rebidding the procurement of its 1,800-MW power requirement, which was supposed to be supplied by Excellent and another SMGPH subsidiary, Masinloc Power Partners Co. Ltd.

The San Miguel units’ contracts with Meralco were terminated earlier this year. The Energy Regulatory Commission had approved the withdrawal of the application for the power supply deal as the agreed time frame to complete the required conditions had lapsed.

Aboitiz Power Corp. (AboitizPower) President and CEO Emmanuel V. Rubio said the country’s electricity supply next year might still be enough to cater to the growing demand amid the return to operations of the Ilijan natural gas-fired power plant.

“I think [supply will be] just like this year, although there’s going to be growth in demand, maybe 600 to 700 MW. Ilijan is offering so I think there would be ample supply,” Mr. Rubio separately told reporters last week.

The 1,200-MW Ilijan power plant of SMGPH has resumed operations and has been reintegrated into the grid in June after the fuel supply from the Malampaya gas field stopped.

The Batangas power plant went offline on June 5 last year following the ceasing of gas supply deliveries from the depleting Malampaya natural gas facility under the Service Contract 38 consortium.

“Although the forecast is El Niño, it’s still going to be tight, especially during summer, but I think we will have ample supply,” Mr. Rubio said.

“Maybe there will be times when diesel plants will be dispatched but it’s good that Ilijan is now running unlike in early 2022,” he said, adding that the “variable” would be hydroelectric plants also running to ease the situation.

Meralco is the main power distributor for Metro Manila and nearby areas. AboitizPower owns more than eight power distribution companies, including the country’s second and third largest.

AboitizPower has allotted P50 billion for its capital expenditure budget next year, which is mostly for the expansion and construction of its renewable energy projects. — Sheldeen Joy Talavera

Telcos seen to report better results in 2024 amid growing demand

PHILSTAR FILE PHOTO

By Ashley Erika O. Jose, Reporter

LISTED telecommunications and information and communications technology (ICT) companies are expected to post better results in 2024, driven by the strong demand for digital services and as firms roll out their expansion plans.

“The telco stocks — their earnings are up. Telcos will always do better. They continue to invest in their expansion. They will not invest billions in their expansion if they do not expect more subscribers,” Philippine Stock Exchange, Inc. (PSE) President and Chief Executive Officer Ramon S. Monzon said in an interview on the sidelines of the BusinessWorld Forecast 2024 economic forum last week

For the third quarter, all listed telecommunications and ICT companies recorded lower attributable net income despite recording higher revenues for the period. Still, almost all of them recorded better profits for the cumulative nine-month period.

“The Philippine ICT/telco industry is expected to continue to grow in [the fourth quarter] of 2023, driven by strong demand for digital services from both consumers and businesses,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

Pangilinan-led PLDT Inc. reported P9.43 billion in attributable net income for the third quarter, down 12% from P10.71 billion a year earlier, citing a challenging economic environment.

In the third quarter, the company’s combined revenues rose by 1.9% to P52.32 billion from P51.35 billion in the same period last year.

Year to date, the company saw its attributable net income climb by 1.4% to P27.88 billion from P27.5 billion a year ago.

For the nine months to September, the company recorded combined revenues of P156.36 billion, up 2.8% from P152.13 billion in the same period last year, its financial report showed.

Globe Telecom, Inc. also recorded lower earnings for the third quarter, with its attributable net income declining by 27% to P4.97 billion from P6.81 billion a year ago.

It recorded consolidated revenues of P44.27 billion for the quarter, a 3.2% increase from P42.88 billion a year ago, amid strong service revenues.

The listed telecommunications and ICT companies’ growth will hinge on their expansion plans, Mr. Monzon said.

PLDT together with its wireless subsidiary Smart Communications, Inc. has committed to explore emerging technologies for its network enhancement.

In early November, Globe announced that it had secured a total of P12 billion loan which it will use to fund its capital expenditures as it also works to ramp up its 5G deployment.

