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Green is good: Why more developers eye green certifications for buildings

By Aubrey Rose A. Inosante, Reporter

PHILIPPINE property developers are increasingly seeking green certifications for office buildings not only because of government energy mandates but also rising demand from multinational companies.

It’s no longer uncommon to find developers touting the sustainable features of their new office buildings, which have received certifications like Leadership in Energy and Environmental Design (LEED), Building for Ecologically Responsive Design Excellence (BERDE), Excellence in Design for Greater Efficiencies (EDGE) and WELL Building Standard.

To get a green building certification, a project must meet certain environmental and sustainability standards. These usually ensure that a building meets high standards of energy efficiency, resource conservation, air quality, among others.

“We see the increase (in green certifications) because of the mandates by the government, such as the Department of Energy, to comply with the laws to Republic Act No. 11285 or known as the Energy Efficiency and Conservation Act,” Jess Niño H. De Villa, Head of Engineering, Energy and Environment of Knight Frank told BusinessWorld.

The law requires Philippine businesses to monitor energy consumption, which is the top contributor to net-zero emissions.

“Certification helps ensure compliance with these requirements, avoiding potential fines or legal issues, making it a top reason for properties to adopt green certifications in the Philippines,” Mr. De Villa said.

Green certifications can make a big difference in attracting potential tenants.

“A green-certified building can be more attractive to potential tenants who prioritize environmental responsibility. Green certification can set a building apart, making it a preferred choice for tenants and investors who value sustainability,” he added.

As of now, 31.2% of the 8.5 million square meters (sq.m.) of existing office supply within Metro Manila have varying levels of LEED certifications, Mr. De Villa said.

He noted the NEO Property Management’s real estate portfolio in the Philippines was the first in the world to secure the International Finance Corp.’s (IFC) EDGE Zero Carbon certification. NEO’s entire portfolio is powered by Cleanergy, which delivers 100% renewable energy.

While the cost of securing green certifications can be costly, it can still be worth it for developers.

“In general, (the cost of the) certification is still quite low in terms of the savings that you can be able to gain and for the revenue,” Mr. De Villa said.

STRONG DEMAND
Demand for green certified buildings in the Philippines is also driven by multinational companies.

“It’s largely because of the Western companies and Western tenants moving to the country, requiring their buildings to be LEED certified. Their head offices in, let’s say, London and the US, have certain requirements for the office space that they need to occupy here,” Leechiu Director of Research Roy Amado L. Golez, Jr. said.

Mr. Golez said most of the newer buildings are compliant with green building standards, mainly because they don’t want to lose out on the tenants whose parent companies are based or headquartered in Western countries.

“It has become a must-have. If you don’t have it, your market might be smaller,” Mr. Golez said.

CBRE Philippines Country Head Jie C. Espinosa said global companies make green building standards a “first hurdle” when choosing office spaces.

“There are certain cases, that these occupiers consciously negotiate provisions in their contract, that down the road developers need to be proactive in providing sustainable features into their buildings,” Mr. Espinosa told BusinessWorld over a video call.

Green leases, rental agreements where tenants and landlords set sustainability-related targets, benefit both parties by raising the value of the property and creating incentives for tenants.

Mr. De Villa said domestic companies also see green-certified office buildings as an ideal location for their operations, as they also seek to comply with evolving environmental standards.

He also noted that tenants that want to integrate sustainability in their operations are willing to pay premium rates to secure office spaces in buildings with green certifications.

ADOPTION HIGH IN METRO MANILA
Central business districts in Metro Manila have seen significant gains in green building adoption in recent years, CBRE Philippines Director of Advisory and Transactions Services Garri Amiel P. Guarnes said.

Based on CBRE data, the office segment in Fort Bonifacio has seen its green building adoption rate jump to 73% in 2024 from 63% in 2022.

For Alabang, the green building adoption rate inched up to 67% this year from 49% two years ago.

The green building adoption rate in Ortigas rose to 66% in 2024 from 42% in 2022, while in Quezon City, it went up to 45% in 2024 from 42% in 2022.

However, green building adoption in provincial locations is lower than in Metro Manila, Mr. Guarnes said.

“This was due to developers being more focused towards third-party outsourcers but moving forward, these companies or the clients they serve would implement their sustainability targets,” he said.

In Davao, 24% of the office stock is green certified, followed by Cebu with 23%, Iloilo with 16% and Pampanga with 8%.

However, Cebu is leading in terms of the rate of increase in adoption, Mr. Guarnes said.

In Cebu, 44% of the recent completions between 2020 and 2024 have green certifications, while 16% are still under application.

FIVE-STAR BERDE
For Aboitiz InfraCapital, Inc., its 800-hectare LIMA Estate in Lipa-Malvar, Batangas, is one of the strongest examples of a green-certified property.

“It’s been recognized as a five-star BERDE, which means it is implementing sustainable practices that are aligned with the global standards,” Aboitiz InfraCapital, Inc. Economic Estates Vice-President for Inventory Generation Group Jolan P. Formalejo said.

BERDE is a local green building system rating that was developed by the Philippine Green Building Council.

Mr. Formalejo said the developments inside the estate, such as the Outlets at Lipa and the LIMA Tower 1 were five-star BERDE certified in 2022.

LIMA Tower 1 holds a BERDE certification for environmental sustainability, and has pre-certification from the WELL Building Standard, which assesses features promoting health and well-being.

“Hopefully, once we start to operate LIMA Tower 1, all the tenants will appreciate the operational savings that they can achieve,” Mr. Formalejo said.

He said the Smart Water Network, wherein its water facilities turn into interconnected and intelligent systems, operated by LIMA Water Corp., resulted in 30% savings in operations and uptime of 99.3%. It is also less than 5% in terms of wastage of non-renewable water.

“Soon we will be developing our Tower 2. We’ll also gear up for these certifications,” he said, adding that The West Cebu Estate and Mactan Economic Zone 2 Estate are aiming for five stars this year.

Mr. Formalejo noted these green certifications make the locators feel secure knowing their business operates inside a sustainable development along with the assurance that all these facilities and systems are future proof.

Makati CBD: The premier financial center, getting its second wind

JC GELLIDON-UNSPLASH

By David Leechiu

FOR MORE THAN 50 years now, the Makati Central Business District (CBD) has been at the heart of the Philippines’ business scene. It was the pioneering district that set the standard for urban development in Metro Manila. What started as a farm with an airport has grown into the premier mixed-use master-planned city. Makati has evolved into the large-scale transit-oriented development that we see today. And it continues to evolve.

ENTERPRISING VISION
Those familiar with the history of Makati know its beginnings stemmed from the vision of Colonel Joseph McMicking who dreamed of building a city and, with Alfonso Zobel de Ayala and Colonel Jaime Velasquez, persevered in creating the prime financial district of Makati, centered around the runways of Nielson Airport. We can still see evidence of that airport in the Nielson Tower which was the airport’s control tower and now form the Ayala Triangle. Colonel McMicking was married to Mercedes from the Zobel de Ayala clan. The connection of their families birthed the vision and eventual execution of plans for Makati CBD. Ayala Corp. still helps shape the CBD today, influencing its growth and continued development.

USHERING THE SUCCESS OF OTHER CBDS
Makati CBD’s success helped pave the way for other business districts. This is especially true for Bonifacio Global City (BGC), separated from Makati CBD only by Epifanio de los Santos Avenue and luxury villages. Like Makati CBD in its early stages, BGC has fresh new buildings that meet today’s standards of efficiency, sustainability, and smart technologies. However, despite being an older district with aging developments, Makati CBD still retains its identity as a premier business and financial district.

UNDERGOING REDEVELOPMENT
Many of the structures in Makati were constructed more than three or four decades ago. The designs of these old buildings have been eclipsed by newer more efficient plans and technologies. These structures do not meet the demands and requirements of the current market. Thus, we see older buildings suffering higher vacancies as preference has shifted to the more cost-efficient space in newer buildings — the tenants’ flight to quality.

The Makati CBD, however, remains competitive, as buildings have been torn down to make way for newer, more dense glass towers but whose design and features are more in line with the current needs of businesses. Makati is no stranger to redevelopment. It has undergone this kind of transformation before. And despite the changes it seems to continually undergo, the essence of Makati CBD’s original plan remains. A revitalized skyline, ensuring the CBD remains modern.

SELECT PROJECTS UNDERWAY
Some developers have already disclosed their plans for redevelopment. For instance, Ayala Land Premier is developing the old site of Le Parc Apartments into a 51-storey exclusive luxury residential tower with large residential condominium units. Bank of the Philippine Islands is building its new sustainable and green headquarters at the corner of Ayala Avenue and Paseo de Roxas, offering around 89,000 square meters of gross floor area. Meanwhile, the new Mandarin Oriental Hotel at the Ayala Triangle Tower 2 will open in 2026, which will offer 276 rooms. Other building owners are in various levels of the planning process looking to redevelop their properties.

