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Philippine banks optimistic on growth prospects

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THE PHILIPPINE banking industry is optimistic on its growth prospects over the next two years, a Bangko Sentral ng Pilipinas’ (BSP) survey showed.

Results of the central bank’s 2023 Banking Sector Outlook Survey (BSOS) showed that banks expect “double-digit growth in their assets, loans, deposits, and net income, as well as plan to maintain robust capital and liquidity positions to maintain institutional stability.”

“Overall, the industry outlook for the next two years remains upbeat amid macroeconomic challenges experienced in 2023,” it added.

The survey covers all BSP-supervised universal and commercial banks (U/KBs) and thrift banks, as well as 80 rural and cooperative banks (RCBs) and five digital banks (DGBs).

These respondent banks accounted for 97.7% of the total assets of the Philippine banking system as of December 2023, the BSP said.

The survey showed there was a “shift in sentiment towards a stronger banking system outlook.”

The majority of respondent lenders (64.6%) expect a “stable” banking system in the next two years, while 34.7% expect a “stronger” banking system.

The BSP said improved economic prospects contributed to banks’ expectations of sustained double-digit growth in their assets.

Latest central bank data showed that the total resources of the Philippine financial system rose by 10.5% to P32.1 trillion at end-July. Banking resources alone climbed by 12.3% to P26.779 trillion year on year.

The survey noted that a bigger percentage of banks (70.1% from 66.9% previously) forecast double-digit asset growth, largely driven by thrift banks and digital banks.

“In particular, 79.4% of thrift banks expect an asset expansion of above 10%, while all digital banks believe asset growth could go up to more than 20%.”

“As for other banking groups, U/KBs’ are divided, with 50% (from 42.1%) expecting asset growth of between 5% and 10%, and the remaining half (from 57.9%) projecting 10% to 15% growth. Most RCBs, and foreign banks expect their assets to grow at a rate between 10% and 15%, relatively unchanged from the 2022 BSOS.”

Banks also expect lending activity to be a key driver of their operations in the next two years, with 82.2% (from 78.7%) expecting double-digit loan growth, the BSP said.

“U/KBs, thrift banks, and RCBs mostly report a 10% to 15% loan growth, while most foreign banks and all DGBs remain optimistic with loan growth projection of over 20%,” it added.

BSP data showed that bank lending rose by 10.4% year on year to P12.14 trillion in July. This was its fastest growth in 19 months or since the 13.7% logged in December 2022.

Loan quality is also seen to further improve amid the country’s continued economic recovery, according to the survey, with a lower percentage of banks (48.7% from 52.4%) expecting their nonperforming loan (NPL) ratio to be above 5% in the next two years.

“The remaining 29.4% and 21.9% believe their NPL ratio [would] settle below 3%, and between 3% and 5%, respectively,” the central bank added.

Broken down, 84.6% of U/KBs see their NPL ratio settling between 1% and 5%, with significantly more U/KBs (38.5% from 5.6%) expecting their bad loan ratio to range from 1% to 2%.

“For thrift banks, RCBs, and digital banks, majority foresee their NPL ratio to be over 5%, almost similar to their 2022 BSOS projection. In contrast, foreign banks are more optimistic, as 50% (same at 50%) maintain an NPL ratio projection of less than 1%, while 20% (from nil) expect their NPL ratio to range from 2 to 3%.”

Meanwhile, 76.5% of respondent banks (down from 77.9%) expect double-digit growth in net income over the next two years.

“Profitability prospects remain encouraging on the back of a high interest rate environment and improving macroeconomic conditions,” the BSP added.

“Healthy liquidity metrics across all types of banks over the next two years, supportive of the banking system’s expanding lending and investment activities.”

Banks intend to focus their lending activities on micro, small and medium enterprises (MSMEs) and real estate activities, as well as sustainable and green financing, the central bank said.

“By banking group, U/KBs are focused on MSME lending, project financing, and sustainable or green financing, while foreign banks are keen on sustainable finance and project financing,” it said.

“Meanwhile, for retail banking operations, housing loans, motor vehicle loans, and salary loans are the top retail banking products and services of most respondent banks over the next two years.”

On the other hand, credit risk continues to be the “top risk” for banks, followed by operational and macroeconomic risks.

“In view of these risks, banks have taken specific steps to manage, mitigate, or control the top three risks. Banks highlighted several measures, such as tightening their credit underwriting procedures, improving their collection process, and using a credit scoring model to manage and mitigate credit risk,” the central bank said.

“They also underscore the importance of strengthening internal controls to manage operational risk and monitoring market and economic developments, identifying macroeconomic risks that can affect their lending and investment activities, as well as maintaining a team with expertise on both global and domestic markets.” — Luisa Maria Jacinta C. Jocson

Chinese woman exposes the ineptitude of government agencies and the shallowness of senators

DISMISSED Bamban, Tarlac mayor Alice Guo. — PHILIPPINE STAR/JESSE BUSTOS

The Senate Committees on Women, Children, Family Relations and Gender Equality, and on Public Order and Dangerous Drugs resumed on Sept. 9 their joint inquiry into the illegal Philippine offshore gaming operations (POGO) of dismissed Bamban, Tarlac mayor Alice Guo.

