Government losing P500 billion to tax evasion — BIR

February 21, 2023 | 12:31 am

BIR-aitr-tax — The Bureau of Internal Revenue (BIR) is encouraging Filipinos to file their annual income tax returns ahead of the April 17 deadline. — PHILIPPINE STAR/EDD GUMBAN

THE GOVERNMENT loses around P500 billion annually to tax evasion, according to a top Bureau of Internal Revenue (BIR) official.

“There is a lot, especially if we include those involved in illicit trade. In cigarettes alone, there’s around P100 billion,” BIR Commissioner Romeo D. Lumagui, Jr. said, when asked about revenue losses from tax evasion.

“Leakages aren’t part of that yet, like petroleum or vape products that aren’t registered, as well as fake receipts. I think it won’t go below P500 billion if you add everything up,” he added.

Mr. Lumagui said the BIR will have an easier time achieving its collection targets if it addresses tax evasion.

Earlier this month, the BIR filed 74 tax evasion complaints worth P3.5 billion against several companies.

“We will tailor efforts to improve digital services so businesses will leave the shadow economy and join the tax net. We will now focus on enforcement activities against tax evaders, put emphasis on tapping uncollected taxes through illegal activities,” Mr. Lumagui said.

The BIR is currently monitoring and investigating a number of suspected tax evaders.

“The most important right now is the selling of fake receipts and we know who (they are). We are investigating so we can file a case against those involved,” Mr. Lumagui said.

The BIR is targeting to collect P2.6 trillion in revenues this year.

“With all our activities and efforts we are making, we will be able to achieve the tax collection target,” he said.

In 2022, the agency collected a total of P2.34 trillion, surpassing its P2.1-trillion target.

Meanwhile, Mr. Lumagui said the agency will also review its policies after the Supreme Court declared void its regulations that require firms to disclose the personal information of investors.

“We must respect the privacy (of these investors) but when it comes to the correct amount of taxes, the BIR has auditing power. There is still a need to pay taxes and the compliance of these businesses needs to be monitored. When it comes to determining the correct amount of taxes, we can investigate that,” he added.

The Supreme Court declared that the BIR Revenue Regulations No. 1-2014 and Revenue Memorandum Circular (RMC) No. 5-2014 “void for being unconstitutional” as it violated the right to privacy.

The regulations require businesses to disclose investor information such as addresses, tax identification number (TIN), and birthdays, among others.

“The Court holds that the collection of information pursuant to the questioned regulations is not necessary for the BIR to carry out its functions. To reiterate, there was no showing that there was a problem or inefficacy with the system prior to the issuance of the questioned regulations,” according to the ruling.

“While creating a tax database may be considered as part of the BIR’s function of tax collection, it would still be futile to state that the information sought are necessary for the BIR to effectively and efficiently perform its statutorily mandated functions,” it added. — Luisa Maria Jacinta C. Jocson

Metro Pacific earmarks P1B for Bulacan greenhouse

February 21, 2023 | 12:09 am

By Justine Irish D. Tabile, Reporter

THE agribusiness arm of Metro Pacific Investments Corp. (MPIC) in partnership with Israel-based LR Group will be investing around P800 million to P1 billion in a vegetable greenhouse facility.

During the fresh farm’s groundbreaking ceremony on Monday, Metro Pacific Agro Ventures, Inc. (MPAV) President and Chief Executive Officer Jovy I. Hernandez said the facility will be able to supply 1,600 metric tons of vegetables a year.

The greenhouse facility, Metro Pacific Fresh Farms (MPFF), is said to be the largest in the country. In 12 months, it will rise on a 22-hectare lot in San Rafael, Bulacan.

“It is time to take advantage of the available technology and leverage against the traditional bottlenecks that we have encountered in the past. It is time to think closely of the type of food that we bring to the table and how it can be improved at a granular level,” MPAV Chief Commercial Officer Toby Gatchalian said.

“This greenhouse project in Bulacan is only the first step of launching and building a platform for a much larger advocacy. MPFF is but a part of a larger ecosystem that is set to fundamentally change how Filipinos eat,” he added.

Up to 15 hectares of the property will be used for MPAV’s irrigation centers, logistics warehouse, packing facility and energy facilities, while the remaining 7 hectares will be used for two greenhouses.