MAKATI CBD’S REAL EDGE
What keeps Makati CBD at the forefront isn’t just its master plan, it’s the responsiveness of its stakeholders to keep it at the top spot as a preferred business district. The local government promotes business growth by streamlining permits processes and allowing online payments of real estate and business taxes. There’s also the Makati Commercial Estate Association (MACEA), a civic nonprofit association of stakeholders in Makati that promotes and preserves the Ayala Avenue, Paseo de Roxas, Makati Avenue, Salcedo Village, and Legaspi Village areas. But what really sets Makati CBD apart is its community. Residents, locators, and visitors all play a part in maintaining high standards for cleanliness, order, adherence to rules, making the district a model city that everyone wants to preserve — and even keep improving. We can view Makati CBD district as like a living organism with different parts, each with its own function but dependent on the other.

A LIVING, EVOLVING CITY
We will soon see a much different Makati skyline in the next decade of its life — its second wind — as it continues to evolve to meet the ever-changing needs of the people and businesses who call it home. It’s a place that will keep inspiring the growth of other township projects in the country. With the active role of stakeholders and a solid master plan, Makati CBD is set to remain at the top spot of preferred locations in the country, showcasing the legacy of a living, evolving city that adapts to ever-changing needs.

 

David Leechiu is the founder and chief executive officer of Leechiu Property Consultants, Inc. (LPC).

LPC provides real estate solutions to clients and partners through its expertise in tenant and landlord representation, investment sales, capital markets, general brokerage, research and consultancy, and property valuation. For more information about LPC, visit www.leechiu.com. For media inquiries or further information, contact Mawhi Steley, director of marketing and communications, at mawhi.steley@leechiu.com or 09171291650.

Recalibration to quell extinction

TIAGO RODRIGUES-UNSPLASH

By Joey Roi Bondoc

OVER the past few years, we have seen major shifts in property developers’ strategies. From primarily focusing on Metro Manila, Colliers has seen substantial launches in growth areas outside the capital region. More master-planned projects mean sizable additions to horizontal and vertical supply across the Philippines, especially in competitive regions such as Central Luzon, Calaba (Cavite, Laguna, and Batangas) corridor, Western Visayas, Central Visayas, Northern Mindanao, and the Davao Region.

Aside from differentiation strategies employed in the construction of residential projects, developers are also acquiring massive parcels of developable land in the above-mentioned regions. These regions accounted for about 47% of the Philippine gross domestic product (GDP) in 2023 and contributed 54% to total overseas Filipino workers (OFW) deployment in 2022. These regions also grew between 5.2% and 7.3% in 2023, while the entire country’s economic output expanded by 5.7% during the year under review.

These are essential strategies for developers that aim to remain relevant in a constantly evolving Philippine property market.

FROM VERTICAL TO HORIZONTAL: THE SHIFT TO SUBURBIA
The Metro Manila pre-selling condominium market continues to see tepid launches and take-up. We attribute this to elevated mortgage rates and lengthened remaining inventory life. Colliers sees a sizable delivery of new condominium units this year, which is likely to raise vacancy in the capital region’s secondary market.

Given a lukewarm pre-selling market in Metro Manila, major developers have taken an aggressive stance in expanding outside the capital region. Property firms are actively landbanking and developing expansive master-planned communities in prime development hubs outside of Metro Manila.

Colliers believes that while property firms are launching integrated projects outside Metro Manila, developers should constantly monitor interest rate changes and assess the most attractive price segment for each Metro Manila sub-location; reassess promos for ready-for-occupancy (RFO) units; and further integrate differentiating features for condominium projects to seize recovering demand.

Developers have been recalibrating their strategies and carefully assessing which developments to focus on. The change in end-users’ and investors’ preferences post-COVID (coronavirus disease) has resulted in property firms aggressively launching massive township projects that highlight the live-work-play-shop lifestyle. Developers are also slowly shifting to horizontal residential projects in key growth areas given the Metro Manila pre-selling condominium market’s stifled demand.

INTEGRATING DIFFERENTIATING FEATURES
Colliers believes that the importance of open/green spaces, smart home technologies, and proximity to places of work and malls are highly valued more than ever. The pandemic has changed the way people live, work, and shop, resulting in developers integrating new features into their projects to satisfy residents’ evolving preferences. 

In our view, residential projects in Metro Manila that provide upscale amenities and top-tier concierge services continue to remain popular among the experienced and affluent clients. We believe that developers should continue innovating with their condominium projects by offering new features and services and by aggressively differentiating. Over the past year, several developers have integrated more healthy and sustainable amenities into their newly launched projects. Some have also incorporated unique features such as glamping nooks, garden gazebos, and sky promenades as hyper-amenitized condominium developments become the norm. 

LAUNCH OF HORIZONTAL PROJECTS OUTSIDE METRO MANILA
Colliers believes that developers will continue to venture into horizontal residential projects outside of Metro Manila where demand comes from end users. Among the developers that will launch massive horizontal projects outside the capital region include Rockwell Land Corp. with its 85-hectare beach property in Lian, Batangas and a 300-hectare horizontal project in San Jose, Bulacan. Century Properties, Inc. also announced that it is launching five new projects under the PHirst brand this year with a combined land area of 85 hectares. 

Meanwhile, Cebu Landmasters, Inc. has also announced its plan to expand outside of Visayas and Mindanao (VisMin) and establish its presence in Luzon. The firm disclosed that it is receiving offers from landed families in Camarines Sur, Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon), and Pampanga. This is a strategic move for one of the country’s major developers in the VisMin region. This is definitely a recalibration for Cebu Landmasters, Inc., going out of its stronghold (VisMin area) and exploring investment opportunities in Luzon.

MORE JV DEALS FOR UPSCALE TO LUXURY PROJECTS
The share of upscale to luxury residential projects to total pre-selling take-up in Metro Manila increased to 18% in 2023 from 10% in 2022. We attribute this to the rising share of higher-priced condominium units to total launches in the pre-selling market in 2023. While the supply and demand for mid-income projects have held firm, the share of pre-selling condos priced at least P12 million ($214,300) per unit has steadily increased, particularly after 2020 and 2021, which we consider to be a disruptive period for the Metro Manila condominium market.

In our view, developers planning to launch projects within the upscale to luxury price band should consider joint venture (JV) deals either with local players or foreign developers. We have seen developers implementing this strategy as they attempt to push their pre-selling residential prices higher. These partnerships should be beneficial to property firms with limited landbank as well as to those that intend to offer upscale to luxury and even ultra-luxury residential projects.

As of end-2023, Colliers data showed that JV luxury projects in Metro Manila have take-up rates of between 64% and 100%.

STRATEGIC LANDBANKING FOR FUTURE MASTERPLANNED PROJECTS
Property firms remain aggressive in developing master-planned communities outside Metro Manila. Over the past 12 months, among the expansive townships launched by national players include Ayala Land, Inc.’s Centrala in Pampanga, Alsons Properties, Inc. and DoubleDragon Properties Corp.’s Northtown Center in Davao, Federal Land, Inc. and Nomura Real Estate Development Co., Ltd.’s Riverpark in Cavite, and Megaworld Corp.’s Baytown Palawan in Puerto Princesa (see map for others). Colliers attributed this not only to the lack of developable land in Metro Manila but also to a gamut of other factors, including the improving infrastructure connectivity in key development hubs outside the capital region as well as rising appetite for condominium projects and office towers.

In our view, property firms can command premium pricing for their residential projects developed within master-planned projects while office developers are able to capture demand from emerging outsourcing destinations outside Metro Manila. Colliers believes that the completion of Metro Rail Transit-7 (MRT-7), New Manila International Airport, and North-South Commuter Railway should entice more property firms to landbank near these public projects and develop new master-planned communities. 

LAUNCH OF MORE LEISURE-THEMED PROJECTS OUTSIDE METRO MANILA
Developers have been taking advantage of the rising demand for resort or leisure-oriented properties outside Metro Manila. These projects were already popular pre-COVID but the pandemic only highlighted the need for these leisure-themed residential enclaves. Among the developers that have leisure-centric properties outside Metro Manila include DMCI Homes, Inc., Rockwell Land Corp., Megaworld Corp., Ayala Land, Inc., Robinsons Land Corp., Cebu Landmasters, Inc., and Damosa Land, Inc. with projects located in Cebu, Davao, Bohol, Palawan, and Batangas. These projects remain popular, and Colliers encourages developers to further assess launching similar projects.

We also see the popularity of golf communities. In our view, residential projects near golf estates have high price appreciation potential. Golf communities are also becoming popular as they are banking on the travel and tourism sector’s recovery post-COVID.

 

Joey Roi Bondoc is the director and head of Research of Colliers Philippines.

joey.bondoc@colliers.com

Integrated rail, bus, and active transit systems needed for better commuting — experts

PHILIPPINE STAR/MIGUEL DE GUZMAN

By Ashley Erika O. Jose, Reporter

A COMPREHENSIVE and integrated transport plan should incorporate active transportation options like walking and cycling, along with first-mile, last-mile connectivity solutions, to create a seamless and efficient network for commuters, according to transport experts.