The hearing started with panel chairperson Sen. Risa Hontiveros moving to cite Ms. Guo in contempt for insisting that she and Guo Hua Ping are not the same person. “The National Bureau of Investigation has confirmed that she is Guo Hua Ping, a Chinese national who entered here in 2003. That means she blatantly lied before us in the Senate,” Ms. Hontiveros said.

Ms. Hontiveros said previous hearings have established that Ms. Guo filed a late registration of live birth and was issued a certificate, which she used to obtain a Philippine passport. “The Philippine Statistics Authority has declared the certificate as irregular,” the senator explained. “Guo Hua Ping, do not continue to insult us,” she warned her.

She ended her opening statement by reminding her colleagues that “the primary purpose of the hearings is to craft better laws and policies. We have identified gaps in birth registration, border control, cyber fraud, and others. We should make sure our hearings achieve this purpose.”

Next to deliver an opening statement was Senate President Pro Tempore Jinggoy Estrada, ex-oficio member of all committees. He asked, “Alice Guo, who are you really? We all know that you are not a Filipino, that you did not grow up in a farm, that you are not an ordinary citizen. Twenty-eight billion flowed through your account, in contrast to your story that you were engaged in poultry raising and to your company’s meagre earnings. When you appeared here you were under oath, but you fearlessly fabricated stories and fed Filipinos a pack of lies.”

The senator then castigated Ms. Guo for “mocking government processes, [having] disrespected the electoral system, insulted the Filipino people by believing that by running for mayor she would never be caught.” He should have castigated the government agencies which were remiss. They were represented in the hearings.

He closed by saying: “We wish to know who helped Alice and her companions leave the Philippines without going through the proper processes. Certainly, we also want to know how Chinese nationals pretending to be Filipinos were allowed to open businesses under their names and to use Filipinos as dummies and how they were able to circumvent Constitutional provisions limiting foreign equity to 40%. They violated many laws. It is but proper that they be made to answer. We will not let them get away with it.”

Next to give an opening statement was Sen. Joel Villanueva, who is neither a regular nor ex-officio member of any of the committees. He was, until recently, Majority Floor Leader. Looking at Ms. Guo, he said sternly, “Alice, you disrespected and degraded the Philippine government and the Filipino people. I do not understand why when you were caught you made it appear it was nothing to you. We got offended. I do not know why you seem to consider us your enemies.”

He then delivered a speech on the virtues and integrity of the Senate. He perorated: “The truth is Alice, if you tell the truth, we here in the Senate are your true allies. We will give you a chance again today to reveal the truth. For even if you do not reveal the truth, this is the Senate. This is not a fair. We are sure the truth will come out in the Senate.

“If you are a true Filipino, you should know that the Senate is the pillar of democracy. This is the one that brings out the truth. If you tell the truth, the Senate will surely protect you more than any other agency or institution in this country. This is your opportunity, Alice, if you tell the truth, it is not only you who will benefit but the whole country as well.

“We wish to tell our countrymen the importance of what we are doing, not just in aid of legislation but to ensure we put a period, an end to this horrible and terrible POGO.”

Joel Villanueva exalting the Senate was sheer gall. Eight years ago this month, on Sept. 19, 2016 to be exact, Sen. Leila de Lima was not only removed from the chairmanship of the Senate Committee on Justice, she was ousted from the committee itself for telling the truth. As chairperson of the Committee on Justice at the time, she was extensively and intensely investigating the bloody war on drugs that Davao City Mayor Rodrigo Duterte waged in that city.

Mr. Villanueva was one of the 16 senators who voted for Ms. De Lima’s ouster. The others were Senators Nancy Binay, Alan Peter Cayetano, JV Ejercito, Sherwin Gatchalian, Loren Legarda, Koko Pimentel, Grace Poe, Cynthia Villar, and Migz Zubiri, all re-elected in 2022. In effect, De Lima’s fellow senators, among them Liberal Party-mate Villanueva, gagged her from further telling the truth about extra-judicial killings in Davao City.

Senators Pimentel, Gatchalian, Ejercito were present when Mr. Villanueva said: “The Senate is the one that brings out the truth. If you tell the truth, the Senate will surely protect you.” I wonder what they thought of the pompous speech. Ms. Hontiveros must have twisted and twitched in her seat. She had valiantly opposed Ms. De Lima’s ouster.

Congressional hearings are opportunities for showing profundity, inquisitiveness, and eloquence. But oftentimes they turn into a display of inanity, inquiry into gossip, and babble. That is what the hearings of the Committee on Women, Children and Gender Equality often are.

