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Changing the way we drive

TIM-FOSTER-TW-UNSPLASH

I have been writing about the electric vehicle (EV) industry for some time now, tackling various issues and concerns regarding the Philippines’ phased transition to EV from gas- and diesel-powered motor vehicles. But truth be told, I have not actually driven an EV myself until a few weeks ago when Audi Philippines introduced the new Audi Q8 E-Tron.

My thanks to former BusinessWorld colleague Brian Afuang for the invitation to view up close and personally try out the new fully electric Audi Q8. It has been around 20 years since I gave up my weekly motoring column, and the Audi event was a great opportunity to reconnect with old friends and other motoring journalists.

More importantly, the event gave me a new perspective on EVs. You see, I am late in the game when it comes to driving electric, or hybrids for that matter. I have never owned such vehicles, and to be honest, up until recently remained unconvinced of the urgency to shift to hybrid or EV. Heck, I still own a gas-guzzling 1975 Range Rover classic with a V-8 engine.

But driving the Audi Q8 E-Tron even for just a short time made me realize how extensively technology has been changing the motoring industry. And it is not just the internal combustion engine that is being replaced. Most everything else connected to “old school” motoring seems to be on the way out with all the “computers” now in our cars.

Despite my background in electronics, having gone to a technical high school, I have always been averse to more electronics in cars. Thus, my natural liking for motor vehicles with limited electronics, for old-school technology. To date, all the cars I own use either gas or diesel fuel, are rear-wheel drives, and have ladder frame chassis — all old-school tech.

I entered this era of EVs with much skepticism. I doubted the range and lifespan of EV batteries; EVs’ ability to survive the heat of our summers and our typhoons and floods; and the local motoring industry’s capability to deal with EV repair and maintenance issues. I also questioned the economics of purchasing an EV relative to fluctuations in fuel prices and the limited number of charging stations.

All told, my sense of things told me not to put my hard-earned money on any EV just yet, especially given the premium on its sticker price compared to gas- or diesel-powered cars. And not until more charging stations are put up inside and outside of Metro Manila. Even hybrids, given their price premium over ordinary vehicles, I felt were still not very accessible to many of us. I will make the jump perhaps when EV prices come down — or when gas or diesel cars are no longer sold.

The Audi Q8 E-Tron, obviously, is only for the wealthy few who can afford its price tag of P6.25 million for the base variant and P7.25 million for the top-of-the-line variant Q8 E-Tron 55 Quattro. It is, obviously, not the every-man EV. It has a claimed range of up to 600 kilometers and can wade in about half-meter of flood water. These two features are the game-changers that tempered my skepticism. My Audi Q8 E-Tron experience revealed a realm of possibilities.

In so short a time, the EV industry has gone a long way in producing better-built cars. And with continuous investments in research and development, technology changes so fast that upgrades now come in shorter cycle times. So, if an Audi Q8 E-Tron can have a claimed range of 600 kilometers today, which was unheard of a couple of years back, then I am sure by next year even more EVs will start trumpeting longer ranges as well. And I would not be surprised if Audi, by 2024, retails EVs with ranges over 600 kilometers.

The Ford Mustang Mach-E has a claimed range of 372 miles (595 kilometers) while the BMW iX has a claimed range of 380 miles (608 kilometers). The newer Tesla Model 3 claims a range of 389 miles (622 kilometers). By next year, with newer battery technologies, many models will probably be looking at ranges of 700-800 kilometers, thus mitigating the urgency of making more “charging” stops or needing to access more charging stations. A game changer.

Upgrades and development with respect to weather and the elements are also surely forthcoming. I have always doubted if EVs could wade in floodwater, even the shallow ones. After all, one would generally assume that “electric” cars will not do well in “wet” environments. But lo and behold, the Audi Q8 E-Tron can wade through 500 mm of water. Like many others, I also dipped the car in the big tub of water and came out unscathed. Again, in just a short time from now, I am certain Audi and other EV makers will be going for even deeper wading depth. More important, EVs are proving to be real all-weather vehicles.

But the greater revelation for me is how driving an EV was like not driving at all. I did not feel any strong engine vibration, or heard much noise from the engine compartment as I drove around the track. There was no engine revolution or automatic shifting to “feel.” Initially, I found this disconcerting. But, after a while, I began to appreciate the quiet engine and the silent drive. And I am certain, after such an experience, many motorists will start turning to EVs as well.

And this now prompts me to believe that with the market putting a greater premium on comfort and convenience, and fuel “savings,” EVs might just turn the corner sooner than later and become the initial choice for new car buyers. Better range, and ability to navigate wet environments, are big pluses. And with EVs now coming in various configurations, customers have a greater variety to choose from.

During my time in the Audi Q8 E-Tron, I did not dare touch any of the buttons or switches, for fear of disrupting any of the “settings.” For the car, in the truest sense, was being run by a network of small computers — by artificial intelligence — that worked with each other to control all the moving parts and components to ensure the optimum configuration for the drive. All I did was gently step on pedals, steer the wheel, and enjoy my first EV experience.