“Investment in rail is important, but it is not the sole solution to our mobility issues; it needs to be matched by equal investment and attention to supporting active and public transportation,” Ira F. Cruz, a transport advocate and director of AltMobility PH, said in a Viber message.

Under an underdeveloped active and public transportation system, the majority of Filipinos have to contend with unreliable, unsafe, and undignified daily commutes, he said, adding that this also translates to economic losses.

With this, the government must tap and promote active transportation as part of a comprehensive transport plan involving multi-sectoral initiatives with members from the transport sector, experts, and civil organizations, he noted.

The Transportation department has launched an ambitious rail network plan designed to reduce traffic congestion, enhance mobility, and improve regional economic activities.

“We are looking into improving travel… We are expecting more progressive development of [rail projects]. We are aiming for substantial and comfortable travel times for the riding public,” Transportation Undersecretary for Railways Jeremy S. Regino said in an interview.

The worsening traffic congestion problem is not unique to the Philippines but rather similar to many urban cities across the globe driven by a car-centric society, according to analysts.

“If everybody ditched their cars and used public transport, this problem will disappear in thin air,” said Nigel Paul C. Villarete, senior adviser on public-private partnership at the technical advisory group Libra Konsult, Inc.

Mr. Villarete said the Philippines’ neighboring countries in Asia like Singapore, Japan, and Hong Kong offer good public transport alternatives that even car owners patronize.

“For Metro Manila and Metro Cebu and other urban areas in the country, we should fast-track more rail and bus-based systems,” Mr. Villarete said.

However, most of the Department of Transportation’s (DoTr) big-ticket rail projects are expected to become operational between 2028 and 2030, Mr. Regino said.

These include the North-South Commuter Railway, which is slated for full operations by 2029; the Metro Manila Subway project, which is expected to be operational by 2029; the Mindanao Railway project, currently undergoing a design overhaul; and the Metro Rail Transit Line 7 (MRT-7), which is scheduled to commence operations by 2028.

COLLABORATION
The Japan International Cooperation Agency (JICA) and the DoTr are collaborating on a railway master plan aimed at bringing the Philippines’ rail lines up to international standards by incorporating Japanese technologies, while also increasing the share of passenger trips and improving the sustainability of the rail network.

“We are also supporting the master plan for the future possibility because here you have only three lines. We have 83 lines with the same land area size between Metro Manila and National Capital Region and Metropolitan Tokyo,” JICA Chief Representative in the Philippines Takema Sakamoto said in an interview.

“We do not need a patchwork or piecemeal railway project. We need to make a comprehensive plan but that will take time,” Mr. Sakamoto noted.

The Philippines’ long-standing transport problem stemmed from the government’s decade-long refusal to introduce reforms in the transportation sector, AltMobility PH’s Mr. Cruz said.

“The government opts to continue a regime of car-oriented policies that, at the end of the day, compromises everyone’s mobility — including those in motor vehicles,” he added.

For AltMobility PH, rail networks alone will not advance the country’s transport sector as it has to be complemented by feeder systems like jeepneys.

The Philippines will never unlock the full potential of rail systems if the government continues to ignore the importance of creating an ecosystem of transportation networks, Mr. Cruz said.

For Metro Manila and Metro Cebu, the government must fast-track not only rail projects but bus-based systems like bus rapid transit, Libra Konsult’s Mr. Villarete said.

Rene S. Santiago, former president of the Transportation Science Society of the Philippines, said the Philippines’ ongoing transport challenges are a result of the government becoming oblivious to past lessons.

“Rail network will help ease congestion in the long run but won’t solve traffic congestion without corollary efforts on road-based public transport and land use controls. Our zoning regulations are a big joke,” Mr. Santiago said.

FUTURE DIRECTIONS
Mobility solutions company MPT Mobility Corp. plans to bring its proposed technology-driven mobility solutions to Metro Manila to help address transport woes.

“That is the vision. For now, let’s make this work in Baguio first,” Leo Emmanuel K. Gonzales, assistant vice-president for corporate affairs at MPT Mobility, said in a Viber message.

MPT Mobility, the innovations arm of the Metro Pacific Tollways Corp., has proposed to implement its tech-driven mobility solutions in Baguio, which include the collection of congestion fees or the mobility program, smart parking management system, advanced traffic management system, and public transport fleet management system.

Mr. Villarete said the government must also consider diversifying the mix of transport systems by also looking into first-mile, last-mile or FMLM connectivity.

He said understanding the role of FMLM and how to better utilize this mode of transportation presents opportunities in advancing the country’s transport sector.

“It’s one thing to patronize public transport, it’s another to get home from a train or bus station,” he said.

He said mobility is seldom addressed by a single solution, and while rail may offer the highest capacity, the government must still design a diversified transportation mix factoring in the rise of ride-hailing companies and transport network vehicle services.

“The speed and ease of rail transport is often offset by the difficulty and inconvenience in getting home from a station,” Mr. Villarete said.

FMLM mode of connectivity provides direct connectivity from point A to point B or an FMLM trip, he said.

“Roll out more and better passenger transport services to cover areas and provide convenient FMLM connections,” he said.

The utilization of transportation network vehicle services (TNVSs) is exactly what is needed to solve the FMLM issues as they offer solutions to other mobility needs, Mr. Villarete said, urging the government to craft better regulations for TNVS.

“TNVS offers more productive use of shared transport like cars and motorcycles. The constraint for wider use is archaic government regulations,” Transport expert Mr. Santiago said.

According to Mr. Cruz of AltMobility PH, the increasing number of TNVSs can also be leveraged, but the government should first develop a plan to assess how their growth can be integrated with other modes of transportation.

“Transport planning is a holistic practice. There is no single magic pill that will improve our mobility,” he said.

Bridging the Gap: The Bataan-Cavite Interlink Bridge

A 3D render of the Bataan-Cavite Interlink Bridge | Source: The Office of Congressman Albert S. Garcia, 2nd District of Bataan

By Almira Louise S. Martinez

IN 1987, the idea of building a link from Southern to Central Luzon was first proposed by Felicito “Tong” C. Payumo, former chair of the Subic Bay Metropolitan Authority and then-Bataan representative.

“Back then, it was a lofty dream that’s very abstract, it seemed impossible,” 2nd District of Bataan Congressman Albert S. Garcia said in an interview.

The bridge did not push through before due to several factors.

“That time the technology, the money, and the need weren’t clearly spelled out,” Mr. Garcia told BusinessWorld.

In 2018, the Japan International Cooperation Agency (JICA) released an updated report on the economic impact of traffic congestion in Metro Manila. It stated that P3.5 billion is lost every day due to the time wasted in traffic.

Mr. Garcia said the JICA report inspired him to revisit the idea of the bridge, now called the Bataan-Cavite Interlink Bridge (BCIB).

During former President Rodrigo R. Duterte’s administration, the BCIB project underwent a feasibility study as one of the 100 infrastructure projects listed under the flagship list of the Build, Build, Build (BBB) program.

The 32.15-kilometer bridge spanning across Manila Bay, connecting the provinces of Bataan and Cavite, is projected to boost regional economic integration and development.

“It has the highest economic return rate among all the BBB projects… even now at 34%,” Mr. Garcia said.

According to the Department of Public Works and Highways (DPWH), the challenges faced by the project were rooted in the difficulties encountered during the COVID-19 pandemic.

“The stringent lockdowns and health protocols significantly delayed data gathering… complicated logistics and coordination efforts,” the DPWH said in a statement.

Transitioning into the administration of President Ferdinand R. Marcos, Jr., the BCIB project was placed under the Infrastructure Flagship Projects of the Build Better More program.

With an initial cost of $3.91 billion, the bridge is envisioned as a ‘world-class’ infrastructure, given its complexity and magnitude, the DPWH said.

To fulfill the initial budget, the government utilized a multi-tranche financing scheme under which the Asian Infrastructure Investment Bank approved the $1.14-billion loan.

In 2023, the Asian Development Bank, co-financing the project, green lit the $2.11-billion loan for the bridge.

The Philippine government would cover the remaining $664.23 million in the estimated project cost.

 

IMPACTS OF THE BRIDGE

AN APPROXIMATION of the path of the Bataan-Cavite Interlink Bridge

The four-lane road link will minimize disparities in public service access and available economic opportunities between Metro Manila and other regions in Luzon.

Danica, a hotel receptionist in Balanga, Bataan, believes that the bridge will help businesses in the province.

“Makakatulong po siya sa business namin kasi mas mapapadali po ang pagpunta ng mga turista [It will help businesses here by making us more accessible to tourists],” she said.

When the bridge is completed, Ms. Danica said local businesses should strive to improve their facilities and strategies to keep up with new competitors.

“The bridge will open up a lot of doors for Bataan,” Mr. Garcia said.

“It will make us more accessible to 50 million tourists in the entire island of Luzon.”

The local economy is also expected to be stimulated through job opportunities, regional developments, business ventures, and infrastructure improvements, according to the DPWH.

Apart from Cavite and Bataan, the Philippine Economic Zone Authority said the neighboring economic zones — Clark and Subic, would also feel the “transformative impacts” of the mega bridge.