In spite of avowals of fidelity to the real purpose of congressional hearings — to craft better laws and formulate good policies — some of the questions asked the resource persons in the on-going hearings were:

“Miss Alice, are you Guo Hua Ping?”

“When did you and Mayor Calugay got to know each other?”

“Why are you wearing each other’s campaign shirt?

“Do you and Alice have a romantic relationship?”

“What is the name of your live-in partner?”

“Does your live-in partner know Alice?”

“Why was your godfather with you when you and your boyfriend went on a trip?”

“Did you know what you were doing when you notarized an affidavit (of an affiant who was not present)?”

In the hearing on Sept. 17, Ms. Hontiveros said in her opening statement that they had managed to identify gaps in border control, the system of granting visas, law enforcement, and birth registration. These have led to the crafting of an amendment to the Anti-Financial Account Scamming Act and amendments to the Expanded Anti-Trafficking in Persons Act. They have also gathered information that has resulted in the filing of criminal charges against several individuals.

If so, the committee’s inquiry into Alice Guo’s alleged involvement in the POGO hub in Bamban should have been put to a close. However, in the same Sept. 17 hearing, Sen. Jinggoy Estrada said in his opening statement, “We are far from over. However, even if we get almost nothing from asking you (addressing Alice Guo), and even if you mislead this committee with your answers, we will not stop here in the Senate.”

The “Alice Guo TV dramedy series” starring Jinggoy and Joel must go on. Joel upstaged Jinggoy and Risa in the Sept. 17 episode. He stole the scenes and lines of his co-stars. He just butted in when the situation was nearing a dramatic point — to the visible annoyance of main character Risa. And Joel really stretched his verbose and repetitive lines, prompting Risa to cut him off many times.

It has been said so often that televised congressional investigations are really in aid of re-election instead of in aid of legislation. That may be true of the televised investigations being conducted jointly by the House of Representatives Committees on Dangerous Drugs, Public Order and Safety, Human Rights, and Public Accounts. Most of the members of the committees will be up for re-election in May of next year.

That may not be said of the inquiry being done by the Senate. The terms of senators Hontiveros, Estrada, and Villanueva will expire in 2028. They cannot be thinking of re-election at present. Neither can they be thinking of running for higher office as elections for president and vice-president are not scheduled until 2028.

But then there is the Senate presidency to aspire for. The Senate president is third in the line of succession. In our present volatile political situation, when there are threats of coups and talk of impeachment, the position of Senate president is crucial.

 

Oscar P. Lagman, Jr. has been a keen observer of Philippine politics since the late 1950s.

Filipinos okay with overstating income when applying for loans, survey shows

STOCK PHOTO | Image by Tirachardz from Freepik

MORE FILIPINOS are fine with overstating their income for loan applications, a survey by analytics software provider FICO showed, highlighting the need for financial institutions to improve their risk assessment.

According to a FICO study conducted in November 2023, more than half (51%) of 1,001 Filipino respondents said it was okay for them to exaggerate their income levels for loan applications, higher than the 35% seen in the 2022 survey and the global average of 39% this year, it said in a statement on Thursday.

“With a noticeable percentage of Filipino consumers viewing income falsification as acceptable or justified, the problem of ‘liar loans’ calls for financial institutions to strengthen their risk assessment procedures,” FICO APAC Segment Leader for Risk Lifecycle and Decision Management Aashish Sharma said.

“Banks play an essential role in steering consumers away from inadvertently committing fraud through robust fraud detection strategies and consumer education,” he added.

According to the survey, more than half of Filipinos think it is normal or acceptable in some cases to misrepresent their income on their applications for a bank account (56%), automotive financing (55%), or mortgage (53%).

“Similarly, many Filipinos are fine with exaggerating income on personal loan applications, further complicating financial integrity,” FICO said.

Meanwhile, 46% of Filipino respondents said it is never acceptable to exaggerate their income for a personal loan application, while 36% said it is acceptable under select conditions.

“About one in seven views exaggerating income on personal loan, mortgage and auto loan applications as common and acceptable behavior,” FICO said.

In comparison, globally, majority of the respondents (56%) said exaggerating income on loan applications was never acceptable. One in four or 24% said it was permissible under certain circumstances, while 15% viewed it as normal practice.

Meanwhile, the survey also showed that 37% of Filipino respondents said it is acceptable to lie on mortgage applications, with 16% saying this is normal.

FICO said the results highlight the risk assessment and asset quality challenges that could be faced by Philippine financial institutions.

“Even when a mortgage application from an existing customer appears legitimate on paper, the established banking relationship can be exploited to commit fraud. By exaggerating income, such as inflating self-employment earnings or overstating bonuses, as well as omitting debts or misrepresenting personal circumstances applicants can manipulate the loan process, making it difficult for lenders to detect these discrepancies without thorough and proactive verification measures,” it said.