MPFF will be serving Metro Manila and neighboring provinces to provide farm-to-fork produce.

“The vegetable market in Metro Manila alone is so big, even this facility will only be able to cater [to] a small one,” Mr. Hernandez told reporters, adding that the facility is just the beginning.

“I think we need more of this in the future. And part of the objective is to teach the local farmers how to do it themselves,” he said.

Manuel V. Pangilinan, MPIC chairman, president and chief executive officer, said: “We’ll make sure the prices are affordable and we’ll make sure that we are able to increase the supply of vegetables in Metro Manila.”

With its modern farming technology, called nutrient film technique hydroponics and drip irrigation system, MPFF is expected to use 90% less water and land and 90-99% lesser fertilizers and pesticides, which is said to lessen the cost of producing vegetables.

MPIC through MPAV has been investing in various agricultural ventures beginning with its acquisition of dairy company Carmen’s Best Group and the recent purchase of an almost 35% stake in coconut products maker Axelum Resources Corp.

For the group’s next venture, Mr. Pangilinan said he is eyeing to get into large-scale farming, especially for farm produce that cannot be planted in a greenhouse facility.

“The real challenge is to get into large-scale farming, which means you need plenty of hectares to achieve the kind of scale and kind of cost that you worry about,” Mr. Pangilinan said. “Certain plants are just not capable of being planted in greenhouses like sugarcane.”

“That’s the next challenge for the group, [if] we should get into large-scale farming. But that’s what you need to address the rice situation and the sugar situation,” he added.

SM Prime profit rises 38% as full rental fees resume

February 21, 2023 | 12:08 am

SM PRIME HOLDINGS, INC reported a 38.1% growth in its consolidated net income to P30.1 billion last year from P21.8 billion a year earlier as it resumed collecting full rental fees in malls.

“We are pleased to report that we ended 2022 on a positive note despite the challenges faced for the most of the year, owing to the robust consumer spending particularly in the last quarter,” said SM Prime President Jeffrey C. Lim in a press release.

Meanwhile, the listed holding firm’s consolidated revenues increased by 28.6% to P105.8 billion last year from the P82.3 billion recorded in 2021. The increase largely came from its mall business, which posted P49.8 billion in revenues or more than double the P24.1 billion recorded in the previous year and made up 47% of SM Prime’s topline.

Full rental fees resumed in the second half of last year, resulting in a 91.7% rise in local mall rental income to P44.1 billion from P23 billion. Other revenues, including those coming from cinema and event ticket sales, increased more than five times to P5.7 billion from P1.1 billion.

“As of December 2022, SM Prime has 82 malls in the Philippines, consisting of 58 malls in the provincial areas, and 24 malls in Metro Manila,” the company said.

SM Prime’s consolidated operating income rose by 51.9% to P49.2 billion from P32.4 billion in the previous year.

The company’s residential arm led by SM Development Corp. posted a 12.6% revenue decline to P40.1 billion from P45.9 billion previously.

Other business segments, including offices, hotels, and convention centers, reported a 59.1% increase in revenues to P10.5 billion from P6.6 billion in 2021.

On Monday, shares in SM Prime declined by 0.27% or P0.10 to close at P36.90 each. — Adrian H. Halili

Alternergy secures water permit for mini hydropower project in Ifugao province

February 21, 2023 | 12:07 am

RENEWABLE energy company Alternergy Holdings Corp. said its unit has secured a water permit from the National Water Resources Board for the Ibulao run-of-river hydropower project.

Eduardo M. Miranda, president and chief executive officer of Alternergy subsidiary Ibulao Mini Hydro Corp., said in a media release that the award of the water permit is a “significant milestone” in the development of the project.

Ibulao 2 hydropower plant forms part of the group’s portfolio of projects in Ifugao province.

Mr. Miranda said the 17.4-megawatt (MW) Asin-Hungduan and Ibulao 1 projects located in the municipality of Kiangan in Ifugao are now under construction. Alternergy’s 6.8-MW project in Ifugao’s Lamut and Asipulo towns is being readied for construction

“In the coming months, we will commence the conduct of the activities to obtain the Free and Prior Informed Consent (FPIC) of our host indigenous cultural communities. This is a long and tedious process but we already gained experience from our other projects. We are confident in due course we will have the consent of the communities,” Mr. Miranda said.

