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Peso weakness ‘temporary’ — BSP

A WORKER counts Philippine peso bills inside a money changer in Manila in this file photo. — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) sees the recent peso weakness as temporary amid the expected delay in the US Federal Reserve’s policy easing.

“We also have to consider that this depreciation of the peso, we view it as temporary given the monetary policy stance of the US, particularly of delaying the reduction in the policy rate of the US. And we believe this is only temporary,” BSP Senior Assistant Governor Iluminada T. Sicat told a press briefing on Friday.

The peso closed at P58.65 per dollar on Friday, weakening by seven centavos from its P58.58 finish on Thursday.

Week on week, the local unit declined by six centavos from its P58.52 finish on June 7.

The Fed on Wednesday left its policy rate unchanged in the 5.25%-5.5% range. Fed Chair Jerome H. Powell said any rate cuts would wait until the central bank is more confident that inflation is headed toward the Fed’s 2% goal, or sees unexpected deterioration in the labor market, Reuters reported.

Fed officials are now projecting only one rate cut this year compared with previous expectations of three.

Ms. Sicat said that the peso will be impacted by foreign exchange (FX) supply and demand.

“We are anticipating our balance of payments (BoP) for 2024 to be at a surplus of $1.6 billion. Meaning to say there will be more supply of FX. We are anticipating more supply of FX in 2024 than what is being demanded.”

The BSP last week revised its BoP surplus forecast to $1.6 billion or 0.3% of gross domestic product (GDP) for this year, higher than its previous estimate of $700 million.

“Any depreciation of the peso would require more dollars for imports, for instance. In terms of BoP, that would require more dollar outflow,” Ms. Sicat said.

“We believe the current depreciation of the peso is merely sentiment-driven but mainly the direction or path of the FX rate will be determined largely by what (are) the fundamental developments,” she added.

BSP Governor Eli M. Remolona, Jr. earlier said that the peso’s recent performance is a case of a “strong dollar” amid tensions in the Middle East.

In mid-May, the peso sank to the P58-per-dollar level for the first time in 18 months or since November 2022.

The BSP said it has intervened in “modest” amounts to keep markets orderly and control FX speculation.

The Development Budget Coordination Committee expects the peso to range from P55-P57 a dollar this year.

IMPACT ON LOCAL FIRMS
Meanwhile, Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University noted the impact of the peso weakness on local firms.

“The problem is not the depreciation, but how resilient are the firms in the face of a lower peso value. Indeed, the other currencies are also falling as a result of a stronger dollar. But the larger conglomerates in the Philippines are more exposed to this shock,” he said in an e-mail.

“This group has been among the most active spender and borrower of dollar-linked instruments over the past decade, either by choice (lower cost) or necessity (size of domestic funding sources).”

Mr. Lanzona said that firms in other Southeast Asian countries would be able to “stand up” to the dollar, but Philippine firms may face difficulties and could be “unable to take advantage of the opportunities created by the depreciation.”

“Because of this, as well as the consequent inflation, the demand for the Philippine peso would continue to decline. In effect, greater depreciation would be expected,” he added.

Mr. Lanzona said that the central bank would need to defend the peso through direct monetary intervention or keep interest rates high. “In both cases, growth will be compromised.”

John Paolo R. Rivera, president and chief economist at Oikonomia Advisory & Research, Inc., said that the BSP has the power to manage any excessive depreciation.

“The BSP has maintained sufficient dollar reserves to do this. It needs to maintain a healthy balance between the export growth and import decline due to currency depreciation,” he said in a Viber message.

Gross international reserves rose by 1.8% to $104.48 billion as of end-May from a quarter ago. This was the highest level of reserves in over two years.

External debt hits $128.7B as of end-March

US dollar banknotes are displayed in this illustration taken on Feb. 14, 2022. — REUTERS/DADO RUVIC/ILLUSTRATION

THE PHILIPPINES’ outstanding external debt stood at a record $128.7 billion as of end-March, the Bangko Sentral ng Pilipinas (BSP) reported.

Data from the central bank showed that external debt rose by 8.3% from $118.8 billion in the same period a year ago. It was also higher by 2.6% from $125.4 billion in the fourth quarter of 2023.

External debt includes all types of borrowings by residents from nonresidents.

“The rise in the debt level was due to resident entities’ net availments of $2.5 billion, largely by private sector banks which raised $2.1-billion funds from offshore creditors for general corporate expenditures, refinancing of borrowings and liquidity purposes,” the BSP said.

Net availments by public sector entities amounted to $331 million as of end-March. These were driven by the National Government (NG) funding for programs that seek to “enhance tax system efficiency and foster an enabling environment for digital technology adoption.”

The Department of Finance has been seeking ways to improve tax administration and collection.

“Positive investor sentiment also contributed to the growth in the debt stock as investments in Philippine debt securities by nonresidents rose by $1.2 billion,” the BSP said.

“In addition, prior periods’ adjustments also increased the country’s debt level by $551 million. The negative $927-million foreign exchange (FX) revaluation of borrowings denominated in other currencies amid US dollar appreciation partially tempered the rise in the debt stock.”

The peso weakened by P0.04 to P56.24 against the dollar as of end-March from its P56.20 close as of end-February.

