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Fulfillment services seen empowering MSMEs in the age of e-commerce

By Miguel Hanz L. Antivola, Reporter

A COMPLETE network of partners and tools is a growing necessity for micro-, small- and medium-sized enterprises (MSMEs) to leverage the steady rise of e-commerce, according to entrepreneur Jacqueline Y. Chua.

Just when the pandemic hit, Ms. Chua, along with her colleague, saw an opportunity. Drawing from their experience in setting up e-commerce ventures for a conglomerate, they embarked on a new venture dedicated to serving MSMEs.

Ms. Chua, as the co-founder and chief executive officer of We Empower Ecommerce Solutions, Inc. (FullFill), took the initiative to convert her business partner’s facility into their startup’s headquarters.

With just a single year in full operation, FullFill grew to become a one-stop e-commerce support hub with micro-warehouses, co-working spaces, photo studios, and other services, Ms. Chua said.

“We are a startup, small business owners as well, so we understand the challenges faced by each MSME,” she said. “We wanted to create an end-to-end solution for them.”

“Our main advocacy is to help as many MSMEs as possible like us so they will have an easier time scaling and finding partners to grow their businesses,” she added.

The Philippine e-commerce market reached P500.9 billion in revenues with a growth rate of 31.3% last year, according to GlobalData analytics.

It is expected to grow by 22.9% to reach P615.7 billion this year, it added.

While Ms. Chua recognized the high growth trajectory of the e-commerce industry, she noted that online-native MSMEs eventually integrate into brick-and-mortar businesses after gaining critical mass. This integration also prompted FullFill to expand its services.

“For things that we cannot do ourselves, we work with collaborator partners,” she said on partnering with other businesses and service providers for MSMEs.

“FullFill was originally intended for e-commerce players,” she said. “But over the course of the past year that we’ve been operating, we have actually expanded to include B2B or business-to-business channel fulfillment services as well.”

Ms. Chua also noted that most MSMEs born in the e-commerce space, typically pandemic-born partnerships, struggle with manpower and finding a trusted service provider that suits their needs.

“If I am the owner myself. I do not have time to run the actual operations, picking and packing orders, or creating social media content,” she said.

“It’s very important for you to have a partner or outsource these services to those who are experts in that particular field,” she said on FullFill’s collaborator partners for other resources.

“In terms of output, content, and the efficiency of fulfillment, your KPIs [key performance indicators] will all be better instead of you doing all the work by yourself,” she added.

“What we strive to do is create an ecosystem where these MSMEs would know who to talk to.”

EXPANSION
While FullFill is still in its first year of operations, Ms. Chua said it is focused on ensuring its business concept is acceptable to the 40 clients it is serving.

“Once we actually tick that box, we will move on to expanding to about 10 more locations in five years,” she said.

Currently headquartered in Pasig, Ms. Chua noted the company’s convenient and strategic location in the metropolitan area.

“We are very near C5 and near Makati, Bonifacio Global City, and Quezon City,” she said. “In general, if you look at the radius, we are a maximum of 20 kilometers away from every location within Metro Manila.”

“But the intent is really to expand outside the metro already,” she added on the company’s plans to build hubs in provincial metropolitan areas such as Davao and Cebu.

Ms. Chua noted that some of FullFill’s clients are based in the provinces and are eyeing expansion in Metro Manila.

“They don’t have the bandwidth to create another team here because it’s not efficient anymore,” she said. “So they actually outsource the fulfillment and even the content creation to us already. We’re like their business partner in Manila.”

“It’s really the maturity of the MSMEs right now,” she said on the main industry driver. “At this point, it is very important that we listen to them as their business partners.”

AgriNurture profits decline to P9.56M

LISTED AgriNurture, Inc. on Tuesday reported that its attributable net income fell to P9.56 million in the third quarter from P30.65 million a year ago.

In a regulatory filing, the company said its revenues dropped by 11.6% to P761.23 million from P860.92 million in the same period last year.

Retail and franchising sales for the period went up by P54.95 million from P36.99 million last year after the opening of new company-owned and franchise stores during the quarter.

Cost of sales fell to P669.6 million, an 11.5% decline from the P756.97 million reported the prior year.