For the third quarter, Converge ICT Solutions, Inc. logged an attributable net income of P2.08 billion, 3.7% lower than P2.16 billion last year. Its consolidated revenues increased to P8.89 billion, up by 5.5% from P8.43 billion last year.

Meanwhile, DITO CME Holdings Corp. trimmed its net loss to P4.29 billion from a loss of P5.9 billion. Its total revenues climbed to P3.11 billion, expanding by 54% from the P2.02 billion last year.

Next year, telecommunications and ICT companies are projected to deliver higher profits, Mr. Arce said, thanks to the expected growth in the industry.

“However, profitability will also be affected by a number of factors, including, but not limited to, the level of competition in the industry, the cost of network upgrades, and the regulatory environment,” he added.

Some catalysts that could drive growth in the industry will be the continued expansion of the country’s digital economy and the accelerated rollout of 5G technology, Mr. Arce said.

However, cybersecurity attacks may derail this projected growth as cyberattacks may persist and are also expected to increase in the coming years.

“Increased digitization efforts by the many businesses and industries, government, and other institutions would also benefit the industry,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

The need to boost telco connectivity in many underserved areas is seen to help benefit the sector, Mr. Ricafort said, adding that these efforts would eventually increase firms’ consumer base as they work towards their digitization initiatives.

PSE chief says raising P200B at local stock market next year will depend on REIT listing

BW FILE PHOTO

CAPITAL raising at the Philippine Stock Exchange (PSE) may not reach P200 billion next year, the bourse operator’s top official said.

“Hindi natin kaya ang P200 billion (We cannot hit P200 billion),” PSE President and Chief Executive Officer Ramon S. Monzon told reporters when asked about capital raising next year.

“It would depend if the planned SM Prime Holdings, Inc.’s real estate investment trust (REIT) will push through because that could be big,” he said on the sidelines of a forum in Makati City last week.

“I expect that to be about $1 billion. We hope that it happens. We’ll see,” he added. 

Sy-led SM Investments Corp. (SMIC) said in August that it had deferred the record $1-billion REIT initial public offering (IPO) of its real estate unit SM Prime after assessing market conditions such as interest rates, inflation, and foreign exchange rates.   

Meanwhile, Mr. Monzon said that capital raising this year is expected to reach up to P110 billion. 

“We’ll end this year [with] about P105 to P110 billion,” he said.

The PSE recently disclosed that the total capital raised as of September this year was at P91.88 billion. More than half or 58.4% of the capital came from follow-on offerings, followed by private placements at 21.9%, stock rights offerings at 15%, and IPOs at 4.7%.

However, Mr. Monzon’s year-end projection is far from the expected P160 billion announced by the market operator in January.

The local stock market logged P110.29 billion in capital raised from primary and secondary shares last year, down 53% from the P234.48 billion raised in 2021.

Mr. Monzon previously said that the local bourse expects at least four IPOs next year from SM’s planned REIT and other companies engaged in sectors such as mining, industrial, and food. 

The PSE recorded a 19% jump in its nine-month net income to P575.65 million from P480.07 million last year led by a 210.7% climb in its investment income to P128.76 million. — Revin Mikhael D. Ochave

QCinema presents the best of Southeast Asia

THE QCINEMA International Film Festival ended this week, with its most elevated lineup since its eleven years of existence (and not just because this year’s theme was “elevated”).

What BusinessWorld took note of for this edition was the success that has befallen many of its Southeast Asian selections.

“This year, we welcomed over three times more foreign guests and international filmmakers compared to last year because of our programs,” Quezon City mayor Joy Belmonte said in a speech on closing night on Nov. 26.

Acclaimed films from the Philippines, Vietnam, Malaysia, Indonesia, Singapore, Myanmar, and many more graced big screens around Metro Manila from Nov. 17 to 26.

Asian Next Wave, QCinema’s main competition program, has long highlighted the work of emergent Asian auteurs. This year, eight films were selected to compete, three of which this writer was able to catch.

TIGER STRIPES
Amanda Nell Eu and her film Tiger Stripes won the Pylon for Best Picture at the QCinema awards night, adding to its accolades that include the Cannes Film Festival Grand Prix. Ms. Eu also took home the prize for Best Director.