Ibulao 2 run-of-river hydropower project will involve the construction, and operation of a 7.4-MW hydropower plant in Brgy. Bolog in Kiangan and Brgy. Caba in Lagawe.

Ibulao 2 is part of Alternergy’s plan to expand its portfolio in five years. The renewable energy company aims to develop up to 1,370 MW of renewable energy sources such as onshore and offshore wind, solar and run-of-river hydropower projects.

Alternergy targets to hold on March 24 an initial public offering of shares to raise up to P1.87 billion. Proceeds from the offering will fund the pre-development stage of its projects currently in the pipeline, including the Ibulao 2 hydropower project. — Ashley Erika O. Jose

iPeople awaits more signups after new educational offering

February 21, 2023 | 12:06 am

LISTED education company iPeople, Inc. expects more students to sign up in August this year on the back of a new education offering under a partnership between its Mapua schools and Arizona State University (ASU).

“The official signing was in May [last year], then we announced it publicly in June. The first classes were in August [last year]. But then we’ve not really had the chance to market or discuss it much,” iPeople President Alfredo I. Ayala told reporters on the sidelines of a press conference in Makati City on Monday.

“This coming year, we’re hoping to see significant signups,” he said, citing the collaboration with ASU.

Mr. Ayala said the company is sharing “more proactively everything there is to offer.”

“We also wanted to get off the ground and run a few courses. Make sure that we are doing everything properly,” he added.

In 2022, iPeople’s Mapua University and daughter schools Mapua Malayan Colleges Laguna and Mapua Malayan Colleges Mindanao entered into a collaboration with ASU to improve and focus on the business and health sciences programs.

The partnership allowed Mapua schools to be members of global network ASU-Cintana Alliance, which consists of 15 higher education institutions in the Americas, Europe, and Asia. Some of the alliance’s other members are Galala University in Egypt, The NorthCap University in India, and Universidad Internacional del Ecuador in Ecuador.

Under the collaboration, students will have access to ASU’s content in all enhanced courses, participate in the global signature courses from professors at member universities of the alliance via virtual classrooms, and interact with foreign classmates without leaving the Philippines.

Students could also participate in classes co-lectured by ASU faculty and gain opportunities to participate in student exchange and summer immersion programs at ASU-Cintana schools.

“Our collaboration with global leader ASU and being part of the ASU-Cintana Alliance enable us to take these to a higher level for our students, by giving them numerous opportunities to learn with a top-ranked US university, and other leading education institutions around the world,” iPeople Chairman and Mapua University President Reynaldo B. Vea said.

iPeople owns seven educational institutions consisting of Malayan Education System, Inc. operating as Mapua University, Mapua Malayan Colleges Laguna, Mapua Malayan Colleges Mindanao, and Malayan High School of Science in Manila; the University of Nueva Caceres in Bicol; National Teachers College; and APEC Schools.

iPeople is an education company under Ayala Corp. and the House of Investments of the Yuchengco group of companies, which hold a stake of 33.5% and 51%, respectively.

On Monday, shares of iPeople at the local bourse dropped 13 centavos or 1.71% to end at P7.49 apiece. — Revin Mikhael D. Ochave

Manila Water secures P3-B term loan

February 21, 2023 | 12:05 am

MANILA WATER Co., Inc. has signed a P3 billion 10-year term loan facility with the Land Bank of the Philippines, the water concessionaire said on Monday.

In a regulatory filing, Manila Water said the loan will fund its general corporate requirements and capital expenditures.

The east zone water concessionaire has said that it is targeting to spend about P181 billion for its capital investments until 2027.

Separately, Manila Water said it is optimistic about the construction of the P4.18-billion Aglipay sewerage treatment plant in Mandaluyong City.

The Aglipay plant has a treatment capacity of about 60 million liters per day (MLD), which is expandable to 120 MLD of wastewater to be collected from its catchment area in the cities of Mandaluyong, San Juan and Quezon. The sewerage system is expected to serve 720,000 by 2037.

The water concessionaire serves Metro Manila’s east zone network, which comprises Marikina, Pasig, Makati, Taguig, Pateros, Mandaluyong, San Juan, portions of Quezon City and Manila, and several towns of nearby Rizal province.