On the other hand, 62% of Filipino respondents said it is never acceptable to exaggerate the value of stolen property or add false items to an insurance claim, while 41% said it is unacceptable to exaggerate income on a mobile phone contract or when applying for automotive financing.

“Financial institutions must adopt a holistic approach to data to overcome the unique challenges posed by application fraud,” Mr. Sharma said. “This should include integrating comprehensive data analysis and continuously monitoring accounts for early detection of sleeper fraud.”

“The FICO survey reveals an alarming acceptance of application fraud among consumers, potentially driven by rising cost-of-living pressures. Financial institutions must evolve their fraud strategies to keep pace with such trends and prevent customers from unwittingly engaging into questionable or criminal behavior,” he added. — AMCS

Klook fuels Asia-Pacific’s tourism economy with $7-B contribution

HONG KONG-BASED tourism platform Klook said it contributed about $7.2 billion to the gross domestic product of the Asia-Pacific region in 2023.

At an event in Singapore marking the company’s 10th anniversary, Klook Chief Executive Officer and Co-Founder Ethan Lin said they had commissioned a study by Oxford Economics, showing that Klook’s services supported over 219,000 jobs across 16 markets in the region in 2023.

“[Klook is] not just about experiences, we have also created real economic opportunities together with all our partners here for many of the destinations in Asia and globally,” he said during the Kreatorverse event on Sept. 24 in Singapore.

“What’s especially notable is that 80% of our partners are small- and medium-sized businesses, which is really forming the backbone of tourism in many of the destinations and forming the local communities,” he added.

In explaining Klook’s edge over other competitors in the market, Senior Director of Product Management Sam Kwong told BusinessWorld in a one-on-one interview that they provide customers with a better selection of experiences.

The company recently launched its “Money Can’t Buy Experiences” campaign for its 10th anniversary, offering lucky winners the opportunity to sleep under the stars in Dubai Glass Dome Desert Dreamscape, snowboard down the top of Europe with a world champion, hunt for mushrooms in the Swiss Alps, and swim with whale sharks on a private Maldives island, among others.

Mr. Kwong pointed out that Klook accepts over 40 payment methods and currencies, and has 15 different languages which allow for automatic translation.

“One of the key reasons we find many customers returning to Klook after completing their research and making a booking is often due to the language or the payment methods available from the local provider,” he said.

In a separate interview with Filipino media, President and Co-Founder Eric Gnock Fah said the top three destinations for Filipinos are domestic spots, Hong Kong, and Japan, largely due to the latter two’s theme park offerings.

He added that South Korea did not have a strong rebound for Filipino tourists post-pandemic, partly due to visa processing difficulties.

SUSTAINABLE TRAVEL
As part of its 10th anniversary, Klook said it is adopting a new standard for eco-friendly travel by collaborating with firms that prioritize sustainable practices, improving animal welfare at elephant sanctuaries, and giving away complimentary local tours led by experts to spotlight cultural heritage and support small businesses in the tourism ecosystem.

“Looking ahead, our focus is on fostering deeper connections between travelers and local communities, preserving cultural heritage, and empowering the many people whose livelihoods depend on tourism,” Mr. Fah said in a separate statement.

Currently, Klook has over 200 certified sustainable activities. It added that these activities follow internationally recognized sustainability standards to help travelers make choices that align with their values.

Klook is enhancing its commitment to responsible tourism by introducing new guidelines for elephant-related experiences in collaboration with experts from the Asian Captive Elephant Standards, the criteria aimed to improve welfare standards for elephants in captivity.

At the launch, 12 elephant sanctuaries have already joined the “Klook Assessed” program, with more expected to participate in the coming months.

The platform was launched in 2014, with the aim of providing a one-stop shop for experiences and travel services, ranging from attractions and tours to local transport and experiential stays in over 2,700 destinations globally. — Chloe Marie A. Hufana

Metro Pacific Health now has six hospitals in Mindanao

SFDOCTORSHOSPITAL.COM

METRO PACIFIC Health Corp. (MPH) has completed the acquisition of a majority shareholding in San Francisco Doctors Hospital (SFDH) in Agusan del Sur, bringing its hospital portfolio to 25.

SFDH was acquired by MPH and its subsidiary Santos Clinic, Inc. (SCI), the private hospital group said in an e-mailed statement on Thursday.

The new acquisition also marks MPH’s sixth hospital in Mindanao.

“Expanding our network through strategic investments like the one in SFDH allows us to bring accessible and dependable healthcare to more communities. We remain committed to delivering top-quality healthcare services and improving the overall health infrastructure across our archipelago,” MPH President Augusto P. Palisoc, Jr. said.

SFDH is a 100-bed facility that started operations in 2013 and is located 80 kilometers (about 49.71 miles) from SCI-operated Manuel J. Santos Hospital in Butuan.

MPH plans to invest in the development and management of SFDH, aiming to improve the hospital’s capacity to address the healthcare needs of the province.

