IBPAP optimistic of hitting revenue, headcount targets

May 22, 2023 | 12:03 am

THE INFORMATION technology and business process management (IT-BPM) sector is optimistic that it would hit its revenue and employment headcount targets for 2023, the head of an industry group said.

“I think the targets at the beginning of the year are within reach. I do not think we will exceed it. It will be within that range,” said Jack Madrid, president of IT and Business Process Association of the Philippines (IBPAP), during a recent chance interview in Pasay City.

According to Mr. Madrid, the sector is aiming to hit 1.7 million in full-time employees and $35.9 billion in revenues for 2023.

“We’ll have a better feel of where we are going, maybe in the third quarter. One of the challenges in our industry is getting the data because the source of our data are many sources and we need to verify,” he said.

IBPAP is still collecting data on the IT-BPM sector’s performance in the first quarter of the year, he added.

“Some of our member companies are a little bit hesitant in providing headcount numbers. So, we collect that a few times a year only. We will have a better feel [of it] by [the] third quarter. It is still too early in the year since we’re still in the first half. We just collected year-end 2022 so we need to time it a bit better,” he said.

Mr. Madrid said the growth catalysts for the IT-BPM sector include the contact center and healthcare services sectors.

“It will continue to be driven by North America. I think the contact center will still lead the way. I just came from a healthcare investor roadshow and prospects are quite positive,” Mr. Madrid said.

“The Philippines is very strong in healthcare because of our large number of registered nurses. We are the second-largest supplier of US-registered nurses. I only wish we had more because they’re all getting hired, to the point that we don’t even have enough nurses in our country. But that is a very bright spot for the IT-BPM industry,” he added.

Meanwhile, Mr. Madrid said the long-term challenge for the industry is the talent pool amid the requirement of more complex skills.

“In the longer term, we have a very big challenge in our education, across university, high school, and elementary. It will not be fixed in the next one or two years. It will take many years to fix it,” he said.

Mr. Madrid cited a need for upskilling and reskilling of the workforce to ensure the competitiveness of the sector.

“We have the population but we need the talent to be employable. The skill requirements of the industry keep getting harder and harder. The answer to our challenge is education — upskilling and reskilling. I am not talking only about college. I am talking about basic skills,” Mr. Madrid added.

Last year, the IT-BPM industry posted a 10.3% increase in revenues to $32.5 billion and an 8.4% jump in full-time employees to 1.57 million.

IBPAP has more than 300 members and six partner associations consisting of the Animation Council of the Philippines, Inc., Global In-House Center Council Philippines, Contact Center Association of the Philippines, Game Developers Association of the Philippines, Healthcare Information Management Association of the Philippines, and the Philippine Software Industry Association. — Revin Mikhael D. Ochave

Sean Penn: Studios’ AI stance in Hollywood writers strike a ‘human obscenity’

May 22, 2023 | 12:02 am

Sean Penn and James Ransone in The First (2018) — Sean Penn in The First (2018) — IMDB.COM

CANNES, May 19 — Actor Sean Penn said on Friday he supported striking Hollywood writers and called studios’ rejection of their demand to restrict the use of artificial intelligence (AI) in writing scripts a “human obscenity.”

“There are a lot of new concepts that are being tossed about, you know, including the use of AI,” Mr. Penn said at a press conference at the Cannes Film Festival.

“And this just strikes me as a kind of human obscenity, for there to be any pushback on that from the producers.”

The dispute over AI is one of several issues that led Hollywood’s film and TV writers to go on strike earlier this month in their first work stoppage in 15 years.

The Writers Guild of America is seeking to restrict the use of AI in writing scripts.

Hollywood studios, battling to make streaming services profitable and dealing with shrinking ad revenues, have rejected that idea, saying they would be open to discussing new technologies once a year, according to the guild.

“It’s difficult … for so many people, so many writers and so many people in the industry, to not be able to work during this time,” added Mr. Penn. “And I guess it’s gonna soul-search itself and see which side toughs it out.”

Mr. Penn is in the Cannes competition film Black Flies — a gritty New York City drama about paramedics that also stars Tye Sheridan of Ready Player One — that premiered on Thursday evening.

