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‘There will definitely be growth’

MG Philippines/TCCCI President and CEO Atty. Alberto B. Arcilla — PHOTO FROM MG PHILIPPINES

MG PHL Head Atty. Alberto Arcilla reveals ‘4-5 models’ are coming this year

Interview by Kap Maceda Aguila

AT THE SIDELINES of the launch of the MG HS, “Velocity” got a chance to speak exclusively with The Covenant Car Company, Inc.-MG Philippines President and CEO Atty. Alberto B. Arcilla about the new SUV, MG’s business, and his take on prospects. Here are excerpts from our interview.

VELOCITY: Please walk us through the decision to bring in the MG HS.

ATTY. ALBERTO B. ARCILLA: We were really very excited when we saw the global product line of MG. And we’ve been seeing that the HS has been winning a lot of awards. It’s been car of the year in various countries. We felt that now would be a good time to again offer another SUV. We were quite pleased and happy with the reception of the market to our MG ZS and RX5. With this new vehicle, we feel that it will be able to address many concerns of our market.

What are these concerns?

First, they want another choice for an SUV. They want the flexibility of having a car and an SUV even for city driving, and more importantly, we see that a lot of them are looking for certain specs and features that the HS can offer. The most critical: We see a lot of the buyers are looking to make a responsible purchase. We’ve learned during the pandemic to be responsible in everything that we do. Since we feel that the car is well equipped, the design aesthetic is very nice, and it is positioned very well, we feel that the market will appreciate this new model.

How does the HS compare to the popular ZS?

In the ZS, we are able to attract a specific demographic — people who want an SUV. The ZS is very agile, has good legroom, and is able to maneuver very well in the streets. However, the SUV market has really expanded the past two years, and we feel that we need to give our audience another option. In terms of demographics, an MG buyer is really someone who’s very adventurous, very progressive in thinking, and wants to try out new things. Our buyer is also someone who’s very educated and wants to find out the specs of cars. So we feel that since the market really expanded and we want to capture a bigger audience, we want to give them another choice. Hopefully, we’ll be able to speak again to the MG buyer — one who recognizes and acknowledges the brand heritage, aesthetics, and quality.

Its price point is very similar to the RX5’s. How would you distinguish the selling propositions of these two vehicles? Will you keep the RX5 in the lineup?

We’re very happy that we have a wide range of MG clients. Those who have purchased the RX5 have given us good feedback about the quality of the vehicle. The HS will provide us another option. We will keep the RX5, as it has been received very well; it’s price is very well-positioned. We feel that we should continue serving our MG audience with that particular model. But the HS is supposed to target a subset of a big segment. Their pricing is similar, but we’re giving the audience the choice. Whatever your need is, we will offer it to you. Since MG is continuously evolving globally, we have that opportunity to bring in more models here. We will continue with the RX5, but we’re very optimistic with the HS.

How soon can we expect MG Philippines to bring in electrified vehicles? We’re seeing a trend now that more brands are bringing in hybrids or even pure electrics.

We’re very excited. MG is one of the biggest manufacturers of EVs. Actually, in Europe, MG is only offering those. We have a full lineup of electrified vehicles ready for the Philippines. We’re very glad because we have a left-hand market, so it’s very easy to bring all these new models here. We’re just waiting for the right legislation so we’ll be able to prepare the market to appreciate having an EV and how to maintain it. As soon as the market is prepped, we’ll be here with EVs.

Is there something you can share among your plans for the year?

Even during the pandemic, the MG Philippines network grew from 29 to 39 dealerships. We were very happy and honored that a lot of our dealer partners applied during a time when we thought that the market or industry was going down. But because the restrictions in mobility were different in every location, there would be an opportunity to open in one location while another would be closed. We have about five to six more that will open within the year. Why are we preparing the market? Aside from the HS, we will be offering at least four to five more models within the next few months, and it will be in different segments. From what I see from the products being offered to us, it will be very exciting for the market.

What’s the industry outlook like for this year, and when are we getting back to pre-pandemic levels, in your opinion?

I feel that for this year, because there are a lot opportunities with very exciting products to be launched, there will definitely be growth. We still need mobility. Definitely, there will be growth from 2021 to 2022, however, if you ask me when the pre-pandemic numbers will return, maybe by next year. But we expect the players to be different. I think what we’ve seen during this pandemic is that people have expanded the way that they think. There’s more time for them to review what they want to do and what they want to purchase. So now we’re giving them all the options. We’re very optimistic in our growth potential, especially with new models.

When you say the players the will be different, are we going to see a resurgence in other brands outside of the usual suspects, so to speak?

That is my hope, because we’re one of the new players.

PLDT sets cybersecurity budget at about P1B yearly

PLDT, Inc. said it will keep investing around P1 billion in cybersecurity every year, as attacks and threats continue to increase.

“We will continue to invest about a billion a year in cybersecurity,” Alfredo S. Panlilio, president and chief executive officer of PLDT and its unit Smart Communications, Inc., said during a recent press briefing.

“Knock on wood, our cyber team has done a good job; we will continue to monitor and we will continue to make sure that we remain secure,” he added.

Angel T. Redoble, first vice-president, chief information security officer, and head of PLDT and Smart Communication’s Cyber Security Operations Group, said the company has a three-year cybersecurity strategy.

“The budget is strategy-driven. I presented the three-year strategy in 2018, which should have ended last year,” he told BusinessWorld in a virtual interview.

“Because of the pandemic, some of the projects were [delayed], so we are completing such projects this year,” he added.

He said his team is requesting “close to P2 billion” for cybersecurity every year.

In December, the group said it had invested “nearly P3 billion” in cybersecurity infrastructure.

The investments have “strengthened the PLDT group’s predictive, detective, and responsive capabilities, acquiring more than 200 million cyber threat intelligence information, and detecting and preventing close to 300 million combined types of cyber attacks this year (2021),” it said in an e-mailed statement.

