Australia plans to reform cyber security rules, set up agency

February 27, 2023 | 11:36 am

SYDNEY – Australia plans to overhaul its cyber security rules and set up an agency to oversee government investment in the field and help coordinate responses to hacker attacks, Home Affairs Minister Clare O’Neil told public radio on Monday.

The comments come amid a rise in cyber attacks since late last year with breaches reported by at least eight companies, including health insurer Medibank Private Ltd. and telco Optus, owned by Singapore Telecommunications Ltd.

Current cyber security rules are not adequate to deal with attacks and cannot protect consumer data, Ms. O’Neil told ABC Radio, blaming the previous government for implementing them.

“That law was bloody useless, like not worth being printed on the paper when it came to actually using it in a cyber incident,” Ms. O’Neil said in an interview. “They’re not fit for purpose at the moment, and I do think they need reform.”

She said Prime Minister Anthony Albanese will meet industry leaders and cyber security experts on Monday, and that he has decided to appoint a cyber security coordinator tasked with ensuring government agencies work together during cyber incidents.

“Different parts of government and the private sector (are) doing important things, but kind of all rowing in different directions,” Ms. O’Neil said.

The office of the cyber security coordinator will exist within the department of home affairs, she said.

The government has published a discussion paper on a new cyber security strategy, which it aims to implement next year, and is seeking feedback on how businesses can improve their cyber security in partnership with the government. – Reuters

Most UK businesses optimistic about medium-term economic growth -survey

February 27, 2023 | 11:28 am

LONDON – More than 60% of British businesses are optimistic about the country’s economic growth in the medium term and their own revenues in the next few years, a survey showed on Monday, challenging some of the gloomy forecasts for the UK economy.

About 61% of over 1,500 business leaders expect economic growth to be “somewhat or significantly better” in 2025, according to the Boston Consulting Group Centre for Growth‘s inaugural business survey.

Some 63% also think their revenues will grow over the next three years.

The Bank of England said this month that Britain’s weak productivity growth means the economy can probably only grow by about 0.7% a year in 2024 and 2025 without generating inflationary heat. It also forecast a recession starting in early 2023 and lasting into early 2024.

“It is easy to get downbeat about the UK‘s prospects both in the short and medium term but those running our businesses tend to be more optimistic,” Raoul Ruparel, director for the BCG Centre for Growth, said. “UK businesses are undoubtedly feeling squeezed, but they’re still standing.”

Data for the survey was collected between Jan. 11 and Feb. 2, when the BoE announced its latest interest rate hike and economic forecasts.

The survey, covering businesses ranging from sole traders to companies with more than 50 million pounds ($60 million) of annual revenues, also showed executives thought inflation would be persistent this year and 56% said they would continue to increase prices over the next six months.

More than three-quarters of respondents expected their headcount to stay the same or grow over the next 12 months, while 20% thought they would cut staff.

The BoE expects a rise in unemployment to contribute to a fall in inflation which is running at more than 10%. – Reuters

China’s new coal plant approvals surge in 2022, highest since 2015 -research

February 27, 2023 | 11:13 am

chimney-coal-power-plantbuilding-2058_1920 — STOCK PHOTO | Image by PublicDomainPictures from Pixabay

SINGAPORE, Feb 27 – China approved the construction of another 106 gigawatts of coal-fired power capacity last year, four times higher than a year earlier and the highest since 2015, driven by energy security considerations, research showed on Monday.

Over the year, 50 GW of coal power capacity went into construction across the country, up by more than half compared to the previous year, the Centre for Research on Energy and Clean Air (CREA) and Global Energy Monitor (GEM) said.

“The speed at which projects progressed through permitting to construction in 2022 was extraordinary, with many projects sprouting up, gaining permits, obtaining financing and breaking ground apparently in a matter of months,” said GEM analyst Flora Champenois.

The amount of new capacity connected to the grid had slowed in recent years after a decline in new approvals over the 2017-2020 period, but it is set to rebound over the next few years, driven by concerns about power shortages.

Many of the newly approved projects are identified as “supporting” baseload capacity designed to ensure the stability of the power grid and minimize blackout risks, the CREA-GEM report said.

However, many are being built in regions which already have a clear capacity surplus, and power supply problems would be better addressed by improving grid reliability and efficiency, the authors said.

China suffered a wave of blackouts in September 2021 as a result of coal supply shortages, cutting off thousands of homes and factories. A long drought last year also saw a dramatic drop in hydropower generation and the rationing of electricity.

Beijing has been trying to rejuvenate its economy after growth and employment were hit badly by stringent “zero-COVID” measures last year, raising concerns that its low-carbon efforts will be sidelined.

However, renewable power capacity additions have remained at record levels, with solar installations at 87 GW in 2022 and expected to rise further in 2023.

The country aims to bring its climate-warming carbon dioxide emissions to a peak by 2030, but it remains unclear what level they will reach. – Reuters

Converge receives Golden Arrow Award for good corporate governance

February 27, 2023 | 11:11 am

Converge ACGS — Converge has received a 1-Arrow recognition from the Institute of Corporate Directors (ICD) for its adherence to the highest standards of corporate governance based on the 2021 ASEAN Corporate Governance scorecard report. In photo are (from left) Securities and Exchange Commission (SEC) Chairman Emilio Aquino, Institute of Corporate Directors (ICD) Vice Chair and President Ma. Aurora “Boots” Geotina-Garcia, Converge SVP and Corporate Compliance and Data Protection Officer Atty. Laurice Estaban-Tuason, Philippine Stock Exchange (PSE) President and Chief Executive Officer Ramon S. Monzon and ICD Chairman Atty. Cesar Villanueva.