 

Marvin Tort is a former managing editor of BusinessWorld, and a former chairman of the Philippine Press Council

matort@yahoo.com

ICTSI’s Hong Kong, Taiwan service from Mindanao resumes

A unit of International Container Terminal Services, Inc. (ICTSI) on Wednesday announced the resumption of its Mindanao-Hong Kong-Taiwan service to meet increased market demand in the region.

In a press release, ICTSI said that Mindanao Container Terminal (MCT) at its container handling facility in Cagayan de Oro is receiving calls from Wan Hai Lines for its Mindanao-Hong Kong-Taiwan service beginning Aug. 3.

“The return of the service is a significant development in our efforts to strengthen regional trade connectivity and support the growing Mindanao economy,” said Aurelio Garcia, chief executive officer of MCT.

“We are thrilled to re-establish this crucial link that makes international trade more efficient and accessible to businesses in Mindanao,” he said.

ICTSI said the return of the service rotation at MCT was due to the increasing market demand and economic activity in Mindanao, which saw an 18% increase in export volume.

During the first call on Aug. 3, MCT handled a total of 237 containers filled with commodities, including coconut byproducts, falcata lumber, and wastepaper.

“MCT looks ahead to a fruitful collaboration with Wan Hai and the mutual benefits that the reinstated service will bring to the region’s economy,” MCT said.

MCT is a subsidiary of ICTSI that operates the container terminal at the PHIVIDEC Industrial Estate in Tagoloan, Misamis Oriental.

At the stock exchange on Wednesday, shares in ICTSI closed 3.01% or P6.2 higher to P212 apiece. — Justine Irish D. Tabile

Another healthy food option arrives in PHL

3 – Shibuya Nights (Php 375): Embark on an Asian-inspired journey with green soba, baked salmon, grilled mushrooms, and a soft-boiled egg. Oriental cabbage salad and furikake come alive with the pairing of Avocado Edamame Dip & Beetroot Miso.

THE SALADSTOP Group is giving a new healthy choice for Manila diners with the opening of another brand in the Philippines called HeyBo.

According to a release, the name is a portmanteau of “hey,” and a truncation of “bowl.” HeyBo specializes in warm grain bowls “with a focus on the use of local flavors.” During the opening at Central Square BGC, Taguig — the first international and flagship outlet of HeyBo — on Aug. 11, guests were treated to the new brand’s bowls.

Kampong Table is a bowl of mixed grains, roasted lemongrass chicken, crispy tempeh, soft-boiled egg, oriental cabbage salad, and a lime wedge, served with white bean and cauliflower dip and green chutney. Muscle Beach is composed of tri-color quinoa, sous-vide chicken breast, charred carrots, broccoli, creamy avocado, and mixed seeds, with a beetroot chipotle dip and yuzu soy.  Shibuya Nights is an Asian-inspired bowl with green soba, baked salmon, grilled mushrooms, soft-boiled egg, oriental cabbage salad, and furikake, with avocado edamame dip and beetroot miso. Sunday Roast is a hearty mix of tri-color quinoa, char-grilled steak, a roasted pumpkin wedge, charred corn, tomato salad, and garlic breadcrumbs, with beetroot chipotle dip and balsamic butter.

For vegetarian options, there’s El Patron, with mixed grains, a vegan Mexican patty, sautéed capsicum, spiced black beans, a tomato salad, and tortilla chips, with an avocado edamame dip and smoky sriracha, while Spice Trade is a savory mix of cauliflower lentil rice falafels, spiced chickpeas, fried eggplant, carrot salad, and Murukku chips, with red pepper dip and tzatziki.

HeyBo also has flavors unique to the country, carefully created to satisfy local cravings. Humba Wamba has garlic black rice, braised pork humba, charred corn, fried eggplant, winged bean salad, and spiced peanuts, with a white bean and cauliflower dip and pineapple tamarind. Off The Hook is a harmony of garlic black rice, halibut adobo, Thai basil tofu, charred corn, and coconut lime spice, with red pepper dip and a moringa vinaigrette.

FILLING A NICHE
SaladStop first arrived in the Philippines in 2014, having been established in 2009 in Singapore then spreading into key markets in Asia. Adrien Desbaillets, Chief Executive Officer and Co-Founder, noted that the arrival of another brand was simply interrupted by the pandemic. Another brand, an outlet selling rice rolls called Wooshi, may also be seen in the Philippines quite soon.

“We’re looking into opening that in the Philippines as well,” said Mr. Desbaillets in an interview with BusinessWorld. “SaladStop was a brand that we knew the niche we would fill,” he said. “HeyBo is in a way, easier to launch because we understand the market so much better.”

