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Prioritizing ESG on corporate strategy

By Mhicole A. Moral, Special Features and Content Writer, BusinessWorld

Businesses are now recognizing the value of embedding environmental, social, and governance (ESG) considerations into their operations to drive financial and reputational benefits.

While the scope of ESG is broad—spanning climate change, biodiversity, human rights, labor standards, and corporate governance—companies that focus on the most material aspects of their industry tend to see greater success. A report from EY-Parthenon said that ESG factors significantly influence financial performance, especially in investment decisions.

Investors also favor companies that demonstrate a genuine commitment to sustainability, often leading to a lower cost of capital. Businesses that integrate ESG into their strategies can strengthen stakeholder confidence and reduce risks related to reputational damage and regulatory pressures.

Trust institutions, by managing assets, investments, and wealth, can support companies in refining their ESG disclosures. By doing so, they help businesses attract investors who prioritize sustainability.

Such entities can also contribute by directing funds into sustainable ventures. They have the capacity to support projects aimed at reducing greenhouse gas emissions and funding climate resilience initiatives.

ESG’s impact in decision-making

Despite ESG’s growing importance, its role in investment decision-making remains modest. According to HSBC’s report, ESG analysis scored 4.0 in June 2024, a slight decline from 4.7 in February 2023. While ESG remains a crucial consideration, its integration into financial decisions continues to evolve. The data also highlights ongoing challenges in quantifying ESG’s impact on investment performance that shape the strategies of trust institutions.

Geopolitical factors also influence sustainability initiatives. HSBC’s findings reveal that 41% of respondents reassessed their ESG strategies due to global tensions, while 35% cited these tensions as a major obstacle to progress. Meanwhile, 21% said geopolitical instability has increased attention on sustainability issues, with only 14% reporting no impact and 12% noting that progress had accelerated as a result.

Shareholders are also demanding greater transparency and accountability in ESG commitments. The report shows an 11% rise in environmental-related shareholder proposals in 2023, with transition plans becoming a key focus. Shareholders are exerting pressure on firms, particularly those in carbon-intensive sectors, to establish and disclose targets aligned with the Paris Climate Agreement. Trust institutions, acting as fiduciaries, bear the responsibility of ensuring that the assets they manage align with these evolving investor priorities.

Investor confidence in ESG reporting also remains critical in driving sustainable investment decisions. HSBC’s research shows that 62% of respondents believe auditing and assurance of corporate sustainability disclosures would be beneficial. At the same time, 60% are satisfied with the current fund labeling system, indicating that existing classifications provide a reasonable level of transparency.

Meanwhile, artificial intelligence is becoming a consideration in sustainability research. According to the report, 36% of respondents are exploring AI as part of their ESG analysis. This way, companies are highlighting AI’s potential role in refining investment strategies and assessing sustainability risks more effectively.

The report also points to an ongoing debate about the terminology surrounding ESG. About 35% of respondents believe that ESG should be replaced with an alternative framework, indicating that some investors find the current classification inadequate or too broad to be meaningful in financial decision-making.

Meanwhile, an analysis of 130 reports from 11 financial research providers revealed that all of them consider ESG factors in their assessments. Additionally, six providers explicitly integrate ESG considerations into their valuation models, emphasizing the need for clear evidence linking sustainability to business performance.

Traditional ESG integration faces challenges in aligning with performance metrics, prompting a shift toward thematic investments, labeled securities, and impact-focused strategies.  Meanwhile, trust institutions are increasingly adapting to these trends by incorporating sustainability considerations into their investment frameworks.

Investment strategies for sustainability

A report by International Finance Corp. (IFC) shows that 71% of the world’s largest companies now disclose their alignment with the SDGs. The report mentioned that banks and trust entities can contribute through impact investing, green finance, and SDG-aligned investment strategies. Trust institutions can also support the expansion of climate finance.

IFC’s involvement in the Philippines has also led to investments in renewable energy, green bonds, and sustainable infrastructure. Projects like green housing, climate-smart agriculture financing, and disaster resilience initiatives align with the broader goal of ensuring long-term sustainability.

Through partnerships with regulators, trust institutions can further integrate ESG principles into their governance frameworks, particularly in the Philippines, where climate risks are factored into financial sector regulations and capital allocation decisions.

Decarbonizing sectors is another key area where trust institutions can contribute, according to IFC. Investments in electric mobility and energy-efficient buildings can reduce carbon footprints.

While the pace of new ESG-focused fund launches has slowed, regulatory developments such as the European Union Deforestation Regulation (EUDR) and the Carbon Border Adjustment Mechanism (CBAM) are expected to influence how companies structure their portfolios. Trust institutions, operating in a highly regulated financial sector, are suggested to navigate these changes while maintaining transparency and accountability in their investment strategies.

The growing emphasis on thematic investments, shareholder activism, and the demand for more transparent sustainability disclosures indicate that ESG considerations will remain significant to financial decision-making.

Strengthening ESG compliance

The Philippine government has taken steps to encourage businesses, including trust institutions, to align with ESG principles. Key regulators such as the Securities and Exchange Commission (SEC), the Bangko Sentral ng Pilipinas (BSP), the Insurance Commission (IC), and the Department of Environment and Natural Resources (DENR) have introduced measures to improve ESG compliance across the private sector.

Trust institutions, including banks and insurance companies, operate under stringent guidelines to ensure sustainability in their operations and investment decisions. They are also required to integrate sustainability principles into their corporate governance frameworks, risk management systems, and strategic objectives.

The BSP’s Manual of Regulations for Banks mandates financial institutions to approve Environmental and Social Risk Management System policies. These policies guide banks in identifying, assessing, and mitigating exposure to environmental and social risks.