Mr. Penn, who is known for his political and social activism, also co-directed Superpower, a feature-length profile of Ukrainian President Volodymyr Zelensky that was filmed before and after Russia invaded the country in February 2022.

That premiered at the Berlin Film Festival in February this year. — Reuters

Centro rolls out Econovan

May 22, 2023 | 12:02 am

VELO_PAGE2_image7 — The Centro Econovan features an aluminum body. — PHOTO FROM CENTRO MANUFACTURING CORP.

LEADING TRUCK body manufacturer Centro Manufacturing Corp. has released a new commercial vehicle product. Called the Econovan, it boasts an aluminum van body said to be the “best in QCD (quality, cost, and delivery) and is set to revolutionize the truck industry.”

The Econovan is “designed to meet the needs of business owners who require top-quality truck bodies for their operations, without breaking the bank.” Units of the Econovan can be delivered to customers in just a week, making it the fastest delivery option in the industry. Centro touts it as the “best-priced aluminum van on the market.”

The truck comes in 14- and 10-foot variants, both featuring Japan standard lock rods and hinges. The Econovan also comes with a single panel roof, which ensures maximum durability.

“We are excited to release the Econovan to the market,” said Centro Manufacturing Corp. Sales Assistant Manager Carlo Enriquez. “This new product is the culmination of our commitment to providing the best in QCD, and we are confident that it will exceed the expectations of our customers.”

The Econovan is now available at selected truck dealerships.

T-bill, bond rates may decline after BSP decision

May 22, 2023 | 12:02 am

RATES of Treasury bills (T-bills) and Treasury bonds (T-bonds) on offer this week could drop after the central bank kept borrowing costs on hold at its policy meeting.

The Bureau of the Treasury (BTr) will auction off P15 billion in T-bills on Monday, made up of P5 billion each in 91-, 182-, and 364-day papers.

On Tuesday, it will offer P25 billion in reissued seven-year T-bonds that have a remaining life of six years and 11 months.

T-bill and T-bond yields could further ease this week, in line with the decline in secondary market rates after the BSP kept benchmark interest rates unchanged at its meeting last week, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

At the secondary market on Friday, the 91-, 182-, and 364- day T-bills went down by 9.37 basis points (bps), 15.08 bps, and 4.29 bps week on week to end at 5.823%, 5.9062%, and 5.9514% respectively, based on the PHP BVAL Reference Rates data published on the Philippine Dealing System’s website.

The seven-year bond also saw its yield drop by 8.08 bps week on week to 5.6809%.

“With the BSP’s Monetary Board still sounding hawkish while likely to maintain an overnight RRP (reverse repurchase) rate of 6.25% for much of the year until core inflation wanes, we reckon benchmark long duration bonds would still court favor among market investors,” Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said.

The BSP on Thursday kept benchmark rates steady amid easing inflation.

The policy-setting Monetary Board kept its key rate or the interest rate on the BSP’s overnight RRP facility at 6.25%.

The central bank paused for the first time after hiking in nine straight meetings, raising borrowing costs by a total of 425 bps from May 2022 to March 2023.

Headline inflation slowed to an eight-month low of 6.6% in April. For the first four months of the year, the consumer price index averaged 7.9%, still well above the BSP’s 2-4% target for the year.

Last week, the BTr raised P15 billion as planned from the T-bills as the offer was nearly four times oversubscribed, with total bids reaching P59.596 billion.

Broken down, the Treasury borrowed P5 billion as planned via the 91-day T-bills, with tenders reaching P14.642 billion. The average rate of the three-month papers went down by 1.70 bps to 5.874%, with accepted rates ranging from 5.8% to 5.9%.

The government also made a full P5-billion award of the 182-day securities as bids for the papers reached P14.271 billion. The six-month tenor was quoted at an average rate of 5.991%, inching down by 0.20 bp week on week, with accepted rates from 5.9% to 6.786%.

Lastly, the BTr raised the programmed P5 billion from the 364-day debt papers as demand for the tenor reached P30.683 billion. The average rate of the one-year T-bill fell 18.30 bps to 6.028%. Accepted yields were from 5.993% to 6.09%.

