Now is not the time for RCEP

December 2, 2021 | 8:05 pm

Closeup of coins stack isolated on black background — RAWPIXEL.COM-FREEPIK

Not yet. Not now. Not when too many things are going on for the country to handle. And not when a new administration is coming in by the middle of next year.

The RCEP — or Regional Comprehensive Economic Partnership, a proposed free trade agreement (FTA) between the ASEAN members (the Philippines, Indonesia, Malaysia, Singapore, Thailand, Brunei, Burma, Cambodia, Laos, Vietnam) and Australia, China, Japan, South Korea, and New Zealand — needs to go through Senate concurrence (not ratification, that is done by the President) if it is to be effective vis-a-vis the Philippines.

Already, Singapore, Thailand, Brunei, Cambodia, Laos, Vietnam, Australia, China, Japan, and New Zealand (or 10 of the 15 signatories) are executing the RCEP in accordance with their own constitutional processes.

On paper, the RCEP does seem significant, covering (at least according to the press releases) “a market of 2.2 billion people, or almost 30% of the world’s population, with a combined GDP of 26.2 trillion US dollars or about 30% of global GDP.” And yet, this again needs to be asked repeatedly: what does RCEP really do for the Philippines?

Even assuming the RCEP does bring benefits, the more important question is: at what cost? This is not even considering RCEP’s unforeseen consequences on a Philippine economy under pandemic conditions.

And for all of RCEP’s vaunted GDP coverage, a free trade agreement however is about trade. And the RCEP on that score admittedly merely accounts for “28% of global trade (based on 2019 figures)” of countries at varying degrees of development.

It’s a fairly intricate, complicated document, covering 20 chapters (not counting the opening and signing section), plus four Annexes of country “Schedules.” It covers the usual (e.g., trade in goods, rules of origin, services, etc.), as well as some relatively new areas (e-commerce and SMEs).

That alone should also raise concerns on what the “noodle bowl” of trade agreements will have on our overworked bureaucracy. The depth and complexity of RCEP leads to further questions on Philippine companies’ capacity for utilization of benefits. After all, we’re still trying to attain the rewards promised by AFTA, JPEPA, and others.

Set aside the fact that our closest security ally, the US, is excluded from the agreement, the Philippines already has free trade agreements with all of the RCEP countries: Indonesia, Malaysia, Singapore, Thailand, Brunei, Burma, Cambodia, Laos, Vietnam, Australia, China, Japan, South Korea, and New Zealand. What the RCEP brings that the other FTA’s don’t needs further elucidation.

Because the RCEP is more than just a trade agreement. It is also a strategic geopolitical tool that could have repercussions on sovereignty and security. The most troublesome aspect of the RCEP in this regard is its close identification with China.

As the National University of Singapore East Asian Institute’s Yu Hong puts it (“RCEP: The benefits, the regret and the limitations,” 2020): “With the signing of the RCEP agreement, China is the biggest winner in terms of economic development and geopolitics. Being part of the RCEP is advantageous to China in the face of the triple threat of the China-US trade war, geopolitical changes and global recession due to COVID-19. It also offers China more room to maneuver in the China-US trade war and as China’s diplomatic relations with the world deteriorate.”

So, while indeed 13 other countries may have agreed to sign on to a deal with China, nevertheless, those countries have not had 150,000 of their workers (others estimate 200,000) enter the Philippines these past few years, plus an additional 3.3 million of their tourists or those otherwise “visiting.”

Add to that the logical increased access that China will have to our domestic market, with the possibility of our current pandemic measures-hampered local industries being overwhelmed by a deluge of competing cheaper Chinese products, either by simple surge in imports or through outright dumping.

Add to that loans that a former Supreme Court justice felt the need to call out. Plus, the reported P1.365 billion in unpaid taxes and other fees by Chinese-run POGO firms.

Add the $1.1-billion trade deficit that we endure against that country.