In 2023, the central bank increased the single borrower’s limit for green or sustainable projects by an additional 15%, encouraging more investments in environmentally responsible ventures. The following year, the BSP introduced the Philippine Sustainable Finance Taxonomy Guidelines, which provide banks with a structured approach to financing sustainable projects.

Trust institutions managing investment portfolios are expected to align with these frameworks, directing funds toward projects that promote renewable energy, resource efficiency, and climate resilience.

This article is in the special edition of BusinessWorld In-Depth digital magazine, in celebration of Trust Consciousness Week. To get the full issue for FREE, visit https://bworld-x.com/product-category/bw-in-depth-industry-report.

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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What’s next for TOAP?: Building trust for future generations

By Jomarc Angelo M. Corpuz, Special Features and Content Writer, BusinessWorld

Managing the trust of some of the biggest banks in the Philippines requires keen attention to detail, fidelity to the client, and exemplary professionalism. After all, they are tasked with the difficult duty of administering trusts in good faith in accordance with the terms and purpose of the trust instrument, while balancing the interests of the trust beneficiaries. Because of this, trust officers boast the confidence of their trustors and are held accountable by the trustees.

The Trust Officers Association of the Philippines (TOAP) is bestowed with the highest fiduciary mandate and works in close coordination with the Bangko Sentral ng Pilipinas (BSP). The association aims to elevate the trust and asset management industry in the country to a level at par with international standards by actively contributing to the development of the capital markets and promoting the interests of its customers and the investing public.

The TOAP’s mission is to respond to the changing needs and remain committed to the interests of its clients; to advance the professional growth and development of its members; as well as provide a dynamic and robust environment conducive to growth for its constitutional members.

The premier association of trust officers in the country hopes to become the authoritative private sector association in trust, fiduciary, and asset management not only in the Philippines but also in the Asia Pacific region. Its vision includes becoming a prominent driver and catalyst of change in the fiduciary and financial markets; a developer of competent, knowledgeable, and qualified professionals; an enforcer of the highest level of ethical standards; and a trusted educator of clients.

After six decades of actively enhancing the Philippine financial management industry, TOAP commits to focusing on and strengthening key areas that seemingly attract the next generation of investors and trustees, namely: digital transformation, sustainable and responsible investing, and enhanced customer engagement.

Digitizing operations, implementing online platforms for client interactions, and leveraging data analytics are among the innovations that the TOAP seeks to implement on its journey toward digital transformation. With 70% of the Philippine population being Generation Zs or millennials, adapting to the needs and attracting the younger generation involves diving into social media and posting materials tailored to appeal to those markets.

Two years ago, the association launched a six-month digital marketing ad campaign aimed at reintroducing UITFs in the market from July to December 2023. The series featured witty captions, posts, and videos explaining various financial topics such as setting financial goals, making smart investments, understanding class assets, and debunking myths about the industry.

Similarly, TOAP is committed to advocating for responsible investing practices to align investments with its environmental, social, and governance (ESG) criteria. In this regard, the association actively promotes the Personal Equity and Retirement Account (PERA) Act of 2008, a voluntary retirement savings program that supplements the existing retirement benefits from the Social Security System (SSS) and the Government Service Insurance System.

Additionally, TOAP consistently gives back to nature as evidenced by its corporate social responsibility programs. Last year, the association helped restore the environment, plant trees, and connect with the Dumagat indigenous community during the TOAP’s Green CSR Day at the Mount Purro Nature Reserve.

Efforts on deploying customer relationship management (CRM) systems, conducting client feedback surveys, and offering educational resources are also eyed by the TOAP to help clients make informed financial decisions and have better overall financial service experience.

Building on these mission, vision, and objectives, the TOAP holds several programs that promote and encourage savings and investments as well as stages various symposia and conferences where regulations and current issues are discussed to ensure that the industry can progressively evolve in the best interest of the investing public.

Chief among them is the association’s annual TOAP Summit where industry leaders gather to connect, discuss trends, and explore the future of fintech in the trust and asset management sector. Held during the week of the association’s anniversary, the summit’s previous edition had the theme “Trust: Balancing Wealth and Global Accountability.”

The Asia Pacific Association for Fiduciary Studies (APAFS) Pacific Region Investment Conference, co-hosted by the TOAP, is another event that advances the association’s advocacy of financial literacy and empowering investors. Last year, APAFs held the event at the peak of the 2024 Fiduciary Events Week in Manila to serve as a valuable platform for networking with fellow fiduciaries across the region. The 2025 Fiduciary Events Week will be on Nov. 17-21, and within this week the 23rd Annual Pacific Region Investment Conference will take place on Nov. 20-21.

Serving the country for more than 60 years, the TOAP has driven growth and created a more inclusive financial industry in the Philippines. By pushing for digital transformation, responsible investing, and enhanced customer engagement, the association hopes to advance the sector further and take the trust, fiduciary, and asset management industry in the Philippines to new heights.

This article is in the special edition of BusinessWorld In-Depth digital magazine, in celebration of Trust Consciousness Week. To get the full issue for FREE, visit https://bworld-x.com/product-category/bw-in-depth-industry-report.

 

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Standard Chartered Bank hosts Global Research Briefing

In the photo from left to right: Toni Bautista, Standard Chartered Bank Head of Financial Markets (FM) and Head of FM Sales; Edward Lee, Standard Chartered Bank Chief Economist and Head of FX for ASEAN and South Asia; BSP Deputy Governor for Monetary and Economics Sector Francisco G. Dakila, Jr.; Mike Samson, Standard Chartered Bank Philippines Chief Executive Officer; and Jonathan Koh, Asia Economist and FX Analyst

Standard Chartered Bank (SCB) Philippines recently hosted its Global Research Briefing at the Makati Shangri-La Hotel. Themed ‘Reverberations,’ the briefing highlighted the far-reaching implications of the new US protectionist policies and impact to the global markets.

