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BSP gears for regulatory sandbox framework

SNOWING-FREEPIK

On Sept. 5, the Bangko Sentral ng Pilipinas (BSP) issued BSP Circular No. 1153 which institutionalizes a regulatory sandbox framework to better evaluate entities under its regulatory purview that offer or use financial products/services utilizing emerging or new technology (such as, but not limited to, artificial intelligence/machine learning, Internet-of-Things or IoT, 5G, cloud and quantum computing, robotics process/business automation, and decentralized ledger technologies). As part of its “test-and-learn” approach, the BSP attempts to gain firsthand, evidence-based insights on how these emerging technologies operate, identify consequences and risks on usage and implementation, and how these technological solutions can be properly regulated without impeding innovation.

It may be recalled that in June 2021, the BSP, through circular No. 1122, initiated an open finance framework that has enabled access for third-party providers (TPP) to use customer’s financial information and data (subject to consent requirements and opt-out mechanisms). Consequently, TPPs can leverage on such data to better develop their financial technology (fintech) products and services. The BSP, in the same circular, recommended the creation of a central sandbox to create an environment where these products can be deployed and tested within specified parameters and timeframes. Circular No. 1153 appears to build on this open finance framework by operationalizing the sandbox component of the BSP’s initiatives.

WHAT IS A REGULATORY SANDBOX?
A regulatory sandbox is defined under the Circular as “a controlled, time-bound, live testing environment, which may feature regulatory waivers xxx [that] involve limits or parameters within which [p]articipants must operate.” Broadly speaking, it allows fintech providers the chance to test their products/services in a controlled environment — consisting of select groups of consumers with whom the fintech providers may interact with — under the supervision of BSP’s Sandbox Oversight Team. Those who wish to participate in the regulatory sandbox must first meet the eligibility standards under the Circular before they can be approved to become part of the sandbox activity.

Under the Circular, the applicants should meet the following criteria to be able to participate in the regulatory sandbox:

a. The financial solution: 1.) uses new or emerging technology or utilizes an existing technology in an innovative manner, or, 2.) bridges a market gap in the delivery of financial products/services. The financial solution must be supported by research that shall be part of the documents submitted to the BSP.

b. The applicant must demonstrate its capability to deploy the proposed solution through a roll-out plan or strategy.

c. The applicant shall provide an initial test plan, which includes test case scenarios and expected outcomes of the experiment.

d. The applicant must be able to identify significant risks, including money laundering and terrorist financing risks, IT and cybersecurity, data integrity and data privacy, market acceptability, consumer protection, and project implementation/execution, relevant to the innovation and the corresponding proposed safeguards and risk mitigation strategies.

e. The applicant must be able to identify Key Performance Indicators or other metrics in monitoring the progress of the pilot implementation; and,

f. The applicant shall provide an acceptable exit and transition strategy once the experimentation is completed regardless of the outcome.

The BSP, in the course of its evaluation, reserves the right to reject an application based on the merits of the submitted documents and representations, without prejudice to the filing of a new application after a six-month cooling off period.

Those who are eligible will be allowed to test their proposed innovation in accordance with the BSP-approved test plan which shall be suited to the features of the proposed innovation/solution. Specific regulatory requirements may be relaxed during the testing period in accordance with the test plan. Once the test plan is approved, the BSP will issue a Letter to Proceed with the Test Implementation. From there, the Testing Implementation Phase commences, with testing duration ranging from three to 12 months from the go-live date, depending on the complexity of the proposed solution. After the testing stage, a comprehensive evaluation of the whole experimentation shall take place as part of the exit procedures. The participants must comply with the reportorial requirements mandated by the BSP to establish the necessary information and final results of the experimentation.

Participants whose sandbox activities are assessed as successful and whose products or services are deemed fit for public consumption may apply to operate and offer for public use and consumption the proposed product or service that was subjected to the sandbox activity. The Sandbox Oversight Team shall endorse for approval the product or service that resulted in a successful sandbox testing. The pertinent requirements and processing timelines for the issuance of an authority to offer electronic products and financial services shall apply for this purpose. However, the approving authorities in the BSP reserve the right to approve or disapprove the proposed product or service despite the successful sandbox testing.