“Our focus has always been on creating a robust healthcare network that can deliver superior patient care across the country and in the localities that we serve. By integrating SFDH into our network, we are expanding our reach and ensuring that the people of Agusan del Sur and nearby areas have access to the best healthcare services,” SCI President Celso Bernard G. Lopez said.

MPH is the healthcare arm of Pangilinan-led conglomerate Metro Pacific Investments Corp. (MPIC). Some of its hospitals include Makati Medical Center, Asian Hospital and Medical Center, Cardinal Santos Medical Center, Davao Doctors Hospital, and Riverside Medical Center. It also has 33 outpatient care centers, two allied health colleges, and a centralized laboratory.

MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT Inc.

Hastings Holdings Inc., a unit of the PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Revin Mikhael D. Ochave

SSS tallies record 2.4 million new members in H1

SSS FACEBOOK PAGE

THE SOCIAL SECURITY System (SSS) said it admitted a record 2.4 million new members in the first half (H1), up 165% from a year earlier.

SSS President and Chief Executive Officer Rolando S. Macasaet said in a statement Thursday: “In the first six months, we hit our year’s target of two million new members, a positive result of our massive membership and coverage drives throughout the country.”

He noted that the pension fund for private sector workers usually averages around one million new members annually.

“It means more Filipinos will have access to a comprehensive set of social security benefits from SSS. The social security protection offered by SSS can help safeguard the financial well-being of Filipino families, particularly during times of uncertainty,” Mr. Macasaet said.

Mr. Macasaet said the new target is now five million new members by the end of the year.

“SSS will sustain this growth trajectory in the coming months as we aim for a historic peak in new member registrations,” he said.

“SSS won’t stop there. We remain steadfast in our mission to further broaden our membership base and cover all Filipinos in the workforce,” he added.

SSS Executive Vice-President for Branch Operations Voltaire P. Agas said that the largest segment of new members consisted of prior registrants, totaling 1.2 million.

These are individuals who have SSS numbers but have not yet been reported as covered employees or self-employed members.

Luzon had the largest number of new members, with more than 882,000, followed by the National Capital Region at over 693,000.

Mindanao and the Visayas followed with 436,000 and 417,000, respectively. Meanwhile, over 10,000 new members came from overseas. — Aaron Michael C. Sy

#JournalismMatters: Journalism is society’s safety net

FREEPIK

A RECORD NUMBER of newsrooms have signed up for World News Day 2024, recognizing the positive influence of journalism the world over.

More than 600 newsrooms and media associations across all continents join to bring awareness to the purpose of journalism, a trade that is under constant attack.

It’s a day to pause, and reflect on the importance of independent and often brave journalists who make a difference in their communities and countries, by providing the proof that leads to the truth.

Too often, he or she who shouts loudest on social media seems to be the newsmaker of the day, overshadowing the professional reporters and editors trained and determined to stand behind everything they publish.

Responsible journalism is a tough business when done properly. It necessarily confronts the easy, repetitive, and instant swirl of polemicists and propagandists determined to derail life to fit agendas that are often based on uncertainty and exclusion.

Photographing events that happen, reporting out the facts; beginning with incomplete information and building a more complete file over time and ultimately ensuring, in the final edit, that the facts are pried out and placed squarely into the public discourse, is the business of mainstream media. It is inefficient yet is a timeless tradition without parallel.

Professionals fight back against the hackneyed idea that belonging to the mainstream is somehow inferior to being extreme.

World News Day is a day of awareness, to better explain journalism to the public at large.

It is also a moment to provide room for our audiences and highlight how their meeting a journalist improved their life. How, perhaps, finally, they were listened to.

Or to reflect on the contributions of a local newspaper to the body politic, or the cost of liberty for a reporter detained for no reason — other than that she could be — by those with armies at their disposal.

Amid the growing coarseness of public debate, the pride of independent journalism stands as a source of optimism and belief.

Often at significant personal cost, whistleblowers entrust journalists with secrets. Businesses, politicians, and others in power increasingly refuse to meet reporters or explain themselves — but that doesn’t mean they are unaccountable. The rot is still exposed by individuals.

This past year I met a source determined to get the truth out, but the conversations took place in a hot tub to prove I was not wearing a listening wire, and, on another occasion, in my underwear for the final interview. The story was worth it all, but I couldn’t have known it would be when I started out on the four-month odyssey.

That’s the romance of the business that recruits and repays the indefatigable.

Interest groups laden with bias threaten economic punishment: “I’ll cancel my subscription” or “we’ll pull our advertising.”  Perhaps next year we will list those people who act that way.

So far, news organizations take the hit, and don’t make it public. But it is all an attempt to interfere with editorial independence, and it is wrong.

Attacks on journalists — including murder — run at record highs. Journalism was not created for the messenger to be shot. But, while you can kill the journalist, you can’t kill the story. Others will take it on. Look at journalists in Mexico or Iran if you haven’t received your daily dose of inspiration. The rate of impunity, killing journalists and not being arrested, creeps toward 100% in some countries, but still the stories mount up.