Meanwhile, the reissued seven-year T-bonds to be auctioned off on Tuesday were first offered on April 25, where the government raised the programmed P25 billion at a coupon rate of 6%. Accepted yields ranged from 5.975% to 6.06%, for an average of 6.012%.

The Treasury wants to raise P175 billion from the domestic market this month, or P75 billion via T-bills and P100 billion via T-bonds.

The government borrows from local and foreign sources to help fund its budget deficit, which is capped at 6.1% of gross domestic product this year. — A.M.C. Sy

Manila ranks 18^th in 45-city Prime Global Cities Index

May 22, 2023 | 12:02 am

Manila’s prime residential prices increased by 2.3% year on year in the first quarter of 2023, according to the latest edition of the Prime Global Cities Index by real estate consultancy firm Knight Frank. Manila ranked 18th out of 45 cities, the capital city was below Singapore (rank 5th), Mumbai (6th), Shanghai (8th), Bangkok (12th), Guangzhou (15th), and Bengaluru (16th).

USAID-backed agri co-op beats membership target

May 22, 2023 | 12:02 am

AGRITERRA, which is implementing a $2 million value-chain initiative backed by the US Agency for International Development (USAID), said its Generating Rural Opportunities by Working with Cooperatives (GROW Coop) project has hit 10,900 members after three years, exceeding expectations.

“Through this project, we just shared to them a more systematized, and results-oriented way of providing support for the value chain,” according to Marciano T. Virola, business advisor of Agriterra and chief of party of the GROW project.

Agriterra, which specializes in developing cooperatives into bankable, farmer-led agribusinesses, has its origins in the Dutch farm cooperative movement.

The project has developed cooperatives, federations, and private companies into local resource organizations which then provide in-depth mentoring, capacity development, and support for micro-, small-, and medium-sized agricultural cooperatives.

According to Mr. Virola, the project has signed 41 new purchasing agreements and has leveraged $3.74 million worth of non-donor investment.

Agriterra hopes its model will help serve as a roadmap for agri-cooperatives, and are pushing for legislation along these lines.

“We came up with a draft of the agricultural cooperative bill… (which) we hope to submit to legislators in the coming days,” he said.

Agriculture Assistant Secretary Jane C. Bacayo said that there are currently over 30,000 registered cooperatives managed by the Cooperative Development Authority. — Sheldeen Joy Talavera

AbaCore turns profitable

May 22, 2023 | 12:02 am

ABACORE Capital Holdings, Inc. reported an attributable net income of P308.16 million in the first quarter, a reversal of the P12.65-million net loss it reported in the same period last year, due to a gain from the disposal of investment properties.

“We are happy for our strong start in 2023. This is the result of the company’s efforts to monetize its assets through property sales and joint ventures,” AbaCore Vice-Chairman and Head of Investor Relations Antonio VF Gregorio III said in a statement.

The company reported a topline of P325.72 million during the three-month period, mainly driven by a P249.96-million gain on the disposal of investment properties.

Its expenses for the first quarter likewise rose to P21.12 million, up 62.3% from the P13.01 million reported in the same period last year, due to an increase in salaries and wages, employee benefits, and repairs and maintenance, among other things.

“[AbaCore] leverages itself by working closely with our business partners to fully realize the growth potential of our assets. This will be a cornerstone of our long-term growth strategy moving forward to deliver value to our shareholders,” Mr. Gregorio added.

AbaCore shares were unchanged at P2.51 apiece on Friday. — Adrian H. Halili

Hammer of gun in Rust shooting possibly modified — prosecutors

May 22, 2023 | 12:01 am

Alec Baldwin in a scene from Rust. — IMDB

May 18 — The hammer of the gun actor Alec Baldwin was holding when it fired a live round killing Rust cinematographer Halyna Hutchins may have been intentionally modified, New Mexico special prosecutors said in a court filing this week.

The comments came a month after prosecutors dropped a criminal charge against Mr. Baldwin over Ms. Hutchins’ death in 2021, citing new evidence. A source close to the case at the time said the evidence concerned modifications to the reproduction long Colt .45 revolver Mr. Baldwin was using.