And let us not forget their continued intrusion and poaching of our territory in the West Philippine Sea, with damages (according to some estimates) amounting to P200 billion.

This is within the context of 4.25 million Filipinos currently unemployed, with around 6.18 million underemployed. And an outstanding national debt currently at P11.97 trillion.

Even the supposed benefits RCEP touts is open to question. Due to its coverage, it is not the most open of free trade agreements. Add to that significant looseness as far as labor standards, intellectual property, competition, and environmental protection are concerned.

Finally, in these pandemic times, the problem of “adverse selection” comes in. Now is simply not the time to increase foreign entanglements when the Filipino people are struggling to make a living, while having to decide who its next president will be in the next several months.

Jemy Gatdula is a senior fellow of the Philippine Council for Foreign Relations and a Philippine Judicial Academy law lecturer for constitutional philosophy and jurisprudence https://www.facebook.com/jigatdula/
Twitter @jemygatdula

Investors are punishing the polluters. Here’s proof

December 2, 2021 | 8:03 pm

Wavy_Eco-03_Single-02 [Converted] — VECTORJUICE-FREEPIK

The corporate sector has a leading role to play in the world’s response to climate change. The data accumulated so far make it clear that the more greenhouse gases a company emits, the lower its stock price relative to its earnings.

This effect — in a sense a climate discount — is influenced by climate risk, by emissions regulations and carbon pricing, and by attention from investors and the public. Those factors lead to larger discounts in some sectors and market-cap sizes than in others. So, it’s clear the stock market is already rewarding companies that reduce emissions with higher valuations. And because this investor response will probably grow over time, the market incentive to lower emissions will, too.

Working with leading academics such as Joseph Aldy of the Harvard Kennedy School, Patrick Bolton of Columbia Business School, Marcin Kacperczyk of Imperial College London, and Andrew Lo of the Massachusetts Institute of Technology, analysts at Lazard looked at data on more than 16,000 global companies and examined the relationship between each one’s equity value and the amount of greenhouse gases it emitted from 2016 to 2020.

This analysis reveals that, on average, a 10% increase in carbon dioxide emissions is associated with a 0.4% decline in a company’s price-earnings ratio (controlling for a wide array of other factors). But that climate discount average masks wide variations across sectors. The market currently punishes emissions in energy (0.8%) three times as much as those in consumer staples (0.3%), highlighting the role that climate risk and emissions regulations play in driving the discount.

The effect is also much larger for big companies than for small ones — perhaps because investors may pay more attention to bigger corporations and because regulations are more likely to apply to them. Consider industrials, for example. For European industrial companies with a market cap above $50 billion, the price-earnings multiple falls by a whopping 18% for every 10% increase in carbon emissions. For European industrial companies with market caps below $1 billion, which are less affected by regulation and investor pressure, the drop is less than 0.5%.

Climate discounts exist in both Europe and the US, but they’re more pronounced in Europe, presumably because of the carbon trading scheme there and other regulatory influences. In the energy sector, the stock values of smaller companies in both Europe and the US are less influenced by emissions than those of larger ones. In the US, the effect is four times greater for big companies. That’s a notable difference, but it pales in comparison with the eight-times differential from small to large energy companies in Europe. Here again, it seems that the size of the market incentive to reduce emissions is influenced by climate risks as well as government regulation and investor pressure.

Debt markets are also paying attention to company emissions, the data show, but here the size effects are reversed. For small companies, especially in Europe, credit default swap spreads (a measure of the riskiness of a company’s debt) are higher for those with higher emissions. But for large companies, emissions don’t matter. Investors seem to believe, not unreasonably, that carbon emissions are an indicator of default risk for smaller companies, but not larger ones.

The data also suggest that all these stock-value effects may grow larger over time. A good illustration is the experience in Europe, where the climate discount for large companies has risen since 2016 as the carbon price on the European Union Emissions Trading System has increased. (The trend in the US has, if anything, moved in the opposite direction, as many climate regulations were loosened over that period.)