A great miracle exists in the business of journalism: facts are not suppressible.

Those in need understand it. And it is those least in need who fight us most: the powerful, terrified their world can’t be entirely controlled.

That’s the magic of World News Day.

As you talk to friends, and consider your community, village, town, or the wider world, think about what you have learned today. There is a fair bet journalism was involved. The story tellers, who come from your community, tell the facts, no matter how uncomfortable that can be.

That is why, unarmed and living in your community, they are targeted, hassled, belittled, threatened. And it is why they respond with more facts, more answers, more independence of thought — and maintain the link between you and the wider world.

Journalists are a bridge as we build the future, supported by the capstone of our audience, who are as loyal and determined as the reporter and the editor.

Together, on World News Day, if it feels at times that the vestiges of hope are falling away, remember the safety net of journalism is there.

 

David Walmsley is the editor-in-chief of The Globe and Mail, Canada and is creator of  World News Day.

US video game actors call strike on maker of popular game League of Legends

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LOS ANGELES — Union video game actors filed an unfair labor practice charge and declared a strike on Tuesday against the company Formosa Interactive, which provides voiceover services for the popular online game League of Legends, the actors’ union said.

SAG-AFTRA union members have stopped providing covered performance services to League of Legends, and the massive multiplayer online battle arena game, developed by Riot Games in 2009, is now listed by the union as a struck game.

“The complaint comes after Formosa tried to ‘cancel’ one of its struck video games shortly after the start of SAG-AFTRA’s video game strike,” the union said in a statement.

“When they were told that was not possible, they secretly transferred the game to a shell company and sent out casting notices for ‘NON-UNION’ talent only.”

The union said the transfer violated performers’ rights to strike under labor laws.

Formosa said it rejects SAG-AFTRA’s allegations and has not undermined union rights in any way.

“We believe the strike of League of Legends, a game unrelated to the union’s claims, is not appropriate,” it said in a statement.

Formosa “stands with developers, publishers, platform holders, and talent” and promotes ethical game development, it added.

Riot Games said in a statement on Tuesday that League of Legends had nothing to do with the union’s claims and had “never once suggested” Formosa should engage with non-union performers.

The American video game developer also said it had not asked Formosa to cancel a previously registered game.

Known for its free-to-play structure and team collaboration, League of Legends is one of the most popular games in the world with one of the largest Esports competitions.

The League of Legends World Championship gives teams from around the globe the opportunity to compete for millions of dollars that are distributed among members.

This strike follows the union’s recent gains with legal protections against artificial intelligence (AI) for Hollywood performers signed by California Governor Gavin Newsom in September as well as a deal reached with major record labels such as Warner Music Group and Sony Music Entertainment in April. — Reuters

Globe says satellite-to-SMS trial advancing

GLOBE Telecom, Inc. is progressing in its satellite-to-SMS trial in remote areas, the Ayala-led telecommunications company said on Thursday.

In a statement, Globe said that it successfully sent text messages using standard phones via its partner Lynk Global, Inc.’s low-earth orbit (LEO) satellite, describing this as “a major breakthrough in providing reliable and inclusive connectivity.”

“This is a significant step in our mission to bridge the digital divide, ensuring that every Filipino, regardless of location, stays connected to the world,” Globe Director & Head of Network Strategy and Technology Enablement Gerhard Tan said.

In June, Globe announced its partnership with Lynk to assess the potential of satellite-direct-to-phone communication services in remote areas in the country.

Lynk is an international company that develops satellite-to-mobile-phone constellation technology to enhance mobile phone service coverage.

“The test, which used a range of mobile devices, showed that direct-to-phone satellite communication is possible without any modifications to existing devices, allowing for widespread access and affordability,” Globe said.

The partnership aims to improve connectivity in the country, particularly in remote and underserved areas. The collaboration is set to last for one year, ending in June 2025.

The company said that the pilot areas for the program are Zambales, Pangasinan, Siargao, and Leyte.

Globe also said that program will use the LEO satellite constellation to provide short-message service, IP-messaging apps, and emergency alerts in regions without traditional network coverage. — Ashley Erika O. Jose

Samsung defends Indian wages as strike at plant enters week 3

REUTERS

CHENNAI — Samsung Electronics workers at a factory in India’s Tamil Nadu state are paid almost twice as much as employees in nearby companies, the South Korean group said Tuesday, as a strike at the plant enters its third week.

More than 1,000 workers have disrupted operations and protested in a makeshift tent close to Samsung’s home appliances factory near the city of Chennai since Sept. 9.

They are demanding higher wages and union recognition at the plant, which contributes roughly a third of Samsung’s annual revenue in India of $12 billion.

Commenting on wages for the first time, Samsung said in a statement: “The average monthly salary of our full-time manufacturing workers at the Chennai plant is 1.8 times the average salary of similar workers employed at other companies in the region.”