Leading fiber broadband provider Converge ICT Solutions Inc. has been recognized as one of the country’s top-performing publicly-listed companies (PLCs) in terms of corporate governance, receiving a one-arrow recognition based on the ASEAN Corporate Governance Scorecard (ACGS) report.

During the 2022 Golden Arrow Awards, Converge was among the listed firms awarded by the Institute of Corporate Directors (ICD), receiving the 1-Arrow recognition for its conformance to the highest standards of corporate governance.

“This recognition is significant because it is a testament that despite being a relatively new publicly-listed company, we already espouse internationally-recommended corporate governance best practices and we advocate and act as champions of good corporate governance,” said Converge SVP and Corporate Compliance and Data Protection Officer Laurice Esteban-Tuason.

Based on the report of ICD, out of 260 local PLCs, 85 firms or 33 percent of the companies assessed scored at least 80 points, including Converge which had only been a year into the local stock market when the regional assessment was conducted.

Since becoming a publicly-listed company, Converge has completed significant efforts to align its corporate governance practices with international best standards. Its Board of Directors, led by Chairman Ping de Jesus, has been at the forefront of ensuring that Converge moves forward and incorporates corporate governance initiatives. In the coming months, Converge looks forward to improving further and joining other top ranking PLCs in being recognized for its corporate governance efforts.

“This award symbolizes our continuous and concerted efforts to raise the level of competitiveness of Converge in the corporate governance practice,” Esteban-Tuason added.

Local publicly traded companies are evaluated by ICD based on the categories of the ACGS, consistent with the G-20 / Organization for Economic Cooperation and Development Principles of Corporate Governance.

These include areas referring to the Rights of Shareholders, the Equitable Treatment of Shareholders, the Role of Stakeholders, Disclosure and Transparency, and the Responsibilities of the Board. Bonus points and deductions are also given for company practices that reflect either good or bad governance.

The local fiber network provider received the highest scores in the areas of the Role of Stakeholders, as well as Disclosure and Transparency.

“We will continue to benchmark ourselves with international publicly listed companies. We do not want to just align with the ACGS but also with the United Nations standards of good governance and anti-corruption. We will continue to be more transparent and accountable as a company that values integrity and always strives to put the best interest of its stakeholders,” Atty. Esteban-Tuason noted.

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Viruses in Cambodian bird flu cases identified as endemic clade

February 27, 2023 | 11:00 am

The viruses that infected two people in Cambodia with H5N1 avian influenza have been identified as an endemic clade of bird flu circulating in the country, the U.S. Centers for Disease Control and Prevention (CDC) said.

The cases reported last week had raised concerns they were caused by a new strain of H5N1, clade 2.3.4.4b, which emerged in 2020 and has caused record numbers of deaths among wild birds and domestic poultry in recent months.

But work so far suggests this is not the case.

Preliminary genetic sequencing carried out in Cambodia led its health ministry to identify the viruses as H5 clade 2.3.2.1c, which has circulated in Cambodia among birds and poultry for many years and has sporadically caused infections in people, the CDC said in a statement on Saturday.

“Yes, this is an older clade of avian influenza that had been circulating around the region for a number of years and while it has caused human infections in the past, it has not been seen to cause human-to-human transmission. However, that doesn’t mean that the threat is any less,” said Erik Karlsson, director of the National Influenza Center of Cambodia and acting head of virology at the Institut Pasteur du Cambodge, which sequenced the virus.

He added that the response needed to be coordinated and swift to prevent any further spread and to limit exposure to any common source.

An investigation into the source and to detect any additional cases is ongoing, the CDC said, adding that so far there had been no indication of person-to-person spread.

Cambodia tested at least 12 people for the H5N1 strain last week, after an 11-year-old girl died from the virus in the first known transmission to humans in the country in nearly a decade.

The victim’s father, who was part of a group the girl had been in contact with in a province east of the capital Phnom Penh, tested positive for the virus but did not exhibit any symptoms, Cambodia’s Health Minister Mam Bunheng had said in a statement on Friday.

Only the girl’s case has been sequenced and the father’s case is still being worked on, Karlsson said.

The World Health Organization said it is working with Cambodian authorities following the cases, describing the situation as worrying due to the recent rise in cases in birds and mammals. – Reuters

Providing Filipinos with premium, affordable homes

February 27, 2023 | 10:30 am

Single-attached unit in Santeví, San Pablo, average Lot Area 85sqm, Floor Area 74sqm

Every Filipino deserves a premium home that provides for their needs and wants. Having a premium home does not always mean paying more for it, given such homes can be attained at an accessible price point. Oftentimes, owning a home is a crucial stage for Filipinos. This is because owning one is an investment for the long-term well-being of their family and even their financial futures.

A real estate developer that strives to help Filipinos achieve their dreams is Ovialand. Established in 2014, the company is a pioneer in the premium, affordable segment of the market with its 1,000 housing units built across South Luzon.