Distinguished panel of speakers include Bangko Sentral ng Pilipinas (BSP) Deputy Governor for Monetary and Economics Sector Dr. Francisco G. Dakila, Jr., who delivered the keynote presentation. He was joined by SCB’s Chief Economist and Head of FX for ASEAN and South Asia Edward Lee, and Asia Economist and FX Analyst Jonathan Koh, who shared the bank’s views on the global, regional, and Philippine economic outlook for the year.

The bank’s economists expressed cautious optimism regarding the country’s economic outlook amid uncertainties brought about by US economic policies, citing that 75% of the Philippine economy is driven domestically.

Mike Samson, Chief Executive Officer, Standard Chartered, said, “We are pleased to be hosting this Global Economic Briefing in the Philippines at this crucial time. The theme for this year’s economic briefing is ‘Reverberations,’ which reminds me of how a pebble, thrown in a lake, can cause great ripples. With the new US protectionist policies and geo-political developments throughout the world, these pebbles are more like boulders that signal a new chapter for global trade. I thank our Keynote Speaker Bangko Sentral ng Pilipinas Deputy Governor of the Monetary and Economics Sector Dr. Francisco G. Dakila, Jr. and our Global Research team for sharing their views on the far-reaching implications of the US policy shifts, China and ASEAN prospects and outlook for 2025.”

SCB organizes economic briefings biannually to provide its corporate and financial institution clients with expert analysis and foresight on economic trends, helping them make informed decisions in an increasingly complex global environment.

 

 

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by publishing their stories on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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BSP projects wider BoP, current account deficits

US dollar notes are seen in this picture illustration. — REUTERS

By Luisa Maria Jacinta C. Jocson, Reporter

THE BANGKO SENTRAL ng Pilipinas (BSP) expects the country’s balance of payment (BoP) position to swing to a deficit this year, as well as post a wider current account deficit, largely due to global trade volatilities.

“The Philippine BoP position is projected to be weaker in 2025-2026 due to slower global trade and subdued investor confidence linked to increased uncertainty in global trade policy and geopolitical developments,” it said in a statement late on Monday.

“The outlook nevertheless reflects sustained expansion in the domestic economy, supported by easing inflation and less restrictive monetary policy.”

The central bank’s latest projection shows the overall BoP will register a deficit of $4 billion this year, equivalent to -0.8% of gross domestic product (GDP).

This is a reversal from its earlier forecast of a $2.1-billion surplus (0.4% of GDP) for 2025.

In 2024, the BoP position stood at a surplus of $609 million, plunging by 83.4% from the $3.672-billion surplus at end-2023.

The BoP provides a glimpse of the country’s transactions with the rest of the world. A deficit indicates that more funds exited the economy while a surplus shows more money entered than left.

The BoP deficit is expected to widen to $4.3 billion next year but still at -0.8% of GDP.

“For 2026, the overall BoP is anticipated to remain in deficit, consistent with the expected widening of the current account deficit relative to the 2025 forecast,” the BSP said.

The central bank said sustained financial account net inflows will support the BoP outlook next year, but cited persisting downside risks, such as trade uncertainties, weak global growth and geopolitical tensions.

“The overall BoP position is expected to show a deficit in 2025 and in 2026, with a wider current account gap resulting from a higher trade-in-goods deficit and lower net receipts in trade-in-services,” the BSP said.

Meanwhile, the current account deficit — which covers transactions involving goods, services, and income — is expected to reach $19.8 billion this year, equivalent to -3.9% of economic output.

This is wider than its earlier forecast of a $12.1-billion current account deficit (-2.4% of GDP).

For 2026, the current account deficit is projected to hit $21.2 billion (-3.9% of GDP).

Latest data from the BSP showed the current account deficit widened by 41.4% to $17.5 billion last year from $12.39 billion in 2023.

This also marked the second-largest current account deficit on record, after the $18.3-billion gap recorded in 2022.

MODEST EXPORTS GROWTH
Meanwhile, the BSP lowered its goods exports growth forecast to 1% this year from 4% previously. It expects goods exports to expand by 2% next year.

“Merchandise exports are anticipated to record modest growth in 2025 and 2026 after two consecutive years of decline in 2023 and 2024.”

“Semiconductor exports will see flat growth in 2025, attributed largely to the ongoing inventory correction and as the industry works to keep pace with the rapidly evolving global demand.”

The BSP also trimmed its growth projection for goods imports to 4% from 5% earlier. Goods imports are seen to grow by 4% in 2026.

Service exports’ growth was also slashed to 8% from 10% previously. The BSP expects service exports to grow by 8% next year.

It said that service exports are seen to register a “modest expansion” amid weaker business process outsourcing (BPO) services.

“The outlook for BPO services incorporates the adverse impact of the US job reshoring agenda, as well as the domestic challenges in the supply of skilled workers in Generative AI and data analytics.”

This could “hamper industry efforts to climb up the value chain and maintain competitiveness,” it added.

BPO revenues are seen to grow by 5% this year and in 2026. This was a tad slower than the previous forecast of 6% for 2025.

Travel receipts are projected to expand by 11% this year, much slower than its previous forecast of 20%.

“Growth in Philippine tourism activity is expected to return to its pre-pandemic trend supported by the continued influx of international tourists, particularly from Korea and Japan,” it added.