Meanwhile, the BSP said that the year-on-year increase in external debt was due to total net availments worth $8.9 billion.

Of the total net availments, $5.4 billion were from borrowings by private sector entities, mainly banks.

“The net acquisition of Philippine debt securities by nonresidents of $1.5 billion and prior years’ adjustments of $1 billion further contributed to the year-on-year increase,” it said.

“The negative $1.6-billion FX revaluation of borrowings denominated in other currencies partially tempered the rise in the debt stock,” it added.

This brought external debt as a percentage of gross domestic product (GDP) at 29% as of end-March, up from 28.7% in fourth quarter and 28.9% in the same period in 2023.

The debt service ratio, or principal and interest payments as a fraction of export receipts and primary income, eased to 3% in the first quarter from 4.3% in the year-ago period.

“The external debt-to-GDP ratio is still relatively lower compared to other Asian countries amid a more conservative stance on foreign borrowings due to forex risks involved,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

BSP data showed that private sector debt increased by 4.7% to $49.8 billion at end-March from $47.6 billion in the previous quarter, driven by bond issuances by local private banks.

Meanwhile, public sector debt inched up by 1.4% to $78.9 billion as of end-March from $77.8 billion in the fourth quarter of 2023.

The bulk or 91.6% of public sector obligations were from NG borrowings while the rest came from government-owned and -controlled corporations, government financial institutions and the BSP.

“The increase in public sector borrowings was driven by the net acquisition by nonresidents of public sector debt securities aggregating to $1.6 billion; and the $331-million net availments, largely by the NG for its various projects/programs.”

As of end-March, the Philippines’ top creditor countries were Japan ($15.2 billion), the United Kingdom ($4.6 billion) and the Netherlands ($3.9 billion).

Loans from multilateral sources amounted to $34.8 billion, while loans from bilateral creditors stood at $15.9 billion. These loans accounted for 39.4% of the total external debt.

This was followed by bonds ($42.2 billion or 32.8%) and obligations to foreign banks and other financial institutions ($28.5 billion or 22.1%), while the rest ($7.3 billion or 5.6%) were owed to suppliers and foreign exporters.

For the coming months, Mr. Ricafort said that external debt could continue to rise “amid the need to finance the budget deficit and to diversify funding sources to include some foreign commercial borrowings in US dollars, yen, euro, and other currencies.”

Latest data from the Treasury showed that the NG’s budget deficit widened to P229.9 billion in the first four months.

Mr. Ricafort also noted the global bond issuance in May would drive up the total external debt stock.

The Philippine government raised $2 billion from its issuance of the dual-tranche 10- and 25-year fixed-rate dollar bonds, its first global bond sale for the year. — Luisa Maria Jacinta C. Jocson

Meralco rates to go down by almost P2 per kWh in June

LINEMEN are seen at work in Tondo, Manila. — PHILIPPINE STAR/RUSSELL PALMA

RESIDENTIAL CUSTOMERS served by Manila Electric Co. (Meralco) will see a nearly P2 per kilowatt-hour (kWh) reduction in their electricity bills this month, instead of the previously announced rate hike.

Meralco made the announcement after the Energy Regulatory Commission (ERC) ordered all distribution utilities and electric cooperatives to implement a staggered collection of charges from their purchases from the Wholesale Electricity Spot Market (WESM) in May.

In a statement on Sunday, Meralco said that the overall rate will decrease by P1.9623 per kWh to P9.4516 per kWh in June from P11.4139 per kWh in May.

Households consuming 200 kWh will see their electricity bills decline by around P392.

The reduction was a turnaround from the P0.6436 per kWh increase that Meralco announced on June 13, citing the higher generation charge.

The ERC ordered the staggered collection of the charges over a four-month period starting with bills payable from June until September.

In compliance with the order, Meralco said the generation charge would go down by P1.8308 per kWh, a turnaround from the P0.3466 per kWh increase announced last week.

“We ask for the understanding of our customers over the delayed bills as we implement the newly issued order of the ERC. Rest assured that Meralco will implement adjusted due dates to give our customers enough time to pay their bills,” Meralco Vice-President and Head of Corporate Communications Joe R. Zaldarriaga said in the statement.

To recall, charges from WESM went up by P1.5203 per kWh due to tight supply conditions in May as average demand increased by more than 1,200 megawatts.

The transmission charge will still go up by P0.1450 per kWh, mainly due to the higher ancillary service charge.

The new June electricity billing also applied the implementation of a new feed-in tariff allowance (FIT-All) rate of P0.0838 per kWh starting this month. This is P0.0474 higher than the previous rate of P0.0364 per kWh.

The FIT-All is a charge reflected in the bills of consumers that is collected from on-grid customers to support the development and promotion of renewable energy.

HIGHER GENERATION CHARGE
However, typical households in Meralco-covered areas may expect an increase in generation charge in the coming months as the company will start to collect a portion of the costs.

The power distributor earlier said that it will defer the collection of around P300 million in generation charges from suppliers Quezon Power (Philippines) Ltd., San Buenaventura Power Ltd. Co., and South Premiere Power Corp.

Meralco will also defer the collection of around P200 million in generation costs.

A total of P500 million will be collected over the July-to-September billing period.