“To ensure the sustainability of their fortified cybersecurity program, PLDT and Smart also started conducting Cyber War Games in 2021, where we identify different types of sophisticated attacks as well as our existing controls and processes, and we assess if these controls and processes can be retained or must be improved moving forward,” it added.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls. — Arjay L. Balinbin

The Velocity Q&A: Raoul Picello (Managing Director Peugeot Philippines)

Interview by Kap Maceda Aguila

IN JANUARY, Peugeot Philippines not only launched a new SUV (the 5008) but, more importantly, presented several of the faces behind a new distributor that would take the reins of the French automaker’s operations here.

Astara (formerly known as Bergé Auto) is a huge automotive distribution and mobility services group founded in 1979. Peugeot Philippines said in a release that “the company carved out a successful path as a leading group in distribution and mobility services. Astara is instrumental in the selling of over three million cars as strategic partner of the world’s leading automotive groups.” One of these is Stellantis, the sixth-largest automaker, in charge of no less than 16 brands (including, yes, Peugeot).

Peugeot Philippines (or, more specifically, BA Motors) is now headed by its Managing Director Raoul Picello, who is very bullish about what the company can achieve, but is not averse to admitting that work needs to be done on the brand, its network, and services here.

“Revitalization” is the key theme for the company, and Mr. Picello wants to realize this sooner than later. The executive, who has three decades of experience “across luxury and volume brands” in various capacities, recently took time to speak to us via video chat. Here are excerpts from our one-on-one interview with him.

VELOCITY: You have your work cut out for you, and we’re sure you know that.

RAOUL PICELLO: What do you mean?

From a media standpoint, there was a feeling that Peugeot didn’t take off here like it should have.

I obviously can’t speak for the past. All I know is that in this business, it’s never a matter of one thing. It’s not complicated business, but it’s complex. There are many factors that come into play. Even the greatest product needs other components to connect with the customer, because the customer has a lot of touchpoints with the product. It’s only the ads, the stories you write. He has to experience it; he has to find it near his home. He has to be taken care of when he owns the car, when things need changing. There are a lot of products that are important to a vehicle that are equally important to a great product.

What were your marching orders from Astara when you were assigned to your post here?

What did Astara tell me? Although I have not worked for Astara for many years — I started a year ago — the truth is that I have known them for 20 years. I worked for them in 2000 when they were distributing Toyota and Lexus in Spain. I was hired as sales and marketing director. But then after a year, they gave back the distribution to Toyota Motor company.

But then, obviously, Bergé Auto — which was Astara until two or four months ago — which was the biggest Spanish group, at least top two in my opinion… they told me that part of our strategic plan is grow in Southeast Asia where we see highest potential for growth as a region and Philippines will be the hub of the operations. “Do you want to go and take care of it?”

I was in Hong Kong then and it was funny because it was like going back in time. I lived in Manila for three years when I was a kid. Who could have (predicted) that life would bring me again to the Philippines?

What are your memories of Manila?

I was 11. I can tell you various memories. I remember Ramon Zamora (laughs). I lived in Dasmariñas, went to IS (International, School), of course. I learned to play tennis at Colegio de San Agustin where Maricar (Parco, Peugeot Philippines brand head) went to school. And I would go to Rustan’s to buy the sausage on the stick. I have lots of memories. It was quite a happy period because at that time, Manila was a very safe place. As a kid, I could take a taxi and go to the cinema and go — if I’m not wrong — to Rizal Avenue to watch the cinema. There was a street with lots of cinemas. As a kid of 11 I could go there in a taxi. That was an amazing time!

What did you know about the Philippine auto industry before your Peugeot Philippines assignment?

I didn’t know much, but I would also stress the fact that given the distribution of cars is similar everywhere in the world, problems are the same everywhere in the world. As you said, the brand somehow was left a bit unattended. And when you left things unattended, things would happen as they would anywhere else in the world.

Customers cherish the ownership of a car for the same reasons. You just change the order: Some countries are more practical; others are more emotional. But practicality and emotion are still there among the top three reasons to buy or purchase. And on top, I think once you have the fundamentals in this business, you are in a good place. That’s why we are working honestly to put the fundamentals in place.

But you will not be able to do all these without the product, obviously.

Why the Philippines?

If I tell you that it’s because there was a thorough study of many months, forecasting, macroeconomics, and deciding at the end that the Philippines is the market, I would probably be exaggerating. It’s a series of factors. Some are created by coincidence and by the opportunity, and the others basically the result of the study. Clearly, Astara has access to opportunities considering the partnership Astara has globally with Stellantis (and) other brands.

And all these partnerships are successful. In 30 years of business, Astara has successfully managed many brands and many countries. The reputation with the OEMs is very good. But then to grab the opportunity, you need substance behind it. We have come to the conclusion that the Philippines is the seventh biggest market in Asia, including China and India. There is a great passion and culture for automotive. Honestly, I also think there is space for a mainstream, premium European brand because Philippines is one of those markets where Volkswagen is not so strong, if I may say, without any disrespect. So maybe there is room.

In general, in the Philippines there is room for beautiful cars that are practical at the same time. So size, growth, an economy that’s slowly recovering, a population of 110 million — basically, all these factors converge into the decision.

How does the Stellantis manufacturing facility in Gurun, Malaysia factor into the decision?

You can’t grow in the region if you can’t have local manufacturing — period. But that doesn’t have anything to do with the choice of Philippines, because Gurun is a Stellantis factory, and Astara drives the decisions.

First of all, Peugeot wants to position itself as a mainstream premium brand across the board in all markets. Secondly, if you are perceived to be in the same place as the customers, at the same time it’s the customer who decides the price.

In a way, the price is a given with variations. The fact that there is a factory in Gurun means that we can price and take advantage of different margins because of taxes instead of importing from France or Europe. That’s an important advantage. You cannot succeed in this region if you do not have local manufacturing. Ninety percent of the cars we will sell in 2022 will be sourced from Gurun.

What else can you share about your plans?