The regulatory sandbox is a step in the right direction towards an inclusive digital financial ecosystem in the Philippines. Hopefully, this bottom-up approach towards policy making will break down unneeded regulatory barriers (while still addressing the risks associated with the adoption of certain innovations), and further promote private and public sector partnerships.

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

 

Juan Miguel C. De La Cruz is an associate of the Corporate & Special Projects department of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW).

jcdelacruz@accralaw.com

(632) 8830 8000

Dealing with a looming military pension crisis

PHILIPPINE STAR/EDD GUMBAN

FEW ARE AWARE that our military, while government employees, are not members of the Government Service Insurance System (GSIS).  Thus, when they retire, they will not draw their pension from the GSIS but directly from the government via the yearly approved General Appropriations Act (GAA). This has several flaws. For one, it is on a pay-as-you-go basis, meaning the government pays only the existing pension and does not set aside annual amounts for future payments (full funding of future liabilities). Moreover, unlike with other government employees with GSIS, no premiums are deducted from the salaries of our military. Thus, the government fully pays for the pension of the military while the GSIS members pay partly for their pension through monthly deductions from their salaries.

The question naturally arises. Why not just absorb them into the GSIS? The GSIS actually did an actuarial study of the financial impact of absorbing the military and estimated that this would involve assuming P9.6 trillion in unfunded liabilities, clearly beyond the financial capacity of the GSIS. And so the problem looms. Last July, the DBM released P26 billion to cover the 1st Quarter pension requirements of our military. Our Congressional Planning and Budget Department estimates that if no reform is undertaken, the National Government will need P800 billion for the next 20 years.

There must be another way of dealing with this looming military pension crisis.

First, a short course on Pension Economics 101.

Pension is the money an employee receives upon or after retirement from a company.

The size of his pension rises geometrically the longer he stays in the company for three reasons:

1) Eligibility — Usually an employee will get a pension only if he works in the company for a minimum number of years. Moreover, in a process called vesting, he receives only a percentage of the pension benefits he would get if he stayed with the company until retirement. For example, if he leaves the company after 10 years, he is entitled to only 10% of the pension.

2) Last salary basis — When an employee retires, his pension is computed on the basis of his last salary. Thus, a person who leaves the company after five years will have a much lower last salary than one who leaves the company after 20 years; and finally,

3) Length of service — The pension is usually computed based on the number of years served. And so, the more years served, the higher the pension.

After World War II, the US Congress, in recognition of the service of its veterans, enacted the G.I. Bill of Rights which in effect allowed veterans to go to any school that they chose and that would accept them, all at government expense. It was so successful that it was continued and now it is available to all serving US military personnel.

With this educational benefit, US soldiers now have an incentive to transition as fast as possible to civilian life. As noted, the US Army retention rate is 5% for those with 37 to 48 months of service. (Unfortunately, we have no comparable figures for the Philippines, but we believe the retention rate to be much higher as noted below.)

And so, Pension Economics 101 kicked in and the US government, unlike the Philippines does not have a military pension crisis.

More important than economics is the impact on military doctrine. As with most countries, the military doctrine adopted by the Philippines is that in case of war it mobilized its citizens to fight led by a professional officer corps.

In some countries such as Israel and Singapore, the government requires every citizen to serve in the military, usually for two years. Thus, when mobilized, the citizenry knows how to fight.

And what about those countries which do not conscript such as the United States and the Philippines? The US military encourages young men to enlist, gives them free education, and then encourages them to return to the civilian sector. This policy of high personnel turnover assures the military of a large pool of militarily prepared citizenry.

The Philippines has not adopted such a policy. We are thus faced with a situation where young men enter military service usually out of economic necessity and then cannot return to civilian life as they do not have employable skills needed in the private sector. Congressman Joey Salceda notes that for our soldiers, the military pension is not earned until after 20 years of service. The fact that despite this, we have a looming military pension crisis indicates that we have a lot of overstaying soldiers.

Putting all this together, we argue that the government should launch a Transition to Civilian Life Program whose objective is to transition our rank-and-file soldier to civilian life after a maximum of 10 years of military service. This program would include among others, career counseling services, school vouchers for education, and partnership with the private sector in terms of internships, job fairs, and subsequent hiring. Moreover, we should consider giving a demobilization bonus so the retiring veteran will have some funds in his new life as a civilian. This program could include our officer corps if surveys show they want it.