“With these already deferred costs, and the recent order of the ERC to also stagger the collection of WESM charges, around P0.77 per kWh will be added every month to the generation charge in the July-to-September bills,” Mr. Zaldarriaga said.

Meralco’s controlling stakeholder, Beacon Electric Asset Holdings, Inc., is partly owned by PLDT Inc.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has an interest in BusinessWorld through the Philippine Star Group, which it controls. — Sheldeen Joy Talavera

PHL gov’t should consider raising taxes, analysts say

GIANT Christmas balls are displayed inside a mall in Mandaluyong City. — PHILIPPINE STAR/MIGUEL DE GUZMAN

By Luisa Maria Jacinta C. Jocson, Reporter

THE GOVERNMENT should consider raising taxes in order to ramp up revenues and meet its fiscal consolidation targets, analysts said.

“Improved tax collection is crucial, but additional revenue streams might be necessary. The government’s stance against new taxes could be tweaked,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

This after the International Monetary Fund (IMF) said that there is room to generate more revenues both through better tax administration and higher taxes, as it expects the pace of the country’s fiscal consolidation to be slower than initially anticipated.

The Development Budget Coordination Committee at its April meeting raised the budget deficit ceiling for the medium term as it boosts infrastructure spending.

The government is targeting to bring down the deficit-to-gross domestic product (GDP) ratio to 3.7% by 2028.

This year, it set the deficit ceiling at 5.6% of GDP or equivalent to P1.48 trillion.

“The current administration’s policy of raising taxes simply through tax administration measures is not sufficient on its own,” Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University said in an e-mail.

Finance Secretary Ralph G. Recto has said he does not plan to introduce any new or implement higher taxes until the end of the Marcos administration. Instead, he wants to focus on enhancing tax administration and boosting nontax revenue sources.

Mr. Lanzona said that the plan to rely on simply improving tax administration only has “marginal” gains.

“An over-reliance on improved tax administration will overlook the need to diversify revenue sources that can expand the number of revenue options needed for structural transformation,” he said.

“A balanced approach introduces a flexibility especially if the tax administration measures are faced with political and social resistance forcing the government to struggle to achieve the necessary political consensus for broader reforms.”

Latest data from the Bureau of the Treasury (BTr) showed that the National Government’s (NG) budget deficit widened to P229.9 billion in the January-April period from a year ago.

BTr data showed that revenues jumped by 16.8% to P1.47 trillion in the first four months as tax revenues rose by 13.21% to P1.28 trillion while nontax revenues surged by 48.8% to P188.8 billion.

Mr. Lanzona also bucked the notion that raising taxes results in inflation.

“That is true if the new tax measures are limited to the value-added tax (VAT) which are incorporated into firms’ additional costs. This will not happen if the government will begin to consider a more progressive income tax system and wealth taxes,” he added.

Mr. Roces said the government can explore “growth-friendly tax policy changes alongside stricter tax administration to solidify the consolidation plan’s long-term success.”

“By consolidating its fiscal position, the Philippines can free up resources that can be redirected towards essential development goals, such as infrastructure development, healthcare, education, poverty reduction and income distribution,” Mr. Lanzona added.

On the other hand, Bienvenido S. Oplas, Jr., president of a research consultancy and of the Minimal Government Thinkers think tank, said that the government’s fiscal consolidation path is both achievable and ambitious.

“Ambitious is good especially in relation to cutting high public debt stock, cutting high annual interest payment,” he said in a Viber message.

“The 3.7% deficit ratio by 2028 should be kept as a goal to control spending and borrowing whenever possible while raising revenues elsewhere, especially privatization.”

Mr. Oplas warned that tax hikes are inflationary and price pressures are passed onto consumers regardless of the tax type.

There is no need to raise taxes amid the government’s existing revenue generation measures, he said, such as privatizing assets, raising the mandatory dividend requirement of government-owned and -controlled corporations as well as cracking down on smuggling.

The IMF said the Philippine government can improve efficiency in VAT collection and review existing tax exemptions.

Understanding fleet leasing and the future of mobility

Photo by kjpargeter on Freepik

Getting a vehicle for your business is more than a simple purchase. You have to take into account insurance, getting the necessary licenses, maintenance and repairs, depreciation, parking and storage, not to mention the actual financial cost of purchasing one.

So naturally, the concept of fleet leasing and its growing popularity is to be expected. Similar to leasing properties or other goods, fleet leases offer a way to manage the complex financial and maintenance aspects of vehicle ownership, as many businesses simply cannot afford or do not want to shoulder that burden.

Fleet leasing involves temporarily renting a fleet of vehicles, such as trucks, vans, and cars, from a fleet management organization. This approach simplifies vehicle management by covering all aspects, including financing, maintenance, fuel management, and driver and safety management. This comprehensive coverage makes fleet leasing an ideal choice for smaller organizations or startups, as it reduces operational costs, enhances driver security, and improves work performance efficiency.

And, as leasing allows businesses to have the vehicles they need for a specified period, with most contracts being for a fixed term, this creates a certain predictability in costs and management that helps businesses plan their finances more accurately and avoid unexpected expenses.

Businesses can then focus on their core operations while leaving the intricacies of fleet management to the experts. This partnership ensures that all aspects of fleet management are reliable and consistent. For instance, overtime work is accurately recorded, and journey planning is made more efficient, enhancing driver awareness and safety during work trips.