At the local bourse on Monday, shares in the company closed four centavos or 2.03% higher at P20.10 apiece. — Ashley Erika O. Jose

Converge to serve Boracay residents by March

February 21, 2023 | 12:04 am

CONVERGE Information and Communications Technology Solutions, Inc. will be extending its coverage to the residents of Boracay Island by the end of the first quarter of 2023.

“We are here to serve the connectivity needs of both local and foreign tourists, as we know internet connection is a value-adding service to any tourist hot spot,” said Dennis Anthony H. Uy, chief executive officer and co-founder of Converge.

“With this, hopefully we can meaningfully contribute to Boracay’s tourist-driven economy,” he added.

The move is part of the company’s strategy of expanding its fiber footprint across the country.

“Converge has been working hard to further expand our fiber footprint in the Philippines so we can reach the unserved and underserved,” Converge Chief Operations Officer Jesus C. Romero said.

According to the company, it is aiming to provide connectivity to the island’s hospitality industry, which could increase profit and bring customer loyalty.

“Businesses will enjoy the benefits of dedicated, hyper-secured, and uninterrupted connectivity services for continuous business productivity, which will lead to increased profit and customer loyalty,” the company said.

Converge is also eyeing to service island-hopping entrepreneurs as entrepreneurial tourists work remotely in hotels, cafes, co-working spaces and temporary housing.

“One of the foremost needs of the modern traveler is having a stable and fast internet connection, while businesses require a reliable and better partner in connectivity. We are confident that our products and services will help cement the island’s luxurious reputation,” Converge Regional General Manager for Visayas and Mindanao Michael Maquiran said. — Justine Irish D. Tabile

Gov’t partially awards Treasury bill offer

February 21, 2023 | 12:03 am

THE GOVERNMENT partially awarded the Treasury bills (T-bills) it auctioned off on Monday as rates went up across the board after the central bank hiked borrowing costs anew last week.

The Bureau of the Treasury (BTr) raised just P13.05 billion from its offer of T-bills on Monday, below the P15-billion program, even as bids reached P30.328 billion or more than twice the amount on the auction block.

Broken down, the Treasury borrowed only P3.55 billion via the 91-day T-bills, below the P5-billion program, despite tenders reaching P7.33 billion. The average rate of the three-month papers rose by 18.3 basis points (bps) to 4.413% from the 4.23% quoted for the tenor last week, with accepted rates ranging from 4.325% to 4.5%.

The government also made a partial P4.5-billion award of the 182-day securities versus the P5-billion plan, even as demand for the tenor reached P10 billion. The six-month T-bill was quoted at an average rate of 5.06%, rising by 11.1 bps from 4.949% the previous week, with accepted rates ranging from 5.025% to 5.1%.

Meanwhile, the BTr raised P5 billion as planned from the 364-day debt papers as demand for the tenor reached P12.988 billion. The average rate of the one-year T-bill climbed by 15.70 bps to 5.455% from the 5.298% fetched for the tenor last week. Accepted yields were from 5.375% to 5.55%.

National Treasurer Rosalia V. de Leon said in a Viber message to reporters after the auction that the Treasury made a partial award of its T-bill offer as rates rose following the Bangko Sentral ng Pilipinas’ (BSP) policy decision last week.

“The committee decided to keep rates aligned with secondary market levels, thus the partial awards for the 91- and 182-day T-bills,” Ms. De Leon said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort likewise said in a Viber message that auction yields posted a bigger increase week-on-week after the central bank’s rate hike and hawkish signals from the BSP chief.

A trader also said in a Viber message that the auction result was “expected due to the recent policy rate hike.”

The BSP last week hiked benchmark rates by 50 bps for a second straight meeting, and hinted at further tightening to help bring down elevated inflation.

The latest move brought the central bank’s policy rate to 6%, the highest in nearly 16 years or since May 2007 when it stood at 7.5%.

It has now raised borrowing costs by 400 bps since May 2022.

BSP Governor Felipe M. Medalla said after Thursday’s policy meeting that a third or fourth rate hike is likely this year, adding that they could look at a 25-bp or 50-bp increase at their March 23 review.