The expected outcome of this program is a larger pool of militarily trained citizens, our veterans with bright prospects in civilian life, and a solution to our looming military pension crisis.

 

Dr. Victor S. Limlingan is the chairman of the Cristina Research Foundation, Inc., a public policy advisory firm, and the Regina Capital Development Corp. He is presently a Regent of the Board of Regents of the Pamantasan ng Lunsod ng Pasig. Among the books he has written are The Overseas Chinese in ASEAN: Business Strategies and Management Practices and The Visible Hand and the Developing Economy. As public policy adviser to the legislative branch, he advised on legislation such as Kalakalan 20, Overseas Workers Development Fund, the charter of the Banko Sentral ng Pilipinas and the EPIRA Law.

France begins nationwide strike amid soaring inflation

REUTERS

PARIS — French trade unions began a nationwide strike on Tuesday, asking for higher salaries amid decades-high inflation and posing President Emmanuel Macron one of his stiffest challenges since his reelection in May.

The strike, which will primarily affect public sectors such as schools and transportation, is an extension of the weeks-long industrial action that has disrupted France’s major refineries and put petrol stations’ supply in disarray.

Trade union leaders are hoping workers will be energized by the government’s decision to force some of them to go back to work at petrol depots to try and get the fuel flowing again, a move some say put in jeopardy the right to strike.

The CGT union notably has called for continued walkouts into a fourth week at TotalEnergies, despite the oil company reaching a deal including a 7% increase and a bonus on Friday with other unions. The CGT is demanding a 10% pay rise, citing inflation and the firm’s huge profits.

Eurostar said it was cancelling some trains between London and Paris because of the strike.

As tensions rise in the euro zone’s second-biggest economy, strikes have already spilled over into other parts of the energy sector, including nuclear giant EDF, where maintenance work crucial for Europe’s power supply will be delayed.

A representative of the FNME-CGT union on Monday said strikes were affecting work at 10 French nuclear power plants, with further maintenance delays at 13 reactors and French power production reduced by a total of 2.2 gigawatts.

In public transport, major disruptions are expected in local traffic, including in the Eurostar, trains and suburban trains, as well as the Paris subway.

Civil service workers’ unions have also called for joining Tuesday’s strike, with possible disruptions in schools and other public facilities.

The strikes are happening in a tense political context as the French government is set to pass the 2023 budget using special constitutional powers that would allow it to bypass a vote in parliament, Prime Minister Elisabeth Borne said on Sunday.

Demonstrations are scheduled all over the country, with one in Paris starting at 1200 GMT.

Thousands of people took to the streets of Paris on Sunday to protest against soaring prices. The leader of hard-left party La France Insoumise (France Unbowed), Jean-Luc Melenchon, marched alongside this year’s Nobel Prize winner for Literature, Annie Ernaux. Mr. Melenchon called a general strike for Tuesday. — Reuters

Britons spend more nights in, take packed lunches to cover electricity bills

Visitors eat fish and chips and drink soft drinks at a beach cafe in Brighton, Britain, Sept. 24, 2017. — REUTERS

LONDON — Britons are spending more nights in, taking packed lunches to work and eschewing new clothes and treats to ensure they can cover rising energy bills this autumn and winter, according to data from Barclaycard published on Tuesday.

While the UK government is subsidizing energy bills for households until April next year, the average household is still paying twice as much each month for heat and lighting versus a year ago. Wages are also failing to keep pace with UK inflation which was 9.9% in August.

Barclaycard’s survey data found 53% of Britons are planning to cut down on discretionary spending to be able to afford their energy bills.

Of these 60% are reducing the amount they eat out at restaurants, 47% are spending less on drinking in pubs, bars and nightclubs and 59% are cutting down on buying new clothes and accessories.

The data showed 51% of Britons are planning to spend more evenings at home over the coming months.

It showed 29% of Britons are now taking a packed or home-made lunch to work instead of buying food on-the-go, while 28% are cutting back on treats at work, such as coffees and snacks. Some 13% are even skipping meals at work altogether.