“Shorter travel times between major economic zones will streamline supply chains, leading to cost savings for businesses.”

 

ENVIRONMENTAL CONSIDERATIONS

AdobeStock Photo


Biodiversity in the province was one of the main concerns discussed in the 2023 DPWH environmental impact assessment of the bridge.

According to the study, one of the most significant risks of the project is the injury and disturbance of protected marine mammals.

To avoid this, Mr. Garcia said provisions and technologies will be introduced during the construction to avoid damage to biodiversity.

“They will use curtain walls while drilling to avoid noise pollution and avoid other environmental impacts,” he said.

On weather resilience, the DPWH said the BCIB project is meticulously designed given its nature as a marine bridge.

“This monumental structure is built with a 100-year design life ensuring resilience against extreme events and harsh environmental conditions.”

 

DECONGESTING NCR

Vehicles and motorcycles are stuck in traffic along EDSA in this file photo. — PHILIPPINE STAR/WALTER BOLLOZOS

One of the main goals of the BCIB is to decongest Metro Manila by reducing the travel time between the provinces of Cavite and Bataan.

“It will significantly cut down travel time… from five (5) hours down to 45 minutes thereby easing the traffic congestion in Metro Manila as well as in South Luzon and North Luzon gateways,” the DPWH said.

By utilizing SCTEX, Roman Expressway, BCIB, travelers can easily reach Calabarzon to save time and money, Mr. Garcia said.

“Normal travel of commuters, tourists, deliveries, logistics that doesn’t need to pass through Metro Manila can bypass it.”

Aside from traffic decongestion, Mr. Garcia said the bridge will help solve the overpopulation in Metro Manila.

“Those losses, the P3.5 billion a day, is a product of unplanned growth and unmanaged in-country migration.”

Once the bridge is constructed, Bataan expects migration due to the economic activity happening in the region.

“If we’ll be connected to a very populous area like Calabarzon and NCR, along with all the economic opportunity, growth in migration is inevitable,” Mr. Garcia said.

He added that the province is meticulously crafting a master plan to avoid creating the same ‘mistake’ as Metro Manila.

“So we prosper, we increase the quality of life, we increase the economic activity and hopefully no traffic, no pollution, more green spaces, and better work-life balance.”

The detailed engineering design and bidding of the project was done last July, according to Public Works Undersecretary Maria Catalina E. Cabral during the Build Better More Infrastructure Forum.

The BCIB is expected to be fully operational by 2029.

15 years after Ondoy: Flood safety still out of reach?

PHILIPPINE STAR/MIGUEL DE GUZMAN

By Edg Adrian A. Eva

WHEN the Southwest Monsoon (Habagat) was enhanced by Typhoon Carina, it devastated large parts of Luzon. Many Filipinos were haunted by memories of Ondoy, a typhoon that caused record-breaking levels of flooding in Metro Manila.

Rhea Perez, a mother of three and a resident of Barangay Gulod, Novaliches, Quezon City, is no stranger to flooding as she grew up near the Tullahan River.

“With Ondoy before and then this, it’s really been traumatic for us,” Mrs. Perez said in Filipino during an interview.

“We were already awake at 4 a.m. putting aside our belongings,” she said.

“We got scared that the flood rose quickly. By the time we were rescued, the water had already reached the second floor,” Ms. Perez said.

As she returned to their home after the flooding, she remembered their experience with Typhoon Ondoy, as most of their belongings have been washed away by the flood.

“We were back to zero again,” she said.

LOOKING BACK AT TYPHOON ONDOY
The rainfall and flooding caused by Typhoon Ondoy in September 2009 have become a benchmark for subsequent floods in Metro Manila, according to Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA).

The storm inundated 80% of the capital, affecting Pasig, Quezon City, Manila, Caloocan, Muntinlupa, and Marikina, as well as nearby provinces.

The Marikina River’s water level rose to 23 meters above sea level, exceeding the 16-meter threshold that prompts evacuation of nearby residents.

Floodwaters as high as 20 feet (6 meters) were observed in areas of Marikina, Pasig, and Quezon City.

Typhoon Ondoy affected 993,227 families and resulted in 464 deaths, 529 injuries, and 37 people remaining missing, according to the National Disaster Risk Reduction and Management Council (NDRRMC).

An estimated P11 billion in damages to infrastructure and agriculture was caused by the typhoon.

CHALLENGES
• Urban congestion

The subsequent flooding in Metro Manila is attributed to the capital’s urban congestion, according to Armando Alli, an architectural consultant and environmental planner.

“The area on which the National Capital Region (NCR) sits is a massive 640.0 square kilometer floodplain. It is not actually ideal for very high-density human settlements,” Mr. Alli said.

Another issue pointed out by Mr. Alli is that urban congestion manifestations, such as structures near waterways and waste management problems, have further exacerbated the capital’s problem of flooding.

• Plastic waste

About 356,371 metric tons of “mismanaged plastic wastes” are dumped into 466 rivers across the country each year, according to a peer-reviewed study published in the Science Advances journal.

Notably, Pasig River ranks as the world’s top contributor, accounting for 6.43% of global plastic pollution.

“Require businesses to shift away from single-use plastics by adopting reuse and refill systems, and utilizing reusable materials,” Marian Ledesma, Zero Waste Campaigner of Green Peace said in a written interview.

• Water from the mountains

According to urban planner Felino A. Palafox, Jr., the region’s waterways can no longer handle the volume of rainwater flowing from nearby mountains.

“More than 4,600 cubic meters per second flowed down from the denuded mountains but the capacity of Pasig River is 600 cubic meters during Ondoy,” Mr. Palafox said.

The remaining 4,000 cubic meters of excess flood water flowed into residential areas in Metro Manila, he said.

• PHL in typhoon belt

According to PAGASA, the Philippines’ ongoing struggle with flooding is largely attributed to its geographical location within the “typhoon belt” found in the Western Pacific.

“The geographical location of the Philippines really makes it more vulnerable,” PAGASA Hydrologist Rosalie C. Pagulayan said in Filipino.

On average, up to 20 tropical cyclones enter the Philippine Area of Responsibility each year, with about 8 or 9 of these making landfall in the country.

• Climate Change

PAGASA warns that extreme meteorological events may become more frequent due to climate change.   

“That’s what our climatologists always say — we could experience extreme climatic events,” Ms. Pagulayan said.

The Philippines is in the forefront of disaster risks among 193 countries from the effects of climate change, according to World Risk Index.

This study indicates that the impact of climate change is also worsening due to the lack of societal capacities and resources in the Philippines.

FLOOD CONTROL PROJECTS
A pressing concern for communities constantly plagued by these floods is how much longer they need to endure this.

DPWH Secretary Manuel Bonoan admitted that there is no single nationwide master plan for flood control in Metro Manila, but more than 5,000 completed flood projects are intended to provide immediate relief and protection for low-lying areas.

“Our decentralized strategy allows us to customize solutions for each major river basin, considering their unique geographical, hydrological, and environmental conditions,” Mr. Bonoan said.

One significant flood control project is the ongoing P351-billion plan for flood management in Greater Metro Manila.

According to the World Bank, the notable measures include construction of the Upper Marikina River Catchment Area, construction and modernization of pumping stations along critical waterways and improved solid waste management for the drainage systems.

The project completion is at 30% and is facing delays due to various factors, including environmental, social, and other issues, Mr. Bonoan said.

Mr. Palafox suggested that a similar concept to the water impounding structure in BGC (Bonifacio Global City) could be applied to some major roads in Metro Manila.

“Let’s say underneath roads like EDSA, you put a big cistern, collect the water before they flow down,” he said.

“We can have a six series of rainwater harvesting in the circumferential roads.”

IS THERE STILL HOPE?
Despite the daunting challenges facing the country’s flood management efforts, the NDRRMC remains hopeful, believing that the nation can become flood-resilient — if only we can get our act together.

The government is prioritizing and investing in engineering, science-based, and long-term solutions to effectively address the country’s flooding issues.

Mr. Alli believes that achieving flood resilience within 18 to 25 years is possible, but only if we commit to a concerted effort across multiple administrations.

“It has to be a very well-coordinated and sustained effort using a combination of natural and artificial solution that must put politics in the backburner,” Mr. Alli said.

PHL firms need to embrace AI to stay ahead in the digital era — experts

RAWPIXEL.COM-FREEPIK

By Revin Mikhael D. Ochave, Reporter

ADOPTING artificial intelligence (AI) is essential for companies to stay competitive and drive growth, as it enhances operational efficiency, customer engagement, and innovation, according to experts.

National Economic and Development Authority Secretary Arsenio M. Balisacan said in July that the Philippine economy stands to gain P2.6 trillion annually if local businesses adopt AI in their operations.

“I believe that we will see higher adoption of AI in the near future, as more and more companies realize the benefits and opportunities of AI, as well as the risks and challenges of not using AI,” Microsoft Philippines Chief Executive Officer Peter D. Maquera said in an e-mail interview.