The company reported that its attributable net income for the nine months ending September decreased by 82.6% to P15.4 million from P88.4 million a year earlier.

It attributed the decrease to a decline in export revenues to China and the United States, an increase in wages, rising logistics costs, and the non-recognition of change in the fair value of its biological assets during the period.

The company’s revenues, likewise, declined by 6% for the nine-month period to P2.65 billion from P2.82 billion last year.

It added that Philippine operations contributed 42% of the company’s total sales, while 58% were from foreign operations.

The company reported a decrease in the export of bananas and various fresh and processed goods to P72.11 million, 32% lower than the prior year.

This was due to a slowing of demand in the Chinese market and “increasing competition from other Southeast Asian suppliers.”

Local sales went up by 59% to P332.85 million from P208.97 million last year, driven by an increase in outlets opened, higher pricing, and stronger demand for rice and fresh produce.

The company’s cost of sales declined by 4.5% to P2.33 billion from P2.44 billion in the same period last year due to a drop in purchase costs.

On Tuesday, AgriNurture shares went up by 0.49% or one centavo to close at P2.06 apiece. — Adrian H. Halili

Rediscount facility untapped in Oct.

BW FILE PHOTO

BANKS continued to leave the rediscount facility of the Bangko Sentral ng Pilipinas (BSP) untouched in October amid ample liquidity in the financial system.

Banks likewise did not tap the Exporters’ Dollar and Yen Rediscount Facility (EDYRF) in the previous month, the central bank said on Tuesday.

The peso rediscount window last saw availments in April, June and October last year, with cumulative loans hitting P15.3 billion. Meanwhile, the last time the EDYRF was tapped was for a dollar rediscounting loan in 2016.

The BSP’s rediscount facility gives banks access to additional liquidity by letting them post collectibles from clients as collateral.

Lenders can use the cash, which could be in peso, dollar, or yen, to lend more to corporate or retail clients and service unexpected withdrawals.

Banks did not borrow from the rediscounting facilities in October due to excess liquidity in the financial system, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Banks have more than enough capital buffers that could be used for additional lending activities,” he said, adding that improved profitability allowed them to lend more.

“Some banks have also raised additional capital from investors that may be used for additional lending and investments activities. Banks also have other alternatives to raise funding such as through the equity and bonds market, interbank market, increased deposits,” Mr. Ricafort said.

Money supply or M3 — which is considered as the broadest measure of liquidity in an economy — rose by 6.8% to P16.5 trillion in August, preliminary data from the central bank showed.

This was faster than the 5.7% growth in July.

Meanwhile, loans disbursed by big banks went up by 7.2% to P11.07 trillion as of end-August from P10.33 trillion seen in the same period last year.

This was slower than the 7.7% increase recorded in July.

NOVEMBER RATES
For this month, the applicable rate for peso rediscount loans will be at 7.733% for those maturing in 90 days and at 7.966% for those falling due in 91-180 days.

Meanwhile, dollar borrowings will be priced at 7.8888% (1-90 days), 7.9559% (91-180 days), and 7.9559% (181-360 days).

Yen-dominated borrowings will be priced at 2.088% (1-90 days), 2.121% (91-180 days), and 2.20693% (181-360 days). — K.B. Ta-asan

Headline inflation rates in the Philippines

ANNUAL INFLATION sharply slowed in October after two straight months of acceleration, reflecting easing prices of key food items, the Philippine Statistics Authority (PSA) said on Tuesday. Read the full story.

Headline inflation rates in the Philippines

The imperatives of green finance

STOCK PHOTO | Image from Freepik

Green financing has become a potent instrument for funding projects that are both commercially and environmentally sustainable in an era marked by rising environmental consciousness and vigilance. The Philippines is slowly embracing green finance as businesses are realizing the importance of incorporating environmental sustainability in business plans.

Green financing gives priority to investments and projects that are ecologically responsible. Its significance is immeasurable because it tackles several urgent global issues, including:

Climate Change Mitigation: Green finance plays a critical role in preventing climate change by directing funds toward initiatives that lower greenhouse gas emissions and foster climate resilience.

