DBP books P5.6 billion in net earnings in 2022

February 24, 2023 | 12:02 am

DEVELOPMENT BANK of the Philippines (DBP) saw its net profit climb by 50% to P5.61 billion in 2022 on the back of improved interest income and loan volumes.

The state-run bank said in a statement on Thursday that its net income rose from P3.74 billion in 2021 as its loans expanded amid the continued reopening of the economy.

DBP President and Chief Executive Officer Michael O. de Jesus said this increase also came despite the rise in its loan loss provisions.

“This resurgent financial performance of DBP enhances its inherent strong capacity to support the National Government’s goal of promoting sustainable and equitable economic growth in the country, through the provision of vital financial support to various socioeconomic initiatives, particularly on infrastructure development,” Mr. De Jesus said in a statement.

The bank’s total loans grew 12% to P527 billion last year from P469.40 billion in 2021.

Mr. De Jesus said P297.14 billion or the bulk of loan releases went to projects in the infrastructure and logistics sector, representing 56% of its loan portfolio.

Credit for projects under the social infrastructure and community development sector amounted to P105.91 billion, while P70.04 billion in loans went to other developmental projects, which include financial and insurance activities, manufacturing, wholesale and retail trade, accommodation, and food services.

“DBP’s outstanding loans for environment-related projects totaled P54.62 billion, P32.14 billion for the MSME (micro, small and medium enterprises) sector, and about P45.58 billion for projects in the agriculture sector in line with the food sufficiency program of the National Government,” Mr. De Jesus said.

The lender’s improved net profit was also driven by the 18% increase in its gross margin that came despite a P5.9-billion credit loss, DBP Officer-in-Charge for Operations First Vice-President Christine G. Mota said.

“For 2022, DBP substantially exceeded its net income target of P3.85-billion by 46%, which attests to the bank’s lofty position as one of the most financially stable government financial institutions in the country,” Ms. Mota said.

Before provisions, the bank’s income stood at P12.5 billion, a 44.4% increase from P8.66 billion in 2021, she added.

DBP’s total assets stood at P1.045 trillion at end-2022, while its total liabilities stood at P965.576 billion.

The bank currently has a network of 132 branches and 15 branch lite units. — AMCS

Alec Baldwin’s Rust manslaughter charges downgraded, cutting possible prison time

February 24, 2023 | 12:01 am

PROSECUTORS have downgraded the involuntary manslaughter charges against Alec Baldwin, reducing the possible prison time the Hollywood star may face for the 2021 fatal shooting on the set of the movie Rust, charging documents showed.

New Mexico First Judicial District Attorney Mary Carmack-Altwies had charged Mr. Baldwin and the movie’s set armorer, Hannah Gutierrez-Reed, with two counts of involuntary manslaughter last month for the death of cinematographer Halyna Hutchins, with the most serious charge carrying a potential prison sentence of five years.

Ms. Carmack-Altwies filed altered charges for Mr. Baldwin and Ms. Gutierrez-Reed on Friday, removing the firearm enhancement and reducing their possible prison sentence from a minimum of five years to a maximum of 18 months.

“In order to avoid further litigious distractions by Mr. Baldwin and his attorneys, the district attorney and the special prosecutor have removed the firearm enhancement to the involuntary manslaughter charges in the death of Halyna Hutchins on the Rust film set,” Heather Brewer, a spokesperson for the New Mexico First Judicial District Attorney, said in a statement.

A lawyer for Mr. Baldwin did not immediately respond to a request for comment.

“We applaud the decision of the district attorney to dismiss the firearm enhancement and it was the right call, ethically, and on the merits,” said Jason Bowles, an attorney for Ms. Gutierrez-Reed.

Lawyers for Mr. Baldwin and Ms. Gutierrez-Reed had argued earlier this month that prosecutors were unjustly charging their clients under a version of the firearm enhancement law that had not been passed until May 2022, months after the incident.