Philippines lands 31<sup>st</sup> in AI responsibility index

He said that Microsoft Philippines uses various AI programs to automate tasks such as scheduling meetings, creating reports, and finding information.

The company also uses a cloud-based platform that provides access to AI models improving customer engagement, product development, and innovation, as well as a machine-learning platform addressing business needs such as demand forecasting, sentiment analysis, and fraud detection. The solutions can also be accessed by local businesses to support the growth of their operations.

“Our motivation in considering the use of AI for our business is to create more value for our customers, partners, and employees, and to contribute to the social and economic development of the Philippines,” he said.

Mr. Maquera said that Microsoft Philippines has seen improved profitability and reduced operating costs through AI solutions, which have enabled the company to create more value for customers and partners. These solutions have also attracted more customers and increased their satisfaction and loyalty.

INCREASED ADOPTION, INTERNAL APPLICATIONS
Lee Carlo B. Abadia, technology consulting principal at the professional services firm SyCip Gorres Velayo & Co. (SGV), said that increased AI adoption is expected among Philippine companies.

“We see better adoption in the next year or so, but more for internal tasks centered on boosting productivity related to reporting or facilitating the ease of decision-making for leaders,” he said in an e-mail interview.

He said that companies can use AI to foster better employee engagement, helping employees complete tasks more efficiently.

However, he noted that the largest barrier to adoption is the fear of jobs being replaced. He said that companies should promote a human-AI partnership in operations, focusing on making tasks more efficient rather than reducing labor costs.

Mr. Abadia also said that SGV’s AI assistant tool, EYQ, aids in ideating, researching, and consolidating information, allowing the firm to focus more on formulating client recommendations.

“The tool boosts productivity by augmenting the capabilities of our people in crafting and improving solutions, considering more information in less time,” he said. “It is not intended for rightsizing activities but to provide value faster.”

Sara Venturina, chief data officer of mobile wallet GCash, said in an e-mail interview that the company has been using AI to develop more relevant products and personalized services. Internally, GCash will launch an AI-powered work assistant to improve productivity and is testing a contact center AgentCopilot to enhance customer service.

She added that while GCash has used AI to streamline internal systems, it has not undergone any rightsizing of manpower, as the company continues to grow and scale up support.

She projected that more businesses will adopt AI to keep up with the fast-paced and data-driven market.

Philippines lags in 2023 Asia-Pacific AI readiness ranking

FUTURE PROSPECTS, CHALLENGES
Alex A. Ustaris, chief technology officer of PHINMA Education Holdings, Inc., said that local companies and organizations will catch up on AI adoption soon.

Cloud-based platforms and mobile technology could push forward AI-enabled services in the Philippines, he noted.

He also said that PHINMA Education will use AI to transform how its students learn and how its employees work.

“AI will help us provide customized learning for each student and scale the learning process so that we can make more lives better through education,” he said.

PHINMA Education has already increased quality leads by 15% and reduced manpower costs for manual tasks through AI initiatives, according to the company.

Mr. Abadia said that universities and businesses should integrate AI into their curricula and on-the-job training programs to enhance local adoption.

Additionally, both the public and private sectors should identify areas where AI can be applied and pursue proof-of-concept projects to build momentum, he also said.

Microsoft’s Mr. Maquera stressed the need for investments in AI education and training, infrastructure, and partnerships to boost AI adoption in the Philippines.

“AI is the new electricity, the new internet, the new platform that will power the next wave of innovation and growth for businesses and society,” he said.

According to Microsoft’s latest AI Readiness Index, the Philippines ranks eighth out of 10 ASEAN countries in terms of AI readiness, with a score of 47 out of 100. The main challenges include a lack of skills, data, and infrastructure, as well as low awareness, trust, and regulation of AI.

Alex Takeda Lagata, Jr., global business director of Tokyo-based AI firm rinna Co., Ltd., said the government and private sector should push for increased AI awareness in the Philippines.

He noted that businesses may be hesitant to adopt AI due to public stigma but emphasized that inaction could lead to lost opportunities.

Hybrid is the future of work

NELLY ANTONIADOU-UNSPLASH

By Chloe Mari A. Hufana, Reporter

LOCKDOWNS spawned by the coronavirus pandemic forced people to adopt a flexible working life. They also showed that a considerable amount of work that took place in the office can continue when it’s closed.

Work life and home life melded together under the work-from-home setup, and now that the pandemic is gone, the hybrid setup appears to be the way forward, with many employers and employees agreeing to maintain this flexibility.

“This system enables employees to have the best of both worlds,” according to Jobstreet Singapore. “When they need a break from the office and the commute, they can work from home.”

“Hybrid work arrangements open up job generation opportunities for people who need the flexibility in their work setup for better work-life balance,” Jack Madrid, president and chief executive officer of the IT & Business Process Association of the Philippines (IBPAP), told BusinessWorld in a Viber message.

He noted how the hybrid setup had helped decongest Metro Manila traffic, known globally for being one of the worst.

Being able to work from home on some days means doing away with daily commute times, increasing worker productivity and benefiting their health and well-being, he said. “It provides better talent retention and by expanding talent pools, it results in stronger diversity and inclusion.”

At the start of the COVID-19 pandemic in 2020, about 2.9 million cars passed through major Philippine highways in the capital region, according to the Metropolitan Manila Development Authority (MMDA).

In 2021 and 2022, when lockdown restrictions were slowly being lifted, MMDA recorded 3.19 million and 3.53 million. Last year, it recorded the highest annual average daily traffic at 3.6 million, beating pre-pandemic levels. 

“The future of work is about flexibility,” Mr. Madrid separately said by telephone. “You listen to what your customer needs. You listen to what your employer needs, and you listen to the voice of the employee.”

“You have to balance the interests and objectives of the customer, the employer — in this case, it’s IBPAP — and the employee,” he added.

IBPAP doesn’t necessarily cut costs by allowing hybrid work because its more than 400 members still have to pay office rent.

“The location of where the work gets done is not important,” Mr. Madrid said. “What’s more important for me are the results. If you can do it outside the office, good. If you can only do it in the office, then you have to go to the office. Everyone has a different job. So, the future is about flexibility.”

Mikaela Katrina D. Coco, a 24-year-old multimedia producer for Chapters PH, creative content creator, said a hybrid setup is best for balancing work and life.

“It provides more opportunities for work-life balance and saves time and resources compared with reporting to work every day,” she said in a Facebook Messenger chat. “Since I work in media production, I don’t have fixed work hours.

Hybrid work, however, might not be for everyone.

Quintin V. Pastrana, president and head of Business Development at WEnergy Power Pilipinas, Inc., said his company has a traditional, in-office setup, but incorporates different activities in between office hours to help employees.

While WEnergy allowed employees to work from home thrice a week during the pandemic, the traditional face-to-face setup works best for his lean team, he said by telephone. They went back to a full office setup in mid-2022.

“It’s difficult [to have a remote setup] because we’re a very flat organization,” he said. “So, a lot of it is multitasking. And you cannot multitask in front of a desktop or laptop at home.”

Mr. Pastrana said the company requires a lot of collaboration among employees that is better done face to face. “That collaboration is in our DNA as a company… [It can get] stifled with a work-from-home setup, [where] there’s not a lot of interaction.”

Despite a full office setup, WEnergy employees still enjoy flexible hours, he said. “If somebody has a traffic issue, we can start at 10 a.m. So, those things will make a difference in terms of micro-flexibility. I think that is also a function of what we’ve learned from the pandemic.”

Mr. Pastrana said the company closed more deals when people were working in the office. “Those things make a difference.”

“A more nuanced approach to a hybrid setup doesn’t necessarily mean work from home. It just means building in a lot more balanced activity within the workday. And in our case, we have a very set schedule in terms of when the activity day is, which is Friday,” he said.

“Team lunch is on Tuesday.”

STATE OF REAL ESTATE
Hybrid work did affect the demand for office real estate, Joey Roi H. Bondoc, research director at Colliers Philippines, told BusinessWorld by telephone.

“At the height of the pandemic in 2020 and 2021, at some point during that period, vacancies in the flexi-space market peaked at about 40%, mainly because people were not allowed to go out,” he said. “As a result of flexi workspace vacancies during that period, I think the work-from-anywhere setup resulted in an increase in demand for these co-working facilities,” he added. 

Mr. Bondoc noted that before the pandemic, companies used to rent three floors of office space, but under the so-called new normal, they are down to just one floor. Colliers expects Metro Manila’s office vacancy rate to widen to 19.6% by yearend from 19.3% in 2023.

The rise of hybrid and remote work setups also gave way to the rise of co-working spaces. Colliers found that people prefer co-working spaces inside malls for convenience.

Mr. Bondoc said Colliers is seeing a rising trend of state agencies occupying more properties in the metro. For instance, the National Bureau of Investigation is occupying an entire building in the Bay Area in Pasay City.

“They are transferring to newer office spaces but at lower lease rates,” he said. “They are taking advantage of the vacancies in the market.”

Mr. Bondoc said Colliers continues to advise clients about where they should invest amid headwinds in the local property market.