It is also no wonder the film is celebrated — it provides a unique Malaysian voice for the coming-of-age body horror genre. Twelve-year-old Zaffan, who starts getting her period, finds that the transition from girlhood to womanhood is horrific, or at least becomes so since it is treated as such by society.

While the film is Malaysia’s official entry to the Oscars 2024 International Film category, it sadly faces censorship issues in its home country. A shame, be cause for teenage girls in a conservative setting, Zaffan’s story could be cathartic, from her innocent playfulness to her feral frustrations about people.

GITLING
Jopy Arnaldo took home the best screenplay prize for Gitling, which started its journey in Cinemalaya earlier this year and now rightfully takes its place among regional gems.

For using subtitles in a very unique, rewarding way, it deserves the screenplay nods it has gotten. Set in Bacolod, Gitling follows Jamie who is hired to be a translator for filmmaker Makoto. Mainly, Makoto speaks in Japanese while Jamie speaks in English, although she often uses her mother tongue Ilonggo and sometimes the national language Filipino.

Makoto and Jamie partake in this mishmash of language, coming from relationships that suffered from communication breakdowns. The two speak a lot and find themselves in romantic situations, and yet so much is left unsaid between them. And the subtitles fill the gaps!

INSIDE THE YELLOW COCOON SHELL
Finally, Pham Thien An’s Inside the Yellow Cocoon Shell, which won in QCinema’s cinematography category, injected the festival with a dose of calming, dreamlike meditation.

It places the (futile? confusing? meandering?) search for faith in its appropriate home in the slow cinema genre as a man travels from Saigon back home to a rural part of Vietnam where unanswered questions await.

While it is easy to get turned off by the religious talk, it does make sense in the context of the character trying to understand it all. Dinh Duy Hung’s cinematography has beautiful framing choices with lush landscapes and sources of light, letting viewers be both sleepy yet also transfixed.

Notably, the film will be added to Netflix on Dec. 11. — Brontë H. Lacsamana

Century Properties ‘cautiously optimistic’ for next year

LISTED property developer Century Properties Group, Inc. (CPG) expects to perform better in 2024, said its top official who remains cautious despite his optimism for the year ahead.

“Our outlook [for next year] is actually cautiously optimistic. There are many reasons why we believe it’s going to be a good year. Our affordable housing business is growing very rapidly. As you are probably aware, we’ve launched many projects,” CPG President and Chief Executive Officer Marco R. Antonio said in a media briefing last week.

“I think overall, 2024 should be a banner year for the company,” he said, describing the coming year as “better than this year.” 

From January to September, CPG logged a 13% increase in its net income to P1.3 billion while its revenues climbed by 10% to P9.7 billion.

“2023 is proving to be a very strong year for the company… We’re already reaching our pre-pandemic levels,” Mr. Antonio said. 

According to Mr. Antonio, the company’s commercial leasing business has been performing “above market” in terms of occupancy rates. 

“For commercial leasing, it is kind of a mixed bag,” he said, citing the challenges faced by the office sector such as the pandemic, the contraction of the Philippine offshore gaming operators or POGO market, and work-from-home arrangements. 

“With that said, I think our properties are performing above market in terms of both occupancies,” Mr. Antonio said.

“We don’t plan any new speculative office developments in the near future. We’re focusing our efforts into really filling up all of our current office and retail spaces,” he added.

On CPG’s retail business, Mr. Antonio said the company is looking at driving occupancy in retail spaces.

“I think there’s a lot to be excited about in retail. But specifically for Century City Mall, we’ve seen already the positive inflection point where we’ve been able to drive up the occupancy for the mall significantly this year, which we plan to continue next year,” Mr. Antonio said.

Based on its website, CPG’s office and retail spaces include Century City Mall, Century Diamond Tower, Century Spire Offices, and Asian Century Center BGC.

The company is also engaged in residential projects, hospitality projects, mid-income and affordable housing, and property management.