A key to Ovialand’s success has been its “HousEasy” scheme for clients. Under this program, clients are assisted in every stage of the homebuying process—from the application of a housing loan, payment process, payment of real estate taxes, and even up to the maintenance of their new homes.

“With our HousEasy! Promise, our clients can move into their brand-new homes within three to six months,” Pammy Olivares-Vital, president and CEO of Ovialand, told BusinessWorld in an email interview. “This makes homeownership easier and more convenient, allowing the new generation of Filipino homebuyers to make their dreams of real-estate investments come true.”

Ms. Vital added that Ovialand keeps evolving to meet the needs of its clients, including those they consider as discerning, hard-working, and aspirational.

The company does this by providing consistent and quality customer service and making transactions simple — which are the core traits of a successful business that retains its clients.

The milestones they have achieved over the years motivates Ovialand to reach greater heights. For example, in line with its goal to expand nationwide, the company has broken ground on its developments in Baliuag, Bulacan. This would mark the company’s first foray outside its core South Luzon market.

According to the Department of Trade and Industry, the real estate sector is striving to maintain its robust growth and development while continuing to offer products that are cost-effective to Filipinos. The sector also continues to see high demand from the public.

In line with this outlook, Ovialand has maintained strong ties with its business partners—such as suppliers—throughout the years. According to Ms. Vital, this has allowed the company to successfully provide premium and affordable homes to Filipinos despite persisting economic headwinds such as supply-chain constraints.

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Real estate’s prospects and opportunities in 2023

February 27, 2023 | 9:00 am

By Chelsey Keith P. Ignacio, Special Features and Content Senior Writer

Rising up from the impacts of the COVID-19 crisis, the property market in the country is generally projected to have bright prospects to rebound further this 2023.

The Philippine economy registered a 7.6% growth last year. This expansion, the country’s fastest in over 40 years, could be a “positive signal” for the property market, according to Colliers. This is because the market reflected the boom-bust cycle of the country’s economic output in the previous decades. Such economic growth is expected to support the office and residential markets.

After recording a net takeup of 110,500 square meters (sq.m.), a February report by Colliers expected the office market to reach a net absorption of 228,000 sq.m. in 2023. The demand is seen to be driven by healthcare, logistics, telecommunications, finance, government, and shared service segments.

Meanwhile, Colliers noted 750,300 sq.m. of new office spaces in 2022. This year, it expected the new supply to reach 641,000 sq.m., with the Ortigas Central Business District and Quezon City projected to cover nearly half of this. Following these new spaces, the firm foresees vacancy to expand to 20.2%.

“The country’s office market is seeing uneven but steady recovery, supported by sustained transaction activity in Metro Manila and provincial locations becoming a mainstay in locators’ portfolios,” Kevin Jara, associate director for office services-tenant representation at Colliers Philippines, said in the firm’s report published on Feb. 2.

In the residential segment, Colliers expected the project completions to slow down this 2023 from the year prior. It saw 9,000 units completed in 2022, then a new supply of 3,540 units is expected in 2023. Almost half of the new supply this year is likely to be in the Bay Area and Fort Bonifacio.

Colliers expected 3,840 units on the residential demand side in 2023. Meanwhile, the recovery of office leasing and tempered completion of condominiums this year are seen to support the drop in vacancy to 17% from last year’s 17.6%.

“We see continued queries from expatriates while demand from local employees has been raising rents in major business districts such as Makati, Fort Bonifacio, and Ortigas,” Colliers Philippines Director for Research Joey Roi Bondoc shared in a report.

Meanwhile, as tourism also recovers, occupancy in the hotel segment is projected to pick up in 2023. On average, hotel occupancies reached 55% in Metro Manila in the second half of 2022, expanding from the 47% recorded in the first half, according to Colliers. This 2023, anticipating more foreign visitor arrivals and the local staycation market’s continued growth, Colliers projected average hotel occupancy in Metro Manila to breach 60%.

Colliers also expected a record-high of new 4,140 hotel rooms in 2023. And between this year to 2025, the firm projected that 42% of new hotel supply in Metro Manila would be made up of foreign brands.

Consumer traffic and purchasing power are also seen to rise, hence more foreign and local retailers are expected to take advantage by covering physical mall spaces this 2023, according to a Colliers report in December. Meanwhile, the firm projected a new 448,900-sq.m. retail space this year, thus vacancy is forecasted to marginally increase to 17%.

Colliers considered that brick-and-mortar shopping would likely be complemented by online shopping, which would continue to be popular among Filipino consumers.

In the industrial segment, Colliers expected fast-moving consumer goods (FMCG), third-party logistics, e-commerce, and agro-industrial locators to lead the takeup in 2023, having done so in the previous year.

A new industrial supply of 132 hectares (ha.) is expected in CALABA (The Cavite, Laguna, Batangas corridor) in 2023-2024, as three industrial parks in Batangas and Laguna are anticipated to be completed; while 243 ha. of industrial supply would rise in North-Central Luzon in the said period.

“Over the near to medium term, the sector’s growth is likely to be supported by investments from new trade deals and the emergence of new industries including the electric vehicle (EV) industry,” Colliers’ Mr. Bondoc noted in the February report.

Opportunities

Buoyed by the economy reopening further, there are several opportunities seen for real estate segments to leverage.