On the other hand, the BSP anticipates service imports growth to accelerate to 14% this year from 8% previously. Its 2026 growth forecast is at 12%.

“Overseas Filipino (OF) remittances are expected to grow slightly below the long-term trend as major OF host economies, such as Saudi Arabia and Qatar, increasingly advocate for the localization of their workforce, affecting OFWs’ (overseas Filipino workers) deployment prospects,” it said.

The central bank also trimmed its cash remittance growth projection to 2.8% this year from 3% earlier. Cash remittances are expected to grow by 3% next year.

However, the United States’ harsher immigration policies are seen to have a minimal effect on remittance flows, the central bank said.

“Most US-based Filipinos are composed of permanent residents and documented migrants and fewer than 1% of total land-based OFWs are deployed in the US.”

Meanwhile, the BSP said the financial account will be “buoyed by sustained net inflows from both foreign direct and portfolio investments.”

“Investor interest will be supported by the country’s macroeconomic fundamentals, along with ongoing reforms to enhance the ease of doing business, optimize tax incentives, and improve capital market efficiency.”

Financial account outflows could reach $16.2 billion this year and $17.8 billion in 2026.

The financial account records transactions between residents and nonresidents involving financial assets and liabilities.

The country’s exit from the Financial Action Task Force “gray list” will also boost investor confidence, the BSP said.

“Investment gains, however, may be tempered by a pause in US monetary policy easing, which would limit capital flows to emerging market economies, including the Philippines,” it added.

The BSP also cut its forecast for foreign direct investment inflows to $9 billion in 2025 from $10 billion previously.

On the other hand, the net foreign portfolio investment projection was raised to $3.9 billion from $3.1 billion.

“The country’s gross international reserves (GIR) level is projected to decline slightly in 2025 and 2026 compared with 2024, reflecting reduced foreign exchange inflows from the exports of goods and services, as well as investments.”

The GIR is forecast to reach $105 billion for this year, lower than the $110 billion it projected earlier.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the weaker BoP outlook was due to US President Donald J. Trump’s tariff policies, which could dampen global growth, investments and trade.

“As a result of all of these, Philippine exports could slow down amid slower global trade and could widen the country’s trade deficit and, in turn, the current account deficit,” he said.

Mr. Ricafort said foreign direct investments could slow due to Mr. Trump’s “America first” policies, while foreign portfolio investments could be affected by increased volatility in markets.

“Softer world GDP could also slow down growth in BPO and other services export revenues, as well as slow down foreign tourism revenues,” he added.

OUTLOOK
Meanwhile, the BSP said domestic growth prospects could “provide a cushion against global headwinds.”

“Domestic expansion driven by private consumption, investments, including government infrastructure spending, as well as continued progress on legislative reforms to improve the business environment should encourage foreign investments and positively impact the external sector outlook in the near to medium term.”

The government expects growth to range between 6% and 8% this year and in 2026.

The BSP earlier said it expects GDP to settle near the lower bound of the target range from this year to the next.

The central bank said global economic growth is seen to remain soft from this year to the next amid the United States’ uncertain trade policies.

“Global growth prospects are expected to be further dampened by several factors, including the ongoing weakness in the Chinese economy, prolonged geopolitical tensions in conflict zones of the Middle East and Eastern Europe, and commodity price volatility.”

Cyber losses hit P5.82 billion in 2024 — BSP

CYBER LOSSES among Bangko Sentral ng Pilipinas-supervised financial institutions reached P5.82 billion in 2024, the central bank said. — REUTERS

By Justine Irish D. Tabile, Reporter

FINANCIAL INSTITUTIONS supervised by the Bangko Sentral ng Pilipinas (BSP) lost P5.82 billion from cyberattacks in 2024, up 2.6% from the previous year, according to an official.

“Technological innovation, while it may have plenty of positive results, also has its fair share of negative externalities (which) take shape in the form of cybersecurity risks,” BSP Deputy Governor Chuchi G. Fonacier said at the UK-Southeast Asia Tech Week on Tuesday.

“Gross cyber losses amounted to P5.82 billion in 2024, a slight increase from the recorded P5.67 billion of losses in 2023,” she added.

Under Circular No. 1019, all BSP-supervised financial institutions are required to submit regular and event-driven reports covering technology-related information as well as incidence of major cyberattacks.

“Based on the submitted reports, the number of reports on crimes and losses submitted by our supervised institutions has surged by 150% from around 16,246 reports in 2022 to 40,572 in 2023, with a slight increase to 40,780 in 2024,” said Ms. Fonacier.

Top cybersecurity risks faced by BSP-supervised institutions last year include phishing, “card-not-present” fraud, account takeover or identity fraud, and hacking, she said.

“Phishing and card-not-present fraud are recorded to have the most financially prominent attacks in 2024, with estimated losses soaring to P1.8 billion and P1.5 billion, respectively,” she added.

Phishing involves the use of fraudulent e-mails, text messages or websites to steal user data such as credit card numbers and login credentials.

On the other hand, card-not-present fraud refers to a type of scam where the physical credit card is not needed to complete a transaction.

Ms. Fonacier said threat actors are now using emerging technologies to conduct cyberattacks.

“So, for instance, artificial intelligence (AI) is being used to produce more convincing phishing e-mails, conduct identity takeover through deepfake technology, and create destructive malware variants,” she said.

“These incidents not only threaten to disrupt the delivery of financial products, but they also diminish the public’s trust in our budding digital financial ecosystem,” she added.

Sought for comment, Global Forum on Cyber Expertise Regional Director for Southeast Asia Hub Allan S. Cabanlong said that criminals can now use AI to improve their scam techniques.