Shares of CPG at the local bourse were last traded on Nov. 24 at 30 centavos apiece. — Revin Mikhael D. Ochave

Federal Land bullish on year-end showing

PROPERTY developer Federal Land, Inc. is bullish about its year-end performance led by its residential portfolio, its top official said.

“We’re doing great. 2019 was our best year ever. And as of end-October, we’ve already exceeded 2019 numbers. We’re very optimistic about the year-end numbers,” Federal Land, Inc. President William Thomas F. Mirasol said on the sidelines of BusinessWorld’s economic forum in Taguig City last week.

“Our growth drivers continue to be what it was always been — it’s residential, particularly in the mid- and high-end [segments],” he added.

For next year, Mr. Mirasol disclosed that Federal Land is eyeing to launch developments in areas such as Mandaluyong City, Bonifacio Global City (BGC), Cebu, Pasay City, and Cavite.

“These [projects] are mixed-use. There is always a residential component and there will always be a bit of retail and commercial components,” Mr. Mirasol said. 

According to Mr. Mirasol, Federal Land launched 10 projects this year. Some of these projects are the second tower of The Grand Midori Ortigas residential project in Pasig City launched in July, the Federal Land Communities that offer multi-use developments, and the first Mitsukoshi mall in BGC.

Federal Land is the wholly owned property unit of Ty-led conglomerate GT Capital Holdings, Inc.

For the nine months through September, it logged a 176% increase in core net income to P1.9 billion while its total revenues rose 6% to P13.2 billion.

Shares of GT Capital were last traded on Nov. 24 at P560 per share. — Revin Mikhael D. Ochave

He will always kick a**

By Brontë H. Lacsamana Reporter

Movie Review
Enter the Dragon
Directed by Robert Clouse
QCinema International Film Festival —Restored Classics

BOTH martial artists and lovers of kickass combat in movies were hooked on Bruce Lee in the 1970s (and even beyond) for his legendary skill and charisma as a fighter and as an actor. This writer, having been raised by a father who practices martial arts and adores movies himself, was well aware of Mr. Lee’s enormous presence on screen and in the lives of many.

When the QCinema International Film Festival announced that Robert Clouse’s Enter the Dragon would be part of its Restored Classics section, getting tickets for it was a no-brainer.

An unprecedented collaboration between Hollywood and Hong Kong, the 1973 film places Mr. Lee in a fighting tournament organized by the crime lord Han (played by an entertainingly stereotypically villainous Shih Kien). With the help of fellow competitors Roper (John Saxon) and Williams (Jim Kelly), he sets out to bust Han’s operation.

For sure, much has already been said about one of the most influential action films of all time. It set the standard for many kung fu films, spy movies, and revenge tales to come.

A few things struck this writer while watching the restored version on the big screen. One was that the remarkable bodily presence of Bruce Lee just doesn’t get old, whether he is acting or fighting (damn, those well-defined muscles and those intense eyes!). It is clear that his movies are a product of an ardent love for martial arts, reaching fans even today every time his character engages in a fight sequence or firmly reiterates his philosophies.

Another striking thing is the image of Hong Kong that this film captures. The floating slums and boats on Aberdeen Harbour, for example, paint a vivid picture of a place that no longer looks like that. On the big screen it conveys the awesome sense of the characters coming together to face the unknown.

However, there’s no doubt that younger people reliving this classic will mainly be viewing it given its revered placement in cinema history. It exists now as the bedrock for many more forms of media that followed, ones that today’s audiences grew up on, from Kill Bill to John Wick (and yes, now you understand why every fighting game MUST have a Bruce Lee type character).

Not all of its elements stand the test of time either — the martial artists having their pick from a lineup of women? The cross-dissolve to transition between scenes recalling the past? That slick, funky score by Lalo Schifrin? It’s stuff you definitely don’t get from movies today.

In a recent trip to Hong Kong, this writer made a few stops to prepare for the big-screen rewatch of the classic. These include Bruce Lee’s statue in the Avenue of Stars, which many tourists visit to this day, and a pop-up exhibit on the legendary martial artist at the Hong Kong Heritage Museum in Sha Tin.