When the incident occurred, New Mexico law stated that the firearm enhancement should be applied when a firearm was “brandished” in the commission of a noncapital felony, meaning the suspect had an intention to harm.

In 2022, the criteria for applying the firearm enhancement — with the five-year minimum prison sentence — was expanded to include when a weapon was simply “discharged” in the commission of a noncapital felony.

Mr. Baldwin’s case is remarkable in that there is little or no precedent for a Hollywood actor to face criminal charges for an on-set shooting.

The 30 Rock actor has denied responsibility for the shooting, which also injured the movie’s director Joel Souza. He has said he cocked the revolver but never pulled the trigger and it was the job of Ms. Gutierrez-Reed and other weapons professionals to ensure it was unloaded.

Videos from inside the church prior to the shooting show Mr. Baldwin with his finger on the trigger, the prosecution’s special investigator, Robert Shilling, said in a statement of probable cause.

An FBI forensic test of the revolver found it “functioned normally” and would not fire without the trigger being pulled.

Ms. Gutierrez-Reed testified to New Mexico’s worker safety agency (OSHA) on Dec. 7 that the shooting might have been prevented had she had more time to train Mr. Baldwin. She said he had “poor form” when using the revolver.

Charging documents held Ms. Gutierrez-Reed responsible for “allowing live ammunition on the set,” but did not accuse her of physically introducing them onto the production.

Mr. Baldwin and Ms. Gutierrez-Reed are both expected to make an initial court appearance in Santa Fe, New Mexico, on Feb. 24. — Reuters

Wilcon Depot moves to expand market share

February 24, 2023 | 12:01 am

LISTED retailer Wilcon Depot, Inc. said on Thursday that its board had approved a proposed change in its incorporation papers to include business names that will reflect its aim to expand market share.

In a disclosure to the stock market, the seller of home improvement and construction supplies said it will be adding Do It Wilcon and Bargain Center by: Wilcon Depot to the names and styles that it uses in doing business.

Do It Wilcon will provide an “opportunity to expand market share by targetting customers who require easy access to a basic range of tools and materials for simple housing repairs and maintenance,” the company said. It will be found in community centers or malls.

Meanwhile, Bargain Center by: Wilcon Depot will provide an “additional distribution channel for pruned items,” referring to discontinued or older products at prices lower than in retail stores.

The proposed amendment to Wilcon Depot’s articles of incorporation was approved by the board of directors on Feb. 22. It will be presented to shareholders for approval during the company’s annual stockholders’ meeting on June 19.

Wilcon Depot said the amendment “is not expected to have any negative or adverse effect on the business operations and/or capital structure” of the company.

On Thursday, its shares rose 1.75% or P0.55 to finish at P32 apiece on the stock exchange. — Adrian H. Halili

AIA Philippines launches investment management arm

February 24, 2023 | 12:01 am

AIA Investment Management on Thursday launched AIA IM and Trust Corp. Philippines (AIM IM Philippines), which specializes in long-term investing focused on sustainability for consistent returns.

“Today’s launch is still a part of AIA Philippines’ rebrand from Philam Life, with AIA IM Philippines bringing together AIA Investment Management’s global capability and our understanding of the local market,” AIA Philippines Chief Executive Officer Kelvin Ang said in a statement on Thursday.

“This is one of the important building blocks that will give us leverage to capture opportunities ahead and remain the leading brand that provides the protection, long-term savings, and healthcare needs of Filipinos,” he added.

AIA IM has more than a hundred years of experience in the Asia-Pacific, managing $294 billion in assets.

AIA Head of Group Investment Strategy and Solutions Trevor Persaud said AIA IM has partnerships with many of the best and largest institutional asset managers who are also long-term investors, such as Blackrock, Wellington Management, Capital Group, Baillie Gifford, PIMCO and Robeco.

“Through our stewardship and this partnership with some of the world’s leading investment managers, Filipinos can now have access to global investing and the investment capabilities of these managers combined with the investment oversight and expertise that has protected and helped AIA to meet the investment needs of its customers over its long history,” he said in the statement.