Opportunities in the office segment might reside in flexible workspaces within and beyond Metro Manila, as such spaces would likely play an important part in post-pandemic operations of tenants, according to Colliers. The firm reported that flexible workspace vacancy in the capital region decreased from 41% in 2020 to 11.9% in end-2022.

Furthermore, the firm recommended developers to tap opportunities beyond Metro Manila, having noticed growing inquiries from outsourcing firms in Iloilo, Bacolod, Bulacan, and Laguna. Developers should also look into prospective demand in the areas touted to comprise high potential to become digital cities, such as Iligan, Dagupan, Urdaneta, Malolos, General Santos, Tarlac, Cabanatuan, and Puerto Princesa.

For the opportunities in the residential segment, developers should look at how the pandemic altered the homebuyers’ preferences.

“In the residential real-estate aspect, we now see that the shift to horizontal living spaces is no longer a pandemic fluke but has become the choice for many Filipinos. Since we all know that there’s barely any more space in Metro Manila, this will now translate to strengthening real estate and property in more places,” Pammy Olivares-Vital, president and chief executive officer of Ovialand, Inc., told BusinessWorld in an email.

“Matched by the aggressive infrastructure plans of the government to make more regions accessible, I believe developers and individuals alike will be grabbing the opportunity to purchase strategic real estate, causing real estate prices to appreciate faster,” she added.

Ms. Olivares-Vital also noted that Filipinos have begun to reconsider their residence by valuing time and quality of life more, instead of being in the vicinity of urban spaces.

“I would say it is a shift in direction, that the opportunity to develop in suburban Metro Manila will provide a great opportunity not just for developers but for the end-users as well,” she said.

Likewise, Colliers encouraged developers to emphasize features that serve the post-pandemic preferences. These include, according to its Q3 2022 Residential Survey, condominiums with good ventilation, and green and open spaces, as well as developments with green and sustainable features. The firm also recommended amenities that enable residents to work from home or multi-task.

Meanwhile, to support the recovery of the hotel segment, Colliers highlighted the importance of developing and modernizing more airports, which could also improve the attractiveness of hotel REITs (real estate investment trusts). The firm also encouraged the development of new hotels in key locations beyond Metro Manila.

And to draw more foot traffic to the malls, Colliers suggested that operators should reactivate their event spaces or activity centers and organize events. They should also maintain putting regular sanitation and other health and safety protocols in place, especially in crowded retail spaces.

The firm recommended developers to consider diversification in building industrial parks and facilities to accommodate a range of locators from different industries such as FMCG, logistics, automobile parts, and electronics, especially as they have recently taken big-ticket investments from locators that occupied industrial spaces in Central and Southern Luzon.

The challenge

The effects of the potential recession in the United States and the Russia-Ukraine conflict could be a risk. But for Ms. Olivares-Vital of Ovialand, the economic state in the US could be a crisis or opportunity, as it could push more equity or capital to be directed to Asia and translate to fresh funds or investments in the Philippine economy.

She added that it has yet to be seen whether China’s new attitude towards COVID-19 would be relentlessly pursued.

The Philippines also still needs better food security and strategic alliances to make certain that the cost of living would not exceed the income of Filipinos.

“All these factors can contribute to a weakening spending power of Filipinos, which will impact not just the property market but across all industries,” Ms. Olivares-Vital said.

Nonetheless, after the pandemic’s impact on real estate in the past years, Ms. Olivares-Vital held that the industry would keep its resilience.

“After the period of 2020-2022, I believe that real estate and property will continue to remain resilient — especially if the property involved has value — in terms of location, usability, and relevance to the market,” she said.

“The world will never be free from calamities, economic disruptions, wars, etc., but humanity continues to live. So, the considerations [for property investors] continue to be the same: evaluate your finances and prioritize investing wisely early; find real estate that will still have value appreciation that you can benefit from; and lastly, as an investor, make sure to invest in developers that have experience and the ability to deliver,” she added.

Fighting against headwinds in Philippine real estate

February 27, 2023 | 8:55 am

The outlook for Philippine real estate is looking rosy. In 2022, office space transactions in Metro Manila grew 43% annually to 603,800 square meters, according to professional services firm Colliers Philippines.

Office space transactions within regions — a key barometer of investor sentiment in the country — rose by as much as 50%, with many outsourcing firms expanding operations within Metro Manila and in emerging markets outside of it.

According to the data, office space was quickly snapped up in Cebu, Davao, and Pampanga, which will account for 90% of transactions in 2022.

Coupled with the country’s 7.6% year-on-year economic expansion in 2022, despite record inflation and interest rates, Colliers predicts that demand for Philippine properties will continue for the rest of the year.

“An aggressive stance taken by the national government in attracting manufacturing investments should result in greater absorption of industrial space across the country,” Joey Roi Bondoc, research head of Colliers Philippines, said.

The data supports Colliers’ previous optimism for the Philippine real estate industry’s performance in 2022, when Mr. Bondoc stated that the “sector is expected to finish 2022 strong,” with “an optimism that is expected to persist through 2023 as recovery prospects are boosted by strong macroeconomic fundamentals.”

Real estate services firm Santos Knight Frank (SKF) echoed the positive sentiments, as their own data foresees a marked increase in activity in the hospitality and retail sectors.

Retailers and hotels are the property sectors that are rebounding the fastest as a result of the easing of coronavirus disease 2019 (COVID-19) restrictions and the resulting greater mobility among the populace, SKF Chairman and Chief Executive Officer Rick Santos told reporters.