With carbon prices rising and other climate-protection measures strengthening, it’s reasonable to speculate that company valuations will become increasingly tied to emissions control. In the meantime, the message to companies is that the market is already paying attention. — Bloomberg Opinion

Why the long Christmas celebration?

December 2, 2021 | 7:56 pm

03 Christmas Belens_2 — Photo courtesy of the author

Filipinos take pride in having the longest celebration of Christmas this side of Christendom. Now that we are weeks away from Christmas, what benefits has this months-long long celebration given us?

A quick crowd sourcing from family members and friends in social media, yielded the following benefits:

ECONOMIC GAINS

The first set of benefits point to the apparent economic gains, now enjoyed by both traditional and online retail outlets. My daughter is quick to point out how the pandemic has prompted consumers to resort to e-commerce for purchasing food and other essential items for their household. This has become part of the “new normal” — a major vehicle for the Filipinos’ Christmas shopping.

A former colleague writes, “The long celebration provides more opportunities for these businesses, in the process stimulating economic activity and boosting the local economy to go back to pre-pandemic levels.” Certainly, many of us joined the bandwagon in the 9/9, 10/10, 11/11, and the forthcoming 12/12 sales promos!

The amount of spending is expected to spike during the Christmas season, especially now that restrictions in some urban centers have been relaxed by government.

EMOTIONAL BOOST

Another workmate says, “The four-month celebration gets people into the jolly and generous Christmas mood earlier. If you have kids, it would provide a good incentive to get them to behave themselves before Christmas time.” I am reminded of how my grandson perseveres to do good in school so he could get the Christmas gift he has been praying for.

Meanwhile, a co-teacher describes how “It sort of primes us up that Christmas is coming (as) we need to prepare financially, emotionally, even physically for the long parties and reunions come December.” A photographer friend adds that “it stretches the yearning for a good family holiday and puts one in the mood.”

Meanwhile, a friend mentions that “the long Christmas celebration (also) gives us time to plan and think about the gifts we could give to our loved ones or the charitable acts we would like to do.” This is reinforced by a friend who observes that “Pinoys tend to be more generous during Christmas.”

Another thing to plan for are the “get-togethers, reunions and extended vacations.” These are driven by Pinoys’ love for celebrations, my wife adds, admitting that she is one of those who really get excited the moment the “’ber” months begin.

JOYFUL ANTICIPATION

As a Christian nation, we are afforded “greater opportunity to enjoy the birth of our Saviour Jesus Christ,” even if the Misa De Gallos, Noche Buenas, and Kris Kringles now have their virtual options because of safety concerns. A team leader says the long-celebration engenders hope as we anticipate the series of joyful events from September to January to see us through these uncertain times.

All these are good for our mental health, a friend states. “An extra opiate for the public (in a good way),” a nephew adds.

But there were also those who question the practice, suggesting that it should be cut short to two months, worried perhaps about the seeming impracticality of the overdrawn celebration. One couldn’t help but be cynical, “are there benefits, to begin with?”

These opposing views notwithstanding, I think the long celebration of Christmas in the Philippines will persist. As long as there are kids who are excited to open their presents under the Christmas tree and as long as there are adults who find joy in putting a smile on their loved ones’ faces when affirmations of love accompany the hearty food that they serve and partake at the Noche Buena table.

Edgar Timbungco is the public relations manager of Mang Inasal and is also teaching corporate communication and organizational planning and development at the School of Management and Information Technology of De La Salle-College of Saint Benilde. He is an accredited public relations practitioner by the Public Relations Society of the Philippines and certified professional marketing educator by the Philippine Marketing Association. He was likewise granted with the crisis communication planner title by the International Consortium for Organizational Resilience.

OECD says it would cost $50 billion to vaccinate the world

December 2, 2021 | 7:48 pm

vaccine — PHILIPPINE STAR/ MICHAEL VARCAS

IT COULD COST as little as $50 billion to save the global economy.