Biodiversity conservation: It backs programs that maintain biodiversity and ecosystems, which in turn protects the planet’s priceless natural resources.

Resource Efficiency: Green finance encourages the wise use of resources, which lowers waste and encourages responsible patterns of production and consumption.

Sustainable development promotes economic expansion while making sure that it is fair, eco-friendly, and inclusive of all social groups.

In fact, green financing’s ability to promote environmental responsibility is one of its main benefits. Considering the global struggles posed by climate change and environmental degradation, businesses that use green financing show that they are dedicated to lowering their carbon footprints and minimizing their adverse effects on the environment. This proactive approach not only helps the environment, but also improves a business’ standing as a socially conscious organization.

In the long run, green finance can result in significant cost savings. Businesses can lower their operational expenses, including energy use, trash disposal, and water use, by investing in sustainable practices, renewable energy sources, and energy-efficient equipment. These cost-cutting strategies may provide one with a competitive advantage in the market and larger profit margins.

Access to a wide variety of financial sources designated especially for environmentally friendly projects is also made possible via green financing. These sources include government grants, institutional investor loans and equity investments, green-focused funds, and green bonds. These grants can give companies the money they need to start or grow their sustainable projects.

Businesses that use green finance are better positioned to comply with environmental restrictions that are being enacted by governments throughout the world. Companies can reduce the risk of non-compliance and possible legal penalties by funding projects that comply with environmental standards.

Adopting green financing also provides a business edge. Surveys have shown that customers prefer to support environmentally conscious enterprises, and investors have become more interested about the environmental policies of the firms they invest in. Businesses can reach a wider range of consumers and investors by embracing environmental stewardship.

Several Philippine conglomerates have embraced green financing in supporting several big-ticket initiatives. One of the biggest and oldest corporations in the Philippines, Ayala Corp., is noteworthy for having pioneered green finance. The diversified firm has regularly used green funding to support its initiatives in infrastructure, energy, and real estate.

The real estate division of Ayala Corp., Ayala Land, for example, raised P8 billion (about $160 million) by issuing its first green bond just prior to the outbreak of the global health pandemic. The money raised was set aside for environmentally friendly and sustainable projects, such as the creation of sustainable townships and the integration of energy-saving infrastructure into their various development projects.

AC Energy, another subsidiary of Ayala Corp., is also an early adopter of green financing. The energy firm has been actively involved in the renewable energy industry, adding more wind and solar projects to its portfolio. To finance these renewable energy projects, AC Energy used green financing through joint ventures with domestic and foreign institutions to issue green bonds. The company’s dedication to sustainability has helped the Philippines switch to cleaner energy while also drawing in green investors.

First Gen Corp., a major player in the renewable energy sector in the Philippines, has also drawn green finance to support its renewable energy initiatives. The business is significantly advancing the nation’s use of sustainable energy.

Green financing, however, provides some unique and inherent difficulties. For example, green bonds have more stringent requirements and can only be applied to projects that adhere to specific environmental standards. This restriction might limit the kinds of projects that an organization can use green money for.

While green financing can result in long-term cost benefits, it is also an accepted truism that adopting environmentally friendly practices and technologies can come with a hefty upfront cost. For one, it is necessary to invest a large amount of money up front to implement sustainable supply chain procedures, energy-efficient infrastructure, or renewable energy solutions. To optimize the advantages of these costs, businesses need to carefully plan and budget for them.

Since the green finance industry is still in its infancy, it is susceptible to shifts in legislation, investor tastes, and market dynamics. Businesses that venture into green financing may encounter uncertainties about the availability of green money, the market for green products, and how green financing instruments will change over time. Additionally, to stay in line with green financing regulations, businesses must continuously track their progress and report on the environmental effect of their projects. This can take a lot of time and might call for additional resources for reporting and verification related to sustainability.

Businesses that use green finance also run the risk of being accused of greenwashing, which is the practice of deceiving investors and customers by portraying a business or its products as being more ecologically friendly than they are. Therefore, businesses that use green finance must be careful in implementing projects funded by green financing as this could potentially harm their brand and they may encounter some legal repercussions if environmental claims are proven to be wrong or made in deceit.