Barclaycard said 65% of Britons were looking for ways to save energy at home.

Of these 68% are turning off lights when they leave a room, 57% are wearing more layers, and 54% are boiling only as much water as they need, rather than a full kettle.

The Barclaycard data chimed with data from market researcher Kantar last week which said Britons were searching for cheaper ways to cook as they try to avoid using their ovens. It highlighted a jump in sales of slow cookers, air fryers and sandwich makers, which generally use less energy.

Kantar also highlighted the stocking-up of candles and duvets as people prepare for possible winter blackouts.

Britons are also buying portable generators and torches. — Reuters

Russian ‘suicide drones’ strike terror in Ukraine

Army soldier figurines are displayed in front of the Ukrainian and Russian flag colors background in this illustration taken, Feb. 13, 2022. — REUTERS/DADO RUVIC/ILLUSTRATION

KYIV/WASHINGTON — Russia attacked Ukraine with drones late on Monday, Ukrainian President Volodymyr Zelensky said, after a day of strikes on cities in which at least four people were killed and a US warning that it will hold Russia accountable for war crimes.

Russian forces also targeted infrastructure across Ukraine in the second wave of air strikes in a week, which like the first came in the morning as people went to work and school.

The Russian strikes followed advances by Ukrainian forces in the east and south and after an Oct. 8 blast on a bridge linking mainland Russia to Crimea — the peninsula Russia annexed from Ukraine in 2014.

“Right now, there is a new Russian drone attack,” Zelensky, said in a Monday evening video address. “There are (drones) that have been shot down.”

The Interfax Ukraine news agency said Telegram users had reported blasts in the town of Fastiv just outside Kyiv, as well as in the southern port of Odesa.

Earlier on Monday, Ukrainian soldiers fired into the air trying to shoot down drones, and as residents raced for shelter, after blasts rocked the capital Kyiv.

US President Joseph R. Biden’s press secretary Karine Jean-Pierre told reporters that the White House “strongly condemns Russia’s missile strikes” and said the attack “continues to demonstrate Putin’s brutality”.

Russian President Vladimir Putin sent 10s of thousands of troops into Ukraine on Feb. 24 in what he called a “special operation” to root out what it calls dangerous nationalists.

Ukrainian forces have mounted stiff resistance, with the help of arms supplied by the United States and its allies, who have also imposed sweeping sanctions on Russia in an effort to force it to withdraw.

Mentioning a $725 million military aid package announced for Ukraine last Friday, Ms. Jean-Pierre said the United States would stand with the people of Ukraine “for as long as it takes”.

“We will continue to impose costs on Russia, hold them accountable for its war crimes,” she said.

A pregnant woman was among four people killed in an attack on a Kyiv residential building, mayor Vitali Klitschko said. Ukraine’s Interior Minister Denys Monastyrskyi said there had been deaths in other cities but did not provide a full toll.

Black smoke poured out of the windows of the Kyiv apartment building and emergency service workers toiled to douse flames.

“I have never been so afraid … It is murder, it is simply murder,” said Vitalii Dushevskiy, 29, a food delivery courier who rents an apartment in the building.

Russia denies targeting civilians. Its defense ministry said it had carried out a “massive” attack on military targets and energy infrastructure across Ukraine using high-precision weapons.

Ukraine said the attacks were carried out by Iran-made “suicide drones,” which fly to their target and detonate. The United States, Britain and France agreed that Iran supplying drones to Russia would violate a U.N. Security Council resolution that endorsed the 2015 nuclear deal between Iran and six powers.

Iran on Monday stuck to its denial that it is supplying the drones to Russia, while the Kremlin has not commented.

The White House accused Iran of lying when it says Iranian drones were not being used by Russia in Ukraine.

Asked for comment, the Iranian mission to the United Nations repeated a statement issued by the government on Friday that said it supports upholding the U.N. Charter and the U.N. attempts to find a peaceful solution to the conflict in Ukraine.

Several EU foreign ministers on Monday called for sanctions against Iran over the transfer of drones to Russia.