“On the other hand, it can also be used by financial institutions to block those criminals,” he said in a phone interview. “It is two-pronged, double-edged, so we should not blame AI. If the criminals use AI, then the bankers or the BSP or whatever financial institution can also use it to block them.”

To mitigate cyberattacks, Mr. Cabanlong said that there is a need to look at banks’ internal policies, make clients aware of the current techniques of threat actors, and strengthen law enforcement agencies.

“The threats are constantly evolving. If your defense doesn’t evolve and you’re stagnant, you won’t be able to catch up with the new techniques of the criminals,” he said.

Dominic Vincent D. Ligot, AI, technology, and research consultant of the IT & Business Process Association of the Philippines (IBPAP), said that the increase in cyber losses can be partly attributed to rapid digital transformation.

“The rapid digitalization of financial services has expanded the attack surface, making financial institutions more vulnerable to breaches. Interconnections with third-party IT systems further exacerbate systemic risks,” he said in a Viber message.

He noted a significant number of cyber incidents involved phishing and social engineering, “exploiting human vulnerabilities rather than technical flaws.”

“Philippine-based threat actors have also been increasingly active, leveraging local scams and political motivations to target financial institutions,” he added.

To mitigate cyber losses, he said that financial institutions and regulators should adopt a multi-faceted approach that will include strengthening cybersecurity infrastructure, enhanced collaboration, human factor mitigation, addressing third-party risks, and legislative support.

In particular, he said that institutions should implement multi-layered defenses like firewalls, intrusion detection systems, and endpoint protection and use advanced technologies like AI-driven threat monitoring.

He also added that initiatives such as the Financial Cyber Resilience Governance Council should be expanded to foster industry-wide cooperation as well as threat intelligence sharing among financial institutions through partnerships.

Uplifting healthcare’s vital professionals

rawpixel.com | Freepik

Behind every doctor and physician is a compassionate heart and years of hard work. The medical profession is one that requires not only a deep technical knowledge of human biology, but a commitment to the arduous — often heartbreaking — work of preserving human life.

Unfortunately, the reality is that such dedication often goes unrewarded in the Philippines. It is a long-understood fact that Filipino doctors would rather become nurses abroad than practice their profession in the country.

Last year, Health Secretary Teodoro J. Herbosa said the Philippines has a shortage of 190,000 healthcare workers. This includes not only nurses and midwives, but also physicians — the backbone of diagnosis, treatment, and medical leadership in every community.

In 2023, Senator Francis N. Tolentino called for a stronger emphasis for a more accessible health program, calling the doctor shortage one of the top priorities in the Philippines.

In his speech during the 93rd National Assembly of the League of Vice Governors of the Philippines, Mr. Tolentino stressed that the longer the country delays, the more the population of local physicians continues to shrink as many among their ranks seek better fortunes abroad.

“The current medical situation in the Philippines right now is below the threshold… there are more Filipinos being born than there are pediatricians,” he had said, adding that of the currently registered doctors, less than half are currently active in the local medical field.

“As of now, there are only four doctors for every 10,000 Filipinos. We barely have any surgeons. Only about 0.2% of the number we need,” he stressed.

In the same speech, Mr. Tolentino said the country needs at least “10 doctors for every 10,000 Filipinos” to have accessible medical healthcare in the country.

According to a separate report by BMI, a unit of the Fitch Group, the 2025 government budget will do little to assuage his concerns. Despite the national budget increasing by 10.1%, funds for public health — alongside other social services like education, welfare, and employment — are being cut. Public healthcare in particular will see a 3.5% decrease in its budget.

“The reduction in total health expenditure allowance will slow progress for the Universal Health Care Act, limiting market opportunities in the public health system,” BMI noted. “Significant cuts to the Health Facilities Enhancement Program and government-owned and -controlled corporation hospitals will reduce investment sustainability in the health system.”

BMI further noted that the increased allocation for the Philippine Health Insurance Corp. (PhilHealth), amidst declining health infrastructure and operations funding, will not support what is required to support the country’s growing population.

Rural areas will almost certainly be the most impacted. Statista noted that in 2022, the highest number of doctors were employed in the National Capital Region (NCR) at a ratio of one doctor to 14,000 people. Meanwhile, the ratio for midwives in the NCR stood at one to 5,000 people, compared to one nurse serving nearly 5,900 inhabitants in the rest of the country.

“Healthcare workers and professionals are necessary in improving the state of health in the Philippines. Despite the number of professionals getting their licenses each year, the number of medical workers choosing to stay in the country to work can be expected to decline in the following years, until better working conditions and higher wages are provided,” Statista noted in its report.

The value of health

The Philippines has long been one of the world’s leading exporters of nurses, but when physicians, too, are increasingly seeking residency or work abroad, it is only a matter of time before a critical point is reached. While this diaspora contributes to remittances and international reputation, it leaves gaping holes in the domestic healthcare network — ones that can severely handicap any future growth the country may see in the future.

The International Trade Administration recognizes the Philippines as an emerging medical tourism country, noting that it had ranked 24th out of 46 countries on the 2020 Medical Tourism Index with competitive medical service prices and English-speaking medical professionals.

The Department of Tourism has been quick to seize the opportunity. Last year, the department partnered with private medical services provider The Medical City to introduce tourism-accredited wellness spots in a bid to position the country as a world-renowned destination for medical tourists.

Currently, the global medical tourism industry is estimated to be worth $47 billion, and is forecast to be valued at upwards of $70 billion by the 2030s. Without adequate investment in medical professionals, however, much of that value lies beyond the Philippines’ reach.

The challenges are not insurmountable. Recently, the House of Representatives passed House Bill 10145, a measure which recognizes physicians collectively as fundamental pillar in a healthcare model that provides access to quality and cost-effective health services.