When I arrived, we had four outlets of which one was basically a pop-up store owned by EDI (Eurobrands Distributor, Inc., which previously handled the brand here). That was the biggest challenge. Now we are at seven outlets which are either fully operational or very close to being operational, and with visibility to get to 11 or 12, at least by end of the year. I say at least because I still think that we can find a build equation which is interesting for dealers that may be in areas with less industry, less market where I say Peugeot could be difficult to sell with acceptable proposition.

Maybe if we make our standards a bit lighter, we can. I’m talking about a north or east of Pampanga area, for example, where there are brands with outlets in the area (selling) 1,000 cars a year. I am not saying 1,000 is our target because I don’t even care whether it’s 800, 900, 1,000 or 1,200 this year. But maybe we can build something. And if we can build something there, the number could be much higher than 11. I need to be where the customers are and where the customers are enough to make the proposition for the dealer viable.

Then there’s another challenge, but that will take time only because it’s complex and involves processes that both integrate with Stellantis in Singapore and Astara in Madrid. Let’s not forget that BA Motors Philippines started operations formally in December because of COVID. The registration of the company and all licenses arrived only in December, and they should have been there in July. Many contracts could not be signed.

You had said you want the brand back in the Filipino buying menu.

That’s what we want: to be in the radar. Until three months ago, we were not in the radar at all. Part of that is brand awareness. We are spending a lot more in communication — and products. And for that I am confident that we have a proposition for the year, and we are still working toward introducing even more new models. The network is a fundamental pillar of the strategy this year, and then the customer handling processes. That’s also a key area of strategic focus of our business.

We have various opportunities. With the cars we will launch this year, we will be present in a much bigger, larger share of the market. However, to be there with one version is not enough. We need more versions and that’s what we are working toward. Then obviously, if I have to put a wish list together, it’s obviously a pickup. It’s approximately 20% of the market in the Philippines so that would be interesting. And then what we call in Europe as light commercial — that also is important. And that could present opportunities. Stellantis is very strong globally in the commercial vehicles area; probably, it is the strongest group in that segment. And that is also where we’d like to see opportunities.

But again, everything has to come gradually. The network has to grow, products will arrive. There are no overnight miracles.

You’re looking at launching four models this year, according to Maricar.

Including what we’ve launched so far, it’s reasonable to say that this will be the activity of 2022. But I want to bring in more versions also of these models which are equally important. I cannot say anything because we still don’t have certainties.

As far as dealerships are concerned, I would like to have more. It’s the team that has to convince me that I am wrong. Otherwise, I am right.

Astara is known for its robust digital platform. Are you rolling that out here?

The Astara platform has two aspects that are very important. The first one is the platform from the inside — a business management platform that is built on a global scale. (This is for) all the operations that allow us to manage the various aspects of the business. This platform in some aspect is purely internal. The other is mixed, internal-external: To know how many customers walked through the door or showrooms is important. It’s important to know the number and the ask. But it’s also important to know who they are, what’s their name, what they read, where they saw us.

And that’s where we integrate the internal business management platform with the external activity which relies on what the customer wants in terms of mobility. Mobility is changing. It’s no longer wanting a car that I can keep for three, four, five, six years. I have three sons and none of them has a car. None of them cares about owning a car. They share my car.

Car subscription is becoming an important trend which, in my view, will grow in the future. Astara is also growing and rolling out these aspects of the business in all the operations across the world. And it will also come in the Philippines. We will bring it more toward the end of the year, because first we need to put the house in order in terms of internal processes. It will come and it’s going to become one of the key aspects of BA Motors in the Philippines.

Are we going to see an electrified Peugeot vehicle here soon?

I could take an electric Peugeot that’s sold in other markets, import 20 units, distribute them to the dealers… and keep them there until they are ready to be thrown into the bin. But that’s not what we’re meaning to do. We need to build an equation which is viable or close to be viable not only for us but also for the dealer and the customer. For that we need infrastructure, we need support to the owners and the buyers of electric vehicles like everywhere in the market.

When will you see an electrified Peugeot? I don’t know. It could be as soon as two years from now. There is, at the moment, no concrete plan. But that’s because we are not Stellantis. We are a private distributor. We get the information a tad later.

What I can tell you is that the interest in the Philippines from Peugeot management is high. As soon as the opportunities are clear in terms of infrastructure and government incentives (we’ll be ready). What I know also from experience, even those markets who were late in the adoption curve, the ramp-up curve once they adopt is deeper than in the past. The conversation and purchase of electric vehicles for late adopters is steeper than it was in the first market 20 or 15 years ago. I think it’s going to be quicker than what we expect on the one side but is going to be quicker on the adoption than what everybody’s writing.

How do you want Peugeot to be seen as a brand? Do you want to be among the likes of Audi or BMW? Maybe an affordable European marque?

I want to be in the league of — in terms of perception — of Mazda, of Subaru or Honda, although they have different volumes. European that looks great; that’s the area I want to be. Nowhere in the world is Peugeot compared to BMW and Audi — I wish. But it would be very arrogant to think something like that.

I am happy that people think we are expensive. But when they see that we are within reach, it’s a good surprise. Honestly speaking, I prefer this than the opposite.

Honestly, I don’t like the word affordable. Affordable has a lot of connotations — some good, some not so good. What I want is to appeal not to a niche but to a volume — to a lot of people. Then some of them will be able to afford a Peugeot or some others. But if they will buy us, it’s because of the design, because of the practicality, because of the technology and the quality. And when you buy that, you also buy excellent customer service. And that takes time. There is nothing that can be done overnight today in this business, I think.

SEC flags unlicensed blockchain platform MetaProfit

THE Securities and Exchange Commission (SEC) warned the public against investing in MetaProfit, a blockchain technology platform.

“Further, it is not authorized to solicit investments from the public since it has not secured prior registration and/or license from the commission,” the SEC said.

In its advisory, the SEC reported that MetaProfit is offering to the public a minimum investment amount of 0.05 Binance coins, “promising earnings of 1% daily in total of 30% for 30 days subscription depending on your subscribed amount plus 100% capital after maturity within 30 days and bonuses from the associate program.”