While Enter the Dragon exists now as some cultural artefact to draw inspiration and quote from, its allure as a kickass piece of entertainment still rings true. It is a timeless showcase of jaw-dropping fight choreography, silly plot points, and inspired set pieces like the mirror room towards the end.

This writer imagines her father in 1973, then in his late teens sitting on the stairs of a packed movie theater staring up at the screen in awe. She thinks back to the many teenagers at the Bruce Lee exhibit making TikToks of each other imitating his fighting poses next to vintage posters and action figures.

Mr. Lee’s most iconic movie, sometimes looking like a parody of itself, still succeeds at freezing him in time at his pinnacle, never to grow old or forgotten.

13th month pay: A comprehensive guide for SMEs

TOWFIQU BARBHUIYA-UNSPLASH

For business owners, understanding the intricacies of employee compensation and taxation is crucial to maintain a well-functioning and compliant workforce. It ensures that their employees are fairly compensated, while also meeting their legal obligations.

One key aspect of employee compensation in the Philippines is the 13th month pay. In this article, we’ll discuss how to compute it, when it must be given and other important things that small and medium enterprises (SME) need to know.

WHAT IS 13TH MONTH PAY?
The 13th month pay is an employee monetary benefit mandated by the Philippine government under Presidential Decree 851. All private employers must provide this benefit to rank-and-file employees at the end of each year, and no later than Dec. 24.

The 13th month pay should not be less than one-twelfth (1/12) of the total basic salary earned by an employee within the calendar year.

Every rank-and-file employee in the private sector has a right to receive a 13th month pay as long as they have worked in the company for at least one month within the calendar year. This benefit applies, regardless of position, designation, and employment status, and irrespective of the method by which their salary is paid. Rank-and-file employees paid on a piece-rate basis, fixed or guaranteed wage plus commission, those with multiple employers, resigned employees, terminated employees, and employees on maternity leave also receive a 13th month pay.

Meanwhile, state employees, employees in private subsidiaries of the government and those working in government-owned and -controlled corporations are excluded from this benefit. This is due to different compensation structures and bonus schemes that apply to the public sector.

Other exclusions for 13th month pay are commission-based employees, boundary- or task-based employees, freelancers, contractual workers, household helpers and persons in personal service, and other employees who are paid a fixed amount for a specific work.

DOLE ENFORCEMENT
The Labor department regional/field/provincial office with jurisdiction over the workplace monitors all employers’ compliance with the 13th month pay. More importantly, SMEs must file a compliance report with the portal at https://reports.dole.gov.ph/. The report must be made no later than Jan. 15.

The report must also contain the name of establishment, address, principal product or business, total employment, total number of workers benefited, amount granted per employee, total amount of benefits granted, and the name, position and telephone number of the person making the report.

Employers that fail to pay their employees face administrative action from the Labor department. Thus, the agency urges employers with difficulties in complying to seek assistance from it or explore other financing options.

For businesses with unpredictable cash flow, or business owners who simply want to be prepared for unexpected cash flow gaps, a revolving credit line can serve as a standby financing option. Alternatively, employers can also get a business loan from the Trade department, which offers reasonable interest rates and simpler application requirements to better help SMEs.

COMPUTING 13TH MONTH PAY
To get the amount of 13th month pay, just follow this basic formula: total basic salary earned during the year divided by 12 months.

If an employee receives the same amount of monthly basic salary (excluding allowances, overtime pay and other benefits), you can compute their total basic salary for the year with this formula: monthly basic salary time months worked.

PREPARING FOR 13TH MONTH PAY
Preparing for the 13th month pay can be a significant financial undertaking. But with proper planning and strategic financial management, this can become a manageable and predictable part of operations. Here are some steps employers can take to ensure they are well-prepared.

BUDGETING THROUGHOUT THE YEAR. Anticipate and budget throughout the year by setting aside a fixed amount each month equivalent to one-twelfth of the expected 13th month payout. By doing this, businesses can avoid the financial strain of a lump sum expense at the end of the year.