“Brick-and-mortar retail and hotels were some of the most severely affected real estate sectors during the pandemic. Now that travel and mobility restrictions have been lifted, we are seeing the resurgence and ‘unfreezing’ not just of market activity but also development and expansion of players in these sectors,” he said.

Further boosting the growth of the hospitality property sector are the return of international flights, more face-to-face events, and China’s relaxing of its COVID-19 policy, as these factors will result in “revenge travel” from tourists.

Almost 2.65 million tourists visited the Philippines last year, a significant decrease from the nearly 8.26 million tourists that visited before COVID-19.

Mr. Santos said that they forecast that 2,692 more hotel rooms will be opened in Metro Manila alone between 2023 and 2024 to accommodate this year’s anticipated foreign guests.

In other sectors within the industry, Morgan McGilvray, senior director for occupier services at SKF, noted that the occupancy rate of retail spaces in Metro Manila by the end of 2022 was 93%, which is very close to the pre-pandemic level of 96%.

With the office sector, the sentiment is the same. The demand for office space is being driven by the information technology and business process management (IT-BPM) industry, and it continues to show promise.

Mr. McGilvray said that the rising inflation in the US and other countries is a positive for the Filipino IT-BPM industry since it means American businesses are considering cost-cutting measures that may involve setting up back offices offshore.

In this, the Philippines continues to be a hot spot for IT-BPM investments.

“We expect more leasing activity this year as a result of greater outsourcing requirements from developed economies, the availability of quality office space and companies adjusting their work setups. While we will continue to see some downsizing of footprints for Philippine headquarter companies, we still expect to see an overall net positive take up in 2023 driven mainly by the BPO sector,” he added.

Real estate services firm JLL Philippines reached the same conclusion, saying that the IT-BPM sector is expected to lead the market amid a grim economic environment.

JLL pointed out that monetary policy rate hikes issued by the Bangko Sentral ng Pilipinas (BSP) to control skyrocketing inflation will dampen the growth of the real estate sector significantly.

As the government weighs the proposed ban on POGOs (Philippine Offshore Gaming Operators), which may adversely affect approximately P65 billion ($1.2 billion) of economic contribution, the IT-BPM sector is expected to carry the recovery of the property industry.

JLL pointed out that the BSP anticipates 9% and 5% year-over-year increase in IT-BPM earnings in 2022 and 2023, respectively. The Information Technology and Business Process Association of the Philippines (IBPAP) also forecast that the sector will generate $59 billion in revenue and add 1.1 million new jobs by 2028, demonstrating continuous development despite a number of challenges.

As they expand their activities all over the country, the IT-BPM industry is expected to continue scaling up operations, which could lessen the market impact of the likely POGO withdrawal. — Bjorn Biel M. Beltran

Emerging trends in the property sector this year

February 27, 2023 | 8:50 am

2022 was quite a challenging year for the real estate sector, especially with the economic crisis and climate change. But, the industry was set to recover and continue growing as one of the major players in economic recovery and development. Setting foot into 2023, real estate leaders are optimistic about real estate, following the easing of travel restrictions and the low COVID-19 infection rate, which have increased the economic performance and growth of the sector.

With such optimism at the backdrop, the real estate industry is encountering emerging trends that will help in shaping its future in the months and years ahead.

Workforce transformation

As pandemic restrictions ease, workforce transformation will come in handy, primarily when the work-from-home or hybrid setup is being implemented in most sectors. Unlike pre-pandemic, most of the employees have yet to return to working face-to-face, and as professional services firm PricewaterhouseCoopers (PwC) observed, only a handful of employees work in a physical office within a day, thus leading to increasing demand for a return to office in most leading companies.

However, the complete shift of face-to-face work is still under discussion, as most employees have their own work preferences and are still not ready to go back amidst the ongoing health pandemic until today. However, the real estate sector is impacted by the work-from-home setup since the office real estate stock can be eliminated or repurposed.

On the other hand, many companies will continuously cling to working in a hybrid setup, as a precaution in keeping their workspaces and respecting the work preferences of their employees. The hybrid setup sets an advantage for employers’ and employees’ work preferences and brings real estate into the digital world, creating an opportunity for sustainable growth in the sector.

Sustainability and climate change

Like other sectors, the impact of climate change is a strong incentive for the real estate industry to take action. For instance, the industry has been incorporating environmental, social, and governance (ESG) initiatives in its business operations.

Some sustainable initiatives that the sector is currently focused on include: developing green buildings and using water, eco-friendly, and energy-efficient materials in business operations that will help achieve a net-zero future.

As the Urban Land Institute (ULI) noted on its latest Emerging Trends in Real Estate report for the Asia-Pacific, many countries have already started this green movement. For instance, new net-zero buildings were being constructed to raise sustainability awareness and acquire carbon efficiency in leading countries like Australia and Japan. But in other Asian regions, adopting net zero standards can be extremely challenging, considering the region’s overall energy and density intensity. However, countries can bridge this gap by taking little steps in adopting net-zero initiatives such as acquiring renewable energy from electricity and purchasing carbon offsets.

In addition, water usage effectiveness and renewable energy have also been impacting the sector. As of now, data centers are searching for ways to reduce energy usage and cut carbon by using rechargeable batteries and rooftop solar panels, according to the said report.