MetaProfit offers daily deposits and withdrawals through a selected cryptocurrency wallet. It is headed by Arthur Dvali, its chief executive officer.

On its website, MetaProfit describes itself as a “platform that uses technical, research and financial skills in Blockchain Development companies.”

“In connection, the platform created a custom-build subscription and website that offer the potential of gaining profit through the optimization of blockchain technology,” it added.

The SEC said that the sale of securities to the public must be duly registered and that the concerned corporation and its agents must have the appropriate registration or license to sell such securities to the public.

“Hence, those who act as salesmen, brokers, dealers or agents or claim to act as such for MetaProfit in selling or convincing people to invest in the investment scheme being offered by said entity including solicitations and recruitment through the internet may be prosecuted and held criminally liable,” the SEC said.

The penalty is a maximum fine of P5 million or up to 21 years of imprisonment.

“Also, those who invite or recruit others to join or invest in such ventures or offer investment contracts or securities to the public may incur criminal liability, or otherwise be sanctioned or penalized accordingly,” the SEC said.

“The public is advised not to invest or stop investing in any investment scheme being offered by any individual or group of persons allegedly for or on behalf of MetaProfit, and to exercise caution in dealing with any individuals or group of persons soliciting investments for and on behalf of it,” it added. — Luisa Maria Jacinta C. Jocson

Designing with compassion

Bakong

DESIGN is not limited to how good products look; functionality is also important. At the Design Center of the Philippines, how products benefit and uplift a community’s lifestyle is also a key principle of design.

The agency presented its recent design projects during the “Future-Proofing by Design” discussion at Pasay City’s Hotel Henry Manila on March 17.

Founded in 1973, the Design Center of the Philippines is an attached agency under the Department of Trade and Industry (DTI), mandated to create and maintain programs on the development and improvement of Philippine products and services, including those by small and medium enterprises (SMEs).

LEARNING, SERVICES, AND INNOVATION
The agency’s projects are driven by the Filipino value of malasakit (compassion) as a pillar of good design.

In her presentation, Executive Director of the Design Center of the Philippines Rhea Matute defined designing with malasakit as “impact-driven solutions sensitive to human needs and social challenges, protecting future generations, and securing a more livable society for all.”

To promote design learning, one of the agency’s ongoing projects is the Compass Workshop Series which is an online training course focused on learning about sustainable design.

“We hope to instill a design thinking and a formal design process that takes into consideration all these key elements of economic sustainability, social sustainability as well as environmental system,” Ms. Matute said.

The program culminates with the 30 designers, creative professionals, and teachers under it, going on to educate and train others to provide design solutions for either local or global problems and challenges.

For its design services, one example is the Design Center’s Uswag Leyte program, done in partnership with the University of Santo Tomas-CCPET, where artisans use local materials such as abaca, bamboo, and tukog to make flora-, fauna-, and marine life-inspired furniture and home decor. At the end of the 2021 edition of the program, it was able to assist 38 artisans produce 80 designs which were sold in three trade events.

Meanwhile, the Kalibutan Project assisted micro-, small, and medium sized enterprises (MSMEs) in Region 7, as well as artisans from Cebu, Bohol, Dumaguete, and Siquijor. Launched during the pandemic, the program was able to assist 38 MSMEs develop 78 designs, with 24 of the products commercialized.
“It’s not just about the market dictating what the market demands, but really developing objects of meaning as well as creating systems that would impact the local community and bring out the confidence in their identity as a people, and as the identity of the province,” Ms. Matute said.

Organized by the Center for International Trade Expositions and Missions (CITEM), this year’s Sustainability Solutions Exchange (SSX) digital exhibition and conference will be held from March 23 to 25. The innovations Pinyapel and Bakong will be launched during the event, along with other Filipino products meant for export.

The water-resistant Pinyapel made with pineapple leaves as the raw material — is used in products ranging from coffee cups to paper shopping bags. Pinyapel won the country’s first Wood Pencil award, given by the UK-based charity D&AD Future Impact, in 2019.

An aquatic plant from Bangalao Lake, Cagayan, the bakong is used to develop bio-plastic, paper, and fiber. In 2021, the Bakong Circular Design Challenge developed 11 design concepts, with 18 more concepts currently under development.

THE GOOD DESIGN AWARDS
In 2019, the Design Center launched The Good Design Awards. According to the award’s description, it is a national and biennial recognition system which seeks to discover works made and systems executed in the Philippines that “address social problems and enrich quality of human life.”

The first winner of the Good Design Awards’ Malasakit Award (grand prix) in 2019 was Dr. Ria Liza C. Canlas, an engineer, technologist, educator, and founder of the construction material manufacturing company Po Lite Technology, Inc. She received the award for developing eco-hollow blocks for housing.

The eco-hollow blocks use a pre-fabricated green composite, leading to 46% less carbon emissions. The hollow blocks are ready to install, and no paint is necessary. They have been tested to be five times stronger than regular hollow blocks, 64% lighter, waterproof, chemical resistant, and fire retardant for up to two hours.

“I am a woman in science and a malasakit design entrepreneur who is aspiring to become a unicorn that will evolve the housing gaps,” Ms. Canlas said during her presentation. “I will train women in construction works.”

“I think sustainability should really be imbedded in the culture of the Filipinos, especially the students since they are the next generation who will continue the practices,” Ms. Canlas said.

This year, the 2nd Good Design Awards is accepting entries until March 31. Tentatively, the initial jury session to come up with a shortlist of entries will be on April 28 to 29. The final jury session is tentatively slated on May 26 to 27, and the awarding ceremony will be on June 17. For more details, interested participants may visit https://designcenter.ph/good-design-award-ph/submission/.

“Future proofing is a mindset as well as a kind of agility not just of the mind, but also of systems. Whether you’re a business, an institution, in government, [it is about] being able to really become agile as an organization or an individual, and to really develop the skill to be able to respond quickly and to not being complacent, but really continually evolving,” the Design Center’s Ms. Matute said.