MONITORING PAYROLL EXPENSES. Keeping a close eye on payroll expenses throughout the year is crucial. This includes being mindful of increases in staff numbers or salary adjustments, because these changes will affect the total 13th month pay liability.

USING FINANCIAL TOOLS AND SERVICES. Consider leveraging financial tools to ensure liquidity and readiness for this payout. A revolving credit line can provide flexible access to funds, allowing businesses to draw on credit as needed to cover short-term expenses like the 13th month pay.

EMPLOYEE COMMUNICATION. Transparent communication with employees about their 13th month pay is important. This involves informing new hires regarding the calculation of their pro-rated 13th month pay and ensuring all employees understand the payment schedule.

REGULAR FINANCIAL REVIEWS. Conducting regular financial reviews can help businesses stay on top of their financial health. These include assessing cash flow, reviewing budget allocations for employee compensation and making adjustments as needed to ensure availability of funds for the 13th month pay.

LEGAL COMPLIANCE AND UPDATES. Staying updated with any changes in legislation or guidelines regarding the 13th month pay is vital for compliance. Employers should regularly consult legal resources or financial advisors to keep abreast of any developments in labor laws and tax regulations.

EXEMPTIONS
According to Section 3 of rules that enforce PD 851, paying 13th month applies to all employers except:

Distressed employers, such as those incurring substantial losses, or nonprofit institutions and organizations whose income has consistently declined by more than 40% of their normal income for the last two years;

The government, its political subdivisions and government-owned and -controlled corporations, except for private subsidiaries;

Employers of household helpers and persons in personal service;

Employers of people paid on commission, boundary or task basis and people paid a fixed amount for performing a specific work;

Employees of people who are not eligible to receive the benefit.

Understanding and correctly computing the 13th month pay is essential for SMEs in the Philippines. By adhering to the guidelines and being aware of taxation implications, employers can ensure compliance and foster a positive work environment. Moreover, by exploring various financial resources like a revolving credit line, businesses can maintain the financial health necessary to meet these obligations, contributing to a thriving and equitable economic environment.

This article reflects the opinion of the author and does not reflect the official stand of the Management Association of the Philippines.

 

Benedict S. Carandang is NextGen vice chairman of the MAP ICT Committee and vice-president for external relations of First Circle. This article was co-written with Jess Jacutan, First Circle’s content marketing lead.

map@map.org.ph

benedict@firstcircle.ph

Rates of T-bills, bonds may end lower

BW FILE PHOTO

RATES of Treasury bills and bonds on offer this week could decline to track secondary market movements, driven by the peso’s appreciation against the dollar and easing global oil prices.

The government will auction off P10 billion in Treasury bills (T-bills) on Tuesday or P3 billion each in 91- and 182-day papers and P4 billion in 364-day papers.

On Wednesday, it will offer P20 billion in reissued seven-year Treasury bonds (T-bonds) with a remaining life of five years and 10 months.

T-bill and bond yields may track the rally seen at the secondary market last week amid a stronger peso, which could reduce importation prices and overall inflation, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Global crude oil prices reached four-month lows last week, which could help alleviate inflationary pressures, causing yields to decline, Mr. Ricafort said.

“The trading week will feature a bond auction with indications of 6.15-6.25%. We think this will be well received as we suspect bond supply in December to be meager,” a trader added in an e-mail.

On Friday, the peso closed at P55.38 against the greenback, appreciating by one centavo from the P55.39 finish on Thursday.

This was the local currency’s strongest close versus the dollar in over three months or since it ended at P55.19 on Aug. 2.

Meanwhile, Brent crude futures settled down 84 cents or 1% at $80.58 a barrel on Friday, while US West Texas Intermediate crude fell $1.56 or 2% from Wednesday’s close to $75.54, Reuters reported.

At the secondary market on Friday, rates of the 91-, 182-, and 364-day T-bills went down by 40.24 basis points (bps), 36.34 bps, and 22.22 bps week on week to end at 5.7399%, 5.9376%, and 6.2694%, respectively, based on PHP Bloomberg Valuation Service (BVAL) Reference Rates data published on the Philippine Dealing System’s website.