Ukraine’s military said it had destroyed 37 Russian drones since Sunday evening, or around 85% of those used in attacks. Reuters was not able to independently verify that tally. — Reuters

Canadian firms see recession coming

A PERSON stands in front of a Canadian flag in Montreal, Quebec, Canada, Sept. 20, 2022. — REUTERS

OTTAWA —Business sentiment has softened in Canada and most firms now think a recession is likely, a Bank of Canada survey showed on Monday, but inflation expectations remain high, leaving the central bank little choice but to continue raising rates.

The bank’s Business Outlook Survey showed 77% of firms see price growth staying above 3% for the next two years. A separate survey showed near-term consumer inflation expectations at record highs, though longer term expectations have eased, providing some relief.

“Still-high expectations for inflation will keep the Bank of Canada in rate hike mode,” said Andrew Grantham, senior economist at CIBC Capital Markets, in a note.

Consumers’ lack of confidence that rate hikes will reduce inflation means “workers will be doing everything they can to negotiate higher wages to offset rising prices,” said Royce Mendes, head of macro strategy at Desjardins Group, in a note.

That is cause for concern for the central bank as it seeks to avoid a wage-price spiral, analysts said.

The more the Bank of Canada has to increase rates to temper persistent inflation and keep expectations in check, the greater the chance that it will trigger a recession.

The central bank has already hiked its policy rate by 300 basis points since March and money markets are betting on another half a point increase to 3.75% on Oct. 26. Rates are now seen peaking between 4.25% and 4.5% next year.

Canadian inflation edged down to 7% in August and analysts surveyed by Reuters forecast data on Wednesday will show a further dip to 6.8% in September, still far above the central bank’s 2% target.

RECESSION WORRIES MOUNT
While business sentiment stayed positive in the third quarter survey, there are early signs that pressures on prices and wages are easing. Labor and supply chain bottlenecks restraining business capacity, may have peaked.

Firms linked to housing activity expect higher interest rates to hurt their sales, while others now see slower — though still healthy — sales growth, the survey found.

“While many firms anticipate a recession, those not linked to housing activity and other household consumption do not expect it to have a large impact on demand for their products and services,” the survey said.

Governor Tiff Macklem said last week that the central bank still believed a recession could be avoided, though he warned the path to a “soft landing” was narrowing. Analysts are more skeptical.

“I don’t believe in a soft landing in the current situation,” said Robert Asselin, a senior policy analyst at the Business Council of Canada. “The bank is very aggressive with hiking rates… I think it will continue and the conclusion of that has to be that there will be significant economic damage.” — Reuters

Shares in HYBE up after BTS clears uncertainty over military service

BTS in 2019 Clockwise from left: Jin, RM, Jungkook, J-Hope, Suga, V, and Jimin — DISPATCH/EN.WIKIPEDIA.ORG/

SEOUL — The announcement by K-pop mega band BTS that members would serve mandatory military service in South Korea has removed a cloud of uncertainty that has hung over their plans.

Investors in HYBE Co., BTS’ management group, responded to the news by driving its shares up as much as 7.8% on Tuesday.

The relatively shorter break, after the company picked 2025 as the potential date for BTS’ return as a group, also appeared to hearten the market.

“Sales from BTS will not disappear. Members’ individual activities, release of content and photobooks already filmed and older album sales will be highly profitable,” said Ji In-hae, analyst at Shinhan Investment Corp.

“However, with the biggest moneymaker absent, the key (for HYBE) will be how much sales are made from new businesses,” including Ithaca Holdings, Ji added.

A South Korean pop culture phenomenon and success story, BTS have become a worldwide sensation since their 2013 debut. Their upbeat hits and social campaigns aimed at empowering youth catapulted the band as the world’s best-selling artists in 2020 and 2021, according to International Federation of the Phonographic Industry.

As the biggest grossing K-pop act, some 880 billion won ($615.11 million) in sales were generated by BTS in 2021 alone, about 70% of HYBE’s 1.3 trillion won revenue, said Hazell Lee, analyst at NH Investment & Securities.

In 2020, BTS accounted for 730 billion won in sales out of the company’s 796 billion won revenue, she noted.

During the 2020 initial public offering (IPO) of what is now HYBE, the seven members received a total of 64.6 billion won worth of common shares, or 9.23 billion won of shares each based on the IPO price.