“Today, fleet management in North America is a multibillion-dollar industry that is highly consolidated. The top five players combined make up for more than 90% of managed vehicles. Tomorrow, the relevance of this market will further increase due to multiple influencing factors,” multinational professional services firm Deloitte wrote in a report.

“More and more original equipment manufacturers will put their focus on this business as it is, or it will become an important sales channel for their vehicle sales,” it added.

Deloitte even noted that the growing popularity of fleet leasing, in the general context of the widespread transformation of the automotive industry, could open new opportunities for other industries like the telecommunication and tech “to expand their current entertainment, telematics, or mobility platform offerings.”

“The key strategic reason is that the fleet management industry will continue to evolve and become even more IT- and data-driven in the future. Deloitte foresees tech companies being in a unique position to take ownership of customer access and data (mobility, payment, etc.), which will be key to monetizing the mobility ecosystem,” the firm said.

“In addition, car rental companies and other mobility providers (such as mobility as a service [MaaS] providers) are tapping into fleet management, as this capability is one of the key enablers for nearly all future mobility services.”

For car rental companies looking into fleet leasing, it is not an easy shift, however. Managing a fleet of vehicles can already be a time-consuming and complex task. Much like property managers assist landowners with paperwork and operational tasks, fleet management organizations need to also provide valuable support in maximizing the benefits of their leased assets. These services might include everything from vehicle servicing to tire replacement, vehicle registration, and ensuring the fleet is always in optimal condition.

But Deloitte notes that for such companies, a shift in strategy is essential. Much more is needed. No longer can car rental companies merely act as asset managers; they must transform into integrated mobility providers, offering a suite of services that extend beyond the vehicles themselves.

Fleet management companies have a unique opportunity to deepen their relationships with their existing customer base. But to do this, companies must provide additional service offerings such as marketing finance and leasing products to clients who currently own their vehicles, providing them with compelling reasons to switch to leasing.

The rise of autonomous vehicles (AVs) also presents both a challenge and an opportunity, as companies now must build expertise in handling AVs, understanding their unique requirements, and managing AV fleets efficiently on a large scale if they want that competitive edge.

“The key to being successful will be operational excellence, both internally and in terms of services. Fleet managers need to focus on digitization, process improvement, operational efficiency, and competitive funding strategies. Investments in IT and data analysis capabilities should enable them to sell new and better services to clients like consulting with corporate functional fleet clients to manage overall savings in operational costs,” Deloitte said.

“Either way, to cope with these trends and changes in the industry requires bold strategic choices amidst uncertainty. Fleet management will continue to become a truly global business, despite strong regional characteristics.”

Such an outlook could very well apply to the Philippines, where of the total 109,606 car sales made in the first quarter of 2024, commercial vehicles accounted for 81,395 units — 60,302 of which were light commercial vehicles, according to the latest report by the Chamber of Automotive Manufacturers of the Philippines and the Truck Manufacturers Association.

In the long run, fleet leasing can add significant value to businesses. It equips them with the right vehicles and equipment to take on jobs that they may not have been able to handle before. Outsourcing fleet management allows businesses to enjoy the benefits of having a well-maintained, reliable fleet without the hassle of ownership.

Moreover, the growing presence of fleet management companies can provide additional services to commercial operations such as telematics and driver training, further enhancing the efficiency and safety of transportation and mobility in the country. These services ensure that businesses operate at peak performance, contributing to improved productivity and reduced downtime.

For businesses in need of industrial or commercial vehicles, fleet leasing presents a compelling financial choice. It offers a way to manage costs effectively, simplify vehicle management, and ensure reliable and consistent fleet operations. — Bjorn Biel M. Beltran

PXP Energy Corp.’s Annual Stockholders’ Meeting set on July 8 at Grand Hyatt Ballroom III

 

 

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Impact Pioneers Network awards grants to climate startups

L-R: AC Dy, head of Incubation and Venture Support of Villgro Philippines; Diane Estepahine Bagui, program officer of Forest Foundation Philippines; John Altomonte, Corporates for a Better Planet Program (CBPI) lead of WWF-Philippines; Audrey Tangonan, CEO and founder of Sinaya Corp.; Joseph Amiel Camingal, CEO and founder of Hive Energy Philippines; Mari Martirez, CEO and co-founder of Rezbin Waste Technology, Inc.; James Soriano, vice-president of Investments of Pasudeco; Greg Moral-Perez, director — Investments of Impact Pioneers Network and director of xchange; and Priya Thachadi, co-founder of Impact Pioneers Network and CEO of Villgro Philippines

By Angela Kiara S. Brillantes, Special Features and Content Writer

As the planet continues to deal with environmental problems, impact investing has become a tool to support and bring about significant change on a larger scale. For instance, investments in climate startups are building more resilient and sustainable communities.

To catalyze local investing and support promising businesses, Impact Pioneers Network (IPN), a first-of-its-kind impact investment network in the Philippines hosted an event titled, “Climate Catalyst: Accelerating Investment in Climate Startups,” featuring climate startups and their innovative solutions, highlighting their critical role in addressing climate mitigation and adaptation.