Yields on the seven-year and five-year bonds also declined by 15.11 bps and 12.72 bps week on week to end at 6.2715% and 6.242%, respectively.

“The PHP BVAL yields mostly continued to ease despite some hawkish signals from local monetary authorities to ensure inflation is anchored towards the Bangko Sentral ng Pilipinas’ (BSP) targets,” Mr. Ricafort added.

BSP Governor Eli M. Remolona, Jr. on Friday said monetary policy will remain “hawkish for a while,” reiterating that the Monetary Board could still resume tightening if inflation picks up anew.

At its Nov. 16 policy meeting, the BSP kept its target reverse repurchase rate at a 16-year high of 6.5% amid easing inflationary pressures following an off-cycle hike of 25 bps last month.

The Monetary Board has now raised borrowing costs by a total of 450 bps since it started its tightening cycle in May 2022.

It will hold its final policy meeting for this year on Dec. 14.

Headline inflation eased to 4.9% in October from 6.1% in September. This brought the 10-month average to 6.4%, still above the BSP’s 2-4% target and 6% forecast for the year.

The Bureau of the Treasury (BTr) did not auction off T-bills last week to make way for its maiden offering of one-year tokenized bonds, from which it raised P15 billion at a coupon rate of 6.5%.

At its last offering of T-bills on Nov. 13, the government raised P15 billion as planned via the short-term papers as total bids reached P46.441 billion or more than thrice the amount on offer.

Broken down, the Treasury made a full P5-billion award of the 91-day T-bills, with tenders for the tenor reaching P20.133 billion. The average rate of the three-month paper fell by 22.9 bps to 6.123%. Accepted rates ranged from 6.024% to 6.197%.

The government likewise borrowed the programmed P5 billion from the 182-day securities, as bids for the paper reached P10.732 billion. The average rate for the six-month T-bill stood at 6.513%, down by 2.3 bps, with accepted yields ranging from 6.45% to 6.549%.

The government also raised P5 billion as planned via the 364-day debt papers, with bids reaching P15.576 billion. The average rate of the one-year T-bill went down by 3.1 bps to 6.56%. Accepted yields were from 6.54% to 6.585%.

On the other hand, the seven-year bonds to be offered on Wednesday were last auctioned off on Aug. 8, where the government raised P23.629 billion, below P30 billion on the auction block, at an average rate of 6.468%. Accepted yields ranged from 6.378% to 6.5%.

The BTr wants to raise P150 billion from the domestic market this month, or P60 billion via T-bills and P90 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — Luisa Maria Jacinta C. Jocson with Reuters

Rio police investigate Taylor Swift concert organizers after fan’s death

TAYLOR SWIFT at an event for Taylor Swift: The Eras Tour. —IMDB.COM

RIO DE JANEIRO’s police said on Friday they have opened an investigation into the organizers of the Brazilian leg of Taylor Swift’s The Eras Tour for the death of a 23-year-old fan who fell ill at the show last week.

The police will investigate whether entertainment firm Time for Fun (T4F) committed the crime of endangering human life or health.

Fans and concert-goers said they had been banned from entering the venue with bottles of water despite the extreme heat in the city which hit 59.3 degrees Celsius (138.7 degrees Fahrenheit) on the day of the event.

Ana Clara Benevides fell ill last Friday, on the first night of Swift’s Rio tour in Rio, and later died in hospital. The extreme weather led the US pop star to postpone her concert the following day, just two hours before she was to go on stage.

“The organizers of the event will be called to give evidence and further investigations are underway to ascertain the facts,” Rio’s civil police said in a statement.

Police have also launched a separate investigation into the cause of Ms. Benevides’ death, which has not yet been concluded.

T4F said the company and its representatives were cooperating with the authorities and available for any clarifications.

The firm’s chief executive officer Serafim Abreu acknowledged on Thursday that the concert organizers could have taken “alternative actions” to help fans cope with the extreme heat. Ms. Swift will conclude the Brazilian leg of her tour with three sold-out shows in Sao Paulo from Nov. 24 to 26, which are also organized by T4F.