Affordable housing

As a solution for production backlog, micro-apartments are also a rising trend, as Gino Olivares, the national president of the Organization of the Socialized and Economic Housing Developers of the Philippines, Inc., was quoted as saying in a previous report by online property marketplace Lamudi for the third quarter of 2022.

Micro-apartments are smaller studio apartments that have all the amenities and functions similar to a standard apartment in a space that is less than 350 square feet. Known as a place with minimal space, it features essential amenities, including a bathroom, kitchen area, and living and sleeping space. Recently, micro-apartments are attracting young professionals or those people who tend to live alone, according to real estate and landlord expert Erin Eberlin in www.liveabout.com.

Another trend mentioned by Mr. Alvares is co-buying or co-ownership, defined as the decision made by two or more persons in dividing ownership of a residence after it has been purchased.

The property owner in a co-buying arrangement could be the following: family, friends, couples, or business entrepreneurs. Unlike being the owner and co-owner of a business, co-buying is based on the individual interest of the owners.

Co-buying is still an emerging real estate trend that may be the key to ending the ongoing housing crisis because it is said to provide cheaper mortgage payments, more equity growth, and utility cost savings.

Moreover, the rights and ownership of co-buyers in property interests are also crucial. Although co-buying may be relatively new to the Philippine market and may pose some complications if not done right, it can still be a good strategy for owners who are eyeing investing in real estate.

Metaverse

Metaverse is also taking a spotlight on the real estate industry, according to PwC, as leaders are optimistic and eyeing the impact of the digital platform and how it can shape business enterprises and consumers to engage with products, services, and with each other.

The digital platform can improve the workplace experience, such as enhancing collaborative spaces, complementing the physical office, and upskilling employees and business operations.

With metaverse, properties can be bought, sold, purchased, and leased. Given that buying virtual homes is significantly less expensive compared to physical houses, this might make real estate create an opportunity to invest more accessible to a broader range of investors.

Similar to other new technologies, the metaverse still has many risks and is far from perfect, yet it’s been already attracting the interest of the sector.

“Interest in the metaverse is hot, even though many of its concepts are years away from being solidified. Your company doesn’t need to be a metaverse leader today, but you should explore the potential implications to your organization,” PwC advised.

Despite the obstacles brought on by the pandemic, the outlook for the real estate sector largely shows optimism as it adopts long-term goals and perspectives for the industry and as real estate professionals are working on strategies that allow the industry to thrive and see steady growth in return.

“Although real estate capital markets are constricting, they are still open for business, investors are still buying high-quality properties, leaders will continue to lend, and companies should move forward with cautious optimism through this current cycle and prepare to adapt to quick market changes,” Byron Carlock, Jr., US real estate leader for PwC, said in a statement. — Angela Kiara S. Brillantes

Sustaining PHL’s growth as IT-BPM hot spot

February 27, 2023 | 8:50 am

SF_asia-businesswoman-social-distancing-OL — Photo by tirachardz on Freepik

The Philippines remains to be a prime hot spot for offshore information technology and business processes management (IT-BPM) services that the country serves as a model for other countries.

The country is one of the world’s leading outsourcing destinations for business process and IT-enabled services. The cost-competitiveness, excellent talent base, proven track record in dealing with global customers, strong English language ability, proximity to key markets and improving infrastructure have all contributed to its continued success.

Looking onward, however, as the shape of the industry evolves and matures, moving toward higher value-added deliverables such as big data analytics, digital media and creative services, which will be increasingly delivered remotely over the Internet, will the Philippines be able to keep up?

Jack Madrid, president and CEO of the IT Business Processing Association of the Philippines (IBPAP), seems to think so.

In talks with BusinessWorld columnist Flor G. Tarriela, Mr. Madrid said that in 2022, the IT-BPM industry employed 1.55 million Filipinos, contributed over $31 billion to the economy and was the second largest source of foreign exchange earnings.

In the next six years, the industry has the potential to add one million more new jobs and generate over $59-billion revenue, representing 8% of the Philippines’ gross domestic product.

“Without a doubt, the industry is, and will continue to be an indispensable pillar of our economy,” he was quoted as saying.

Mr. Madrid stated during a previous press briefing that the sector hopes to make Philippines the world’s top experience hub for digitally enabled and customer-centric services while promoting inclusive and sustainable growth throughout the nation.

He said that the IBPAP’s growth target of 54% will be driven by IT-BPM firms setting up and expanding rural operations.

Upskilling the local work force will be one of the goals of the IT-BPM sector in order to support the industry’s growth target. This is shown in IBPAP’s plans to increase the number of high-skill positions over the next six years, with a 13% increase in revenue per FTE by 2028.

Mr. Madrid told Ms. Tarriela that the Filipino talent will be the basis of the industry’s future growth, adding that aside from excellent communication skills and English fluency, Filipinos are world-renowned for their adaptability, creativity, empathy, and resilience.

Due to their special skill sets, Filipino providers may now provide services to clients worldwide in a variety of sectors, including financial services, healthcare, hospitality, animation, and IT technical assistance.

He added that the BPO sector, which demonstrated the adaptability and resiliency of the Filipino population and led to the creation of 255,000 new employment from 2020 to 2022, was one of the pandemic’s silver linings.