Mr. Ricafort added that rates also rose amid policy signals from US Federal Reserve officials, which fanned market expectations of two or three more rate hikes to bring down elevated US inflation.

Cleveland Fed President J. Loretta Mester and St. Louis Fed President James Bullard both said they would back a 50-bp hike in the next Federal Open Market Committee meeting following stronger-than-expected US consumer inflation in January.

The US consumer price index (CPI) increased 0.5% last month after gaining 0.1% in December. In the 12 months through January, the CPI increased 6.4% following a 6.5% rise in December.

The US central bank this month hiked its fed funds rate by 25 bps to a 4.5%-4.75% range, bringing cumulative increases since March 2022 to 450 bps. Its next policy meeting is on March 21-22.

On Tuesday, the BTr will offer P35 billion in reissued 10-year Treasury bonds (T-bonds) with a remaining life of nine years and six months.

The Treasury wants to raise P130 billion from the domestic market this month, or P60 billion via T-bills and P70 billion via T-bonds.

The government borrows from domestic and external sources to finance its budget deficit, which is capped at P1.47 trillion this year or 6.1% of gross domestic product. — A.M.C. Sy

DICT sticks to SIM card registration deadline

February 21, 2023 | 12:03 am

sim cards — A VENDOR shows different SIM cards for sale at a stall in Quiapo, Manila, Oct. 8, 2022. — PHILIPPINE STAR /KRIZ JOHN ROSALES

THE Department of Information and Communications Technology (DICT) said it will not extend the deadline for the mandatory registration of subscriber identity module (SIM) cards.

“We are not yet looking at the possibility of an extension. We are still sticking with the April 26 deadline and all hands are on deck to ensure the registration of as many users as possible,” DICT Undersecretary for Public Affairs and Foreign Relations Anna Mae Y. Lamentillo said in a media briefing on Monday.

Ella Blanca Lopez, the commissioner of the National Telecommunications Commission (NTC), said the agency is confident of meeting the deadline.

“We are hoping that SIM subscribers will register by April 26 though as of now only 19.71% are registered. But we still have time,” Ms. Lopez said.

Data from the DICT show that there are about 168.98 million subscribers nationwide. The SIM card registration process started on Dec. 27, 2022

Republic Act No. 11934 or the SIM Registration Act is said to combat worsening text scams and fraud in the country.

Ms. Lopez said four months before the implementation of the law, the NTC had been receiving complaints through its hotline for text scams.

“We reviewed the complaints that we received and there are 51,874 complaints or roughly 1,500 per day,” she said.

She said since the start of the SIM card registration, the complaints were down to 8,700.

Meanwhile, Ms. Lopez said that the NTC is now addressing the concerns over the slow progress in the registration of SIM cards.

“Yes, we have received the letter from Infrawatch,” Ms. Lopez said, referring to the public policy think-tank. “We are internally discussing how to address the matter.”

In a letter to the NTC dated Feb. 7, Infrawatch PH expressed concern over the slow pace of registration, warning that if the current pace continues, the number of registered subscribers would only be at around 69.52% of the total subscribers.

Meanwhile, Globe Telecom, Inc. rolled out assistance desks in over 500 locations in the country to assist and make it easier for customers to register their SIM cards.

“It is a momentous initiative that will bring together Filipinos across the country to register their SIMs and move us closer to our goal of reducing spam and scam text messages, which is the intent of the SIM Registration Act. It’s a historic moment for Globe as we endeavor to get closer to our customers through online channels and on-site booths,” Darius Delgado, head of Globe’s channel management group, said. — Ashley Erika O. Jose

Haraya Residences set to rise in Bridgetowne Estate

February 21, 2023 | 12:03 am

UPSCALE developer Shang Robinsons Properties, Inc. (SRPI), a joint venture between Shang Properties, Inc. and Robinsons Land Corporation (RLC), recently unveiled a high-rise condominium project in Pasig City.

Haraya Residences, described as a “vertical gated village for the modern era,” will rise within RLC’s master planned 31-hectare district Bridgetowne Estate.

The company launched on Saturday the first of two towers, the South Tower which will feature 558 units on 57 storeys. The North Tower has no target launch date yet.