Indeed, businesses that value environmental sustainability can benefit from green financing in several ways, including cost savings, competitive advantage, environmental responsibility, and access to capital, but companies that embrace this finding mode just need to be cognizant of potential pitfalls.

Green finance has shown to be an effective tool for Philippine businesses like Ayala Land, AC Energy, and First Gen Corp. in funding their environmentally friendly projects, which range from renewable energy projects to sustainable real estate developments. The initiatives of these businesses can be used as insightful case studies by others who wish to adopt green financing to pursue profitable and environmentally responsible business operations.

As can be observed, green finance is going to be more and more important in determining how businesses and environmental responsibilities are shaped in the future as we continue to transition toward sustainability.

Studies have shown that green finance is, indeed, a very potent instrument that has the potential to create a sustainable future as it addresses the interrelated issues of resource depletion, biodiversity loss, and climate change by balancing economic expansion with environmental stewardship. Green finance can provide an avenue towards a future where environmental integrity and economic success coexist by reducing environmental risks, promoting business sustainability, attracting money to ecologically responsible projects, and exhibiting global leadership.

When countries and organizations continue to place a high priority on green finance, they can continue to improve both the planet’s overall health and their own. Making the shift to green finance is a crucial step toward creating a sustainable world and emphasizes the crucial role that finance will play in determining the course of our planet’s future.

 

Ron F. Jabal, APR, is the chairman and CEO of PAGEONE Group (www.pageonegroup.ph) and founder of Advocacy Partners Asia (www.advocacy.ph).

ron.jabal@pageone.ph rfjabal@gmail.com

South Korea police question K-Pop star over alleged drug use

G-DRAGON — EN.WIKIPEDIA.ORG

INCHEON, South Korea — The former front man for the K-pop band BIGBANG, known as G-Dragon, appeared at a police station for questioning on Monday over allegations of illegal drug use, the latest in a string of South Korean artists embroiled in high-profile narcotics cases.

The investigation against the singer and rapper, whose given name is Kwon Ji-yong, comes amid an ongoing crackdown on illegal drugs by the government of conservative President Yoon Suk Yeol.

After the allegations surfaced in late October, shares of some K-pop agencies fell, including Mr. Kwon’s former agent YG Entertainment, though they have since rebounded.

Leaving the police station after four hours of questioning, Mr. Kwon, 35, denied the allegations and said a drug test taken during questioning came back negative. He said he was cooperating with the police investigation.

As he arrived for questioning earlier, Mr. Kwon, who was dressed in a dark suit, said: “There is no truth to (the accusation of) illegal drug-related crime.”

The police station in Incheon was the same location where the star of the Oscar-winning film Parasite, Lee Sun-kyun, was separately also questioned over the weekend over an allegation of illegal drug use.

Mr. Lee declined to comment as he left the police station on Saturday, only saying he had answered all the questions asked by police to the best of his knowledge.

A series of arrests on drug charges in recent months, including of chaebol heirs and celebrities, has prompted authorities to tighten a crackdown on narcotics and customs inspections.

South Korea has tough drug laws, and crimes are typically punishable by at least six months in prison or up to 14 years for repeat offenders and dealers.

Social media and foreign travel have made illegal drugs more accessible, drug rehab advocates say.

Mr. Kwon is not the first member of BIGBANG to face criminal charges.

In 2017, T.O.P., whose legal name is Choi Seung-hyun, received a suspended 10-month jail sentence for marijuana use, after he pleaded guilty and sought leniency to avoid a prison term.

Mr. Seungri, whose real name is Lee Seung-hyun, was convicted in 2021 of collusion in a tax evasion, bribery, and prostitution scheme and served an 18-month prison sentence.

BIGBANG dominated the K-pop scene after their debut in 2006. Mr. Kwon and four other former and current members have pursued solo careers. — Reuters

Maynilad to offer discount to marginalized customers

LOW-INCOME customers served by Maynilad Water Services, Inc. may expect lower water bills next year as the company is set to implement a program that will allow them to apply for a bigger discount.