The Samsung factory is next to units of global giants such as Foxconn and Dell in an area popular for automobile and electronics manufacturing.

“Our workers are also eligible for overtime pay and other allowances and we provide a workplace environment that assures the highest standards of health, safety, and welfare,” Samsung said, adding it was ready to engage with workers to address their grievances so they can return to work as soon as possible.

The Samsung protests cast a shadow over Indian Prime Minister Narendra Modi’s drive for more foreign investors to “Make in India” and to triple electronics production to $500 billion in six years.

It is the biggest such strike in India in recent years.

Veera Raghava Rao, Tamil Nadu’s labor secretary, said Tuesday that efforts were ongoing to resolve the dispute.

According to labor group CITU, which is leading the strike, Samsung workers earn 25,000 rupees ($300) on average per month, and are demanding a further 36,000 rupees per month over three years.

Samsung last week warned its striking workers they would not receive wages if they continued protesting, Reuters reported. — Reuters

Board chair of the future

At the Global Governance Summit held Sept. 19 at the Marriott Hotel, Kirsten Patterson, chair of the Global Network of Directors, made a comprehensive and insightful presentation about the evolving role of the board chair of the future. The role of “the first amongst equals,” she said, is now more complex and demanding amid the rapid global landscape changes, digital transformation, cybersecurity risks, climate issues, and geopolitical uncertainties.

She also presented some current top issues for directors in New Zealand, which are similar challenges faced in the Philippines, such as climate change. It is a reality as we can now feel the extreme heat and heavy flooding, with the Philippines being a disaster-prone country. Another issue is future-ready succession and leadership transition, as every company should be ready for this. Harnessing artificial intelligence (AI) was also cited as a top challenge, as there is a need to understand AI risks and opportunities and to ensure an AI governance framework is in place and one’s board is AI literate. Lastly, enabling productivity is also a challenge for directors. They must focus on strategies that improve operational efficiency and workforce productivity.

So, what is the chair’s role? Ms. Kirsten said he or she must be a:

1. Strategic leader – The chair must push the board to think long term, and not just reactionary or transactional. He or she must anticipate and plan and balance short-term pressures with the need for sustainable growth.

2. Culture builder – The chair should encourage diverse perspectives and create challenging conversations that are constructive and respectful. Ms. Kirsten presented gender diversity as a critical driver for better decision-making, improved governance and performance, and gave a 30-50% target ratio to accelerate progress.

I agree with Ms. Kirsten, as there are various studies showing the benefits of gender diversity and having women directors in boards. How is gender diversity in the Philippines? The good news is that from having just 17% women directors in publicly listed companies (PLC) pre-pandemic, this has grown to 21% in 2022, based on the latest survey by the Philippine Business Coalition for Women Empowerment and the Philippine Women’s Economic Network. While still far from Ms. Kirsten’s target, we are moving in the right direction. This didn’t happen by chance — it is thanks to the advocacy and support by the Institute of Corporate Directors (ICD), as well as other organizations with a gender lens. These include the NextGen Organization of Women Corporate Directors formed in 2021, which targets to increase competent women representation in company boards to 23% by 2025; the Filipina CEO Circle formed in 2015 by lady CEOs with the mission to help other women reach the top and have more capable women available to be board directors; and the Women’s Business Council Philippines, Inc., which is composed mostly of women entrepreneurs and a good source of women directors.

Philippine firms also currently have the unique situation of having a mix of four to five generations in the workforce today. Let’s look at this generational diversity as something that has great potential.

3. Performance monitor – The chair must oversee the performance of directors and ensure continuous development and training.

4. Change agent – The chair must lead boards through periods of changes and ensure change is managed in a way that mitigates risk and preserves long-term viability.

It was a privilege to be a panelist at Ms. Kirsten’s session along with former Bangko Sentral ng Pilipinas governors, namely Ambassador Joey Cuisia, who reacted on cybersecurity, and First Independent Director Chairman of the Board of SM Investments Corp. Amando “Say” M. Tetangco, who talked about the economic environment and other issues. Senen Matoto acted as moderator.

The views and opinions expressed above are those of the author and do not necessarily represent the views of FINEX.

The board chairs of the future face growing demands, and they should be strong physically, mentally, emotionally, and spiritually. The board chair should also be firmly grounded in terms of values, principles, and ethics. He or she must be someone who will try to do the right things right all the time. This should also be the same for the chairs of today.

The Philippines has gone a long way since the ICD’s formation 25 years ago. During the Asian financial crisis, Dr. Jesus “Jess” Estanislao saw to it that corporate governance reforms were implemented. There was a gap between Asian cultural values and universal ethical principles, and he wanted the Philippines to be part of the global financial system to prosper and corporate governance is key to be connected.