During the said event, held last June 5 in Makati City, IPN announced the winners for its “Climate Catalyst Startup Pitch Competition.” Climate startups were given the opportunity to share their innovative visions and projects, inspiring and supporting these enterprises in driving impactful solutions that bring about sustainable change and propel the country towards a net-zero future.

Nine early-stage startups presented their climate innovations, namely: Hive Energy Philippines, Sinaya Corp., Dewaste Solutions, Rezbin Waste Technology, Inc., LITHOS Manufacturing, Galansiyang, Inc., FiveDOL Upcycling Corp. (LimaDOL), The Aquaculture Group, and Young Farmers Club of Zambales, Inc.

Hive Energy Philippines, a renewable energy startup from Oriental Mindoro, is the winning entry that won the grand prize of P100,000 with business mentorship and technical support for their solar energy solutions, catering to commercial, residential, and industrial sectors.

From charging devices to powering an entire house, Hive Energy Philippines offers a wide range of power solutions that are affordable, accessible, and sustainable at the same time. These solutions aim to address customers’ energy needs, all while improving energy security, accessibility, increasing comfort, and preserving the ecosystem.

In line with their unwavering commitment in promoting energy empowerment, Hive Energy Philippines will use the prize to support further research and development efforts, which aims to enhance renewable energy and its accessibility to all.

Another notable winner, Sinaya Corp., was granted P50,000, technical support, and business mentorship from IPN. The startup is the founder of the first local menstrual cup that provides high-quality menstrual management products and promote proper reproductive and hygiene education. This user-friendly product helps Filipino women to become more comfortable, eco-friendly, and reduce country’s waste.

The third prize was awarded to Rezbin Waste Technology, a startup that focuses on revolutionizing the waste disposal industry in the Philippines. It uses cutting-edge technology that recycles all plastic collected, ensuring a cleaner and more sustainable environment.

Impact investing

The event also featured discussions on financing climate startups in the Philippines, as well as expounding on the importance of impact investing, supporting local impact enterprises that address urgent social and climate issues, catering to the needs of both local and global communities.

“Impact investing channels much-needed risk capital to entrepreneurs who are addressing some of the most pressing issues of our time, including climate change. Unlike traditional investments that primarily focus on financial returns, impact investing aims to generate financial, social, and environmental benefits alongside financial returns. It catalyzes solutions that can create sustainable change and push us forward to net zero,” Priya Thachadi, chief executive officer of Villagro Philippines and co-founder of IPN, said in her opening remarks.

A panel discussion was led by climate startup leaders from Agro-Digital PH, Suds Sustainable Pods, Negros Women for Tomorrow Foundation, Inc., and Magnus Renewable Tech Corp. The panelists shared about the challenges and risks their businesses have faced, including limited access to funding, regulatory hurdles, and the need for specialized knowledge and mentorship.

All three startups have received investments through the IPN to grow their models and increase their impact footprint.

“Filipino climate startups often face difficulties in securing early-stage and growth capital due to a smaller pool of local investors focused on climate innovation versus our counterparts in other countries,” Andy Coscolluela, strategic projects manager of Negros Women for Tomorrow Foundation, Inc., said during the panel discussion.

Unlocking opportunities through impact investing is thus more important than ever because without the right kind of funding, there’s a limit where enterprises can get to, no matter how innovative the solutions are.

The discussion also highlighted that collaboration and partnerships play a big role in supporting these types of initiatives.

“We started in 2020 and we operated very small. When we needed outside funding, it’s also finding the right partner who would be committed as you in executing your mission. For us, finding that [outside partner] brought us not only financial support but also mentorship and network which what brought us here now,” shared Jean Magboo-Yuzon, co-founder of Suds Sustainable Pods.

For Greg Perez, director of xchange, one of IPN’s co-managers, impact investing in the Philippines, which is currently the second-largest impact investing market in Southeast Asia in terms of number of deals, is expected to grow more over the next decade.

“Increased awareness of environmental issues as well as the urgent need to reduce carbon emissions, along with a growing ecosystem of socially conscious entrepreneurs, are likely to drive sustained growth,” Ms. Perez said.

IPN also recently announced three new investment deals facilitated through their Working Capital Facility to provide financial support to three local impact enterprises Magnus Renewable Tech Corp., Agro-Digital PH, and Suds Sustainable Pods to scale their operations.

La Salle Green Hills wins grand prize at Enderun Colleges’ The Next Bright Idea 12

The Next Bright Idea 12 Grand Champion RyzaBond of La Salle Green Hills with executives from Enderun Colleges

Enderun Colleges’ annual business pitch competition, The Next Bright Idea, concluded its 12th season with the grand awarding ceremony that recognized the most innovative and sustainable business ideas from Grades 10-12 students across the Philippines.

This year marked the largest competition to date, with a remarkable 93 team registrations from various high schools nationwide. Out of these 93 teams, only 10 teams qualified for the final round, showcasing the best and brightest ideas.

Prior to the competition, Enderun hosted three sessions of the Enderun Entrepreneurship Masterclasses. These sessions were designed to provide all participants with equal learning opportunities, equipping them with essential skills and knowledge for their business idea submissions.