That’s the amount needed to vaccinate the world, a measure that’s key to ending the pandemic and tackling the imbalances “plaguing the recovery,” according to OECD Chief Economist Laurence Boone.

“When you balance things out, $10 trillion for supporting the economy going through the pandemic compared with a tiny $50 billion to bring the vaccine to the entire world population, that looks completely disproportionate,” she told Bloomberg Television in an interview Wednesday. The first number is the amount spent by Group of 20 countries to mitigating the economic impact of coronavirus disease 2019 (COVID-19).

The emergence of Omicron increases the uncertainty already weighing on the global economic outlook and highlights vaccination shortcomings, she said. While the Paris-based organization didn’t directly account for that strain in its new forecasts, it emphasized continued pandemic risks and urged governments to address low inoculation rates in some regions so as not to create “breeding grounds for deadlier strains.”

On top of tighter virus restrictions including renewed lockdowns in some parts, OECD members are battling soaring inflation and hold-ups in global supply chains that are starving factories of components. — Bloomberg

Consultancy firm helps PHL businesses set up shop in Dubai

December 2, 2021 | 4:43 pm

Enter PH, a local consultancy firm that helps foreign companies expand to the Philippines, has partnered with Dubai-based business setup firm Creative Zone to help Filipino businesses enter Dubai and other Gulf Cooperation Council markets (Saudi Arabia, the United Arab Emirates or UAE, Kuwait, Bahrain, Qatar, and Oman).

The partnership provides coaching and business support services to small and medium enterprises (SMEs) and investor-seeking startups from the Philippines.

“The Filipino community is the third-largest expatriate community in the UAE and is an important demographic,” said Lorenzo Jooris, Creative Zone chief executive officer, to BusinessWorld.

“Filipinos in the UAE have a thriving business community, with a diverse range of businesses, including food and beverage, fashion, and various types of professional services,” he said. “Aligning with this is Dubai’s vibrant consumer base that constitutes tech-savvy, high-income, and young professionals.”

Mr. Jooris cited the Philippines’ young and English-speaking workforce, its strategic location in the Southeast Asian market, and its strong industrial sector as among the factors for the company’s decision to extend its services to the country.

“The Philippines has introduced various incentives to create an investor-friendly climate and attract foreign business ventures,” he added. “The creation of Special Economic Zones (SEZs), tax benefits, and entrepreneur-friendly commercial laws make it relatively easy for foreign companies to set up in the Philippines”

In a press statement, Rene “RJ” A. Ledesma, Jr., founding partner of Enter PH, said that his firm’s partnership with Creative Zone encourages the spirit of entrepreneurship.

“Dubai has always been close to my heart, and educating my fellow entrepreneurs on the overlying opportunities and business potential that can be leveraged whilst within the country is a novel approach,” Mr. Ledesma said.

The economy of the UAE, of which Dubai is a part, is rebounding faster than expected, according to a chief economist for Oxford Economics Middle East in Dubai. The economy has been open for months, and is buoyed by a well-equipped health system as well as a population that is about 90% fully vaccinated. Bloomberg reported in September that Dubai’s job market was at its strongest in two years.

The UAE’s latest foreign direct investment laws, which took effect on June 1, allow foreign investors and entrepreneurs full ownership of onshore companies. — Patricia B. Mirasol

Inside a luxury unit at the heart of the city

December 2, 2021 | 4:36 pm

Here’s how you can experience the ultimate comfort and convenience only a Westin home can provide.

If you’re on the lookout for a home that houses all the best things in life – and we mean best in the form of high-end home features, accessibility, convenience, and wellness-centered amenities, we got you! You can find all these in one place at The Residences at The Westin Manila Sonata Place.

There are two ways on how you can see and experience what this upscale development has in store for you. If you wish to view this luxurious home that you can soon live in while at the comforts of your home, a virtual showroom is made available for you. But if you want to see for yourself the Westin brand of living and find out the world-renowned luxurious lifestyle services it offers, an actual show unit is the perfect route to go.