Opening another brand focused on healthy eating is also a reflection on how well the Philippines is providing more options for health-conscious consumers. With SaladStop, he said, “We’re going into areas of Manila and in the outskirts that a few years ago we would have probably found to be a little bit difficult. Now, I guess, the healthy food segment has grown so much.”

Mr. Desbaillets pointed out that most of the ingredients they use are sourced from local farmers, and their utensils are made from biodegradable materials. Sustainability is one of the pillars holding up the company, considering they just opened a carbon net-zero store in Singapore. “It’s just the impact that we do. It’s part of our DNA. It’s how some are built, what we as people within the company are strong believers in: trying to… change the conversations around sustainability and do it in a very authentic way.”

That’s nice — but does morality make the food taste better? “Yeah. Local is better. Simple,” he said. He elaborates: “It’s a belief in terms of how we develop our menu. We know that we can work with local farms and it takes 24 hours for a product to reach the store. It’s just going to taste fresher.”

In the Philippines, HeyBo and SaladStop are both licensed by the SSI Group, Inc. — Joseph L. Garcia

Corporate failure is a valuable asset that’s hard to protect

CHARLESDELUVIO-UNSPLASH

THE fraction of enterprise value of large US companies represented by tangible assets — things like real estate and inventory — has fallen from 50% to 20% over the past 15 years. Moreover, only about 25% of enterprise value is in identifiable intangible assets such as patents, copyrights, trademarks, customer lists, and data files. The remaining 55% is in assets too intangible to even identify clearly — things like technical knowledge, corporate culture, going-concern value, and customer relationships.

A recent article in Business Law Today calls attention to something less tangible still — the economics of negative information assets. How do you assess and safeguard corporate know-how about products that didn’t work, dead-end research or failed experiments at a time of heightened staff mobility?

For companies with little in the way of tangible assets or recurring revenue — ones valued primarily on expected future products and services — gauging the worth of what a company knows is key, and much of that knowledge is about approaches that don’t work. Moreover, that knowledge only has value if the company can protect it.

Just as normal matter exists in a sea of dark matter and dark energy that make up 95% of the universe, positive business information (such as product specifications) exists in a much larger sea of negative information (such as ideas that don’t work). Advertisers work to create brand names — positive information assets — but also to warn against an innumerable list of dangers from head (dandruff) to toe (athlete’s foot), or make “where’s the beef” criticism of competitors’ products. Such negative information assets increase the value of a product by making the alternative seem worse. Employee handbooks list a few positive admonitions, and much longer lists of what not to do.

Not only are intangible assets — especially negative information assets — growing rapidly in economic value, they are also getting harder to protect. Employee mobility has grown since 2008, especially in technology fields; and the government is working to increase it further with Federal Trade Commission efforts to ban non-compete clauses and the proposed Workforce Mobility Act of 2023. Courts are getting more reluctant to grant patents and other intellectual protection, especially on software. Work-from-home means information spills out to uncontrolled locations, and of course the internet makes transmitting information far easier than in the past.

From an investors’ perspective, this means that only about 20% of what you pay for an average stock covers assets that can be easily insured and protected against theft or damage; and that creditors can seize and sell in a bankruptcy with some hope of recovery. Stock investors are hoping for future cash flows to be generated mostly by intangible assets, in many cases assets that cannot even be identified clearly and may be negative. Creditors can look to only a small portion of enterprise value to secure loans.

At least with positive information there is some hope of tracking down theft and suing for recovery. If an employee goes to a competitor who soon launches a product similar to yours, you will notice. You can demonstrate the similarities in court, and perhaps refer to patent or other protection.

But what if an employee goes to a competitor and designs a different product from yours, and the research effort is sped up because your former employee learned on your dime what dead ends to avoid? What will you point to in court to prove the theft? What kind of patents protect failed ideas?

Most of my professional experience is in finance. A hedge fund employee who copies her former employer’s strategy can be identified. But behind every implemented strategy are hundreds or thousands of alternatives that were tested and rejected. An employee who knows those results can find a good new strategy much faster than a researcher starting from scratch.

One prominent example of this is the high-profile lawsuit by Alphabet, Inc.’s Waymo alleging that its former engineer Anthony Levandowski took to Uber Technologies, Inc. information about dead-end designs and approaches unsuited to market that saved Uber substantial time and money, and were critical to its efforts to develop self-driving cars.

Moving from an investor’s to a social perspective, intellectual protection and trade secret law attempts to balance the social good of encouraging research and development, with the other social good of competition. Patents force applicants to reveal their secrets in return for 20 years of protection. Companies are allowed to take some measures to protect trade secrets, but not to prevent former employees from making a living in their fields.

Negative information does not fit into either model. You can’t force former employees to remake mistakes they identified while working for you. You can’t get a patent on a failed idea, one that forces other people to pay you money to avoid the failure. From a social standpoint these don’t balance any considerations, they just impose perverse costs.

There is a related issue in academic research — it’s rare to publish negative results. A vast amount of negative information knowledge is systematically excluded from the literature in many fields.