AIA IM Philippines CEO Angie L. Pacis said the Philippines is attractive to investors due to its young population as well as a growing middle class.

“The one thing that is going to provide support is really the demographic dividend. It’s a young population. It’s a big population. And because with a growing middle class, and a middle class that is actually becoming stronger because of that, we will continue to attract investments, notwithstanding some of the structural problems,” Ms. Pacis said at the launch event.

AIA IM Philippines currently offers three peso-denominated unit investment trust funds, she said.

“These funds were designed to address the various needs and risk appetite of our customers. By creating funds that vary in exposure and investment portfolio, customers have the luxury of choosing what suits their needs, at the level of risk comfortable to them,” AIA Philippines Chief Investment Officer Lee C. Longa said in a statement. — AMCS

Worker repeatedly discredits his coworkers

February 24, 2023 | 12:01 am

I’m a manager with five direct reports, including Raffy (not his real name), the most senior person in the group. The trouble is his tendency of belittling every move of his junior work colleagues. At every opportunity, Raffy would come in to my office to complain about many trivial issues like reporting how long they take their coffee or meal breaks. At one point, he came to my office complaining about one worker’s tardiness. Fortunately, his co-workers don’t know anything about his complaints. How do I handle the situation without antagonizing Raffy? — Pink Star.

There are two possible reasons for Raffy’s treatment of his colleagues. One is attention-seeking. It is possible that he wants a raise or a promotion even if he knows he doesn’t deserve it. He could also be deflecting the focus away from him because he can’t prove his worth. Incompetent people do that so the attention is removed from them.

Which one is the most likely cause of Raffy’s actions? I’d like to believe that Raffy is blaming or criticizing others as a cover-up for his own inadequacies or mistakes, as a sort of defense mechanism. He’s trying to muddy the waters by diverting your attention to others.

“Blaming others,” according to Arash Emamzadeh in Psychology Today (2023) “is more common in those who are experiencing negative feelings and are unable to regulate their emotions.”

REMEDIES
What should you do? Every time that Raffy comes to you to complain, cut him off right away. Tell him that you can arrange for a private meeting with him in your office or in conference room to discuss all the things you’ve assigned him. Seek an update of what he has accomplished so far. Make this a habit whenever Raffy complains about his colleagues, so he’ll get the underlying message. Then proceed as follows:

One, acknowledge all the information that he’s giving you. While you appreciate the help he’s extending to you, emphasize that you don’t have enough time to verify all the information. In this age of fake news and disinformation, say that you abhor receiving exaggerations and untruths.

Two, talk to each one of your direct reports. Probe for their version of events without divulging that the complaints came from Raffy. This is what I would call a quick but casual engagement dialogue to explore the workers’ issues or challenges in performing their jobs. The objective is to address their immediate concerns before they become major issues.

Three, have a bias for concrete work performance. Remain steadfast that as long as there are no workers crossing the line as defined by the company’s code of conduct, you’re willing to ignore minor issues, as long as they deliver concrete results. Let him know that you’re very particular about meritocracy.

Say that taking coffee breaks is not necessarily a bad thing as long as the workers are trying to solve work issues even away from their work stations.

Four, arrange for a weekly department meeting. The ideal approach is end-of-the-day reporting. If that’s not possible or practical, require all your workers to submit a weekly one-page accomplishment report highlighting the tasks they have completed. This report must contain the weekly goals, status (achieved versus pending), timelines, estimated budget spent and the challenges encountered. Assign each worker to deliver an overview of all reports on a weekly rotation basis starting with Raffy, as the most senior.

Five, assign special projects to each worker every week. These may include waste elimination projects, cost efficiency initiatives, or anything to do with making their work easier. Require each worker to achieve at least 15% improvement from baseline levels provided by human resources, accounting or purchasing. These tasks should keep everyone busy.

Last, emphasize that cooperation is required from everyone. Teamwork is imperative even in the context of constructive competition. No one should be declared a sacred cow, regardless of their length of service in the organization. Everyone must follow the same route and be judged in accordance with uniform parameters or performance standards applicable to all workers.