Dubbed the Philippine Medical Act, the proposed measure aims to overhaul the country’s medical system by strengthening standards in education and professional practice. It seeks to modernize and regulate all stages of medical training — from basic education and internships to postgraduate specialization — while also revising the licensure and registration process for physicians.

The Philippine Medical Act will amend Republic Act 2382, or The Medical Act of 1959, finally allowing foreign nationals who attended local medical schools and completed a year of internship to be granted registration for practice in the country.

While those who stand to benefit the most from the bill are foreign medical students, particularly those from India, it will nonetheless serve as a measure to plug the current shortage of doctors and physicians in the country, as well as raise the standard for medical education in the country, pushing the development of competent, ethical and globally competitive physicians.

The Universal Healthcare Law, which was signed into law in 2019, also was a big step forward. In a keynote speech at a BusinessWorld Insights forum in January, Emmanuel R. Ledesma, Jr., president and chief executive officer of PhilHealth, highlighted the sector’s recent successes year after its signing, saying that it represented the government’s commitment to strengthening the local healthcare system.

“Six years ago, this landmark legislation was enacted, embodying our shared aspiration for accessible, equitable, and quality healthcare coverage for every Filipino. It has made significant strides in expanding coverage to all Filipinos and strengthening local health systems to ensure access to healthcare,” Mr. Ledesma said.

Nonetheless, he acknowledged the serious gaps that remained. Many rural and isolated communities still face issues in resource allocation and accessibility of healthcare services. Mr. Ledesma said that there remains a need for building a robust healthcare infrastructure, including more hospitals and more modern equipment; as well as for supporting healthcare workers and professionals by establishing a strong support system for them.

“These dedicated professionals are the backbone of our healthcare systems and comprise the indispensable nuts and bolts of the National Health Insurance Program,” Mr. Ledesma said. “Investing in their welfare is investing in a happier, healthier and more resilient nation, one that stands ready to face any public health challenge with courage and competence.” — Bjorn Biel M. Beltran

Meralco secures ERC nod for 290-MW power supply from San Miguel unit

PHILIPPINE STAR/RYAN BALDEMOR

THE Energy Regulatory Commission (ERC) has approved Manila Electric Co.’s (Meralco) purchase of the remaining 290 megawatts (MW) under its 1,200-MW power supply contract with San Miguel Group’s South Premiere Power Corp. (SPPC).

“After careful deliberation, the Commission resolved to add 290 MW to the originally approved capacity under the instant case,” the ERC said in a notice.

Under the resolution, the ERC said the additional capacity must be subject to the same rate as the previously approved P5.9282 per kilowatt-hour base rate.

Last year, the ERC granted provisional authority but approved the procurement of only 910 MW from SPPC’s 1,200-MW Ilijan natural gas-fired power facility.

The regulator said the remaining 290 MW was covered under a prior power supply agreement between the two companies, executed in 2019.

When asked for details, ERC Chairperson and Chief Executive Officer Monalisa C. Dimalanta said SPPC and Meralco had filed a motion for reconsideration, arguing that SPPC had transferred the 290-MW power supply agreement to Sual Power, Inc. (SPI).

SPI, a subsidiary of San Miguel Group under San Miguel Global Power Holdings Corp., operates the 1,200-MW coal-fired power plant in Pangasinan.

Following the assignment, the 290 MW was integrated into the 910-MW supply for Meralco under the 2024 power supply agreement.

“We checked our records and verified the assignment and hence allowed the consolidation,” Ms. Dimalanta said in a Viber message.

The ERC chief said final approval of the 2019 mid-merit power supply agreement has been deferred pending resolution of the Commission’s outstanding technical and legal concerns.

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

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

Converge says Starlink partnership may boost enterprise revenue by up to 10%

CONVERGE is among the few companies in the country authorized to resell Starlink services, according to Converge Chief Executive Officer Dennis Anthony H. Uy

CONVERGE ICT SOLUTIONS, Inc. said it projects a 5%–10% increase in enterprise revenue through its collaboration with Elon Musk’s Starlink.

On Tuesday, the listed fiber-optic network operator announced its partnership with Starlink to extend broadband access to remote areas, strengthening enterprise connectivity nationwide.

“For the enterprise business, that is where we will see the impact [of this collaboration]. This is how we will serve our clients. This will improve our revenue side easily by 5–10%,” Converge Chief Executive Officer Dennis Anthony H. Uy told reporters.

“The agreement we started signals the turning point of the enterprise business, which will be able to serve many more enterprises within the satellite solution,” Mr. Uy said.

Converge is among the few companies in the country authorized to resell Starlink services, Mr. Uy said, adding that the company targets to resell approximately $4 million worth of Starlink kits.

Starlink, a satellite internet service of Space Exploration Technologies Corp. (SpaceX), continues to expand its satellite network to provide high-speed broadband to rural and remote areas, according to its website.

As an authorized reseller, Converge now offers end-to-end turnkey solutions, including installation, network management, monitoring, and maintenance.

“Converge already has a formidable fiber network across the country. But we believe that by beefing up our satellite-powered connectivity solutions, we can charge full speed ahead in expanding our Global Business portfolio. This collaboration with Starlink is a key pillar to this aspiration,” said Sherie Ng, managing director of Converge Singapore, the company’s wholly owned unit.

With Starlink’s high-bandwidth, low-latency connectivity, Converge will now serve industries requiring reliable and resilient internet, including construction, mining, agriculture, retail, and hospitality, in remote areas.

For this year, Converge expects revenue growth of up to 16% after posting a P10.8-billion net income in 2024.