If the trend toward increasing negative information asset value and decreasing ability to protect it continues, it should lead to fragmentation in research. If every company pursues one idea and liquidates if its idea fails, negative information becomes public, and no entity has to protect it. Negative information assets are a problem only for large companies that survive the failure of many research paths, and thereby accumulate large negative information assets that cannot be insured or protected.

One solution for a large company is to put researchers in siloes, so individual employees have knowledge of at most one dead-end. But this eliminates valuable cross-fertilization of research and gets in the way of rational employee development. Many hedge funds do this, but it is a problematic solution in fields like information and medical technology where the scientific culture is more open, and there is more communication between academic and for-profit activities and more diverse specialists are needed for projects.

I don’t know how this will play out, but I think it represents one of the biggest challenges to big tech company valuations. With increasing employee mobility and weakening non-compete protections, big tech is losing the ability to protect its fastest-growing type of asset. I can’t see any good solution — either in research strategy or law — but it’s something investors should consider seriously.

BLOOMBERG OPINION

PAL ties up with low-carbon energy services provider

PHILIPPINE STAR/EDD GUMBAN

Flag carrier Philippine Airlines (PAL) has signed a memorandum of understanding (MoU) with ENGIE, a global low-carbon energy services provider, to manage its energy resources.

“Having ENGIE as a key partner helps us manage our resources more efficiently and work towards a more sustainable world in air travel, for the benefit of our economy and the traveling public,” said Stanley K. Ng, president and chief operating officer of PAL, in a statement on Wednesday.

Under the MoU, ENGIE Services (Philippines) and ENGIE Global Energy Management & Sales (GEMS) APAC will be helping PAL in four key areas: energy risk management services, carbon credits procurement and supply, decarbonization strategies, and decarbonization projects.

“ENGIE is proud to partner with PAL on their decarbonization journey. Together, we will explore ways to reduce their environmental impact and foster a greener, more environmentally conscious future for the aviation sector, in the Philippines and beyond,” said Thomas Baudlot, country head at ENGIE South East Asia.

Specifically, ENGIE will be assisting the airline in the procurement and in supplying carbon credits that will enable it to offset its carbon emissions as well as in developing and implementing sustainability-related projects including exploration of sustainable aviation fuel.

PAL currently operates flights to 33 destinations in the Philippines and 39 destinations in Asia, North America, Australia and the Middle East through hubs in Manila, Cebu, Clark, and Davao.

On Tuesday, the airline announced the resumption of its Manila-Tuguegarao daily flight services starting Oct. 29.

The resumed route, which the airline previously operated from October 2014 to June 2019, will be operated with 180-seater Airbus A320 aircraft. — Justine Irish D. Tabile

TDF yields inch up before BSP meeting

YIELDS on the term deposits auctioned off by the Bangko Sentral ng Pilipinas (BSP) inched higher on Wednesday ahead of its policy meeting on Thursday.

Demand for papers under the BSP’s term deposit facility (TDF) totaled P319.002 billion on Wednesday, higher than the P300 billion on the auction block and the P297.282 billion in bids logged last week.

Broken down, the seven-day deposits attracted tenders amounting to P179.011 billion, higher than the P170-billion offering as well as the P167.147 billion in bids recorded the prior week for a P160-billion offer.

Rates for the one-week papers ranged from 6.57% to 6.61%, unchanged from the previous week. This brought the average rate for the tenor to 6.5956%, inching up by 0.24 basis point (bp) from the 6.5932% seen on Aug. 9.

For the 14-day deposits, tenders hit P139.991 billion, going above the P130-billion offering and the P30.135 billion in bids last week for the P140 billion on the auction block.

Accepted yields were from 6.55% to 6.52%, steady from the previous week. This brought the average rate of the two-week deposits to 6.5998%, up by 0.24 bp from the 6.5974% logged a week ago.

The central bank has not auctioned off 28-day term deposits for more than two years to give way to its weekly offering of securities with the same tenor.

The term deposits and the 28-day bills are used by the BSP to mop up excess liquidity in the financial system and to better guide market rates.

TDF yields were higher on Wednesday amid expectations of a 25-bp rate hike from the BSP this week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

According to Mr. Ricafort, there is a good chance the BSP will resume its policy tightening to mirror the latest move of the US Federal Reserve and help stabilize the peso.

A BusinessWorld poll last week showed 13 of 15 analysts predict the Monetary Board will extend its pause at its Aug. 17 meeting.

On the other hand, two economists expect the BSP to hike borrowing costs by 25 bps to match the move of the US Federal Reserve last month. If realized, this would bring the key rate to 6.5%.

The Monetary Board has raised policy rates by 425 bps from May 2022 to March 2022. Meanwhile, the US Federal Reserve raised the federal funds rate target by 25 bps to 5.25-5.5%, the highest level in more than two decades.