Weather forecasters say those days are set to be cloudy, rainy and have milder temperatures. — Reuters

It’s past time scientists admitted their COVID mistakes

L-N-S7-UNSPLASH

DURING the pandemic years, Americans’ trust in scientists fell, according to a Pew poll released this month. In 2019, only 13% of Americans were distrustful enough to say they weren’t confident in scientists to act in the public’s best interest. Now that figure is 27% — despite recent triumphs in astronomy, cancer research, genetics and other fields.

It’s reasonable to assume the problem stems from Covid-era public health missteps. Some public health agencies took years to admit what had quickly become obvious: that the virus was airborne. Others suggested precautions, closing playgrounds and beaches, where any benefit would have been minimal. Some promoted policies, like sustained social isolation, that were hard to implement and endure — even for the prominent epidemiologists promoting them.

Public health researchers and officials seem to think that rebuilding trust is just a matter of clearer, more persuasive communication. That would help, but it’s not enough — they should admit to their mistakes.

There’s been reluctance to do so. Last week, I attended an international meeting at Boston University on pandemic preparedness, and a panel on communication never got into the mistakes of the pandemic. When I asked experts afterwards about various policies and declarations that look wrong in retrospect, I got a chorus of “We didn’t know” — an unsatisfying answer. Even at the time, scientists should have been clearer when they were basing policies on educated guesses.

Sandro Galea, dean of public health at Boston University, delves deep into what public health got wrong in his new book, Within Reason: A Liberal Public Health for an Illiberal Time, to be published on Dec. 1.

He tackles the silencing of dissenting opinions that led to groupthink, and the encroachment of political and personal opinions into the arena of science. That led to policies that were not always within reason — restrictions on outdoor behavior, closed playgrounds and prolonged school closings.

In an interview, Galea told me that the reluctance to talk about such mistakes comes from a place of insecurity — a fear of giving in to the other side, equated here with former President Donald Trump. Public health officials were rightfully dismayed by Trump’s unreliable bombast. But the answer isn’t to pretend to be infallible.

Even as early as January and February of 2020, the US public health community was making unforced errors. Evidence mounted week after week that this disease was wreaking havoc in China and spreading around the world. Health authorities should have been scrambling to prepare hospitals and nursing homes, to create tests that worked, and to develop a strategy for contact tracing and virus monitoring. They should have warned people of possible business and school closures ahead.

Instead, we got reassurance from public health officials, including editorials claiming that seasonal flu was a worse threat.

New York’s major outbreak in March 2020 created the conditions for a U-turn. As people died despite the lockdowns, we got moralizing about the dangers of going outside, despite reasonable evidence that was not the problem.

Perhaps it’s misguided to expect people to trust scientists when trust in so many institutions has fallen. (Scientists are still more trusted than journalists.) And yet science works because the methods of science were developed to smooth out the work of fallible humans into a body of reliable, useful knowledge.

The double-blind clinical trial is an ingenious antidote to bias and our human tendency to see what we want rather than what’s really there. That’s why I got the Covid vaccine — not because I uncritically trust Anthony Fauci.

The same level of evidence didn’t support the implementation of vaccine mandates, and some institutions went beyond reasonable evidence in forcing workers and students at very low risk of severe disease to get second and third booster shots.

This public health excess fed into existing pockets of irrational paranoia, giving new power to gurus on YouTube, who proclaim that they government is covering up deadly vaccine side effects — as well as the “real” cure for Covid, UFO aliens and plots to take away everyone’s property.

Some of those spouting conspiracy theories are scientists — or at least people with the right degrees — which points to a flaw in the idea that people should trust the whole profession. Historian Edward Tenner calls them alt-thorities, and they show up not just on YouTube but Fox News and the popular Joe Rogan show.

So maybe the best we can hope for is more trust in scientists who appeal to that great body of established knowledge, and who present new knowledge when bolstered with multiple lines of evidence. And we should trust them not necessarily to act in the public interest, but to act in the pursuit of truth.

BLOOMBERG OPINION

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