Forbes estimated BTS had an annual income of $50 million as of 2020.

BTS’ economic impact will be partly eroded while the members carry out their military service.

The Korea Culture and Tourism Institute estimated that BTS’ 2020 No. 1 hit on the Billboard Hot 100 chart, “Dynamite,” had an economic impact worth 1.7 trillion won including direct sales and exports of related goods such as cosmetics and clothing.

Hyundai Research Institute estimated that BTS’ average annual production impact is about 4.1 trillion won, and the value-added economic effect is about 1.4 trillion won, in a 2018 report.

The relatively short break for the members, however, has set at ease investors and fans alike.

“Demand will be maintained, as the vacuum that will be felt by the fandom is only about one year with members carrying out individual activities while enlisting sequentially,” NH’s Lee said. — Reuters

[EXPLAINER | Transportation] Edsa Carousel: Promising, but government needs to study and invest more

At its height, the coronavirus disease 2019 (COVID-19) pandemic shut down public transportation in the Philippines.  

As restrictions loosened, a transport consortium implemented the EDSA Carousel, a dedicated busway spanning the length of the MRT Line 3 along the main thoroughfare of Metro Manila, a city notorious for traffic congestion. 

With people reporting back to office, commuter demand for the busway has shot up. 

Primo V. Morillo, convener of The Passenger Forum, explains what government needs to do to enhance the EDSA Carousel bus service and ease public transport woes. 

TAKEAWAYS

Invest in the busway and bike lanes so they will not just be ‘pop-up projects.’

The EDSA busway and dedicated bike lanes are able to cater to commuters who take a bus or ride a bicycle, but the government must still allocate a decent budget for them. 

“We think those are two things that are promising, but we need to further invest in it,” said Mr. Morillo. “The EDSA busway, for example: we really need to ensure that we streamline the process [of] how to pay the service contractors.” 

Bus operations tend to be problematic with contractors not plying routes because they’re not paid, he said. This then reduces the number of buses on the road, increasing commuters’ waiting time. Even a subsidy for procurement of better buses would help. 

Similarly, the bike lanes should not just be a “pop-up project” — it’s good that they exist, but infrastructure and policies should also be pedestrian- and bike-friendly, he added. 

Maximize bus stations to accommodate the large number of commuters.

Given the metro’s heavy commute traffic, the bus stops that were put up along with the bus rapid transit system have proven insufficient. 

“They just used the stations of the MRT, and some of the stations that do not use the MRT stations are even worse. We need to make the stations look like a real station. It needs a waiting area and it needs ample space for people,” Mr. Morillo said.  

He specified that, in order to maximize it and make it work better for commuters, the state will have to invest in it. Both bus terminals and bus stations have to be improved. 

Reorient the transport policy to focus on moving people rather than cars.

The Passenger Forum’s assessment of Metro Manila’s urban planning and Philippine transport policy in general is that it’s car-centric. 

“It prioritizes moving cars rather than moving people. It prioritizes road widening, highways, and even skyways (elevated expressways), rather than trains, additional train lines, sidewalks, and bike lanes,” said Mr. Morillo. 

For ordinary people to easily travel in the city, infrastructure and policy must change.  

“Now, it seems that the policy is that if you find it hard, just buy a car, because we are making it easier for those who have cars,” he added. 

Interview and text: Brontë H. Lacsamana
Videography: Earl R. Lagundino and Joseph Emmanuel L. Garcia
Video editing: Earl R. Lagundino

In this series:

Biden admin talks with energy firms as it seeks to balance oil prices-sources

US PRESIDENT JOSEPH R. BIDEN — WHITEHOUSE.GOV

WASHINGTON — The Biden administration has spoken with energy companies as it considers a plan to use the Strategic Petroleum Reserve to both push down oil prices for consumers and support longer-term demand for producers, two sources familiar with the matter said.

The discussions, which involve combining new releases from the stockpile and setting the schedule for buying the oil back, reflect the White House’s desire to combat rising pump prices without hurting domestic drillers or refiners.