On Wednesday, the local currency closed at P56.515 per dollar, appreciating by 32.50 centavos from its previous finish of P56.84 against the greenback. Year to date, the peso has depreciated by 1.3% or 76 centavos from its P55.755 close on Dec. 29.

After Thursday’s review, the BSP’s other policy-setting meetings for the year will be held on Sept. 21, Nov. 16, and Dec. 14. — Keisha B. Ta-asan

To bring back the office, bring back lunch

IT HAS been nearly two years since corporate America reopened, and employers are still struggling to get people back into the office. Just ask Jamie Dimon, Chief Executive Officer of JP Morgan Chase, who has been pushing for in-office-work, yet 30% of his workers remain hybrid and he continues to face pushback.

So allow me to make a modest proposal. This fall, to get people back to the office, US employers need to do something radical, something bold, something (gasp) very French: They need to buy their employees lunch — a proper lunch, in a restaurant.

There are no sad desk salads in France. Eating in the workplace is prohibited. Since 1962, French employees have received meal vouchers as part of their compensation. The vouchers used to be paper tickets, but now they are usually loaded on to a plastic card, which can be used to buy lunch at local restaurants. Both employers and employees contribute to the card — the former tax-free — with employers paying 50% to 60% of the lunch’s value.

The voucher can be used for a meal up to 19 euros, though that limit was doubled during the pandemic to help struggling restaurants. The number of meals an employee gets each month depends on the number of days he or she works; one meal voucher can be provided for each full workday, provided the meal occurs during the workday.

Like most efficiency-focused Americans, I always looked upon this system with a mixture of amusement and horror. I saw it as the sort of thing that can only happen in France. A law against eating at your desk? Talk about uncivilized. I prefer a quick lunch, thank you, so I can finish work and get home sooner. And as nice as a free lunch sounds, benefits are never really free; they usually mean a lower salary. Once again, thank you but I’d prefer the cash.

But I am rethinking my aversion to the French lunch voucher system because I fear the US workplace is stuck in what we economists call a sub-optimal equilibrium. Working together, in person, is important for training and workplace culture — especially for younger workers who require mentoring. Over time, working from home even a few days a week can mean lower productivity and less engagement with work.

I also worry about what working from home does to a society that is increasingly isolated and lonely. Not to mention all the struggling businesses in America’s downtowns. Foot traffic in downtown San Francisco is at only 32% of its 2019 level. New York is at 67%. Office vacancies remain elevated. Despite pleas and even threats from their bosses — many of whom are also WFH, at least part of the time — or free food in the office pantry, not enough people are going back.

So what if there were such a thing as a free lunch — not metaphorical but actual?  A lunch that lasts an hour (maybe more) may be just the incentive you need. Especially at a nice restaurant in the middle of the day. It makes you feel so sophisticated. More important, it will involve making plans to get you out of the house. And while you shouldn’t be required to eat with your colleagues, maybe you will want to, which will improve morale and help restore the connections lost in the years of working from home. Perhaps you will even invite your junior coworkers.

True, there may be some productivity losses. Some people will take lunch breaks that are too long, especially if wine is involved. But working from home indefinitely might mean even more lost productivity. And any losses from lunch should be measured against the economic boost it would provide the restaurant sector.

The voucher system should be a little different than it is in France. Employee contributions to the voucher should be optional. And the vouchers should only be used in restaurants located in business districts, or near the workplace, for a sit-down meal. The tax incentive would be a nice bonus, but it’s not necessary, especially with growing public debt. Instead, participating restaurants may offer discounts or voucher-lunch specials if they want the business.

I realize this is all getting expensive. So employers needn’t offer a free lunch for every day worked. This is America, after all. It is your right as a citizen to eat at your desk. — Bloomberg Opinion

Energy realism: Decarbonization and deindustrialization

(Part 4)

The rush for “net zero” emissions and decarbonization is evident in Europe while many Asian countries are not so enamored with this rush. I have put together a chart showing how the United Kingdom and Spain are in a mad rush towards decarbonization by ditching their coal consumption, compared to China’s more considered conversion and Vietnam’s rejection of decarbonization.

The percentage of coal/total power generation from 1992 to 2022 are as follows: UK, 60% to 2%; Spain, 41% to 3%; China, 75% to 61%; and Vietnam, 9% to 39%. As countries reduce their coal consumption, their overall power generation either declines or flatlines (See Table 1).

To cover more countries, I added Germany and France to the “rush-to-net-zero” decarbonization countries, and India and the Philippines to the “no-rush” decarbonization countries. The coal/total generation of these countries for 1992 to 2022 are as follows: Germany, 55.1% to 31.3%;   France, 8.1% to 0.7%; India, 68% to 74.3%; and the Philippines, 6.9% to 59.6%.