A Tour Inside a Westin Home

The Show Floor of The Residences at The Westin Manila Sonata Place features a one-bedroom show suite. This houses all the premium deliverables that future residents will get to enjoy once they move into their new home.

One of the signature home features you’ll find inside this deluxe unit is the Westin Heavenly® Bed, complete with a soft mattress and pillows for a comfortable and restful sleep every single night.

In the kitchen area, you’ll get to see the branded home appliances that will help you craft delicious meals for yourself and your loved ones. A cooktop, ref, and range hood from world-famous luxury brand Gaggenau are what you can find inside every Westin unit, complemented by equally-classy kitchen cabinets made by premium global brand Leicht to complete the modern and high-class kitchen that you deserve.

Going to the toilet and bath area, you can be assured of a refreshing bath every day with Westin’s Heavenly Bath™ experience, made possible by Hansgrohe’s premier shower fittings plus the signature Heavenly Bath™ Set in the form of plush robes and soft towels. It also comes with a toilet and sink from another luxury name in the toilet and bath industry – Duravit, all to complete the branded way of living inside your Westin unit.

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Your Luxurious City Home

Apart from all these exclusive home deliverables, The Residences at The Westin Manila Sonata Place offers ultimate convenience with close proximity to essential establishments such as commercial centers, corporate headquarters, hospitals, medical centers, schools, hotels, and government offices. So there’s no need to worry about traveling too far to get to where you need to be!

The property also offers top-notch leisure and wellness amenities that residents can exclusively use when they need to. Housed inside The Haven, a four-floor amenity zone where you can find the fitness center, move studio, and indoor lap pool, among others. Also found here is the Golf Simulation Room, where residents can enjoy a round or two. In addition, kids, both by age and heart, can spend time having fun at the Playhouse, Game Room, and the Private Theater, where they can safely enjoy and bond without leaving the development or traveling too far.

With all these and more, you can be assured of only the best when you choose to live in a Westin home. To set a private tour of this show suite, simply connect with an RLC Residences Property Specialist through this link. Learn more about the luxurious life that awaits you by visiting www.rlcresidences.com or by following RLC Residences on Facebook and Instagram.

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories directly on the BusinessWorld Web site. For more information, send an email to online@bworldonline.com.

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PHL tops NFT ownership out of 20 countries — Finder

December 2, 2021 | 3:51 pm

The Philippines ranked first for non-fungible token (NFT) ownership out of 20 countries, with 32% of Filipino internet users saying that they own NFTs, according to an online survey released this November by Australian independent information service Finder.

Globally, just 1.7% of internet users owned NFTs. Meanwhile, of the 1,507 Filipinos surveyed, nearly three times of the global average were NFT owners, the platform said, adding that NFT adoption in the Philippines could soon hit 41.5%.

NFTs are non-interchangeable digital tokens that contain data proving ownership of items, mostly related to art, audio, video, and the like.

The popularity of NFTs in the country is mainly from in-game assets gained in play-to-earn games like Axie Infinity.

“It’s still very early days for NFTs in the Philippines,” Finder said in an official statement. “Fifty-one percent of Filipino internet users currently know what NFTs are and we expect adoption to grow with awareness.”

Jeffrey Zirlin, co-founder of Vietnam-based company Sky Mavis, which operates the crypto game Axie Infinity, said in the a16z podcast in November that Filipinos’ love for mobile games and their knowledge of cryptocurrency is what keeps the country ahead.

“There’s relatively high crypto literacy. It’s a very communal culture where information and trends can spread very quickly,” he explained. “Filipinos have traditionally been early adopters to many social networks and platforms like Facebook.”

The Philippines has the highest number of Axie players in the world. Groups like Yield Guild Games (YGG) cultivate this by onboarding Filipinos to their scholarship programs, where the play-to-earn lifestyle can be sponsored to generate income.