“The modification appears to be related to the notches on the internal portion of the hammer for full cock, half cock and quarter cock positions,” prosecutors said in documents filed on Wednesday asking a judge to authorize transfer of the revolver, ammunition, and a jacket belonging to the film’s weapons handler for forensic testing.

“It appears that these notches may have been partially removed or ground down so that they are less prominent.”

An FBI test of the gun found it would not fire unless the trigger was pulled. Mr. Baldwin said he never pulled the trigger.

Prosecutors said additional testing was required to see if the hammer was modified, the source of the modification, and what impact it might have on the firearm’s performance.

Ammunition found on the set was requested for testing for manner of assembly and origin of manufacture, prosecutors said.

Prosecutors have yet to reveal how live rounds got onto the set of the low-budget movie production.

Rust weapons handler Hannah Gutierrez-Reed is the only person still facing charges over Ms. Hutchins’ death.

Prosecutors also requested Santa Fe County Sheriff’s Office transfer Ms. Gutierrez-Reed’s jacket to them for gunpowder-residue testing.

Her attorneys on Thursday filed a motion to dismiss the criminal case against her on grounds of lack of prosecutorial authority and violations in Ms. Gutierrez-Reed’s due process rights.

Prosecutors last month said they would continue to charge Ms. Gutierrez-Reed with involuntary manslaughter. A preliminary hearing on the charge is set for Aug. 9-16. — Reuters

Bosch AA education campaign draws support

May 22, 2023 | 12:01 am

From left are Bosch Philippines’ Michael Tengonciang, Teach for the Philippines (TFP) CEO Clarissa Delgado, TFP COO Mavie Almeda Ungco, Warren Auto’s Jennifer Sitosta and Eileen Sitosta, and Bosch Philippines Managing Director Paulo Duarte. — PHOTO FROM BOSCH PHILIPPINES

FOLLOWING the launch of the Bosch Automotive Aftermarket Philippines (Bosch AA) #CareForEducation campaign in collaboration with Teach for the Philippines (TFP) last December, the initiative has gained “significant support from the local community to enable children in the Philippines to receive access to quality education and secure a better future for themselves.” Bosch Philippines said that among the tremendous support received from various organizations and individuals is a contribution of P500,000 from Warren Automotive Company, the reigning Dealer of the Year of Bosch AA.

Said Bosch Philippines Managing Director Paulo Duarte, “We are thrilled to receive this contribution from Warren Automotive Company, which will help increase our efforts to provide quality education to children in need and boost literacy rates, especially in rural areas. To date, we have successfully raised 45% of our target funding amount. With the continued support and contribution from others, we are confident that we can support more children and make a meaningful impact through education to secure both their future and our nation’s future.”

Said TFP COO Mavie Almeda Ungco, “We wouldn’t be able to do our work without champions like Bosch AA. We are immensely grateful to them for connecting us with Warren Automotive Company, and enabling us to receive this generous donation from them.” Continued the incoming CEO, “Their support will go a long way in ensuring that our public school students grow up with the foundational skills they need to shape bright futures for themselves, their families, and our country.”

The #CareForEducation campaign is a partnership between Bosch AA and Teach for the Philippines, and it comprises two programs — the Functional Literacy Program (FLP) and the Batang Bayani Program (BBP). FLP provides early-grade intervention for reading and math, while BBP encourages children to practice positive behavior toward learning at home. The initiative is part of Bosch AA’s Care For Life campaign, which aims to contribute to vulnerable children in ASEAN, supported by Bosch Primavera, a charitable organization founded by Bosch associates.

The launch of #CareForEducation in the Philippines makes the country the third to activate Bosch AA’s ASEAN-wide Care For Life campaign. Plans are under way in Malaysia, Vietnam and Thailand with initiatives focusing on road safety, children’s health and clean air, respectively.

Check out https://teachforthephilippines.com.

Emperador shares inch up on global expansion, Q1 income

May 22, 2023 | 12:01 am

By Bernadette Therese M. Gadon, Researcher

EMPERADOR, Inc.’s shares went up last week as investor confidence picked up on the company’s commitment to global expansion and its double-digit revenue growth in the first quarter.