In Table 2 one sees their average economic performance from 1983 to 2019, up to the first half of 2023. The UK, Spain, Germany, and France are generally crawling with just 1% to 3%. In contrast, China, Vietnam, India, and the Philippines were humming along with 3% to 11%, except for the Philippines’ 1% average growth in the 1980s to the early 1990s. This can be explained by the political upheavals in the mid-1980s, the coup attempts in the late ’80s, and severe blackouts plus a volcanic eruption and a major earthquake in 1990-92.

The rush to decarbonization of G7 industrialized countries simply leads to their piecemeal path to deindustrialization.

Of course, there are many reasons and factors why countries grow slowly or fast, but the fast expansion of total power generation is a big factor. Many big investments will not come to a country that suffers from frequent blackouts and has expensive electricity.

There were a number of interesting and beautiful reports in the energy sector recently. See these reports in BusinessWorld written by my favorite energy reporter, Ashley Erika O. Jose:

“No net-zero target in Philippine Energy Plan” (July 23), “NGCP fully committed to completing projects” (July 26), “Energy dep’t counting on extra 8,000 MW in capacity by 2028” (July 26), “RE transition won’t happen ‘overnight’ — DoE” (July 30), “Meralco seeks replacement power for San Miguel’s terminated supply deal” (Aug. 2), “Meralco looks at nuclear power as long-term solution” (Aug. 3), “AboitizPower in talks with US nuclear supplier” (Aug. 10), “August power rates down on lower generation charge” (Aug. 10), “ERC suspends order allowing NGCP to pass on franchise tax” (Aug. 10).

I particularly like the reports on “No net-zero target,” that Meralco and Aboitiz Power are looking into setting up nuclear power plants someday, and the Energy Regulatory Commission’s (ERC) suspension of the National Grid Corp. of the Philippines’ (NGCP) practice of passing their franchise tax on to the consumers.

Coal remains the single biggest power insurance of the Philippines against frequent blackouts and underdevelopment. Existing coal plants should expand, from Luzon to the Visayas to Mindanao.

On nuclear power, France used generate 75% of its total power from nuclear plants, resulting in an ample and cheap supply of electricity. It had very bright and beautiful lights at night, a huge amount of electricity to export to neighbors in Europe, and no nuclear accidents. Then they embraced net zero with an exit plan for many of its nuclear plants. Then energy prices and overall inflation started rising. The Philippines should embark on nuclear power generation, including the revival of the Bataan Nuclear Power Plant, and setting up small modular reactors (SMRs) for big island-provinces.

Regarding the new ERC order to the NGCP, I think this is the first time that the ERC had the courage to issue that kind of order. The NGCP is levied with a 3% franchise tax in lieu of corporate income tax and other taxes and this should not be passed through to the consumers. Consumers pay extra on top of capex and high profit of NGCP — they should not pay for the franchise tax. Bravo, ERC.

See also the previous columns on “energy realism” series: “Energy realism: Raising consumption and economic growth” (Part 1, June 29), “Energy realism: G7, BRICS, and other big Asian economies” (Part 2, July 6), and, “Energy realism: Oil-coal consumption and NGCP’s delayed projects” (Part 3, July 13).

 

Bienvenido S. Oplas, Jr. is the president of Bienvenido S. Oplas, Jr. Research Consultancy Services, and Minimal Government Thinkers

minimalgovernment@gmail.com

Haus Talk earns P43.5M as revenues surge

LISTED property developer Haus Talk, Inc. reported a 10.5% gain in net income for the second quarter to P43.51 million from P39.38 million the prior year.

In its financial statement, the company reported a top line of P226.44 million, 19.5% higher than P189.52 million previously.

For the first half, Haus Talk saw a 9.36% decline in income to P77.23 million from P85.21 million as expenses increased.

The company’s top line for the six-month period was relatively flat at 0.10% to P378.02 million from P378.39 million the previous year.

In a separate press release on Wednesday, the company said its recent development in Laguna, The Granary, has seen significant sales in housing units during the period.

“We came up with a timely and well-planned product that answers the call for residences that feature amenities usually found in the pricier developments south of Metro Manila,” Haus Talk President Maria Rachel D. Madlambayan said.

The company said that close to half of that land is dedicated to public and common use. It recently acquired land beside the property for additional projects.

The acquisition led to a 33% increase in the company’s asset base.

“We believe that Bataan is the next boom town. We will be expanding there very soon to answer the housing demands in Dinalupihan, proximate to Pampanga and Zambales, as well as Mariveles, with its export processing community,“ Ms. Madlambayan added.

On Wednesday, Haus Talk shares were unchanged at P0.95 apiece. — Adrian H. Halili

UnionBank expands partnership with Infobip Philippines

BW FILE PHOTO

UNION BANK of the Philippines, Inc. (UnionBank) has expanded its partnership with cloud communications platform Infobip Philippines to enhance customer engagement through the latter’s Moments platform.

Moments is an omnichannel customer engagement solution with personalization and automation capabilities, Infobip said at a press briefing.