For more details on the Design Center of the Philippines and its programs, visit https://designcenter.ph/. — Michelle Anne P. Soliman

Kia opens remodeled Sto. Tomas, Batangas dealership

PHOTO FROM KIA PHILIPPINES

KIA PHILIPPINES recently opened the doors to the second showroom in the country to implement the new design language and motto of Kia. Located along President Laurel Highway in Barangay San Roque, Sto. Tomas, the newly remodeled Kia Sto. Tomas features the updated corporate identity of Kia, along with the new logo which was first unveiled to the public late last year.

In a release, Kia Philippines said that guests can expect to see the brand’s “Opposites United” design philosophy in action. The customer area features a relaxing, earthy feel with its minimalist wooden interior and warm lighting. In contrast, the showroom has a more thrilling and futuristic atmosphere with its metallic surfaces and cool lighting.

“The improved showroom is the first step taken by Kia to inspire Batangueños to start their journey. Next comes the brand’s effort to provide customers and prospects with the experience they need to motivate them. This is why the sales representatives over at Kia Sto. Tomas has been better trained to assist customers, solve needs, and exceed expectations,” continued the statement.

Operations are overseen by MG Gateway Mantrade Corp., and dealer principals Michael Goho and Markane Goho promise to champion the philosophy of “Movement That Inspires” while ensuring that every Batangueño receives the best customer experience in the dealership.

The refreshed store identity, the new customer experience, and the improvements in management embody the brand’s intent to drive Filipinos to a better tomorrow. Kia Philippines wants to create innovative experiences that will drive people towards their ideal future — through purpose-driven vehicles and a thoughtful store design.

“Our brand’s purpose is to create spaces that will inspire consumers,” said Kia Philippines President Manny Aligada. “To create more time for consumers so they can focus on what inspires them and what they aspire for.”

For sales and after-sales-related inquiries, customers may reach Kia Sto. Tomas via +63 (909) 611-2753, +63 (931) 832-8088, and +63 (927) 133-2331. For more information and updates, follow Kia Sto. Tomas on its official Facebook and Instagram accounts.

Treasury bill, bond rates to rise further amid inflation concerns

BW FILE PHOTO

RATES of government securities are expected to increase this week due to inflationary pressures caused by the Russian invasion of Ukraine.

The Bureau of the Treasury (BTr) will offer P15 billion in Treasury bills (T-bills) on Monday, or P5 billion each in 91-, 182- and 364-day securities.

On Tuesday, it will auction off P35 billion in seven-year Treasury bonds (T-bonds) with a remaining life of six years and four months.

A bond trader said via Viber that T-bill yields may inch up by 5 basis points (bps) this week, while the seven-year T-bond rates could range between 5.35% and 5.55%.

“The Fed rate hike was as expected, but the elephant in the room remains to be the ongoing conflict between Russia and Ukraine as this also impacts domestic inflation,” the trader said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort in a Viber message said T-bill yields could continue to go up this week in line with a weekly rise in the secondary market.

He said the rate hike fired off by the US Federal Reserve last week has already been priced in by the market, along with Russia’s continued invasion of Ukraine, which had pushed up global oil and commodity prices.

The Fed last week raised rates by a quarter percentage point, the first time since 2018, to help combat rising inflation. It penciled in six more increases for the rest of 2022.

Global oil prices have been surging after the Feb. 24 Russian invasion of Ukraine, raising inflation concerns here and abroad.

At the secondary market on Friday, the 91- 182- and 364-day T-bills were quoted at 1.2005%, 1.4172%, and 1.7486%, respectively, based on the PHP Bloomberg Valuation Reference Rates published on the Philippine Dealing System’s website.

Meanwhile, the seven-year bonds fetched a yield of 5.48%.

The government partially awarded the T-bills it offered last week as investors asked for higher rates due to rising oil prices and ahead of the Fed’s rate hike. The BTr raised just P9.14 billion via the short-term securities or less than the programmed P15 billion even as the offering attracted P23.35 billion in bids.

Broken down, the Treasury awarded just P3.04 billion in 91-day T-bills even as total bids reached P8.96 billion for the P5 billion on offer. The average rate for the three-month T-bill climbed by 40.6 bps to 1.305% from the 0.899% fetched during the previous auction.

The BTr also awarded only P3 billion in 182-day T-bills that attracted P7.22 billion in tenders versus the P5-billion program. The tenor fetched an average yield of 1.458%, up by 30.1 bps from the 1.157% seen previously.

The government likewise made a partial P3.1-billion award of the 364-day papers versus the P5-billion offer even as bids totaled P7.17 billion. The average yield on the one-year paper went up by 16.6 bps to 1.734% from the 1.568% fetched previously.

Meanwhile, the last time the government offered the seven-year T-bonds to be auctioned off on Tuesday was on Jan. 25, when it borrowed P35 billion as planned as total tenders reached P55.62 billion.

The debt papers were awarded at an average rate of 4.689%, up by 22.1 bps from the 4.468% quoted when the series was last awarded on Oct. 26.

The BTr plans to raise P250 billion from the domestic market this month, or P75 billion via T-bills and P175 billion from T-bonds.

The government borrows from local and external sources to help fund a budget deficit capped at 7.7% of gross domestic product this year. — Jenina P. Ibañez

SEC plans to set up unit to check financing, lending firms

THE Securities and Exchange Commission (SEC) plans to create a financing and lending division to exclusively regulate lenders, the Department of Finance (DoF) said.

An SEC crackdown on abusive and illegal lending has led to the conviction of 76 individuals, based on eight cases on violations of the Lending Company Regulation Act (LCRA), the DoF said in a news release on Saturday.

The SEC revoked the registration of 2,081 firms.

The regulator has also issued cease-and-desist orders against 73 lending applications and cancelled the licenses of 36 financing or lending companies for violating the LCRA and other rules.

“We are also creating a financing and lending companies division within the SEC to focus exclusively on the regulation and monitoring of these entities,” SEC Chairman and Chief Executive Officer Emilio B. Aquino said.