In a media release on Tuesday, Metro Manila’s west zone concessionaire said it would implement the Enhanced Lifeline Program (ELP) starting Jan. 1, 2024, which will give an opportunity to low-income and low-consuming residential consumers to apply for more discounts on their water bills.

Maynilad said the move came after it was urged by the Metropolitan Waterworks and Sewerage System’s Regulatory Office to extend a discount not only to its low-consuming customers but also to its marginalized customers.

Regular lifeline customers, or those whose monthly consumption does not exceed 10 cubic meters, already enjoy a 41% discount on the basic charge.

“But under the ELP, those ‘Regular Lifeline’ customers who are also marginalized [or] beneficiaries of the Pantawid Pamilyang Pilipino Program (4Ps) Act, or customers living below the poverty line, as determined by the Department of Social Welfare and Development (DSWD) — can apply and qualify for a higher discount on their water bills,” the company said.

The company said that applications for the low-income lifeline rate will start on Nov. 14. Qualified customers can apply by submitting a completed application form, their latest water bill, and a photocopy of their 4Ps identification to any Maynilad business area office or Barangay helpdesk.

For non-4Ps beneficiaries, a local Social Welfare and Development Office certification and photocopy of one government identification card are required.

Maynilad said that it has over 320,000 regular lifeline customers and expects around 60,000 low-income lifeline customers to apply for the higher discount under the ELP.

Maynilad serves Manila, except portions of San Andres and Sta. Ana. It also operates in Quezon City, Makati, Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, and Malabon.

It also supplies the cities of Cavite, Bacoor, and Imus, and the towns of Kawit, Noveleta, and Rosario, all in Cavite province.

Metro Pacific Investments Corp., which has a majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc.

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

FedEx Express says expedited Vietnam-PHL flight service to benefit local businesses

EXPRESS transportation company FedEx Express, a subsidiary of FedEx Corp., has introduced a new flight service connecting Vietnam to the Philippines, aiming to expedite shipment transit and support e-commerce growth.

It will now take one business day for Southern Vietnam exports to reach the Philippines and major Asian markets, the company said in an e-mailed statement to reporters on Monday.

“Local businesses serving international customers may gain a competitive advantage with expedited delivery times,” said Maribeth Espinosa, managing director at FedEx Express Philippines.

“The improved transit time from Vietnam to the Philippines will support the growth in trade volumes between both markets,” she said.

“Combined with the projected revenue growth of e-commerce in Southeast Asia, the role of logistics in enabling intra-Asia trade becomes even more pronounced,” she added on enabling access to more import and export opportunities.

FedEx Express noted that deliveries taking too long were the number one consumer pain point for small- and medium-sized enterprises (SMEs), followed by handling returns, according to a study it commissioned last year.

It said consumers typically expected delivery within three days to one week. “There is a desire for delivery to be at least more reliable if not faster.”

However, it also noted how SMEs in India, Malaysia, Philippines, and Vietnam were among the most optimistic about their future e-commerce growth in the next three years.

Trade between the Philippines and Vietnam increased by 14.7% last year, reaching $7.8 billion in revenues, the Philippine News Agency said in July.

“We anticipate increased investments within the world’s largest free trade area, stimulating economic growth in Southeast Asia,” Ms. Espinosa said on the new FedEx service alongside the Regional Comprehensive Economic Partnership (RCEP).

The Senate ratified the RCEP in June, which is billed as the world’s biggest free trade agreement (FTA). This involves a third of the global economy as the participating countries include the members of ASEAN, Australia, China, Japan, New Zealand, and South Korea.

RCEP-participating countries are expected to have increased trade among participants as the FTA allows a liberal, facilitative, and competitive investment environment, especially in terms of quantity, tariffs, and import taxes.

“The new flight will use a dedicated B767 freighter flying four evenings a week from Ho Chi Minh connecting Asia and Europe through the FedEx Asia Pacific Hub in Guangzhou, China,” FedEx Express noted.

The company now offers nine weekly flights departing from Vietnam to Asia, Europe, and the United States. — Miguel Hanz L. Antivola

Cargill to invest $2.6M in farm projects

REUTERS

CARGILL PHILIPPINES, Inc. said that it is planning to invest about $2.6 million in projects aimed at supporting farmers and the agriculture sectors.