The competition celebrated innovative ideas aimed at fostering sustainability. La Salle Green Hills impressed the judges and won the grand champion title with “RyzaBond,” a cost-effective, eco-friendly adhesive made from locally sourced rice husk and rice bran starch, offering strength comparable to both basic bio-adhesives and synthetic adhesives while being biodegradable and non-toxic.

Ecofil from Life Academy International earned the first runner-up spot by showcasing R3 Filament, which transforms discarded PET plastic bottles into high-quality, eco-friendly 3D printing filaments to combat pollution and promote sustainability in the Philippines.

The second runner-up position went to “Three Birds, One Stone,” also from La Salle Green Hills, for presenting the Banana Leaves Wax (BLW) Cloth Packaging, a reusable, eco-friendly food packaging made from banana leaf wax, chitosan, jojoba oil, and upcycled cotton cloth, designed to reduce plastic, agricultural, and fabric waste in the Philippines.

The winning teams received medals, plaques, and cash prizes worth P50,000, P20,000, and P10,000.

The event was graced by notable attendees and judges, including Daniel Perez, chief operating officer of Enderun Colleges; Lou Molina, director for college program development and branding at Enderun Colleges and the creator of The Next Bright Idea; Ray Estrada and Marivic Ignacio, both faculty members of the College of Business at Enderun Colleges; Mhyles Oliva, director of sustainability and head of academics at Enderun Colleges; and Larry Gamboa, PhD, resident judge and author of Think Rich, Pinoy!.

“Tonight we honor each of you for your unique ideas, your perseverance, and your entrepreneurial spirit. We believe that this experience will propel your motivation to become an entrepreneur one day,” Ms. Molina said, emphasizing the importance of fostering young talent.

“Entrepreneurship is not just about making money,” Mr. Perez added. “Being an entrepreneur is a very noble calling because you solve problems and help improve other people’s lives. And through your business and projects we provide purpose for other people to join your vision to impact wonderful change.”

Choosing the right vehicles for your company’s fleet

Photo by katemangostar on Freepik

As an archipelago with more than 7,000 islands, the Philippines faces unique logistical and mobility challenges that make fleet leasing an attractive option for businesses and foreign investors. According to Automotive Fleet Magazine, multinational companies perceive the country as the third largest vehicle fleet market in Asia, only behind Japan and India, with the industry dominated by local and small lessors.

When mulling over the right automotive for your fleet in a diverse and geographically complex country like the Philippines, several factors must be considered to ensure efficiency, sustainability, and cost-effectiveness that meets business needs and regional demands.

According to Web-based fleet system Chevin, one of the most important things to consider whether to buy vehicles, finance fleet purchases, or lease vehicles is its utility to its users. Although some brands of car manufacturers are more appealing than others, focusing on car features and capabilities directly impacts the performance, reliability, and efficiency of the vehicle fleet and can be more practical and affordable.

Finding out the right size, style, and carrying capacity of a vehicle is essential in the operation of a fleet. The type of vehicle needed for urban deliveries is different from those required for long highway hauls, off-road operations, or even business meetings. To match a vehicle’s capabilities with its intended use is important to ensure efficiency and practicality.

Besides vehicle utility, choosing the right vehicles for your fleet also means sticking with a budget and finding one that will be the best value in the long run. It is important to look beyond the initial purchase price of a car fleet and consider the total cost of ownership throughout its operation.

In budgeting for a car fleet, some components must be considered to reduce costs and be more economically efficient.

With gas prices fluctuating weekly, fuel economy becomes critical as it impacts the operating costs. Although their prices differ depending on the model and make of a vehicle, maintenance and repair costs can unexpectedly affect the budget as well. Additionally, car insurance costs vary based on vehicle type and frequency of use. Finally, potential resale value should also be evaluated, as it can be considered possible income and offset initial expenses when it’s time to replace or upgrade the fleet.

One way to help ease these costs is through standardizing certain specifications across a fleet of vehicles can help ease these costs by simplifying maintenance and ensuring consistency in performance. An article from Chevin suggests that through setting up guidelines for fuel types, engine sizes, or vehicle features, businesses can streamline maintenance programs, and optimize technician training and parts inventories.

Safety also needs to be a consideration in choosing the right vehicle for a fleet. According to data from the Philippine Statistics Authority, road traffic deaths increased by 39% from 7,938 deaths in 2011 to 11,096 deaths in 2021.

Ensuring that the vehicles chosen have strong safety records can help protect drivers and passengers while minimizing risks. Investing in additional safety features such as automatic emergency braking, lane departure warning systems, and blind-spot monitoring must also be considered as they can reduce accident-related costs and improve fleet safety.

With increasing pressure to reduce carbon footprints and combat climate change, the environmental impact of vehicles must be a pivotal consideration when selecting a fleet. While options like hybrid or electric vehicles are currently sparse in the country’s fleet leasing market, businesses can explore various strategies to mitigate environmental impact.

According to an article by US-based fleet leasing company Ewald Fleet Solutions, an alternative option comes in the form of advancements in petrol engine technology that have enabled car manufacturers to produce vehicles with smaller engines that emit lower carbon emissions. This development offers a viable substitute for fleet leaders seeking to reduce their harm to the environment without immediate access to hybrid or electric vehicles.