The company said its profit increased by 18.9% to P10.8 billion from P9.09 billion in 2023, while total revenue grew by 14.8% to P40.61 billion from P35.36 billion.

By segment, residential revenue rose by 14% to P34.42 billion, while enterprise revenue grew by 22% to P6.19 billion from P5.08 billion.

Converge also announced a partnership with NASDAQ-listed Ribbon Communications, Inc. to strengthen its network to meet the growing demand for high-speed, low-latency, and reliable connectivity.

Based in Texas, Ribbon Communications specializes in real-time communications technology and IP optical networking solutions, helping large service providers and enterprises modernize and secure their networks.

At the stock exchange on Tuesday, Converge shares fell by 22 centavos, or 1.16%, to close at P18.78 apiece. — Ashley Erika O. Jose

NGCP: Grid ready to integrate 10,260 MW of new power capacity

PHILSTAR FILE PHOTO

THE NATIONAL GRID has an available transmission capacity of 10,260 megawatts (MW) for integrating new power generation assets, according to the National Grid Corp. of the Philippines (NGCP).

In Luzon, upcoming power plants can supply up to 6,573 MW to the grid, NGCP data showed.

Currently, existing power plants connected to the Luzon grid have a total dependable capacity of 18,068 MW.

In the Visayas, power plants are delivering 3,178 MW, leaving 2,281 MW of transmission capacity available for connection.

Meanwhile, the Mindanao grid has a total capacity of 4,697 MW, with 3,291 MW utilized by existing power plants. This leaves 1,406 MW of available transmission capacity.

The available capacity can accommodate 6,586.73 MW of committed power projects set to come online this year, based on Department of Energy (DoE) data as of end-January.

The additional capacity from these projects is expected to support the DoE’s projected peak demand of 14,769 MW for Luzon, 3,111 MW for the Visayas, and 2,789 MW for Mindanao this year.

In a previous briefing, NGCP Spokesperson Cynthia P. Alabanza said the company and the DoE will adjust their power outlook following the recent yellow alert declaration.

“What we saw is generation driven. NGCP has no control over generation. The only preparedness that NGCP has in such situations is to ensure that our lines do not fail simultaneously,” Ms. Alabanza said in Filipino.

NGCP has reiterated the need for additional non-intermittent baseload power sources to maintain grid stability.

“As the transmission service provider and grid operator, NGCP can only provide an overview of the current supply-and-demand situation and dispatch any and all available power,” the company said. — Sheldeen Joy Talavera

A celebration of versatility

CANDICE ADEA in Alice Reyes’ “Amada” — JOJO MAMANGUN

ARDP restages ‘Amada’ and other rare gems

FOR National Artist for Dance Alice Reyes, there is excitement in seeing the next generation of dancers take on both classic and modern pieces, requiring the exact versatility that Alice Reyes Dance Philippines (ARDP) revels in with their vast repertoire.

This April, the company will show off the fruit of their hard work with PAGDIRIWANG: Sayaw Alay sa Sining, a mixed-bill program that restages seven pieces of various genres. One of these is Ms. Reyes’ own dance “Amada,” first choreographed in 1969 and last staged in 2017.

“I love passing these dances down to the new generation of artists, who will give it a life of their own. We train a lot of our new dancers by recalling older dancers and choreographers to teach them,” she told BusinessWorld at a press conference in Makati early in March.

“Amada” is based on a short story by Nick Joaquin titled “Summer Solstice,” set in the 19th century. It follows the aristocratic Doña Amada and Don Rafael who find their lives changed when the former attends the women-only summer-solstice festival Tadtarin.

Considered an iconic piece in Philippine dance history, Ms. Reyes’ choreography extracts the tension within the original story and translates it into a push-and-pull between traditional male dominance and rising female power. It features music by National Artist for Music Lucrecia Kasilag and set and costume design by National Artist for Theater Design Salvador Bernal.

Ms. Reyes highlighted how “Amada” requires “powerful body and hair movements” to express tension, authority, and opposition. “It’s why the lead role requires a dancer with long hair,” she explained.

The upcoming restaging is made even more special because it is the farewell performance of multi-awarded ballerina Candice Adea, who will take on the titular role before she retires from dance.

“For years, Candice did ‘Amada’ and she did an amazing job. She recently retired as a soloist from the Western Australian Ballet, and this will be her last time on the Philippine stage. We’re taking advantage of that,” said ARDP Artistic Director Gonelson Yadao.

“She’s a very important figure in Philippine dance because she has really made strides for us here and abroad,” he added.

A STRONG VISION
Starting its 4th season with a set of seven masterful works by renowned choreographers is ARDP’s show of strength with regard to its vision. It represents “what Alice Reyes has always wanted for a dance company,” according to ARDP President Liliane “Tats” Manahan.

“It’s a company that doesn’t settle for one thing, but can do multiple genres. Through the years, Alice has stuck with that,” she said.

In a media preview, dancers showed a glimpse of four of the pieces, including “Amada.”

Kun-Yang Lin’s “Moon” stands out as the only solo. First choreographed in 1994 and last staged in 2021, it features Dan Dayo as a priest of an ancient culture paying homage to heavenly deities with a spiritual yet ecstatic dance mixing Eastern movements with modern expression.

Augustus “Bam” Damian III’s “C’est La Cie,” in its world premiere, has a group of dancers, led by Sarah Alejandro and Monica Gana, explore explosive, neo-classical styles of dance.

Norman Walker’s “Songs of a Wayfarer,” premiered in 1973 and last staged in 2017, follows up with a more pensive and sorrowful pace, backed by Gustav Mahler’s music. It tells a story of unrequited love, with the man grieving over his lover’s marriage to another.