“Cargill envisions a future marked by shared success with Filipino farmers, as well as our employees, customers, industry and government partners,” Cargill Philippines President Sonny Q. Catacutan said in a statement.

“By coming together, we can scale our impact in transforming the local agriculture sector and helping build vibrant and resilient communities that thrive,” Mr. Catacutan added.

The company said that it is planning to rehabilitate the Tigiro River in Batangas located along a company plant.

“This investment will launch the Adopt-a-River for Tigiro River project where Cargill aims to rehabilitate the river that runs beside their processing plant in Batangas,” the company said.

It added that a part of the investment will be allocated towards local corn and coconut producers through “training on sustainable agricultural practices, improved productivity and market access, and increased income.”

The projects include the Agri-Sagana project aimed at creating value for 7,000 corn producers and 10 cooperatives in Isabela and Cagayan.

It added that the investment would also go to the training of 300 to 400 coconut farmers in Bohol.

“We believe in supporting local communities to pave the way for a more inclusive and resilient food system and sustainable future for Filipinos,” he said.

Meanwhile, the company said that in its goal to reduce carbon emissions, it will plant about 7,500 trees across locations where it operates to capture at least 25,000 tons of carbon.

“This initiative reflects the company’s commitment to sustainability and will be done along with its community partners from Asia Society for Social Improvement and Sustainable Transformation,” it added. — Adrian H. Halili

China Bank sees net income rise by 10% at end-Sept.

BW FILE PHOTO

CHINA BANKING Corp.’s (China Bank) net income climbed by 10% in the first nine months amid continued growth in its core businesses and as it earmarked lower loan loss provisions.

The Sy-led bank booked a net profit of P16.2 billion at end-September, it said in a disclosure to the local bourse on Tuesday.

This translated to a return on equity of 15.6% and a return on assets of 1.6%.

For the third quarter alone, the bank’s net earnings climbed by 16% year on year to P5.4 billion.

The bank’s financial statement was unavailable as of press time.

“China Bank’s sustained growth reflects the successful execution of our business strategies. Despite the current high interest rate environment, we continue to grow our bottom line by preserving our margins, managing our overall costs effectively, and bringing greater efficiencies to our operations with technology,” China Bank President and Chief Executive Officer Romeo D. Uyan, Jr. said.

China Bank’s net interest income grew by 16% to P39.2 billion in the first nine months even as interest expenses nearly tripled as revenues surged by 44%.

Its net interest margin stood at 4.2%.

“Operating expenses increased by 14% to P20.5 billion, driven by higher manpower and inflation-related expenses and bigger volume and revenue-related taxes,” China Bank said.

Cost-to-income ratio was at 50%.

Gross loans grew by 10% year on year to P765 billion as consumer loans increased by 19% as teachers’ loans and credit cards rose, the bank said.

Its nonperforming loan (NPL) ratio was at 2.2%, with NPL cover at 126%.

China Bank set aside lower loan loss provisions at end-September at P1.3 billion.

On the funding side, total deposits increased by 14% to P1.1 trillion with a current and savings account or CASA ratio of 49%.

China Bank’s assets grew by 11% year on year to P1.4 trillion at end-September.

Total capital increased by 7% to P141 billion.

The bank’s common equity Tier 1 ratio was at 14.9% while its capital adequacy ratio stood at 15.8%, above the central bank’s minimum requirements.

“Our balance sheet remains strong. A quality loan book has helped us during a period of rising interest rates. We also continued to optimize our capital structure, maintaining strong capital generation and asset quality,” China Bank Chief Financial Officer Patrick D. Cheng said.

The bank’s closed unchanged at P30.40 apiece on Tuesday. — AMCS

Philippine Merchandise Trade Performance (September 2023)

THE COUNTRY’S trade-in-goods deficit in September narrowed to its lowest level in nearly a year after a decline in exports and imports, preliminary data from the Philippine Statistics Authority showed. Read the full story.