REPUTATION
Emamzadeh might describe Raffy’s defense mechanism as a “feature of mental illness” and recommended that “seeking therapy may be helpful as well.” However, I will not advise you to do that unless Raffy has become combative and disruptive to his co-workers. Rather, require all workers to undergo a certain personality test conducted by a third-party service provider under the pretext that you’re assessing them for a possible assignment.

Take positive steps to help improve Raffy’s reputation. You can start by recognizing his accomplishments and perhaps offer him up as a case study for doing an excellent job. Catching people like Raffy doing a good job is a difficult proposition but not exactly impossible. You can start by looking at Raffy’s small wins and congratulate him on those.

Bring Rey Elbo’s program called Superior Subordinate Supervision to your team. Or chat your workplace questions on Facebook, LinkedIn or Twitter or e-mail elbonomics@gmail.com or via https://reyelbo.com

Philippines places 51^st in Impunity Index

February 24, 2023 | 12:00 am

The Philippines ranked 51st out of 163 countries in the Atlas of Impunity or the “Impunity Index,” which measures the abuse of power by governing bodies, by the political risk analysis and consulting firm Eurasia Group. The country got an overall score of 2.83 out of 5 (where 5 is the greatest level of exhibiting impunity). Across the five dimensions of the index, the Philippines ranked highest on the abuse of human rights at 20th place with a score of 3.28.

Offense and defense strategies for Asia-Pacific CEOs

February 24, 2023 | 12:00 am

CEOs today around Asia-Pacific are shifting from years of rapid development and scale to making strategic decisions that prioritize resilience, efficiency, and quality — all in anticipation of a recession that is likely to be shorter but more severe than expected.

In the January 2023 EY CEO Outlook Pulse, a study conducted with 1,200 CEOs around the world, nearly all respondents agree that a downturn is coming or has already arrived. In the Asia-Pacific area, specifically, 99% of the 290 CEOs who participated are actively preparing for a downturn scenario. Roughly half at 49%, however, are gearing themselves up for one that is temporary.

While 61% of Asia-Pacific CEOs are confident that fiscal and policy decisions will ultimately shorten the length of the recession, the majority believe this will be different from previous slowdowns and that it may be worse than the Global Financial Crisis (GFC) in terms of depth and severity.

Given the uncertain climate of the economic landscape, it is critical that CEOs adopt a defensive stance: finding a balance between fortifying their businesses to withstand the worst of the downturn while also planning for the future to strengthen their market position. According to the study, Asia-Pacific CEOs are almost equally focused on offensive and defensive strategies, such as investing in early-stage companies, acquiring companies in related industries, and developing sustainability or environmental, social, and governance (ESG) capabilities. On the other hand, defensive strategies include adapting supply chains for resiliency, selling off underperforming business units, and hiring quality talent.

PANDEMIC ISSUES NO LONGER THE GREATEST RISKS
The study indicates that only 29% of CEO respondents now view pandemic-related interruptions as the greatest danger to organizational growth.

CEOs throughout the Asia-Pacific are now focusing on the problems presented by greater input costs and higher capital costs in the face of rising inflation and the regionalization of the global economy. Inflation was high in almost every major Asia-Pacific nation in 2022, and this trend is predicted to last at least through the first half of 2023 before progressively decreasing.

With the exception of China and Japan, most central banks in the Asia-Pacific region have dramatically hiked their interest rates to combat inflation, which in turn increased the cost of financing. The regionalization and fragmentation of the global economy, which resulted in broken supply chains, higher input costs, and sharp increases in energy prices, have all likewise increased cost pressures.

OPTIMIZING FOR THE SHORT-TERM STORM
CEOs are examining and optimizing capital expenditures, working capital, and corporate finance management to make organizations leaner and more efficient for the downturn.