Mr. Aquino said that the SEC has been rolling out a campaign on abusive lending companies after the commission received complaints from consumers about the firms’ collecting practices. Such practices include threats and insults against borrowers.

Meanwhile, the SEC and the Philippine National Police in February arrested 46 employees of Cashtrees Lending Corp. for violations of the Cybercrime Prevention Act and the LCRA.

The SEC said most of the company’s online applications, including Goodpocket, Easymoney, 365 Cash, and Rushloan, are unregistered.

“To date, we revoked over 2,000 certificates of registration of lending companies that failed to secure their requisite certificate of authority, pursuant to LCRA,” Mr. Aquino said.

“Our next step is to sustain this crackdown on unregistered and abusive collection practices of online lending applications.” — Jenina P. Ibañez

Who’s ready for ‘alt’ data?

OUR TEAM-FREEPIK

By Ana Olivia A. Tirona, Researcher

IN THE COMING YEARS, banking for the ordinary and the underbanked Filipino can be made easier and accessible even with minimal resources. The fast pace of digitalization in the banking sector calls for alterative ways and opportunities that consumers should be entitled to.

This could also mean that a regular smartphone can be a great tool for those who aim to up their credit game.

The central bank has laid out a six-year-long plan to extend the reach of financial inclusion to the vulnerable parts of the Philippines. Launched on Jan. 28, the Bangko Sentral ng Pilipinas (BSP) released its National Strategy for Financial Inclusion (NSFI) for 2022 to 2028.

“Financial inclusion is a state in which everyone, especially the vulnerable sectors, has effective access to a wide range of financial services,” the report said.

“Effective access means not only the availability of financial products and services, but that these products and services are appropriately designed, of good quality, and responsive to the varied needs of individuals and businesses — whether for saving, payments, financing, investing, or getting insured,” it added.

Thus, creating more options allows more interested Filipinos to become banking confident.

One of the initiatives to be prioritized by the central bank is the use of “alternative data” for credit evaluation.

In a webinar by the FinTech Alliance Philippines and TransUnion in January, BSP Governor Benjamin E. Diokno said one example that can benefit consumers for credit assessment is the use of alternative data.

The World Bank Group defines alternative data as information harnessed from modern data sources. These data are retrieved from social media, mobile data, utilities data, behavioral data, online transactions, geolocation data, and browser data, among others, usually not collected by the financial institutions.

In a paper authored by Peter Caroll and Saba Rehmani titled “Alternative Data and the Unbanked” from the American consulting firm Oliver Wyman, they cited that those who have no credit scores are called “credit invisibles.” These individuals may not be holding any credit file, or they currently hold one but do not have sufficient recent information to generate a credit evaluation.

Creditworthiness or credit score is a measure of one’s ability to pay back debt. This is where alternative sources of data can benefit the vulnerable sector of the country who wish to take out a loan.

“Traditionally, credit scoring factors in data which are stored in banks and credit bureaus, and includes payment history, credit utilization rate, length of history and credit mix among others. Potential borrowers, however, may have limited or zero credit history,” the BSP said in an e-mail to BusinessWorld.

The use of alternative data as a means of assessment is not new to the banking sector, the central bank said. Credit scoring firms in the US have been using nontraditional data to generate credit risk profiles for companies. However, this was not immediately taken in as a method by most firms.

“With the emergence of big data and machine learning technologies in the last decade, there is now an opportunity to harness alternative data to enhance credit evaluation,” the BSP said.

ALTERNATIVE DATA FOR THE UN(DER)BANKED
The 2019 Financial Inclusion Survey by the central bank cited that seven out of 10 Filipinos do not have a transaction account. This is equivalent to about 51.2 million adult Filipinos who are still unbanked.

“Financial inclusion necessitates financial products and services be appropriately designed according to the specific needs, capabilities, and context of individuals and businesses, especially those in the vulnerable sectors. The disadvantage of the unbanked and underserved Filipinos is that they have little or no financial transaction data, which is typically used as basis for developing a customer profile,” the BSP said.

Notably, the Bankers Association of the Philippines (BAP) fully supports the priority initiative of the central bank in terms of alternative data use.

“The use of alternative data in assessment for purposes of credit is on the table of discussions in the BAP. The BAP was supportive of this initiative when proposed in the House Committee on Banks in Congress. We contributed to the exploratory talks and was responsible in opening the eyes of Congress to the concept of Big Data as the technology that will drive behind alternative credit rating framework,” BAP told BusinessWorld in an e-mail.

“In this time of technological surge and various social media platforms, we are confident that the banks are building and incorporating their own alternative sources of data in their assessment of a borrower’s creditworthiness.  The use of which will still have to be consistent with regulatory requirements and international best practices,” it added.

In 2019, CIMB Bank Philippines partnered with Singapore-based fintech CredoLab for a more inclusive way of assessing an individual’s borrowing capability. The mobile application CredoApp was created for the purpose of streamlining loan applications through a smartphone’s metadata.

The app’s bank-grade algorithm enables a consent-driven analysis to form a predictive behavioral pattern, which can be instantly converted to a person’s creditworthiness.

More recent developments were carried out by Tonik Digital Bank Philippines by teaming up with alternative credit scoring company FinScore in 2021. The credit company used telco data by harnessing a device’s data and voice usage, top-up patterns, location, and SIM card age.

However, the adoption of alternative data for evaluation is still static.

In September last year, the BSP’s Financial Inclusion Office conducted a rapid survey distributed to 146 financial service providers (FSPs). One in four FSPs said alternative data was used to generate a person’s debt-paying ability score. The BSP noted that this was true among various financial institutions and nonbank lending companies. In spite of that, more than half of fintech firms are already utilizing alternative data.

“Despite the current low adoption of alternative data, 127 FSPs or 87% of all survey respondents believe that the local financial industry will use alternative data more extensively moving forward. Aside from using alternative data for credit scoring, future use cases include pricing of financial services, setting of credit limits, and fraud detection,” the BSP added.