Philippine Merchandise Trade Performance (September 2023)

Flexible work arrangements after COVID-19

FREEPIK

The end of the COVID-19 global pandemic is beginning a transformative era for the global workforce. For years, the pandemic reshaped the way we work, accelerating trends in remote and flexible work arrangements, and emphasizing the importance of employee well-being. As vaccination campaigns have proven to be successful in curbing the virus’ spread, the workforce is now going through a crucial transition, especially during this time where we can finally say that COVID-19 is in our rear-view mirror.

The question should then be asked as to whether or not employers can retain the flexible and alternative work arrangements that have been shown to cause employers and employees to re-evaluate their approaches to work, reinvent their office cultures, and harness the lessons learned during the pandemic in creating a more dynamic work environment.

On July 21, the President of the Philippines issued Presidential Proclamation No. 297 effectively lifting the State of Public Health Emergency throughout the country brought about by the pandemic.

Subsequently, on Sept. 20, the Department of Labor and Employment (DoLE) issued Labor Advisory No. 23, Series of 2023 (LA 23-23), also known as the Guidelines on Minimum Public Health Standards in Workplaces Relative to the Lifting of the State of Public Health Emergency. LA 23-23 covers all those in the private sector and emphasizes the shared responsibility of both employers and employees in ensuring safe and healthy working conditions. The Advisory further mandates the Safety and Health Committee to review, evaluate, and update their occupational safety and health programs.

Moreover, while the Advisory specifically prohibits any form of discrimination in terms of tenure, promotion, training, pay, and other benefits, towards employees who refuse or fail to get vaccinated, employers are nonetheless obligated to promote vaccination among their employees as well as the employees of their contractors, and their families. It also provides for the availability of workplace sanitation and hygiene facilities for employees.

Significantly, the Advisory expressly revoked issued labor advisories that were effective during the State of Public Health Emergency, which include, Labor Advisory 9, Series of 2020 (LA 9-20), and Labor Advisory 17, Series of 2020 (LA 17-20).

These pertained to the guidelines on the implementation of flexible work arrangements and employment preservation upon the resumption of business operations. This made it possible for employers to formulate alternative schedules other than the traditional or standard work hours, days, and weeks, provided in the Labor Code of the Philippines, as amended.

Notably, during the pandemic, the said advisories were used by various employers as the basis for adopting flexible or alternative work arrangements as they relaxed and/or suspended, certain requirements (i.e., consent of the affected employees), due to the urgency of the situation.

Specifically, as an alternative to the termination of employment of its employees or closure of its business during the pandemic, LA 17-20 allowed employers to enter into schemes such as: a.) the transfer of employees to another branch; b.) the assigning employees to other functions and/or positions; c.) reducing work hours and days; d.) weekly job rotations; e.) partial closure of establishments; and, f.) other feasible work arrangements depending on the specific peculiarities of business requirements.

However, the said arrangements were mandated to be temporary in nature, and to be adopted only during the existence of a Public Health Crisis.

Thus, in light of the lifting of the State of Public Health Emergency and the subsequent issuance of LA 23-23, has the authority of employers to enter into flexible and/or alternative work arrangements with their employees been revoked? Otherwise stated, would it still be possible for employers to enter into similar arrangements?

Fortunately, while LA 9-20 and LA 17-20 have been expressly withdrawn, moving forward, employers may still be guided by the permissible arrangements under Labor Advisory No. 2, Series of 2009 (LA 2-09) and Labor Advisory No. 4, Series of 2010 (LA 4-10).

The said labor advisories allow the following flexible work arrangements: a.) compressed workweek schemes; b.) reduction of workdays; c.) rotation of workers; d.) forced leaves; e.) broken-time schedule; f.) flexi-holidays schedule; g.) gliding or flexi-time schedule; and, h.) other arrangements voluntarily agreed upon by the parties.

It is important to note, however, that since the Public Health Crisis no longer exists, strict compliance is now expected from employers who intend to adopt these arrangements. As such, it is now imperative for employers to get the consent of the affected employees, ensure that the arrangement will not result in a diminution of their existing benefits, and notify the DoLE prior to the implementation of the same.

This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

 

Nicanor P. Geraldez is an associate of the Labor and Employment department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

npgeraldez@accralaw.com

(632) 8830 8000

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