Mr. Madrid went on to further claim that despite increasing inflationary pressures and constricting regulatory frameworks, the positive economic trajectory nevertheless stayed its course.

Carrying office space, business demand

The industry contributes by preserving jobs, creating new opportunities, encouraging rural development, promoting investments, and increasing demand for real estate.

Real estate services firm JLL Philippines affirmed this with a statement they released in January about the real estate industry’s resilience against global economic headwinds like skyrocketing inflation and interest rates alongside the depreciating peso.

“The IT-BPM industry is likely to carry the market in trying times. In 3Q22, IT-BPM firms made up 85.3% of Metro Manila office transactions, higher than the 6% share taken by POGOs (Philippine Offshore Gaming Operators),” JLL Philippines said.

“Continued activities from the IT-BPM sector are anticipated as they further scale up operations which may offset the impact of the probable POGO exit in the market. The Bangko Sentral ng Pilipinas expects IT-BPM earnings to see 9% and 5% y-o-y growth in 2022 and 2023, respectively.”

Mr. Madrid was quoted as saying that “the future is bright as a growing number of global business services are incorporating offshoring and outsourcing into their strategic initiatives to improve efficiencies and optimize costs in multiple geographies.”

“The sustained growth will be spurred by next-generation business models and assets, the talent and skills supply-demand gap, and ongoing cost optimization. Expansion across select industry horizontals and verticals, and increased digital adoption by traditional players will also be key drivers of growth in the coming years,” he said.

Measures moving forward

This pursuit of growth may face challenges in the coming years, and in order to maximize the country’s growth potential and reinforce its global competitiveness the country must take measures. Mr. Madrid outlined several of them.

Supply chain talent resilience, he said, will be essential in the midst of a talent battle that is heating up due to greater attrition rates and rising demand for specialized and emerging capabilities like automation, cloud computing, data analytics, and cybersecurity.

Hybrid work models must be included into company initiatives. Around the world, 70% of IT-BPM businesses claim to have used hybrid work arrangements. 80% of local IT-BPM workers in the Philippines said they preferred a hybrid work approach.

On this point, Mr. Madrid had previously told the media that they have called for partners in the telecommunication industry to build infrastructure to support the IT-BPM industry outside Metro Manila, where many companies are now keen on expanding.

“As a whole the Philippines is more than holding its own and in retaining its position. What’s more important in the coming six years is how much more market share we can capture. It’s there and it’s ours for the taking,” he had said.

“Our industry has been the focal point of what I believe to be a global desire for more flexible work, location-independent setups. The future of work is already happening… It’s loud and clear that an overwhelming majority in the Philippines, but even across other parts of the world have shown that the future is going to be about finding that optimal balance.”

The strategic imperatives that IBPAP will work on with industry and government partners are described in the IT-BPM Industry Roadmap 2028. They include enhancing business accessibility, tackling the talent shortage, and bolstering our digital infrastructure.

The nation’s ability to capitalize on new trends and avoid looming threats from around the world will be crucial to the industry’s survival. The Philippines has to keep focusing on building a strong talent pool, a stable regulatory framework, and an infrastructure that is more conducive to investment. — Bjorn Biel M. Beltran

PHL eyes retail dollar bonds in Q2

February 27, 2023 | 12:34 am

American Dollars Cash Money in sack on black table in the dark r — JCOMP-FREEPIK

THE PHILIPPINES is looking to offer dollar-denominated retail Treasury bonds (RTBs) in the second quarter, Finance Secretary Benjamin E. Diokno said.

“There’s a lot of interest from London and Frankfurt. Even in Japan. What’s good about dollar-denominated is that even if the peso depreciates, you still win because of high interest and it’s tax free too,” he told reporters on Friday on the sidelines of the 2023 Annual Reception for the Banking Community in Manila.

Mr. Diokno said there is no set volume for the proposed retail dollar bond offering.

In December, the Finance chief said the government was targeting to offer retail dollar bonds within the first quarter. At that time, the bonds were expected to have a tenor of at least five years and raise around $3 billion, depending on demand.

Mr. Diokno said the offering was pushed back after the government held an RTB sale this month. The government raised P162.180 billion or almost $3 billion from the second RTB issue under the Marcos administration.

The Philippines’ last retail dollar bond sale was in 2021, where it raised $1.6 billion.

The government plans to borrow P2.207 trillion this year, where 75% is expected to be sourced domestically.

MORE AID
Meanwhile, Mr. Diokno said the government will also extend its Targeted Cash Transfer (TCT) program, which will provide P1,000 each for around 9.3 million beneficiaries.

“There are some 9.3 million beneficiaries which will have P1,000 each, (that) translates to P9.3 billion (for) the poorest of the poor beneficiaries. This is different from the Pantawid Pamilyang Pilipino Program (4Ps). Some beneficiaries under 4Ps are under this program,” he added.

Mr. Diokno said they are considering a two-month subsidy for these beneficiaries. Malacañang will make the announcement, he added.

Mr. Diokno said there is a possibility the cash transfer program may be extended again when needed.

“Others may still be in need of the cash transfers. I cannot say if this is the last,” he said.

The government released a total of P18.3 billion in subsidies to about 9.2 million household beneficiaries under the TCT program, according to the Department of Finance (DoF).

The program was launched in June last year and granted cash payments for poor households amounting to P500 per month for six months.