A testament to the Philippines’ success is the more than 100 PLCs and 25 insurance companies that were recognized as Golden Arrow awardees during the ASEAN Corporate Governance Scorecard (ACGS) Awards night. ICD Chairman Emeritus Jess said: “it is now time to go beyond the ACGS and start to be maka-Diyos (love of God), makatao (love of fellowmen), makakalikasan, (love of environment), and makabayan (love of country).”

Thank you, Dr. Jess, for initiating and leading the way to building boards with good governance so that the Philippines will not be left behind! More power to you!

 

Flor G. Tarriela is PNB board advisor, Independent Director of LTG and Nickel Asia. The first Filipina vice-president of Citibank N.A, she was former undersecretary of Finance. An environmentalist, she founded Flor’s Garden in Antipolo, an events destination.

The business sector must join our national security architecture

PHILIPPINE STAR/WALTER BOLLOZOS

Several years ago, the Philippines was enmeshed in heavy negotiations at the World Trade Organization. The Philippine panel was usually headed by the Department of Trade and Industry Secretary and the idea was brought up to create a Philippine Trade Representative Office (PTRO) that could focus solely in developing and negotiating our country’s trade position at the multilateral, regional, and bilateral levels.

Included in this proposal was the heavy participation of the business sector, both as resource and auditor, for which the planned PTRO was supposed to be enabled to weave their inputs and have the means to translate the same into a cohesive trade policy and negotiating position.

Fast forward to today, when the overwhelming need is the ability to respond to emerging security issues that must be simultaneously responded to tactically and strategically. In that regard, numerous forums and studies have been made involving international relations and security experts, from the academe, the military, and think tanks to shore up our defensive position and planning.

However, one glaring absence in all these gatherings and research is palpable and that is of the business sector. Admittedly, private business organizations and associations are indeed usually referred to when discussing national security but usually as the end-product beneficiary and not a player in the process: hence, the mantra of “national security is economic security.” Yet the truth of the matter is that the private sector, our local corporations and small business owners, can have a significant role to play in the formulation of our national security stratagem and execution.

This was noted by the Journal of International Affairs (“Intelligence Redefined: The Interplay of Private Companies and National Security,” March 2024) in describing how to respond to the “complex interplay between private interests and national security interests.” Thus, “private companies play an increasingly important role in enhancing intelligence collection, analysis, and dissemination, as most recently evidenced by their contributions to the war in Ukraine.”

“Private companies can contribute significantly to the collection and processing phases of the intelligence cycle. While they might not always provide entirely new or previously inaccessible information, their value lies in allowing ICs to focus their resources on higher-priority issues. Private companies also increase the speed of information collection, processing, and dissemination, subsequently informing up-to-date intelligence.”

US practice in this regard is instructive as to how the business sector can participate in national security discussions: “There is a deep history in the US of examples when the government turned to the private sector for help in protecting the country from national security threats. In World War II, the primary operations of certain factories not controlled by the government were converted to support the war effort. For example, some factories shifted from manufacturing automobiles or household items to planes and tanks. Also, during World War II, the US government turned to large American banks for help with financing the war effort.

“The nature of these collaborations has evolved over time, reflecting the changing security landscape and technological advancements. Recently, the US government has increasingly relied on the private sector to develop intelligence on and protect against cyber threats to critical infrastructure.” (“The Evolving Role of the Private Sector in Protecting Our National Security,” FTI Consulting)

Canada is another example of a government calling on the private sector to develop and implement a national security strategy. This is in recognition of the fact that “Canada’s economic security is too important an undertaking to be left to either the public or private sectors working alone. Both must work together seamlessly to detect, deter, and disrupt a broad range of emerging and evolving threats” (“Economic Security is National Security: The Case for an Integrated Canadian Strategy”; Business Council of Canada, September 2023).

Recognizing that today’s national security threats “have the potential to wreak large-scale havoc on Canadians’ daily lives,” the participation of business groups has become a necessity. Accordingly, it has been proposed that Canada’s economic security structure be strengthened and this can be done by “creating a legal framework allowing the Canadian Security Intelligence Service to proactively share timely and actionable threat intelligence with companies targeted by attacks.”

Another measure is to bolster “Canada’s economic and innovative capabilities, including by incentivizing high-risk, high-reward research in disruptive and emerging fields which are foundational to spurring economic growth and are strategic from a national security perspective.”

It is definitely not too late to galvanize the business sector into joining our national security efforts, creating a vision they can buy into and unquestionably support. For far too long, China’s propagandizing — which included huge investments, infrastructure loans, and trade promises – have been allowed to cause a divide between sovereignty and business interests, resulting in the weakening of Philippine resolve on defense. Recruiting Philippine business into the national security architecture not only informs more key players as to the actual stakes involved but also greatly enhances the resources (material and intellectual) needed to defend the country.

 

Jemy Gatdula is the dean of UA&P Law, as well as a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence.

https://www.facebook.com/jigatdula/

Twitter  @jemygatdula

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