“Mixed-build programs are important because it allows our dancers to have a balance of what they can do in our repertoire. It’s how the likes of Monica (Gana) and Ejay (Arisola) can take on this piece, among others,” said Ms. Reyes.

The other three pieces that weren’t shown at the preview are Carlo Pacis’ “Nocturne” which is a tender yet controlled pas de deux; Adam Sage’s “Glinka’s Valse,” known for its dynamic rhythm showcasing one male dancer and seven female dancers; and Denisa Reyes’ “Muybridge/Frames,” an abstract ballet inspired by sequential motion photographs as if in a moving picture show.

Mr. Yadao emphasizes that the company is versatile because of how its dancers are trained to “articulate movement clearly.”

“It’s why more senior dancers and choreographers are important in showing them the right steps. We remember based on muscle memory, and we can share the nuances that might not be initially obvious from watching a performance,” he said.

PAGDIRIWANG: Sayaw Alay sa Sining will be staged on April 4 and 5 at 2 and 7:30 p.m. at the Globe Auditorium of the Maybank Performing Arts Theater in Bonifacio Global City, Taguig. Tickets are available via TicketWorld. — Brontë H. Lacsamana

Jollibee plans $300-million notes issuance

BW FILE PHOTO

LISTED Jollibee Foods Corp. (JFC) plans to raise at least $300 million through a dollar-denominated senior unsecured guaranteed notes issuance to refinance debt.

“The $300 million is the minimum if you want to be listed in indexes,” JFC Chief Financial Officer Richard Shin said in a virtual briefing on Tuesday when asked about the planned issuance.

“We don’t have just local investors. We also have international investors. The debt capital market is very excited because we’re a very low credit risk company. If you go lower than that, it’s very hard to get attraction from some of the larger investors,” he added.

Mr. Shin also said JFC would issue senior bonds instead of perpetual bonds.

“The reason for that is it’s more cost-effective as a senior bond versus a perpetual bond. Our covenants are all in a very good place. We want to do what’s best for shareholders by securing the lowest cost,” he said.

“This pertains to our perpetual bond amounting to $396 million that was due in January… We’ve taken $96 million out of the $396 million and converted that into very favorable rate term peso loans onshore,” he added.

On Monday, JFC said it tapped multiple banks for a planned Regulation S five-year US dollar-denominated senior unsecured guaranteed notes issuance.

Regulation S issuances are securities offered outside the United States that are not registered under the US Securities Act or any US state securities laws.

Mr. Shin said JFC would use the proceeds from the issuance for refinancing.

“It’s just refinancing what’s coming up for maturity. Most of our businesses have shifted already or are shifting to the franchise model,” he said.

“Going forward, we’ll have fewer and fewer capital expenditure (capex) requirements for store expansions,” he added.

Jollibee Worldwide Pte. Ltd., a wholly owned subsidiary of JFC, appointed JP Morgan Securities Asia Pte. Ltd. and Morgan Stanley Asia Pte. as joint global coordinators and bookrunners for the issuance.

It also tapped BPI Capital Corp. and Hongkong and Shanghai Banking Corp. Ltd. (HSBC) Singapore branch as joint lead managers and bookrunners.

For 2025, JFC allocated a capex budget of P18 billion to P21 billion to support its target of opening up to 800 new stores.

As of end-2024, JFC operates 9,766 stores worldwide, including 3,382 in the Philippines and 6,384 international branches.

JFC shares dropped by 3% or P7.20 to P232.80 apiece on Tuesday. — Revin Mikhael D. Ochave

Hong Kong, China art sales drop a third as high-end market slows

GUESTS VIEW an artwork by Yue Minjun at Art Basel Hong Kong 2024. — BLOOMBERG/KEITH TSUJI/GETTY IMAGES

AUCTION HOUSES in Hong Kong and mainland China made a third less in modern and contemporary art sales last year due to a dearth of ultra-high-end artworks on the market as vendors wait for a rebound in prices.

Auction sales fell 33% to $576 million in 2024 compared with the previous year, the lowest level since 2017, according to a report released Thursday in Hong Kong by law firm Mishcon de Reya and art market research and analysis firm ArtTactic.

A major driver of the drop was the small number of artworks for sale worth more than $1 million, the report said. The impact was most visible at the ultra-high-end — art worth $10 million or more — where there were just six sales totaling $114 million. In comparison, in 2021, 28 works in this category sold for a total of $456 million.

“This drop in supply reflects a broader lack of confidence among vendors of high-value pieces, many of whom are waiting for a resurgent market,” the report said, adding that the global art market had developed an over-reliance on the $1-million-plus segment. “This dependence has made the market overly vulnerable to the buying patterns of a small pool of ultra-wealthy collectors.”

The report brings the market into focus as Art Basel Hong Kong, one of the most important fairs for contemporary art, is set to take place in the Asian financial hub next week. About 240 galleries from 42 countries and territories will attend the event.

Chinese-French master Zao Wou-Ki led the $1-million-plus category in 2024 with sales of $49 million, with Japanese contemporary artist Yayoi Kusama ranking second with $46 million in sales, the report showed. Claude Monet, Mark Rothko, and Vincent van Gogh also featured in the top 10.

Despite the slump in expensive artwork sales, consignments under $50,000 gained popularity among collectors in the region. Lots sold for less than this price jumped 70% from 2022, while auction sales by value increased more than 17% over the past two years.

“The softening at the upper end of the market has stimulated activity at more accessible price segments,” the report said. “This evolution not only highlights the adaptability of the market, but has opened avenues for new collectors, particularly from Millennial and Gen Z demographics.” — Bloomberg

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