“If you’re a mall, a residential developer or an office building developer, you need to innovate and renovate, otherwise you will evaporate,” he said. For developers and property firms, we believe that recalibration is important to quell extinction.”

Companies should also learn to adapt.

“If you’ve decided to be a hybrid organization, activating the office component isn’t simply a matter of unlocking the doors and dusting away the cobwebs,” according to a blog post from peoplemanagingpeople.com. “You’ve got to manage your office in a different way. It’s not the place where people come to do work anymore.”

Shifts and turns: The imperatives for Philippine businesses

PHILIPPINE STAR/MIGUEL DE GUZMAN

By Ron F. Jabal

THE global business landscape has been dramatically reshaped by a series of unprecedented challenges. The coronavirus disease 2019 (COVID-19) pandemic served as a major catalyst, accelerating trends that were already in motion while introducing new dynamics that have irrevocably altered how companies operate. The rapid advancements in artificial intelligence (AI) are changing the way we do business, even creating new work paradigms.

Thus, it has become imperative for businesses to not only adapt to these changes but to actively shape the future. The post-pandemic era, defined by the integration of artificial intelligence (AI) and the reimagining of work, truly presents opportunities, risks, and challenges. It is therefore critical to explore and review how Philippine businesses have been transforming and how they must continue to evolve over the next decade.

THE POST-PANDEMIC LANDSCAPE: A CATALYST FOR CHANGE
The COVID-19 pandemic was more than just a health crisis; it was a wake-up call that forced businesses to rethink their strategies, operations, and priorities. As the world ground to a halt, companies that were quick to pivot and adapt found themselves not just surviving but thriving in an altered environment. The pandemic exposed the vulnerabilities in global supply chains, highlighted the importance of digital infrastructure, and underscored the need for agility in business operations.

For Philippine businesses, the pandemic accelerated the adoption of digital technologies. Companies that had previously been slow to embrace digital transformation were suddenly thrust into a world where online platforms became the primary mode of operation. Retailers, for example, shifted to e-commerce models almost overnight, while service providers adopted remote work arrangements. This rapid shift was not without challenges, but it laid the groundwork for a more digitally integrated economy.

EMBRACING AI AND THE FUTURE OF WORK
As we look ahead, the role of artificial intelligence in business cannot be overstated. AI is no longer a futuristic concept; it is here, and it is transforming industries across the board. From automating routine tasks to providing deep insights through data analytics, AI is enabling companies to operate more efficiently and effectively.

In the Philippines, the integration of AI is still in its early stages, but the potential is immense. AI-driven solutions can help businesses enhance customer experiences, optimize supply chains, and improve decision-making processes. However, the widespread adoption of AI also raises important questions about the future of work. As machines take on more tasks, what will happen to the human workforce? This is a critical issue that businesses must address as they navigate the road ahead.

The future of work is not just about technology; it is about people. The pandemic has fundamentally changed how we work, with remote and hybrid work models becoming more common. This shift has implications for everything from employee productivity to company culture. As businesses in the Philippines adapt to these new work arrangements, they must find ways to balance the benefits of flexibility with the need for collaboration and connection.

As we consider the future of Philippine businesses over the next decade, several scenarios emerge that will shape the landscape in significant ways. These scenarios are not predictions, but they highlight potential trends and challenges that businesses must be prepared to navigate.

Digital Transformation as a Continuous Process: The rapid digitalization prompted by the pandemic is just the beginning. Over the next decade, businesses will need to view digital transformation as an ongoing process, continuously integrating new technologies and refining their digital strategies. This will require not just investment in technology, but also in upskilling employees to thrive in a digital-first environment.

AI-Enhanced Decision Making: As AI becomes more sophisticated, it will play an increasingly central role in business decision-making. Companies that leverage AI to analyze data, predict trends, and optimize operations will gain a competitive edge. However, they must also address the ethical considerations of AI, including issues of transparency, bias, and data privacy.

The Evolution of Work: The future of work will be defined by flexibility. Remote and hybrid work models are likely to become permanent fixtures, but businesses will need to navigate the challenges of managing distributed teams, maintaining company culture, and ensuring employee well-being. The gig economy will also expand, offering workers more flexibility but also raising concerns about job security and benefits.

Sustainability as a Business Imperative: Environmental sustainability will move from being a corporate responsibility to a business imperative. Companies will need to adopt green practices not just to comply with regulations, but to meet the growing demand from consumers and investors for sustainable products and services. This will involve everything from reducing carbon footprints to embracing circular economy models.

Resilient Supply Chains: The disruptions caused by the pandemic highlighted the fragility of global supply chains. In the coming years, businesses will need to build more resilient supply chains that can withstand shocks, whether from pandemics, geopolitical tensions, or natural disasters. This may involve diversifying suppliers, investing in local production, and leveraging digital technologies to improve supply chain visibility and agility.

Cybersecurity as a Top Priority: As businesses become more digital, they will also become more vulnerable to cyberthreats. Cybersecurity will need to be a top priority, with companies investing in advanced security measures, training employees on best practices, and developing robust incident response plans. Protecting customer data and maintaining trust will be critical in an increasingly interconnected world.

The Rise of Regional Trade: Geopolitical shifts and the rise of regional trade agreements will reshape global trade dynamics. Philippine businesses will need to navigate these changes by exploring new markets and forging strategic partnerships. The Regional Comprehensive Economic Partnership (RCEP), for example, presents opportunities for businesses to expand their reach within Asia, but it also brings competitive challenges.

The Consumer of the Future: Consumer behavior is evolving, with a growing emphasis on convenience, personalization, and digital experiences. Businesses will need to stay ahead of these trends by offering seamless, omnichannel customer journeys. The next decade will also see the rise of the conscious consumer, who prioritizes ethical and sustainable products. Companies that fail to adapt to these shifting preferences risk losing relevance.

Health and Well-being as a Business Focus: The pandemic has placed a spotlight on health and well-being, not just for individuals but for businesses as well. Companies will need to prioritize the health and well-being of their employees, customers, and communities. This will involve providing comprehensive healthcare benefits, supporting mental health, and fostering a culture of wellness. Businesses will also play a critical role in addressing public health challenges, from vaccine distribution to promoting healthy lifestyles.

Innovation as a Driver of Growth: Innovation will be the key to staying competitive in a rapidly changing world. Businesses will need to foster a culture of innovation, encouraging employees to think creatively and take risks. This will require investing in research and development, embracing new business models, and staying attuned to emerging trends. Companies that prioritize innovation will be better positioned to seize new opportunities and drive long-term growth.

TRANSFORMING FOR A BETTER FUTURE
The scenarios outlined above represent both opportunities and challenges for Philippine businesses. To navigate these future trends successfully, companies must embrace a mindset of continuous transformation. This involves staying ahead of technological advancements, understanding and responding to evolving consumer behaviors, and fostering a culture of innovation and resilience.

To thrive in the AI-driven future, businesses will need to make strategic investments in technology and talent. This includes adopting cutting-edge technologies such as AI, machine learning, and blockchain, as well as upskilling and reskilling the workforce to meet the demands of the digital economy. Companies that prioritize innovation and invest in human capital will be better positioned to adapt to changing market conditions and drive long-term growth.

Collaboration will be key to navigating the complexities of a fragmented world. Businesses in the Philippines should seek partnerships with other companies, government agencies, and nongovernmental organizations to address common challenges and achieve shared goals. Additionally, embracing inclusive business models that prioritize diversity, equity, and social impact will be crucial in building trust and ensuring long-term sustainability.

The ability to adapt quickly to changing circumstances will be a critical success factor for businesses over the next decade. This requires cultivating a culture of agility and flexibility within organizations, where decision-making processes are streamlined, and teams are empowered to respond swiftly to new challenges. Businesses that can pivot and innovate in response to unforeseen events will be better equipped to thrive in an unpredictable world.

As businesses navigate the future, they must do so with a commitment to ethical and responsible practices. This includes addressing the ethical implications of AI, ensuring data privacy and security, and promoting transparency in business operations. Companies that prioritize ethical considerations and act with integrity will build stronger relationships with stakeholders and contribute to a more just and equitable society.

RIDING THE TRAILS OF TRANSFORMATION
The next decade presents a transformative journey for Philippine businesses. The scenarios above highlight the critical areas where companies must focus their efforts to remain competitive and drive positive change. As the business community navigates the post-pandemic landscape, embraces AI, and redefines the future of work, there is a unique opportunity to create a better, more inclusive, and sustainable future for all Filipinos.

By riding on the trails of transformation, businesses can not only adapt to the challenges of a rapidly changing world but also lead the way in shaping a brighter and more prosperous future. The road ahead may be complex and uncertain, but with the right strategies, investments, and a commitment to continuous improvement, Philippine businesses can turn these challenges into opportunities and achieve lasting success.

 

Dr. Ron F. Jabal, APR, is the CEO of PAGEONE Group (www.pageonegroup.ph) and the founder and president of the Reputation Management Association of the Philippines (www.rmap.org.ph). Please correspond to ron.jabal@pageone.ph or rfjabal@gmail.com

Philippine students are in deep trouble

Students answer test questions at a state high school in Manila. — REUTERS

By Kenneth Christiane L. Basilio, Reporter

THE PHILIPPINE education system is walking on thin ice, with nine of 10 Filipinos unable to read and understand a simple age-appropriate text at age 10, according to the World Bank.