Rising retail gasoline prices have helped boost inflation to the highest in decades, posing a risk to Mr. Biden and his fellow Democrats ahead of the Nov. 8 midterm elections, in which they are seeking to keep control of Congress.

Mr. Biden said last week gasoline prices are too high and that he would have more to say about lowering the costs this week. David Turk, his deputy energy secretary, also said last week the administration can tap the SPR in coming weeks and months as necessary to stabilize oil.

The administration has spoken with energy companies about buying back oil through 2025 to replenish the reserve, known as the SPR, the sources said, after Mr. Biden in March announced the biggest sale ever, 180 million barrels, from May to October.

To stabilize oil prices, which rose before falling last week and steadying on Monday, it is also preparing to sell about an additional 40 million barrels of SPR oil, which could be announced soon, said a third source.

The Energy Department still has about 14 million barrels of SPR oil left to sell from the 180 million barrel release, which was slowed in July by holidays and hot weather. In addition, the administration is mandated by a law Congress passed years ago to sell another 26 million barrels of SPR oil in fiscal year 2023, which started Oct. 1.

“The administration has a small window ahead of midterms to try to lower fuel prices, or at least demonstrate that they are trying,” said a source familiar with the White House deliberations. “The White House did not like $4 a gallon gas and it has signaled that it will take action to prevent that again.”

Average U.S. gasoline prices hit about $3.89 a gallon on Monday, up about 20 cents from a month ago and 56 cents higher than last year at this time, according to the AAA motor group. Gasoline prices hit a record average above $5.00 in June.

The White House and the DOE did not immediately respond to requests for comment about the talks with energy companies.

In May, the DOE said it would launch bids late this year for a buy-back of about one third of the 180 million barrel sale. It suggested then that deliveries would be linked to lower oil prices and lower demand, likely after fiscal year 2023, which ends Sept. 30 next year. Two sources said the buy-backs could continue through 2025.

Biden officials in recent months also urged oil refiners including Exxon Mobil, Chevron and Valero to not increase exports of fuel and warned them it could take actions if plants do not build inventories. The administration has not taken a potential ban of gasoline and diesel exports off the table although opponents of such a move say it could exacerbate Europe’s energy crisis and raise fuel prices at home. — Reuters

Hyundai Motor is considering selling its Russia plant — media report

STOCK PHOTO | Image by Pexels from Pixabay

SEOUL — South Korea’s Hyundai Motor is considering options for its suspended Russia operations that could include selling its manufacturing plant there, South Korean media reported on Tuesday.

Many factories in Russia have suspended production and furloughed workers due to shortages of high-tech equipment because of sanctions and an exodus of Western manufacturers since Moscow sent armed forces into Ukraine on Feb. 24.

Hyundai Motor recently submitted to management a report analyzing its future prospects in Russia due to the difficult operating environment, Dong-a Ilbo newspaper said, citing an unidentified auto industry source.

Hyundai Motor was not immediately available for comment when contacted by Reuters.

Hyundai Motor, which together with affiliate Kia Corp. is among the world’s top 10 biggest automakers by sales, builds about 200,000 vehicles per year in Russia, about 4% of its global production capacity.

“We estimate that Hyundai and Kia together could generate at least a 450 billion won ($315 million) loss this year due to the business environment in Russia,” said Esther Yim, an analyst at Samsung Securities.

Hyundai Motor suspended operations at its Russian factory in March and a regulatory filing from the company showed it sold no cars in the country in August and September.

“While it’s still unclear what Hyundai would do with its Russia factory, Hyundai has a lot to factor in to actually exit from Russia, such as financial situations and its relationship with Russia and the United States,” said Kim Jin-woo, an analyst at Korea Investment & Securities.

Last week, Nissan Motor Co Ltd 7201.T said it would hand over its business in Russia to a state-owned entity for 1 euro, taking a loss of about $687 million in the latest costly exit from the country by a global company. — Reuters

Philippines looking at market intervention to defend peso

PHILIPPINE STAR/KRIZ JOHN ROSALES

MANILA — The Philippines will continue to use interest rates to mitigate against inflation and may step in to defend a depreciating peso, President Ferdinand Marcos Jr said on Tuesday.

“We may have to defend the peso in the coming months, but the overall forecast is that we are still doing better than other countries in terms of inflation,” Marcos posted on Twitter.