Data from the Philippine Stock Exchange (PSE) showed a total P314.08-million worth of 14.88 million shares were traded from May 15 to 19, making it the 19^thmost actively traded stock in the local market last week.

Shares of the Tan-led distillery rose by 1.7% week on week to P21.2 apiece on Friday from its P20.85 finish last May 12. For the year, the stock went up by 2.9%.

While the stock’s price inched up due to revenue growth and strong international demand, Globalinks Securities and Stocks, Inc. Head of Electronic Trading Mark Crismon V. Santarina said that Emperador’s stock remained “stagnant” last week amid investor caution and market uncertainties.

The economy has been showing signs of slower inflation after the 14-year peak of 8.7% in January, as consumer prices cooled to 6.6% in April. Core inflation also slowed to 7.9% in April from its 22-year high of 8% in March.

Last Thursday, the Bangko Sentral ng Pilipinas kept the benchmark interest rate at 6.25% after nine consecutive meetings of rate hikes that totaled a 425-basis-point increase since May 2022.

Despite data showing foreign investors had sold Emperador’s shares last week, the company’s global expansion, premium brands, and market diversification have given it a way to mitigate the impact of inflation and interest rates on earnings, Mr. Santarina said in a Viber message.

“Additionally, the company’s adaptability, operational efficiency, and strategic planning contribute to its resilience in navigating challenging economic conditions.”

The international spirits company announced on May 17 its allocation of P7 billion in capital expenditure (capex) to boost international expansion this year.

Emperador earmarked P6 billion of its capex for its whiskey segment and the upgrade of five facilities in Scotland. About P1 billion will be set aside for its brandy business facilities in the Philippines, Spain, and Mexico.

“We view expansion plans as generally positive in nature since this could eventually translate to better earnings prospects for the company,” China Bank Securities Corp. Research Associate Stephen Gabriel Y. Oliveros said in an e-mail.

“Specific to [Emperador], we think its focus to further grow the whiskey business is margin accretive in the long run considering the high margin of whisky compared to brandy. For context, the gross margin of whisky was at 46.3% in [first quarter 2023] versus Brandy at 24.8%,” he added.

Mr. Oliveros thinks Emperador’s expansion plans are likely to “bear better fruit in the longer term” as aged spirits take time for profits to show up while forming part of its goal to attain a 50-50 revenue split between local and international markets by 2025.

Amid market concerns about the high inflationary environment, Emperador released its quarterly figures last Friday showing a 26.4% year-on-year revenue growth to P15.59 billion from P12.33 billion a year ago.

First-quarter net profit grew by 10% to P2.34 billion from P2.13 billion a year earlier. Attributable net income also went up by 10.5% to P2.32 billion from P2.10 billion previously.

Globalinks’ Mr. Santarina gave his second-quarter income forecast for Emperador at approximately P3 billion, with his full-year income forecast at P11.7 billion.

Analysts said that the liquor products firm’s global expansion was strategic with its well-established brand reputation providing a solid foundation for growth.

“We think [Emperador’s] listing on SGX was generally geared to improve the stock’s liquidity and boost its global profile. While the listing typically would not have a direct impact on financial performance, we think that it helped with respect to building brand recognition with global consumers,” Mr. Oliveros said.

For the week, China Bank Securities’ Mr. Oliveros pegged Emperador’s support and resistance level at P20.65 and P21.40, respectively.

“When evaluating [Emperador’s] stock, it is crucial to monitor revenue growth, global expansion, and brand performance, while staying informed about economic conditions, financial reports, and industry trends,” Mr. Santarina said.

He placed Emperador’s support and resistance levels fat P20 and P23.30, respectively.

“It may be prudent to await favorable developments that could potentially trigger a breakout in the stock, considering the potential positive impact from an anticipated interest rate slowdown in the future,” he added.

Gov’t debt yields go down

May 22, 2023 | 12:01 am

GOVERNMENT SECURITIES (GS) rallied last week after the Bangko Sentral ng Pilipinas (BSP) decided to keep its benchmark interest rate unchanged amid easing inflation.