Lastly, Ewald Fleet Solutions suggests that the appearance and type of vehicles chosen for fleet leasing can influence how a company is perceived by its customers, stakeholders, and the general public. Selecting vehicles that are in style, modern, and in top shape can convey professionalism, reliability, and a commitment to quality service while outdated or poorly maintained vehicles may project a negative image, and impact customer trust and satisfaction.

Similarly, the type of vehicles chosen can also reflect company values like sustainability and innovation. Choosing eco-friendly or technologically advanced automobiles can be perceived as showing care for the environment and positions the company as forward-thinking.

Considering image and branding in fleet selection decisions makes sure that vehicles fulfill operational needs with a bonus that contributes positively to a fleet leasing company’s reputation and public relations.

Selecting the right automobiles for a fleet needs careful assessment of different elements such as vehicle utility, budget constraints, operational requirements, and environmental impact. By considering thoroughly the said different factors, businesses can choose the vehicles that will suit their needs and so better navigate the logistical challenges they face, and in turn have long-term success and positive impact. — Jomarc Angelo M. Corpuz

Youth movement

From left are Kia Asia-Pacific Head of Product Ezan Ley, Kia Asia-Pacific Head of Sales Joey Hong, ACMobility CEO Jaime Alfonso Zobel de Ayala, ACMobility Head of Automotive Retail and Distribution Toti Zara, and Kia Philippines Chief Operating Officer Brian Buendia. — PHOTO BY KAP MACEDA AGUILA

Kia Philippines pitches ‘affordable’ Sonet to Gen Z, millennial car buyers

By Dylan Afuang

KIA PHILIPPINES, led by the Ayala Corp.’s ACMobility, eyes to boost its sales success by pitching to younger car browsers the Sonet. Replacing the Stonic, the Sonet is now the smallest and most affordable crossover in the brand’s local roster.

The Sonet comes in four trim levels: 1.5 LX MT (P758,000), 1.5 LX AT (P868,000), 1.5 EX AT (P978,000), and 1.5 SX AT (P1.138 million).

The Stonic was “the top-selling nameplate for Kia (locally), accounting for over 40% of sales in recent years,” Kia Philippines President and Head of Automotive Retail and Distribution at ACMobility Antonio “Toti” Zara III said during the Sonet’s public launch in Parañaque City.

“It achieved such volume because it played in the sweet pricing spot,” he continued, explaining that buyers attained the old car’s price range between P750,000 to P1 million. The executive also cited that one of the country’s best-selling cars is priced in that “sweet spot.”

The company counts on the Sonet being priced within the same bracket — and the “market shifting to crossovers and SUVs” — for the new model’s possible success.

“We are excited to offer this modern entry-level SUV, especially to the young millennials and Gen Zs who seek a balance of convenience, technology, and affordability,” Kia Philippines COO Brian Buendia said in a statement.

ACMobility CEO Jaime Alfonso Zobel de Ayala joined during the car’s public unveil, “The arrival of the Sonet shows ACMobility’s commitment to giving Filipinos more reasons to fall in love with the Kia brand again.”

As a nod to its target market, the Sonet’s name is derived from the words “social” and “network,” Kia Asia-Pacific Head of Product Ezan Ley explained.

Design highlights found within the car’s 4,110-mm length, 1,790-mm width, and above-1,600-mm height are the brand signature Tiger Nose grille with a geometric pattern, large headlights with LEDs for the SX variant, and a rear full-width lamp cluster.

Complementing these are three monotone color options Vivid Red, Snow White Pearl, and Imperial Blue. For the SX variant, Vivid Red and Snow White Pearl are paired with a black roof. Pewter Olive, a special monotone color, is exclusive to the SX.

The Sonet boasts an all-digital gauge cluster, while infotainment comes as an eight-inch or 10.25-inch touchscreen system with Apple CarPlay and Android Auto. Passengers fore and aft get USB Type C charging ports. A sunroof and wireless charger also come on select variants.

Powering the car is a 1.5-liter four-cylinder engine that produces 115hp and 144Nm of torque. It is mated to either a six-speed manual or an intelligent variable transmission (IVT).

For safety, there’s Kia’s DriveWise system, which includes Forward Collision Assist, Lane Following Assist, Lane Keeping Assist, and High Beam Assist. These go on top of the standard dual SRS air bags, ABS with EBD, stability control, and rear parking sensors with rear camera.

Also standard on the Sonet is Kia Philippines’ five-year or 160,000-kilometer warranty.

Perks of fleet leasing for businesses

Photo by vectorjauice on Freepik

Global management and consulting firm McKinsey & Company noted in a report that consumer preferences in mobility are changing and, in particular, are now more inclined towards leasing a car than purchasing.

“Consumers say they prefer the shift toward more flexible ownership forms like vehicle leasing. For their next vehicle purchase, about twice as many consumers say they would choose leasing over their current ownership situation. This shift comes at the expense of both traditional outright car purchase and credit financing deals,” McKinsey said.

On a larger scale, organizations can also see vehicle leasing as a viable choice to acquire reliable mode of transportation for running their business in a fast-paced environment. Many businesses find leasing vehicles a practical economic choice as it provides a convenient, hassle-free, and cost-effective transport solution that can benefit an organization.