The coronavirus pandemic made that worse as the country endured the longest school closure among 122 countries, along with highly unequal access to the internet and digital learning resources.

The government should address this crisis if the Philippines wants to realize its growth potential. Failure to do so would lead to economic stagnation, according to an education expert.

Reforming the country’s education system is no small task, and the state should look at slowly improving the sector, Elvin Ivan Y. Uy, executive director of the Philippine Business for Social Progress, said in an interview.

“If we are unable to properly capacitate, educate, and develop our human capital, then the Philippines will be caught in a middle-income trap,” he said. “For education, the hope is you are improving every day, every year. You can at least say that this school year is better than the last… it shows that there is progress.”

The Philippines’ human capital indicators are “lackluster” compared with other countries, the World Bank said in a report in June. A Filipino child could only achieve half of their productive potential by the time they reach 18 years, it said.

“The Philippines is currently missing out on almost half of its human capital potential,” the multilateral lender said. “The Philippines has the lowest human capital index, which warns of the constraints to productivity of the next generation of workers given the prevailing rates of mortality, schooling achievements, and health outcomes.”

“The next five to 10 years will define whether we can maximize our demographic dividend window by 2049,” Mr. Uy said.

Filipino students were among the world’s weakest in math, reading, and science, according to the 2022 Program for International Student Assessment. The Philippines ranked 77th out of 81 countries and performed worse than the global average in all categories.

Institutional neglect is largely to blame for the failures of the system, said Justine B. Raagas, executive director of the Philippine Business for Education.

“Despite various reforms and initiatives, the country continues to grapple with issues such as low student performance in international assessments, insufficient resources, overcrowded classrooms and a lack of qualified teachers,” she said in an e-mail.

NEW CURRICULUM
Vice-President and former Education Secretary Sara Duterte-Carpio introduced in August 2023 the so-called Matatag  (stable) curriculum, focusing on subjects that will produce “competent, job-ready, active and responsible citizens,” according to the Department of Education (DepEd).

The curriculum will be implemented in batches, starting with kindergarten, grades 1, 4, and 7 in the school year 2024-2025. It will be fully implemented by 2026-2027.

Pasig Rep. Roman T. Romulo said the curriculum, which seeks to “decongest” competencies and subjects, would improve education quality.

“Under the Matatag curriculum, we will not only limit competencies but also subjects,” Mr. Romulo, also a co-chairperson of the Second Congressional Commission on Education (EDCOM II), said in an interview in mixed English and Filipino.

“We will focus on functional literacy and numeracy, which is what we really need because if you look at it, we score low in reading comprehension and in numeracy,” he added. 

Matatag claims to decongest the old curriculum by 70%, while still ensuring that the heavier weight of the learning areas would be on English, Filipino, Science, Mathematics, and Technical Livelihood Education.

Education authorities should assess the new curriculum to determine if it’s effectively addressing learning losses, Ms. Raagas said.  She added that it should be “adaptable to local contexts,” allowing local school authorities to have a say in what should be included in the syllabus. 

“The curriculum should be adaptable to local contexts, allowing schools and teachers flexibility, while decentralizing decision making to empower local authorities,” she said.

Ms. Raagas said the Education department is too centralized, hindering its ability to quickly enforce policy interventions.

DepEd’s authority should be cascaded to local governments, she added, noting that strengthening local education boards would make community-based learning programs possible.

The Education department is already “functionally decentralized,” Mr. Uy, a former DepEd assistant secretary, said. “When I say functional, responsibilities from what used to be at the national or regional level were already transferred to the field or school level.”

The problem lies with funding sources for regional and local school boards, he said, noting that DepEd failed to decentralize fiscally.  “The funds are still controlled by the National Government,” he added.

DepEd’s proposed budget for 2025 increased by 4.2% to P745.8 billion, while the budget for education as a sector inched up by 0.9% to P977.6 billion, according to a summary from the Budget department. The latter covers the Education department, Commission on Higher Education, Technical Education and Skills Development Authority, and state universities.

Education’s share in the 2025 budget fell to 15.4% from 16.8% this year.

“It’s not just the amount, but the quality of spending [that we have to consider],” Socioeconomic Planning Secretary Arsenio M. Balisacan said in an interview. “If we can improve the quality of spending, even a small amount can do a lot.”

COLLEGE WOES
The college education system also faces issues, including incompetency among graduates and the lack of emphasis on soft skills, Ms. Raagas said.

“One significant issue is the lack of collaboration between industry and academia, resulting in graduates who are not adequately prepared for the workforce,” she said. There’s also a problem with redundant competencies — many skills taught in senior high school are repeated in college, wasting valuable time and resources.”

In a report to the House of Representatives, the Commission on Higher Education (CHED) said three of 10 Filipino college students who were supposed to graduate this year dropped out.

About 37% of students dropped out in 2021-2022. The college dropout rate spiked to 41.03% the following school year before settling at 29.4% in 2024, according to CHED data.

CHED has started enforcing key policies that could improve higher education, chairman Prospero E. de Vera III said in an interview.

He said CHED now requires state universities and colleges to submit a certificate of program compliance, which the agency could review to check if their degree complies with minimum education standards.

Mr. De Vera is also pushing internationalization efforts. “If our universities are willing to benchmark and compare themselves with the top universities in the world and adopt good practices, they will definitely improve what they are doing in teaching and research.”

Internationalization would also let graduates of Philippine schools find jobs overseas, he added.

“If the curriculum for nursing in a Philippine university is the same as the curriculum in universities abroad, then they could find employment [easily],” Mr. De Vera said.

A joint education master plan crafted by the government and business stakeholders would benefit the education sector as a whole, Ms. Raagas said.

“A combined government-business master plan could enhance curriculum relevance, ensure proper resource allocation, and foster public-private partnerships for innovative programs,” she said. “This collaboration would make sure graduates have the necessary skills and knowledge to succeed, boosting the country’s economic development.”

Mr. Uy said a long-term learning master plan would help chart the direction of the country’s educational system.

Having a joint master plan would produce students with the skills needed in the job market, Ms. Raagas said.

“Universities can be informed about the competencies their graduates need so they can change the curriculum to ensure that students are industry- or work-ready upon graduation,” Mr. De Vera said.

“The problem is that if the industry has no input in the curriculum, graduates will need retraining. So we need to adjust the curriculum to meet the needs of the industry.”

Mr. Romulo said he’s pushing for businesses to have more say in technical-vocational (tech-voc) skill training programs. “There needs to be a bigger role because the tech-voc track is about skills training,” he said.

Data integration is the game changer for Philippine healthcare

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By Patricia B. Mirasol, Multimedia Producer

THE application of robotics and artificial intelligence (AI) in clinical operations in the Philippines has already started, but according to healthcare stakeholders, the real game-changer is data integration.

Data integration is the process of combining data from different healthcare sources, including electronic medical records (EMRs) and medical devices.

“We can go on and on with AI applications here, but there is value in having an EMR,” said Einstein C. Rojas, a board member of the Philippine Alliance of Patient Organizations, and an innovation ecosystem consultant for an international company.

“One of the most basic problem-solution fits that data analytics can do is when you go to a hospital,” he said in an Aug. 6 Zoom interview. “The first thing they ask you to do is fill up a form — but this form [asks for] your basic information that you already gave to other hospitals.”

Mr. Rojas noted the usefulness of a nationwide data integration model, wherein “a patient holds his/her data, and then simply allows the [healthcare provider] to access it during checkup, treatments, or emergency cases.”

The worldwide health records market size was estimated at $32.23 billion in 2023 and is anticipated to grow at a compound annual growth rate of 4.43% from 2024 to 2030, according to Grand View Research.

Government initiatives to encourage healthcare IT usage is a key driver to this market, the market research and consulting company said.

In Asia-Pacific, Singapore and Australia have already enacted nationwide EMR systems that provide healthcare providers access to patients’ medical records.

Singapore’s National Electronic Health Record (NEHR) system, in particular, is an enabler for the island-state’s vision of “One Patient, One Health Record.”

Accenture, a global professional services company, worked with MOH Holdings, the holding company of Singapore’s public healthcare assets, to create the NEHR system using a common application architecture, common data standards, and privacy and security guidelines.

Clinicians have a holistic picture of each patient’s history, as the system provides a summary care record for each patient including problem lists, medications, discharge and event summaries, allergies, immunizations, investigations, and procedures.

Hospitals in the Philippines, including the University of the Philippines-Philippine General Hospital (UP-PGH), are likewise embarking on their own journeys in healthcare innovations. In the works is a more efficient EMR system.

Based on a 2019 study by the Philippine Health Research Registry, the average pre-consultation time of new patients in the UP-PGH’s outpatient department is over an hour, or 72.84±43.39 minutes. The average total service time, meanwhile, is 8.70±6.99 minutes.