The Aboitiz-led bank has been using Moments to automate the sending of notifications for UnionBank’s Quick Loan products to its clients since June, UnionBank Head of Low Code Development and Automation Marc S. Angeles said.

“We’re reaching more people; conversion rate is higher because of the continuous follow ups. So that’s the power [of Moments],” Mr. Angeles said.

Moments is being used to automate notifications through SMS, Viber, e-mail, and in-app.

“So, even the customers that are abroad, OFWs (overseas Filipino workers) and even those traveling, we can already reach them. That was one of our pain points back then. So, in terms of reach, we’re maximizing all channels,” Mr. Angeles added.

During the two months since it began using Moments, UnionBank’s notification frequency has grown by five times, he added.

“Earlier, the engagements of the throughput of our Quick Loans actually multiplied by five. It’s in the tens of thousands before but now we’re talking hundreds of thousands per hour,” he said.

This also helped the bank surpass its revenue targets by 132% and contributed to its income, Mr. Angeles noted.

“We’re reaching more people. The conversion rate is higher because of the continuous follow-ups.”

While Moments is currently only being used for UnionBank’s Quick Loan products, Mr. Angeles said it will eventually be expanded to all of UnionBank’s products, and eventually, its whole system.

To increase on-boarding, InfoBip Asia-Pacific Sales Director Cecile P. Tizon said Moments will help greet new bank customers with a personalized welcome sequence. It will also automatically adjust campaigns based on user activity.

UnionBank booked a net profit of P6.4 billion in the first six months of the year amid growth from its consumer businesses, up 6% from P6.06 billion in the same period a year prior.

Its shares closed unchanged at P73 apiece on Wednesday. — A.M.C. Sy

Logitech launches wireless gaming headset in Manila

LOGITECH Philippines, Inc. on Tuesday launched its Pro X 2 Lightspeed wireless gaming headset in the country.

“Building upon the success of its predecessor, the Pro X Wireless Headset, the Pro X 2 LIGHTSPEED aims to elevate gaming audio to new heights, combining cutting-edge technology with Logitech’s commitment to delivering top-tier peripherals,” the brand said in a statement.

“For gamers looking for no-nonsense, no-frills equipment during their MMO battles and MOBA PC games, this new wireless headset could be the one for you as it is style, utility, and comfort all rolled into one,”Logitech added.

The Pro X 2 Lightspeed gaming headset, priced at P13,799, features advanced audio technology, Logitech said. It gas 50mm graphene drivers, which the brand said “delivers enhanced audio response, reduced distortion, and unrivaled sound.”

“The headset offers unprecedented audio clarity and precision. Gamers can expect rich, immersive soundscapes that allow them to hear every footstep, gunshot, and whisper with astonishing accuracy,” Logitech said.

The headset also has DTS Headphone:X 3D audio support, which creates a three-dimensional soundscape to simulate the direction and distance of in-game sounds for improved situational awareness while playing.

The Pro X 2 Lightspeed has an ergonomic design for improved comfort while playing. It has memory foam ear cushions, a rotating hinge, an adjustable headband, and is lightweight at just 345 grams. It is made of aluminum materials and has a steel frame.

Users can also switch between Bluetooth wireless connectivity and a 3.5mm wired connection, depending on their preference. For wireless use, the headset comes with up to 50 hours of battery life.

“The Pro X 2 also features a detachable and noise-cancelling Blue VO!CE microphone, which delivers studio-quality voice communication. This ensures that teammates can hear every command and strategy clearly, making collaboration in multiplayer games more effective than ever before,”Logitech said.

“Logitech’s commitment to sustainability is also reflected in the Pro X 2’s design. The headset is constructed using eco-friendly materials, further underscoring the company’s dedication to reducing its environmental impact. With its blend of comfort, cutting-edge technology, and a focus on delivering a competitive advantage, the Pro X 2 looks set to become an indispensable tool for gamers seeking the ultimate audio experience,”it added.

The Pro X 2 Lightspeed is now available via Logitech’s official store on Shopee and partner outlets nationwide, namely PC Express, Silicon Valley, DataBlitz, Octagon, Electroworld, Complink, iTech, Techwarez, GameOne, Interpace Computer Systems, GameXtreme, TTI, GameOne, DynaQuest PC, Digi-Serv Solutions, Concept Computer, NUTECH, DFE (Davao Futurebright Enterprises), Villman, PCWorx, Abenson, Digistore, and Greenware. — BVR

Guardrails for the future: A blueprint for governing artificial intelligence

By Dale Jose

ARTIFICIAL INTELLIGENCE (AI) is one of the most rapidly growing and most talked about technologies. Its momentum shows no signs of slowing down. With recent rapid developments, AI is on the path to becoming the most definitive and transformative technology in this generation. It is crucial for all sectors to speed up the work to manage this technology.