Leasing vehicles in the business setting is a smart and strategic move that must not be overlooked because it presents a unique opportunity for them to manage operations and their finances effectively.

Fleet management companies and professional services highlight the benefits of investing in car leasing and how it will cater to market needs and consumer preferences.

Flexibility and cost-effectiveness

Unlike purchasing, leasing is more flexible and helps save more money. It provides a great alternative, allowing users to drive the car they want without heavy financial commitment. This means businesses can maintain financial flexibility while still having access to modern vehicles.

Also, with leasing, lessees do not have to bring out a large amount of money upfront. Instead, they can make smaller initial payments which is more manageable and makes it easier to manage finances easily. This financial flexibility is more favorable to businesses looking for affordable vehicle options while enjoying the luxury of driving newer car models without the hefty price tag.

Access to modern vehicles

With leasing, businesses get to enjoy driving newer and modern car models to their liking. They can enjoy driving newer models and more efficient models every few years, keeping pace with the latest trends and technological advancements in the automotive industry. Moreover, these newer models are designed to have lower fuel consumption and are more eco-friendly compared to previous models.

This constant upgrade cycle is especially enticing for those who enjoy keeping up with the newest vehicle features and technologies while also enabling businesses to stay ahead in terms of technological advancements and provide employees with reliable and cutting-edge car technology.

More than that, lessees can also customize their fleet vehicles according to their preferences. In an article from fleet management company Momentum Groups, this means they can avoid wasting money on unused features and instead provide the specs and details they prefer. Also, by ordering directly from the factory, they can steer clear of advertising fees that are usually included by manufacturers.

Tax benefits

Another great perk from leasing a car is the tax benefits it brings. When leasing a car, businesses can deduct lease payments as business expenses, which reduces tax liability and saves money, making it more convenient for businesses.

“For companies, this can also streamline the processes of managing vehicle expenses, as lease payments are consistent and can be easily accounted for in financial planning. Furthermore, the tax benefits associated with leasing can be particularly advantageous in jurisdictions with favorable leasing laws, making it an attractive option in certain regions or countries,” app-based platform Invygo said in an article.

Streamlining operations

Leased vehicles are also advantageous because of leasing agreements that come often with lower maintenance and repair coverage, which helps them avoid unexpected costs and operational downtime in the long term. As a result, this improves fleet management and eases administrative tasks, as fleet management platform Fleethouse stated in an article.

Additionally, with leasing cars, leasing providers are saving businesses the time and hassle by managing vehicle registration and insurance. On top of that, they also offer flexible maintenance contracts that cover inspection, and wear and tear costs, minimizing the risks of unexpected repairs that can hurdle businesses from running smoothly.

Building a better brand image

The brand image of any business is just as important as its vehicles. To elevate brand reputation and experience, choosing the right vehicle for the company is a must. Upgrading to newer models that are more advanced and more customer-facing can bring many benefits to businesses. This approach is effective for industries where appearance holds great importance. It signals to potential clients that it prioritizes quality, comfort, and professionalism, subtly strengthening the brand reputation.

For the said reasons, leasing is a viable choice to consider when getting vehicles to run a business, whether one looks for executive cars, utility vehicles, or trucks. Nevertheless, it will boil down to the vehicle of choice, besides an organization’s budget and other considerations, if leasing will serve the organization best to build and deploy its own fleet. — Angela Kiara S. Brillantes

Muji’s new offers: Soft serve ice cream and embroidery

MUJI UPTOWN MALL

The 7th store in 7 years also has new product lines

THERE’S a new Muji store in town, and it’s in Taguig’s Uptown Mall.

During a store tour on June 6, Muji Philippines Corp. Marketing Manager Christina Dagdag took us to see highlights like the Coffee Counter (where they serve soft-serve ice cream drinks, a first in the country for Muji; as well as use Benguet coffee beans) and the embroidery counter (where customers can take their Muji items to be personalized, for a fee). “A lot of our customers are appreciating the fact that they can personalize their own Muji items,” she said.

The store, according to Ms. Dagdag, spreads over 2,000 square meters, and carries 7,000 Muji products. She pointed to other innovations they have used in the branch, such as using reclaimed tanguile wood in their stamp station.

The store also carries product new lines: there’s a Madras line (a checked pattern from India which is uncharacteristically bright for Muji), a cooling linens line (both pillows and bedsheets), and an innovative Muji Labo line, unisex clothes that can be shared and swapped between genders, thanks to neutral fits and free sizing.

Muji began in 1980 in Japan, and its name derives from the phrase mujirushi ryohin, which means “no brand quality goods.”  According to its Information Disclosure Based on TFCD (Task Force on Climate-related Financial Disclosures) Recommendations, it said that the brand does business in accordance with its corporate purpose: “to contribute to the realization of a truthful and sustainable life for all through our products, services, stores, and business activities that consider the ideal relationship among people, nature, and products, as well as a generous human society.”

Muji has branches at Greenbelt 3, Central Square in BGC, Power Plant Mall at Rockwell, the Shangri-La Plaza East Wing, SM Mall of Asia, SM North EDSA, and Uptown Mall in BGC.

“[This is] Store No. 7, and we also just celebrated our seventh year last April,” pointed out Ms. Dagdag. “It was good timing.” — JLG

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