The TCT program was aimed at mitigating the impact of rising commodity prices on the most vulnerable households. The program expired on Dec. 31, 2022. — Luisa Maria Jacinta C. Jocson

25-bp hike ‘most likely’ in March — BSP chief

February 27, 2023 | 12:33 am

There are signs that inflation in February is slowing, according to the Philippine central bank. A store employee arranges packs of sugar in a supermarket in Quezon City in this undated file photo. — PHILIPPINE STAR/MIGUEL DE GUZMAN

THE BANGKO SENTRAL ng Pilipinas (BSP) will likely hike the benchmark rate again next month, with its governor eyeing a smaller 25-basis-point (bp) move amid signs of slower inflation in February.

“We’re actually looking at the month-on-month (inflation), but the most likely scenario is maybe one more hike,” BSP Governor Felipe M. Medalla told reporters on the sidelines of the annual reception of the banking community on Friday.

He said that a 25-bp hike is the “most likely” option at the March 23 meeting, due to a “great possibility” that inflation has already peaked in January as non-monetary measures are starting to dampen price increases.

“There are signs that (February inflation) will be (lower), there are lots of sugar imports and we’ll probably be seeing that with other products as well,” Mr. Medalla said in a mix of English and Filipino.

He also said that the economic team was able to convince Philippine President Ferdinand R. Marcos, Jr. to import more food items such as sugar.

At the same event on Friday, Finance Secretary Benjamin E. Diokno said February inflation is “definitely lower” than January.

“The price of oil has stabilized, peso has stabilized, all that’s left is food. We really have to focus on food items. It’s not just importation, but the food has to reach the market,” Mr. Diokno told reporters in a mix of Filipino and English.

“Right now, prices of sugar are still high,” he added.

The Sugar Regulatory Administration has issued Sugar Order No. 6 earlier this month, authorizing imports of 440,000 metric tons of the commodity, part of which would form a buffer stock in order to stabilize prices.

However, a higher month-on-month increase in February inflation may prompt a bigger move at the Monetary Board’s meeting on March 23, Mr. Medalla said.

“We’re still hawkish. If the results are bad, we will act… If the month on month is 1%, which implies a year on year of 12%, we have to act,” he added.

Inflation accelerated to a 14-year high of 8.7% in January from 8.1% in December. Stripping out seasonality factors, month-on-month inflation rose by 1% in January.

“The main impetus behind inflation is not demand. What’s happening is what we call second-order effects. Prices are rising because the previous increases influenced future increases,” Mr. Medalla said.

He reiterated that he expects inflation to return to within the 2-4% target range by November or December this year.

The BSP projects inflation to average 6.1% this year, higher than the actual 5.8% recorded last year, before easing to 3.1% in 2024.

Asked if another rate hike is possible at the Monetary Board’s next meeting after March, the BSP governor said it is “hard to forecast because the data is so fluid.”

After March 23, the BSP will discuss policy on May 18.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa expects the BSP to hike borrowing costs by 25 bps next month as well, adding that a whole-of-government approach is needed to address high inflation.

“BSP rate hikes can only do so much to quell demand hikes with supply-side remedies needing to kick in to make a dent in the inflation fight,” Mr. Mapa said.

“BSP will still need to hike to maintain the hawkish stance, but it’s clear that a 50 bps will not be able to effectively deal with searing price pressures, especially as the main driver for this episode is food inflation best addressed by the Department of Agriculture and Bureau of Customs,” he added.

Security Bank Corp. Chief Economist Robert Dan J. Roces said a month-on-month increase of about 0.3% may result to a year-on-year headline inflation of 8.9% this month.

“So, the risk is on the upside as disinflation lies in food prices which is a significant portion of the CPI (consumer price index). Solve the supply side there, then disinflation is guaranteed,” Mr. Roces said.

While many central banks worldwide, such as the US Federal Reserve, have slowed monetary tightening to 25-bp rate hikes this year, the BSP has so far stuck to large rate increases with the 400 bps in cumulative hikes since May 2022.

RRR CUT?
Meanwhile, the BSP may reduce banks’ reserve requirement as part of efforts to encourage financial institutions to cut or eliminate fees for small-value digital transactions.

“We are ready to collaborate with banks and payment system operators to explore a cost-sharing system that excludes small transactions from these types of fees,” Mr. Medalla said.

“We may even consider cutting the reserve requirement to enable banks to make these concessions. All these, in pursuit of a financial system that leaves no one behind,” he said.

The BSP earlier reduced the banks’ reserve requirement ratio (RRR) to 12% from 18%. It aims to reduce the country’s RRR, the highest in the region, to single digit this year.

Mr. Medalla said one way to make digitalization more inclusive is to make small transactions free of charge.

“If the fee is P15 for a P200 transaction, then the fee is quite large relative to the amount being sent,” he said.

The value of electronic fund transfers coursed through the PESONet and InstaPay rose by 36% to P955.9 billion in January from P702.6 billion in the same month last year, latest data from the BSP showed. The combined volume also grew by 25.8% to 58.922 million from 46.83 million in 2022.

Last year, the combined value of PESONet and InstaPay transactions went up by 36% to P9.94 trillion from P7.24 trillion in 2021, with the volume rising by 21% to 633.46 million from 523.59 million. — Keisha B. Ta-asan

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