Finder said they expect further NFT adoption in the Philippines, with 9.5% of Filipinos surveyed saying they plan to own NFTs in the future.

Gabriel “Gabby” Dizon, founder of YGG, shared in the same podcast that the growth of play-to-earn and NFT ownership was due to unemployed Filipinos’ need to escape economic hardship during lockdowns.

“These were people who weren’t crypto enthusiasts. These were regular people that were stuck at home that had no jobs,” he said.

Finder also spoke of the potential for play-to-earn gamers to dive into other types of NFTs as well, saying they can be “a great gateway to cryptocurrency ownership.”

After the Philippines, Thailand came in second place with 27% of users owning NFTs, followed by Malaysia at 24%, United Arab Emirates at 23%, and Vietnam at 17%.

Countries like Nigeria and Peru are projected to see an increase of NFT adoption by 22% and 15% respectively, but Finder said that they will likely not come close to the Philippines’ rate. — Brontë H. Lacsamana

Omicron rapidly dominating in South Africa; US reports first case

December 2, 2021 | 3:37 pm

JOHANNESBURG/WASHINGTON — Heavily mutated Omicron is rapidly becoming the dominant variant of the coronavirus in South Africa less than four weeks after it was first detected there, and the United States on Wednesday became the latest country to identify an Omicron case within its borders.

The first known US case was a fully vaccinated person in California who returned to the United States from South Africa on Nov. 22 and tested positive seven days later.

The person had mild symptoms and was in self-quarantine, Dr. Anthony Fauci, the top US infectious disease official, told reporters at the White House.

Late on Tuesday, airlines in the United States were told to hand over the names of passengers arriving from parts of southern Africa hit by Omicron, according to a US Centers for Disease Control and Prevention letter seen by Reuters.

Key questions remain about the new variant, which has been found in two dozen countries, including Spain, Canada, Britain, Austria and Portugal. The UAE reported its first case on Wednesday, the second Gulf country after Saudi Arabia.

Early indications suggesting Omicron may be markedly more contagious than previous variants have rattled financial markets, fearful that new restrictions could choke off a tentative recovery from the economic ravages of the pandemic.

South Africa’s National Institute for Communicable Diseases (NICD) said early epidemiological data suggested Omicron was able to evade some immunity, but existing vaccines should still protect against severe disease and death.

It said 74% of all the virus genomes it had sequenced last month had been of the new variant, which was first found in a sample taken on Nov. 8 in Gauteng, South Africa’s most populous province.

The number of new cases reported in South Africa doubled from Tuesday to Wednesday.

World Health Organization (WHO) epidemiologist Maria van Kerkhove told a briefing that data on how contagious Omicron was should be available “within days.”

BioNTech’s CEO said the vaccine it makes in a partnership with Pfizer was likely to offer strong protection against severe disease from Omicron.

‘PREPARE FOR THE WORST’

The president of the European Union’s executive body said there was a “race against time” to stave off the new variant while scientists establish how dangerous it is. The EU brought forward the start of its vaccine rollout for 5-to-11-year-olds by a week to Dec. 13.

“Prepare for the worst, hope for the best,” Ursula von der Leyen, president of the European Commission, told a news conference.

She said that full vaccination and a booster shot provided the strongest possible protection, according to scientists — a view echoed by Dr. Fauci.

But WHO emergencies director Mike Ryan criticized developed countries pushing booster shots for large parts of their fully vaccinated populations when vulnerable people in many poorer regions have had no vaccination at all.

“There is no evidence that I’m aware of that will suggest that boosting the entire population is going to necessarily provide any greater protection for otherwise healthy individuals against hospitalization or death,” he said.

Britain and the United States have both expanded their booster programs in response to the new variant.

The WHO has noted many times that the coronavirus will keep producing new variants for as long as it is allowed to circulate freely in large unvaccinated populations.