Outsourcing and managed services are critical to managing fixed costs and shifting risk, according to 54% of CEOs. Higher-value tasks like research, analytics, and risk management are included in this beyond standard business process outsourcing, such as payroll.

Companies that made significant investments in digital transformation during the COVID-19 pandemic are now benefiting from operational advantages. These companies are doubling down, with 98% of CEOs stating that it is crucial to keep up with the digital and technological change in order to deliver revenue growth.

FOCUSING ON THE FUTURE
CEOs are leaning towards and boosting investments in areas that will help them come out of the looming crisis stronger while being careful not to repeat the long-haul flight to safety that many took during the GFC. Some respondents intend to boost their spending on business ventures, product and service innovation, and research and development. Others want to expand their investment in technology- and data-driven digital transformation projects.

Talent, particularly employee wellbeing and skill development, is listed by 39% of respondents as an investment priority. More than half of CEOs have already started switching from hiring new talent to upskilling their existing workforces, while three-quarters feel that flexible working will be essential to lowering employee attrition and attracting new talent.

NEGOTIATING DEALS BETWEEN ALLIES
Most CEOs in the Asia-Pacific at 84% anticipate pursuing some form of transaction this year, but with a more surgical approach. In lieu of or in addition to a more capital-intensive merger or acquisition, they are considering joint ventures and alliances to access strategic parts of a business.

When looking for a merger or acquisition target, 68% of Asia-Pacific CEOs favor “friendshoring” or choosing a market with a close geopolitical and economic tie to their home nation. CEOs are confident that their main operations and supply chains won’t be significantly disrupted due to the relative predictability surrounding free trade and cash flow among allies.

CEO CONSIDERATIONS THIS 2023
The year opened with hope for many CEOs, with signs that several significant macroeconomic and geopolitical issues may be easing up this 2023. Although there will undoubtedly be new challenges, CEOs must show strategic and decisive leadership to weather these issues and future-proof their organizations through transformation and bolder investments in future capabilities.

One of the key considerations CEOs must make is to prepare for multiple scenarios to deal with the rapidly shifting macroeconomic and geopolitical environment of the Asia-Pacific. As events unfold, they should be prepared to switch between probable situations and make swift decisions about purchasing, building, partnering, or letting go. They also have to use data to make informed judgments. From risk management in the supply chain to cybersecurity, CEOs should employ data analytics to control risks in real time and provide information for urgent choices that must be made.

According to previous recessions, CEOs who made investments in future capacities during the downturn reaped the greatest rewards after the upturn. Taking a risk to advance business strategies now despite the uncertainty is an investment in the future.

This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. The views and opinion expressed above are those of the author and do not necessarily represent the views of SGV & Co.

Wilson P. Tan is the chairman and country managing partner of SGV & Co. and the president of FINEX.

How PSEi member stocks performed — February 23, 2023

February 24, 2023 | 12:00 am

Here’s a quick glance at how PSEi stocks fared on Thursday, February 23, 2023.

General Wholesale Price Index in the Philippines (Annual average)

February 23, 2023 | 9:10 pm

GROWTH in the bulk prices of general goods eased in December for a third straight month to 6.7% year on year, tempering the 2022 average to 7.3%, which is still an 11-year high. Read the full story.

General Wholesale Price Index in the Philippines

February 23, 2023 | 9:09 pm

GROWTH in the bulk prices of general goods eased in December for a third straight month to 6.7% year on year, tempering the 2022 average to 7.3%, which is still an 11-year high. Read the full story.

Peso climbs as oil prices drop

February 23, 2023 | 9:00 pm

THE PESO rose against the dollar on Thursday as global crude oil prices dropped to two-week lows, helping ease inflation concerns.

The local currency closed at P54.87 versus the greenback on Thursday, appreciating by 31 centavos from Wednesday’s P55.18 finish, Bankers Association of the Philippines data showed.

The peso opened Thursday’s session at P55.12 per dollar. Its intraday best was its closing level of P54.87, while its weakest showing was at P55.15 against the greenback.