RISKS AND POSSIBLE CONFLICTS
In terms of regulatory practices, for the use of alternative data to be deemed credible by financial institutions, the BSP shall maintain the strict implementation of guidelines on the credit risk management system.

“The principles and practices for sound risk management are expected to be embedded in the BSFI’s (BSP-supervised financial institution) credit scoring/evaluation process, which would cover the use of alternative data,” the central bank said.

“Any scoring model therefore should undergo regular review and back-testing by the BSFI, as well as validation by a third party which has the expertise to evaluate the accuracy and predictive ability of these models. The BSP reviews the results of the third-party validation and if needed, can challenge assumptions and comment on parameters used in the model,” the BSP said.

“The use of alternative data is also governed by regulatory expectations on consumer protection under Section 1002 of the MORB (Manual of Regulations for Banks). For instance, well-intentioned algorithms that inadvertently discriminate against specific groups of consumers must be avoided,” the BSP added.

However, the BAP flagged the possible risk against the Data Privacy Act of 2012.

“Proper mechanisms shall be in place to ensure that customer’s private information is not used for purposes against their interests. The customers should be educated and informed and must also consent on how their data is being used. More importantly, customers have opt-in and opt-out mechanisms if they decide to withdraw or modify the scope of their consent in the open finance ecosystem,” BAP said.

In other terms, the use of alternative data can be a conflict towards the data privacy act. As such, the BSP ensures all policies and regulations will be strictly administered in accordance to the protection of “fundamental human right of privacy, of communication while ensuring free flow of information to promote innovation and growth.”

EXPANDING INCLUSION
Latest available data from We Are Social’s Digital 2022 showed that about 98.8% of adults ages 16 to 64 own a smartphone. In an annual basis, its increment grew by 0.3%. Significantly, 27.9% use applications related to banking, investment, or insurance each month; 21.4% use payment services each month; and 19.4% own any form of cryptocurrency.

The continuous penetration of digitalization through smart devices and the internet generates alternative data that can be utilized for the user’s benefit.

“Over the years, the demand for alternative data has become increasingly prevalent and has undeniably transformed the global landscape — politically, socially, and economically. For instance, some financial institutions have resorted to data from social media engagements to facilitate a more comprehensive credit scoring analysis,” the BSP said.

With the vision “toward inclusive growth and financial resilience,” alternative data is just one of the priority initiatives BSP wishes to take on.

“Under the Open Finance Framework, the BSP envisions an ecosystem that will benefit from the use of alternative data, particularly in driving the development of more customer-centric financial products and services. Alternative data offers a different perspective in evaluating consumer preferences and activities, which allows deeper understanding of factors that affect behavior,” the BSP said.

Furthermore, the BSP ensures data collection process will follow through regulations and standards that are consumer-centered.

“The Open Finance Oversight Committee Transition Group, working alongside the BSP, will spearhead the development of these standards and protocols to ensure that the Open Finance ecosystem provides a safe, secure, and interoperable financial system,” the BSP said.

There are benefits to the use of alternative data. The Oliver Wyman paper said: “Having more data is only valuable if it results in real incremental benefits; in this case, the benefits of using alternative data in addition to traditional bureau data, beyond just technical improvements to the credit score, should flow to both consumers and lenders.”

Such benefits will affect both potential and existing borrowers. The chance for interested borrowers will more likely increase. Similarly, existing borrowers would be granted possible lower interest rates.

In the long run, the NSFI six-year plan will reap benefits and more opportunities for the unbanked and underserved.

The central bank dissecting the already-available resources or data most Filipinos now have, would highly increase the chances for better banking.

“Other use cases include statement sharing or account aggregation and direct debit payments or fund transfers. This data-sharing framework can also facilitate financial inclusion and MSME access to finance as it provides information to third-party financial service providers through application programming interfaces (APIs),” the BSP said.

“Existing regulations notwithstanding, the provision of regulatory guidelines specific to the use of alternative data for credit evaluation may further promote its adoption toward greater financial inclusion,” the BSP said.

Likewise, BAP commits to maintaining the practice of adopting policies and measures that could prevent consumer’s financial data to be at risk.

“The BAP understands that digitalization and technological innovation is key to expanding financial inclusion in the country. By providing every Filipino greater access to financial products and services — with savings accounts and personal loans as a starting point — will drive the economy to grow and recover from the crippling effects of the COVID-19 pandemic,” it said.

Menswear through the ages: V&A holds its first male fashion exhibition

WOOL coat and trousers, and silk top hat. — PHOTO FROM VAM.AC.UK

LONDON —  From 18th century billowing shirts to a blue Gucci suit worn by singer Harry Styles, London’s V&A museum is holding its first exhibition dedicated to men’s fashion.

Opening on March 19, “Fashioning Masculinities: The Art of Menswear” looks at menswear in different centuries, shining a light on designers, tailors and artists.

On show is underwear —  old and contemporary, lace and bubble wrap ensembles and plenty of suits.

Among designer items are an intricately embroidered black Dolce & Gabbana cape, an embellished green Fendi couture gown, a pink Thom Brown suit with ball-shaped shoes and a Gucci dress Mr. Styles wore for a Vogue magazine cover.

Alongside the outfits are pictures, paintings and sculptures.

“We wanted to do an exhibition about menswear because we wanted to celebrate its diversity ranging from the historical to the contemporary and the approach to the show was to look at both fashion and art,” Claire Wilcox, senior curator of fashion at the V&A, said.

“We start… with a male body and how that’s been shaped and fashioned over the years. We move into the central section, which deals with the exuberance of male fashion from the 18th century to the present… then the final section we look at the suit, how it’s been redressed, dissolved, remade and how (its) language… continues into the present day.”

The Gucci dress worn by Mr. Styles is among outfits that sparked online viral moments, including a black tuxedo ballgown by Christian Siriano worn by Pose actor Billy Porter. Another Porter outfit on show is a Randi Rahm grey suit and embroidered cloak with a hot pink lining.