In Microsoft’s report, Governing AI: A Blueprint for the Future, we offer some ideas and suggestions. These suggestions build on the lessons we’ve been learning based on the work we’ve been doing for several years. We’ve defined, published, and implemented ethical principles to guide our work. We’ve built out constantly, improving engineering and governance systems to put these principles into practice. Today, we have about 350 people working on responsible AI at Microsoft, helping us implement best practices for building safe, secure, and transparent AI systems designed to benefit society.

NEW OPPORTUNITIES TO IMPROVE THE HUMAN CONDITION
The resulting advances in our approach have given us the capability and confidence to see ever-expanding ways for AI to improve people’s lives. We’ve seen AI help push progress in multiple fields and sectors. Moreover, other innovations are fending off cyberattacks and helping to protect fundamental human rights, even in nations afflicted by foreign invasion or civil war.

AI offers even more potential for the good of humanity than any invention that has preceded it. In fact, AI offers a new tool to genuinely help advance human learning and thought.

THE GUARDRAILS FOR THE FUTURE
While AI opens a world of new possibilities to help improve people’s lives, we must also be ready for the challenges that lie ahead with this new and evolving technology.

As technology moves forward, it’s just as important to ensure proper control over AI as it is to pursue its benefits. We are committed to develop and deploy AI in a safe and responsible way. We also recognize, however, that the guardrails needed for AI require a broadly shared sense of responsibility and should not be left to technology companies alone.

When we at Microsoft adopted our six ethical principles for AI in 2018, we noted that one principle was the bedrock for everything else–accountability. This is the fundamental need: to ensure that machines remain subject to effective oversight by people, and the people who design and operate machines remain accountable to everyone else. In short, we must always ensure that AI remains under human control. This must be a first-order priority for technology companies and governments alike.

People who design and operate AI systems cannot be accountable unless their decisions and actions are subject to the rule of law. In many ways, this is at the heart of the unfolding AI policy and regulatory debate. How do governments best ensure that AI is subject to the rule of law? In short, what form should new law, regulation, and policy take?

A FIVE-POINT BLUEPRINT FOR THE PUBLIC GOVERNANCE OF AI
In Section One of Governing AI: A Blueprint for the Future, we offer a five-point framework to address several current and emerging AI issues through public policy, law, and regulation. We offer this recognizing that every part of this blueprint will benefit from broader discussion and require deeper development, but we hope this can contribute constructively to the work ahead.

First, implement and build upon new government-led AI safety frameworks. The best way to succeed is often to build on the successes and good ideas of others. In this instance, there is an important opportunity to build on work completed just four months ago by the US National Institute of Standards and Technology (NIST). NIST has launched a new AI Risk Management Framework and we offer four concrete suggestions to implement and build upon this framework. We also believe the administration and other governments can accelerate momentum through procurement rules based on this framework.

Second, require effective safety brakes for AI systems that control critical infrastructure. This blueprint proposes new safety requirements that would create safety brakes for AI systems that control the operation of designated critical infrastructure. These fail-safe systems would be part of a comprehensive approach to system safety that would keep effective human oversight, resilience, and robustness top of mind.

Third, develop a broad legal and regulatory framework based on the technology architecture for AI. We believe there will need for the law place various regulatory responsibilities upon different actors based upon their role in managing various aspects of AI technology. For this reason, this blueprint includes information about some of the critical pieces that go into building and using new generative AI models.

Fourth, promote transparency and ensure academic and nonprofit access to AI. We believe a critical public goal is to advance transparency and broaden access to AI resources. Moreover, it is critical to expand access to AI resources for academic research and the nonprofit community.

Fifth, pursue new public-private partnerships to use AI as an effective tool to address the inevitable societal challenges that come with new technology. Important work is needed now to use AI to protect democracy and fundamental rights, provide broad access to the AI skills that will promote inclusive growth, and use the power of AI to advance the planet’s sustainability needs. It is crucial to develop concrete initiatives and bring organizations from all sectors together to advance them. We offer some initial ideas in this report, and we look forward to doing much more moving forward.

GOVERNING AI WITHIN MICROSOFT
Every organization that creates or uses advanced AI systems will need to develop and implement its own governance systems. In Section Two of Governing AI: A Blueprint for the Future, we describe the AI governance system within Microsoft — where we began, where we are today, and how we are moving into the future.

When it comes to AI, we first developed ethical principles and then had to translate these into more specific corporate policies. We’re now on the second version of the corporate standard that embodies these principles and defines more precise practices for our engineering teams to follow. We’ve implemented the standard through training, tooling, and testing systems that continue to mature rapidly. This is supported by additional governance processes that include monitoring, auditing, and compliance measures.

We are on a collective journey to forge a responsible future for artificial intelligence. We can all learn from each other. And no matter how good we may think something is today, we will all need to keep getting better. As technological change accelerates, the work to govern AI responsibly must keep pace with it. With the right commitments and investments, we believe it can.

 

Dale Jose, National Technology and Security Officer of Microsoft Philippines. Microsoft (Nasdaq “MSFT”@microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

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