The Philippine peso, which has lost 13.5% against the U.S. dollar year-to-date, has depreciated the most of Southeast Asian currencies this year, contributing to the four-year high inflation recorded in September.

The country is monitoring external and domestic developments to see how authorities can intervene in financial markets to address risks like currency depreciation and inflation, its economic planning chief said on Tuesday.

The government can deploy monetary tools like tweaks in the interest rate and market intervention to address currency risks, Economic Planning Secretary Arsenio Balisacan told a news conference after a meeting between Marcos and his economic team. — Reuters

Pepper’s Philippine office (PSO Manila) joins the Circle of Excellence at the prestigious Asia CEO Awards 2022

For the third year in a row, PSO (Manila), Pepper Money’s Philippine office, has once again been chosen as an awardee of the Circle of Excellence (COE) for SME Company of the Year in the 12th Asia CEO Awards.

The shared service facility operates on behalf of the Australian and New Zealand consumer and commercial lending operation Pepper Money and other third-party services and employs almost 500 Filipino employees locally.

PSO Manila offer a wide range of managed business outsourcing and offshoring services from originations lifecycle, including provision of post settlement support to customers via frontline contact centre and back-office servicing activities through to HR support, that greatly reduce costs without exposing risk.

Shakira Snowdon, Country Head, Philippines, said she was honored by the recognition of their high performing team and their continued success: “We’re honored and delighted to be recognized as a finalist for SME Company of the Year 2022. This achievement recognizes our team, their values, and their commitment to driving a great culture, involvement in social and giving programs, and our continued business growth and excellence by always putting our people, our customers and partners at the heart of what we do.”

Culture

According to Ms Snowdon, PSO Manila has a culture that sets it apart in the marketplace: “We drive a high-performance culture throughout our business with strong governance, people, and process management practices.”

To support this, “We strongly support and live the diversity and inclusion principles and recognize the value of attracting and retaining employees with different ideas, abilities, and backgrounds to achieve our core competencies.”

With the creation of the Diversity and Inclusion Committee within the business, different sub-groups were established to focus on the ongoing empowerment and training of staff.

These sessions alongside other engagement programs led to a positive culture that far exceeds industry standards. PSO Manila’s 2022 engagement survey shows engagement is at 86% and is in the 98th percentile for Culture of Engagement, 96th percentile for Strategic Alignment, 97th for Manager Execution, and 96th for Manager Motivating and Relating.

High engagement has its advantages according to Ms Snowdon, “We know our highly engaged team translates to less recruitment fees, reduced percentage of agents in training, and higher quality and more efficient outputs.”

Social Commitment

PSO Manila invests in activities and initiatives that demonstrate a genuine interest to improve the lives and conditions of people within and outside the organization.

“This is the second year of our Pepper Giving program. It brings to life PSO Manila’s community and charitable initiatives in the Philippines. The program is run by passionate volunteer employees,” says Ms Snowdon.

The committee is governed by the Global Pepper Giving policy framework that ensures clear direction for Pepper’s charitable and community ventures. The committee has three main principles that govern all decisions and initiatives. First, to support organizations that work to provide the social necessities of life including housing and shelter, transport, education, and a means of earning a living. Secondly, Pepper will work with organizations that are seeking a different pathway to help others who are underserved by traditional support structures. And lastly, support is provided to inspire innovation and courage amongst those in need to find different pathways to achieve their goals, explains Ms Snowdon.

Business performance and growth

Despite the ongoing uncertainty of the economic impacts of COVID-19, PSO Manila has continued to drive growth across all areas, finding new opportunities to build on the foundations of success and delivering a broad range of shared services.

Where other companies experienced a downturn during the pandemic, PSO Manila challenged the accepted, and continued to invest in their service and product offering. The group experienced a 200% growth in headcount since 2020. Through diversifying their service and product offering, the business has achieved great success and sustainable growth.

“We don’t just aim to meet Service Level Agreements, for us it’s about exceeding those expectations. We educate our agents, so they understand the role that the tasks they complete have in the end-to-end process. This includes customer impact and awareness of dependencies on and outcomes of the tasks they undertake,” she says.

 

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