The exhibition also features outfits seen on famous names like Marlene Dietrich, David Bowie, and Sam Smith as well as a Haider Ackermann black sparkly suit worn by actor Timothee Chalamet at the premiere of sci-fi movie Dune.

“Contemporary menswear is in a position of great strength at the moment,” Ms. Wilcox said.

“They’re drawing on a wide availability of ideas and fabrics and concepts and young designers such as Edward Crutchley, Harris Reed, Grace Wales Bonner… are really using the catwalk to challenge assumptions about what is masculine dress and what isn’t.” — Reuters

Lamborghini harvests int’l awards in 2021

IMAGE FROM LAMBORGHINI MANILA

AS AUTOMOBILI Lamborghini accelerates toward an electrified future (with 2022 the last year Lamborghini celebrates its purely gasoline combustion engines), super sports models from the House of the Raging Bull continue to collect acclaim worldwide.

In 2021, Lamborghini doubled the number of awards it received compared to the previous two years. Emerging as the models which received the most honors last year are the Lamborghini Urus super SUV and the Huracán STO super sports car.

The Urus confirmed its leading position among all Lamborghini models. It was voted by readers of the prestigious German publication Auto Motor und Sport as “Best car in the Large SUV Category” for the second consecutive year, and was named “Best SUV among Imported Cars” by the German magazine Sport Auto. International organization Off Road also recognized the Urus with its highest award in the “Luxury SUV” category.

Meantime, the Lamborghini Huracán STO bagged two accolades from Motorsport Magazine — “Sports Car of the Year” and “Best Engine 2021.” Further reinforcing the Lamborghini Squadra Corse-bred Huracán STO’s performance credentials was the “2021 Track Weapon” award conferred by online authority CarBuzz.

The Lamborghini Huracán EVO RWD was named “Sports Car of the Year 2021” by luxury authority Robb Report. The publication’s Singapore edition also cited the rear-wheel drive model as the “Best Convertible for 2021” in its Best of the Best competition. CarandBike magazine called the Huracán EVO RWD Sports Car of the Year as well.

Lamborghini’s first hybrid super sports car, the Sián, garnered its own attention when it was chosen by renowned automotive journalist Chris Harris as “Electric Car of the Year” during the Electric Awards of Top Gear magazine’s UK edition.

In 2021, Lamborghini bared its road map to decarbonization in a plan called “Direzione Cor Tauri.” The brand’s electrification program is divided into three phases, and outlines Lamborghini’s transition to hybrid power by 2024. The first fully electric Lamborghini is targeted to launch in the second half of the decade, with all Lamborghini models following this powertrain choice afterward. A fourth fully electric model is also set to be launched before 2030.

North Star Meat cites ‘affordability’ of products as top challenge in 2022

NORTH STAR MEAT

By Luisa Maria Jacinta C. Jocson

NORTH STAR Meat Merchants, Inc. said it considers keeping its products affordable to the public as its main management challenge in 2022 ahead of plans to expand production and a focus on sustainable power to mitigate rising costs and the carbon footprint of livestock raising.

“This year is unique as we will be focusing on efficiencies and what we can improve in our current operations. We are very much anchored to the growth of our clients,” North Star Chief Executive Officer Anthony Ng said in a virtual interview.

“The challenge is how North Star can make our products available to our consumers. If we look at demand, it will always be there. The only challenge we have is keeping the prices affordable to everyone, that’s the biggest challenge of this year,” he added.

In January, North Star announced that it tapped WEnergy Power Pilipinas, Inc. to provide a solar rooftop system for its cold storage complex in Bulacan.

“A few months back, we did not anticipate the energy shortages. We’ve shifted our sights to that facility and not just about how we sell the product, but about how we procure it, how we store it in our cold storage facilities, and how we deliver it to the stores,” Mr. Ng said.

“We store our meat in a fashion where we are also concerned with the environment and the planet. Obviously, raising pigs and cattle has a carbon footprint, so in our small gesture we want to be able to contribute to preserving the environment,” he added.

In December, North Star announced plans to put up distribution hubs in Iloilo, Puerto Princesa and Coron.

“We are located in several areas; however, Iloilo is something we’re looking at very closely. It will become the center for everything from Luzon, Bacolod, and Cebu, which is great for logistics. We’re looking at our possibilities in Iloilo,” Mr. Ng said.

“We will be looking at different locations again in Palawan, which is a strategic investment. Tourism is getting back on its feet there, and we see Palawan outgrowing Boracay in terms of tourism,” he added.

Mr. Ng said the company also recently signed a partnership with Gawad Kalinga.

“We are developing a meat concession for the Gawad Kalinga communities by using their production, then adapting it (to our) processes. We bring it back to them in a prepackaged frozen form for retail and long- and short-term storage,” he said.

With the outbreak of African Swine Fever, North Star is working with the Department of Agriculture (DA) to support affected hog farmers.

“The virus currently has no commercial vaccine yet, so until that happens you will have a supply and demand issue. We will be there to directly buy from them, cutting out the middle man in the process. That in turn should give us better pricing. But (right now), generally farmers are enjoying a relatively good price,” Mr. Ng said.

“Our expertise is the logistics part of operating the meat concessions. But the way we can help is provide farmers the venue to sell, especially the smaller ones by cooperating with the DA,” he added.

With the Russian invasion of Ukraine, Mr. Ng said the industry must brace itself for the impact of volatile commodity prices.

“We will be expecting our food prices to rise going forward for sure. Cost of production is going to be high and that will reflect in a few months from the purchases of the establishments and traders, as well as in feed inputs, transportation logistics, and the like,” he said.

He added that cooperation between the government, industry, and the private sector is necessary for the sector to recover from the crisis.

Mr. Ng said he hopes the next administration will further invest and focus on innovation in the livestock industry.

“What we can do as of now is to supplement or augment local production with our efficiencies, and use our scale to give them properly priced meat products. That will really be our solution, especially if you’re coming out of a pandemic as the average Filipino has lost a lot of (purchasing power). We want to provide each and every Filipino clean, safe, and most of all affordable products right now,” he added.