Dollars traded rose to $1.109 billion on Thursday from $1.006 billion on Wednesday.

The peso strengthened as global crude oil prices eased to two-week lows, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The peso appreciated, driven by profit taking from market participants and tracking the decline in global crude oil prices,” a trader said in an e-mail.

Oil prices fell by $2 per barrel to their lowest in two weeks on Wednesday, Reuters reported.

Brent crude futures settled $2.45 or 3% lower at $80.60 per barrel. West Texas Intermediate crude futures dropped by $2.41 or 3% to end at $74.05 a barrel.

The settlement levels were the lowest for both benchmarks since Feb. 3.

Prices dropped on growing concerns over oil demand as the US Federal Reserve aims to keep hiking rates to reduce surging consumer prices, based on the minutes of its meeting earlier this month.

The US central bank hiked its target interest rate by 25 basis points (bps) to a range between 4.5% and 4.75% during its Jan. 31 to Feb. 1 meeting. This brought cumulative increases since March 2022 to 450 bps.

The Fed’s next policy meeting is on March 21-22.

The trader said the peso will likely strengthen further on Friday amid an expected downward revision to the fourth-quarter US gross domestic product report.

The trader expects the peso to trade between P54.70 and P54.95 against the greenback on Friday, while Mr. Ricafort gave a forecast range of P54.80 to P55. — AMCS

PHL stocks drop as market digests Fed minutes

February 23, 2023 | 9:00 pm

EEI--PSE---BW-FILE-PHOTO — BW FILE PHOTO

PHILIPPINE SHARES declined on Thursday as investors priced in the minutes of the US Federal Reserve’s meeting earlier this month, which were released overnight.

The benchmark Philippine Stock Exchange index (PSEi) went down by 13.33 points or 0.19% to close at 6,685.90 on Thursday, while the broader all shares index dropped by 7.16 points or 0.2% to end at 3,572.20.

“The local bourse declined further this Thursday as investors digested the minutes of the Fed meeting,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“Philippine shares have fallen deeper as market participants mull the summary of the Fed’s latest meeting, contemplating the central bank’s next action to curb inflation,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort in a Viber message likewise said the PSEi closed lower for a second straight day “as Federal Reserve officials continued to anticipate further increases in borrowing costs would be necessary to bring inflation down to their 2% target when they met earlier in February 2023.”

Minutes from the Federal Reserve’s Jan. 31-Feb. 1 meeting said that “almost all” Fed officials agreed to slow the pace of increases in interest rates to a quarter of a percentage point, Reuters reported.

There was also solid backing though for the belief that the risks of high inflation remained a “key factor” that would shape monetary policy and further rate hikes would be necessary until it was controlled.

At that meeting, the US central bank raised the fed funds rate by 25 basis points (bps) to a range between 4.5% and 4.75%, bringing cumulative hikes since March 2022 to 425 bps. Its next policy review is on March 21-22.

Back home, the majority of sectoral indices closed lower on Thursday. Property went down by 21.86 points or 0.75% to 2,885.76; financials declined by 10.68 points or 0.59% to 1,797.26; mining and oil lost 52.41 points or 0.47% to end at 11,041.42; and holding firms fell by 12.93 points or 0.20% to 6,452.

Meanwhile, services gained 7.03 points or 0.42% to 1,672.50; and industrials went up by 21 points or 0.21% to 9,634.78.

Value turnover declined to P4.35 billion on Thursday with 932.40 million shares changing hands from the P4.93 billion with 1.34 billion issues traded on Wednesday.

Decliners narrowly outnumbered advancers, 90 versus 85, while 39 names closed unchanged.

Net foreign selling went down to P712.96 million on Thursday from P752.34 million on Wednesday.

Regina Capital’s Mr. Limlingan put the PSEi’s support at 6,400 to 6,500 and resistance at 6,794.13 to 6,800, while RCBC’s Mr. Ricafort placed immediate major support at 6,250 and resistance at 7,000 to 7,100. — Ashley Erika O. Jose with Reuters