Haraya Residences offers one-bedroom units (67 square meters), two-bedroom units (104-142 sq.m.) and three-bedroom units (187 sq.m.).

A one-bedroom unit “reimagines” a traditional one-bedroom layout with flexible spaces and a loggia that expands the living room.

As a low-density residence, the two towers will only have ten units to a floor for exclusivity and privacy.

“Haraya in Filipino means ‘imagination,’ so we hold our mission sacred, to envision new possibilities for homeowners, introduce meaningful innovation, and develop inventive spatial configurations that provide comfort, freedom, and inspiration,” SRPI Executive Vice-President Jose Juan Z. Jugo said at the Feb. 15 media launch.

Haraya Residences will have 2,270 sq.m. of indoor amenities including a movie room, a library, function rooms, a private dining room, a game room, a playroom, a gym, and a lounge with a view of the skyline.

It will also have 2,500 sq.m. of outdoor amenities which include green spaces, swimming pools, and play areas.

“Haraya Residences is really a project that will transform normal urban living into something very special. We want to be a landmark project that improves the way people live,” Mr. Jugo said.

SRPI is targeting young urban professionals that want to upgrade their lifestyle.

“We’re a very young country. I believe today the average age of the Filipino is 24 or 25 years old. A 24-year-old will be in the workforce for the next 40 years,” said Mr. Jugo.

“These young people need homes and they’re in the workforce, so they might start with a simple home, a modest one, and as they get older, they upgrade. That’s the market Haraya Residences is targeting — people who are upgrading their lifestyle,” he added.

SRPI aims to complete Haraya Residences by 2028.

The residential development is expected to be surrounded by office towers and other premium developments in Bridgetowne Estate.

Bridgetowne Estate is a few minutes away from the Ortigas business district and accessible via C-5, Ortigas Avenue Extension, and Amang Rodriguez Avenue.

Offices and the upscale Opus mall are expected to open in Bridgetowne Estate this year. — B.H. Lacsamana

Pandemic drives demand for life insurance among new small business owners

February 21, 2023 | 12:02 am

MAJORITY of new business owners in the country bought life insurance products for protection and security during the coronavirus pandemic, according to a study by The Manufacturers Life Insurance Co. (Phils.), Inc. (Manulife Philippines).

The study, titled “Filipino entrepreneurship and the bayanihan spirit: The resurgence of micro and small businesses in the Philippines,” was conducted in partnership with research firm InSites Consulting, Manulife Philippines said in a statement on Monday.

It surveyed 500 Filipinos nationwide aged 18 to 55 in May 2022.

Manulife Philippines said 40% of the respondents said life insurance was the top financial product they bought in the last 12 months, with 41% of the respondents also saying they planned to buy life insurance in the next 12 months.

This was followed by medical/health/accident insurance (36%) and nonlife insurance (17%) as the top financial products Filipino bought.

“These new business owners… became more conscious about preparing for financial challenges or crises, encouraging them to seek to buy life protection and security for themselves, and indicating their openness to consider financially protecting their employees,” Manulife Philippines said.

According to the survey, 41% of respondents started micro and small businesses during the pandemic, and 50% said they are very likely to continue their operations in the new normal.

The survey showed earning income was the top reason for starting a business at 43%, followed by maintaining financial stability (34%), and providing convenience and accessibility to people (8%).

The nature of their businesses also reflected market needs during the pandemic, with most of them going into food preparation and processing (41%), retail (30%), or delivery of essential goods and services (24%).

“The pandemic emphasized the vital role of micro and small businesses in sustaining our local and national economies, especially in times of crisis. Manulife aims to help Filipino entrepreneurs to protect their businesses by securing their most valued asset — their employees,” Manulife Philippines President and Chief Executive Officer Rahul Hora said.

“With our customizable insurance solutions, entrepreneurs can empower their employees with confidence and a sense of security in the midst of financial setbacks,” he added.

The life insurer said these businesses have “flourished” amid support from communities in the country.

Majority or 65% of respondents said they availed of products and services from local small and micro businesses, with 32% doing so more than once a week. The top reasons for their patronage were to support the economy (66%) and the community (63%).