“We have a very different patient experience here. We go visit a doctor and have a 5- to 10-minute checkup that you waited two hours for,” Mr. Rojas told BusinessWorld.

Mr. Rojas, whose wife is currently pregnant, says an average checkup with an obstetrician-gynecologist at a tertiary hospital entail “arriving at 8 a.m. for a 9 a.m. clinic, getting listed at around 15th most of the time, [then] waiting two hours at the minimum.”

“Imagine an EMR with an appointment setting, where you have a period to go to a consultation, so you don’t have to wait,” he said. “It saves time, it saves stress, it definitely saves costs from the hospital and doctor.”

There are various factors that eat up a doctor’s time, Dr. Gerardo D. Legaspi, the PGH medical director, said.

Nearly half (49%) of their resident doctors’ time is spent inputting health information, Mr. Legaspi said in a July 23 interview.

“We are partnering with AIM [the Asian Institute of Management] to develop a local speech-to-text program…, so that the actual interview can proceed without the resident typing, and then you retrieve it and actually have a summary afterwards,” he said. “That’s the kind of AI we want to use for patient care.

PERSONALIZED HEALTH PLANS THROUGH DATA
Even primary care providers recognize technology’s role in the implementation of healthcare in the country.

Centralizing data is crucial when assessing patients, according to Karl Aaron G. Dimaano, general manager and chief operating officer of HealthFirst, multispecialty outpatient clinic and Unilab subsidiary.

Data has been consolidated in its four-storey Williams Building, he said during the facility’s June 7 launch. A patient who consults across different outpatient services will have a single record instead of multiple.

Utilizing technology in data collection has helped “facilitate the collection of real-time health data, enabling more accurate monitoring and management of patient conditions,” HealthFirst medical director Dr. Robert T. Castro said.

It has allowed organizations to gain insights into disease patterns and health trends, he said.

Chronic disease programs can likewise be tailored through health metrics profiling, Mr. Castro added in an Aug. 8 e-mail.

“By analyzing data such as blood pressure, glucose levels, BMI [body mass index, which is used to estimate one’s body fat], and lifestyle factors, we create personalized health plans that address the specific needs of each employee,” Mr. Castro said.

“This approach enhances overall workforce health, reduces absenteeism, and boosts productivity.”

CENTRALIZED DATABASE
The Medical City (TMC) has been investing in infrastructure in order to implement its technology-related solutions, according to group chief information officer Jojo C. Dionaldo.

He shared that the network’s initiatives include a superapp with features such as a doctor’s consult queueing system as well as access to each patient’s digital twin.

This is in line with TMC’s focus on preventative healthcare, Mr. Dionaldo said in a July 26 Zoom interview.

“With a digital twin,” he said, “we can map [your body] and tell you that, in five or ten years, if your habits and your [diagnostic] findings do not change, then you will have this kind of sickness.”

TMC, with six hospitals and 64 clinics in its network, is working to create a centralized database to “unify and harmonize all our EMRs” by the end of 2025, Mr. Dionaldo told BusinessWorld.

“The moment we make that successfully implemented across our hospitals and clinics, we will have been able to achieve an EMR which has never been implemented in the Philippines — and in Southeast Asia — in that scale,” he said.

“The government or the Department of Health [DoH] can use this as a benchmark or a reference,” he added.

The global adoption of ESG for inclusive and sustainable growth

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Initially driven by ethical considerations, Environmental, Social, and Governance (ESG) has evolved into a core component of corporate strategy, risk management, and long-term value creation.

Companies are increasingly recognizing the significance of sustainability in their operations. In fact, the latest “KPMG Global ESG Due Diligence” report revealed that ESG has become a top priority over the past 12 to 18 months, a trend expected to continue.

Similarly, the “2024 Sustainability Organization Survey” by KPMG mentioned the growing commitment of organizations to ESG, with 90% of organizations planning to increase their ESG investments over the next three years.

The report also stated that 43% of these companies recognize the need for specialized roles focused on sustainability to ensure that ESG considerations are integrated into decision-making processes across the organization.

The demand for advanced software solutions tailored to ESG management is also increasing, with 40% of companies using ESG-specific software to improve data collection, analysis, and reporting. Meanwhile, 38% are investing in employee training programs to equip their workforce with the knowledge and skills necessary to support ESG initiatives and foster a culture of sustainability within their organizations.

According to the “2023 ESG Global Study” conducted by Capital Group, global adoption of ESG investment has reached a new high, with 90% of investors identifying as adopters, up from 89% in 2022 and 84% in 2021.

However, while the overall adoption rate is rising, the proportion of “conviction investors,” those who consider ESG central to their investment strategies, remains at 26%. The study also notes that 57% of investors believe incorporating ESG analysis can uncover attractive investment opportunities, and 45% think it is likely to improve long-term investment results.

Meanwhile, nearly three-quarters of ESG adopters prefer active investment strategies, allowing for better engagement and a more comprehensive view of company ESG profiles.

Disconnection between perception and preparedness

Despite increasing investment in ESG, a significant disconnect remains between organizations’ perception of their ESG readiness and their actual preparedness. The KPMG ESG Assurance Maturity Index shows that while 83% of organizations believe they are ahead of their peers in ESG reporting, nearly half still rely on spreadsheets for managing ESG data — a method lacking the robustness and scalability needed for comprehensive ESG management.

The reliance on outdated tools, according to the report, highlighted the gap in data management capabilities. As the complexity and volume of ESG data grow, so does the need for more sophisticated data management systems that can integrate sustainability goals with broader business objectives.

Furthermore, the maturity levels of companies in ESG also remain low. In fact, 75% of respondents are still in the early stages of ESG maturity, making them less prepared for ESG assurance. The lack of readiness is evident with only 25% of companies feeling confident in their ESG policies, skills, and systems to achieve assurance.

Investors also often struggle with defining a meaningful and actionable scope, obtaining high-quality data from target companies, and quantifying potential ESG findings. The KPMG report, however, noted that solutions are beginning to emerge.

For instance, there is now greater clarity on which ESG topics should be included, with a shift to focusing on value. Moreover, there is an increasing opportunity for sellers and sell-side advisors to add value through higher-quality ESG vendor documentation.

The latest “KPMG Global ESG Due Diligence Study” said that budgets remain low for ESG due diligence compared to other workstreams, such as financial, commercial or legal. This limits ESG specialists’ ability to perform in-depth analysis across the many complex environmental, social and governance topics that investors seek.

Another KMPG report mentioned that 44% of companies cite high initial costs as a major barrier to ESG. Many firms struggle to allocate adequate budgets for developing robust ESG frameworks, which hampers their progress.

Interestingly, beginners in ESG are facing between four to five main challenges, while more mature companies encounter slightly fewer with around three to four.

The rapid investment in ESG

ESG integration is becoming prominent across various industries as environmental concerns, social justice issues, and governance standards grow increasingly important to stakeholders.

According to a 2023 research by McKinsey & Company, companies that actively pursue ESG goals alongside traditional growth and profitability metrics tend to generate better returns for their shareholders. The study analyzed performance data from the world’s 10,000 largest companies between 2016 and 2022, and discovered that companies excelling in both ESG and financial performance, also known as “triple outperformers,” achieve an annual excess Total Shareholder Return (TSR) that is two percentage points higher than their peers who focus only on financial metrics.

This finding is particularly significant given the challenges of the past five years, which include the COVID-19 pandemic, high inflation, geopolitical tensions, increasing climate events, and the emergence of generative AI. Despite these challenges, companies with a strong focus on ESG were more likely to achieve or exceed the 10% annual revenue growth benchmark. In fact, more than half of the triple outperformers studied were able to accomplish this feat.

The research also indicates that the benefits of ESG-focused strategies are not limited to large and established corporations. Companies of various sizes and sectors can leverage ESG to enhance their growth prospects and resilience in the face of global challenges.

Leading investors are also using ESG to identify risks and unlock financial value. According to KPMG, they are incorporating ESG considerations into their investment theses, ensuring that ESG risks and opportunities are thoroughly understood and managed.

The focus on ESG is particularly evident in areas like decarbonization, recycling and circularity, and supply chain management. With improved ESG, investors can drive revenue growth, reduce costs, and mitigate risks to further enhance the overall value of their investments.

On the other hand, increasing regulatory requirements and pressure from customers and investors are compelling companies to adopt ESG frameworks. According to software-led risk management solutions provider Alcumus, 55% of companies cited regulation as a key reason for integrating ESG practices, while 54% pointed to pressure from investors and customers.

The same report also mentioned that about 60% of companies said that gaining an improved image is a significant benefit of ESG adoption, highlighting the reputational advantages associated with sustainable practices.

George Richards, Partner and Head of ESG Reporting and Assurance of KPMG in the UK, noted that forward-thinking companies are leading the charge by integrating ESG principles into their core operations to create significant value for their organizations.

“One of the potential benefits [of ESG is] that it allows the company to show how they will operate not only profitably in the long term, but also sustainably, in a much more credible way,” he said. — Mhicole A. Moral

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