GS yields, which move opposite to prices, at the secondary market went down by 8.28 basis points (bps) on average week on week, based on the PHP Bloomberg Valuation Service Reference Rates as of May 19 published on the Philippine Dealing System’s website.

Rates fell week on week across the board at the end of trading on Friday. The yield curve remained inverted.

Yields on the 91-,182- and 364-day Treasury bills declined by 9.37 bps, 15.08 bps and 4.29 bps, respectively, to 5.8230%, 5.9062% and 5.9514%.

At the belly, the two-, three-, four-, five-, and seven-year Treasury bonds (T-bonds) saw their rates drop by 7.47 bps (to 5.7961%), 7.68 bps (5.7231%), 8.72 bps (5.6756%), 9.82 bps (5.6495%), and 8.08 bps (5.6809%), respectively.

Yields on the 10-, 20-, and 25-year papers likewise decreased by 1.63 bps, 9.18 bps, and 9.72 bps, respectively, to 5.7903%, 5.8406%, and 5.8229%.

Total GS volume reached P17.08 billion on Friday, higher than the P15.74 billion seen on May 12.

Strong gross domestic product (GDP) growth and the BSP’s policy decision drove yield movements last week, Security Bank Corp. Chief Investment Officer for Trust and Asset Management Group Noel S. Reyes said in a Viber message.

“Yields came off strong initially from added buying, as sustained strong GDP amid the trending lower of inflation and the BSP pause was a good combination to generate more positive sentiment,” Mr. Reyes said.

“However, the last two trading days of the week saw some profit taking given that Fed may yet still have a chance to raise policy rates in the US that could affect fixed income markets elsewhere,” he added.

Local bonds rallied on expectations of a tightening pause from the BSP, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa likewise said in an e-mail.

“Yields are impacted by both the outlook on policy rates and inflation. Shorter dated bonds are more sensitive to policy rates and less to inflation while long-end bonds are more reactive to inflation and less to policy direction,” Mr. Mapa said.

The Philippine economy grew by 6.4% in the first quarter, the slowest in two years as elevated inflation and rising interest rates dampened consumer spending.

GDP expanded by 6.4% in the January-to-March period, slower than the revised 7.1% growth in the previous quarter and the 8% expansion in the first three months of 2022.

Still, this was within the government’s 6-7% target for the year.

Meanwhile, the BSP last week paused its tightening cycle and signaled that borrowing costs could remain unchanged at its next two to three meetings as inflation continues to ease.

The Monetary Board on Thursday kept its policy rate unchanged at 6.25%. Interest rates on the overnight deposit and lending facilities were also maintained at 5.75% and 6.75%, respectively.

This is the first time the BSP left rates untouched after nine meetings. Since it began its aggressive monetary tightening cycle in May 2022, the central bank has raised borrowing costs by a total of 425 bps.

Headline inflation eased to an eight-month low of 6.6% in April from 7.6% in March.

For the first four months, inflation averaged at 7.9%, higher than the 3.7% seen a year ago. This is still well above the BSP’s 2-4% target and 5.5% forecast for the year.

For its part, the US Federal Reserve has raised borrowing costs by 500 bps since March 2022, with its target interest rate now at 5-5.25%.

Market players expect the Fed to start keeping rates on hold at its next meeting on June 13-14.

For this week, yields may move sideways amid a lack of catalysts, Security Bank’s Mr. Reyes said.

“Yields could correct [this] week after the sharp moves we have seen of late with market participants watching the US debt talks for more direction,” ING Bank’ Mr. Mapa said.

“The favorable inflation in April and the BSP prudent pause contributed to the better outlook for rates… Interest rates are seen to continue to move sideways to down in the near term,” Jonathan Ravelas, managing director of eManagement for Business and Marketing Services, said in a Viber message. — Lourdes O. Pilar

Philippines: Balance of payments position

May 22, 2023 | 12:01 am

THE PHILIPPINES’ overall balance of payments (BoP) position stood at a $148-million deficit in April, narrower than the $415-million gap in the same month a year ago. Read the full story.

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