“This study’s findings coincide with our previous studies that show how the pandemic spurred significant behavioral shifts among Filipinos, including business owners, regarding their finances. The socioeconomic disruptions Filipinos experienced in the past two years drove increased interest in purchasing life insurance as a financial safety net,” Manulife Philippines Chief Marketing Officer Melissa L. Henson said.

“Manulife aims to respond to this growing demand by offering relevant and affordable solutions that can give them the protection and financial security that they deserve,” Ms. Henson added.

Manulife Philippines said they offer group insurance products to help business owners provide their employees protection, such as “Group Protect,” a comprehensive life and accident insurance package with benefit add-ons.

The company was ranked eighth among life insurers in terms of premium income in 2021 with P17.51 billion, based on Insurance Commission data. It also booked a net income of P2.86 billion in 2021. — A.M.C. Sy

Global hotel industry likely to withstand headwinds in 2023

February 21, 2023 | 12:02 am

Mark Willis — MARK WILLIS, global chief executive officer of Fairmont Hotels & Resorts — BW FILE PHOTO

By Arjay L. Balinbin, Multimedia Editor

THE global hotel industry will remain resilient and continue its recovery in 2023, thanks to the resurgence of international travel, according to an industry expert.

For 2023, “we see global recovery,” Mark Willis, global chief executive officer of Fairmont Hotels & Resorts, told BusinessWorld earlier this month.

“Yes, there has been a lot of negativity around a possible global recession and a return to 2008-2009 (global financial crisis), but that has been an ongoing discussion for some months… For the most part, it’s been delayed and delayed, and I wonder if it will come because most of the locations around the world are recovering,” he said.

The global hospitality had an “uplifting year” in 2022, driven by leisure demand and various international tourism events such as the World Expo Dubai, Formula One Grand Prix and FIFA World Cup, according to real estate services company JLL.

In its “Global Hotel Investment Outlook 2023” report, JLL said occupancy rates have recovered around the world. For instance, occupancy rates in the Americas have recovered to 95% of the pre-pandemic levels, while those in Europe and Asia have regained 89% and 77%, respectively.

“The industry has bounced back after an appalling period. I don’t think anybody was hit as hard as the travel and hospitality sector,” Mr. Willis said.

Pent-up travel demand is expected to remain resilient in 2023, JLL said, “particularly as China and other international borders reopen and consumers consistently demonstrate a desire to travel.”

“Inflation, cost of goods, cost of payroll…, and power… have all been elements of business that have been under a lot of pressure in the past 18 months,” said Mr. Willis.

Although hotel rates have gone up, demand has also gone up, he noted.

“Supply has slowed down a little as we come through COVID, and there is a desire to travel, particularly from those locations that have been under lockdown.”

In the Philippines, travel agencies are likewise expecting international visitor arrivals to approach pre-pandemic levels.

International visitor arrivals will reach seven million this year, Michelle G. Taylan, chair of the Philippine Travel Agencies Association’s 30^th Travel Tour Expo 2023, told BusinessWorld last month.

The Department of Tourism has set a target of at least 4.8 million tourist arrivals this year. While this is below the 8.26 million foreign arrivals in 2019, it is still an improvement from the 2.65 million international arrivals in 2022.

Despite the economic challenges, Fairmont’s Mr. Willis is confident that the luxury hotel brand will “remain strong.”

“The brand is wonderfully strong; it’s a heritage brand with a hundred-year-plus history,” he noted.

Fairmont is part of Accor, a global hospitality group that operates in more than 5,000 locations across 110 countries. The Fairmont Makati celebrated its 10^th anniversary earlier this month.

Mr. Willis said that Fairmont is set to open more than 30 hotels in the next 36 months, nine of which will be in Asia.

“If you have the right product, the right service, and you can personalize what you are doing and reach and exceed people’s expectations, people are prepared to pay a fair price for that,” he added.

Mr. Willis is responsible for the luxury brand’s portfolio of more than 100 hotels in operation and under development globally. Prior to taking the helm at Fairmont, he was the chief executive officer for India, Middle East, Africa and Turkey at Accor, overseeing a portfolio of more than 520 hotels in operation and development across 20-plus diverse brands.

The goals for Fairmont include modernizing or digitalizing its processes, as well as “making sure that you are attracting the next generation… and that they are coming, utilizing and enjoying our fabulous portfolio of hotels.”