TRAVEL RESTRICTIONS

Some 56 countries were reportedly implementing travel measures to guard against Omicron as of Nov. 28, the WHO said.

UN Secretary-General Antonio Guterres slammed what he called “travel apartheid.”

“Blanket travel bans will not prevent the international spread and they place a heavy burden on lives and livelihoods,” the WHO said, while advising those who were unwell, at risk, or 60 years and over and unvaccinated to postpone travel.

The United States has barred nearly all foreigners who have been in one of eight southern African countries.

Hong Kong added Japan, Portugal and Sweden to its travel restrictions. Malaysia temporarily barred travelers from eight African countries and said Britain and the Netherlands could join the list.

Fitch Ratings said it lowered its global air passenger traffic forecasts for 2021 and 2022.

“It feels a little bit like we are back to where we were a year ago,” said Deidre Fulton, a partner at consultancy MIDAS Aviation, at an industry webinar. “And that’s not a great prospect for the industry and beyond.”

Wall Street’s major averages fell more than 1% on Wednesday, erasing morning gains, on investor angst over the first US case, along with concerns about inflation. Crude oil prices also fell.

Dr. Fauci said it could take two weeks or more to gain insight into how easily the variant spreads from person to person, how severe the disease is that it causes, and whether it can bypass the protections provided by the vaccines currently available.

“We don’t have enough information right now,” said Dr. Fauci, adding that the variant’s molecular profile “suggests that it might be more transmissible, and that it might elude some of the protection of vaccines. … We have to be prepared that there’s going to be a diminution in protection.” — Promit Mukherjee and Trevor Hunnicutt/Reuters

Apple tells suppliers demand for iPhone 13 lineup has weakened — Bloomberg News

December 2, 2021 | 2:32 pm

Apple Inc. has told its parts suppliers that demand for the iPhone 13 lineup has slowed, Bloomberg News reported on Wednesday, citing people familiar with the matter, signaling that some consumers have decided against trying to get the hard-to-find item.

The company had earlier cut production of iPhone 13 by as many as 10 million units due to a global chip shortage, but now it has informed vendors that those orders may not materialize, the report said.

Apple and some of its suppliers 3M Co., Broadcom Inc. and Advanced Micro Devices Inc did not immediately respond to requests for comments from Reuters.

A global chip crunch, initially due to high demand for smartphones and personal gadgets during the coronavirus pandemic, has affected the auto industry and disrupted production at companies ranging from Apple to GM.

In October, Apple’s Chief Executive Tim Cook warned that the impact of supply constraints, which cost the company $6 billion in sales in the fiscal fourth quarter, will be worse during the holiday quarter and that chip shortage was affecting most of the company’s products.

Nikkei reported last month that Apple even cut back production of iPad tablets to allocate more components to the iPhone 13. — Reuters

Grab’s Nasdaq debut to set tone for Southeast Asian tech listings

December 2, 2021 | 1:48 pm

SINGAPORE — Grab, Southeast Asia’s biggest ride-hailing and delivery firm, makes its market debut on Thursday after a record $40 billion merger with a special purpose acquisition company (SPAC), in a listing that will set the tone for other regional offerings.

The backdoor listing on Nasdaq marks the high point for the nine-year-old Singapore company that began as a ride-hailing app and now operates across 465 cities in eight countries, offering food deliveries, payments, insurance and investment products.

Grab’s rivals, including regional internet firm Sea and Indonesia’s GoTo Group, are also bulking up, with the region’s internet economy forecast to double to $360 billion in gross merchandise volume by 2025.

Grab was founded by Anthony Tan, its chief executive, and Tan Hooi Ling, who developed the firm from an idea for a Harvard Business School venture competition in 2011.

CEO Tan, 39, expanded Grab into a regional operation with a range of services, after launching as a taxi app in Malaysia in 2012. It later moved its headquarters to Singapore.

“What we have shown to the world is that homegrown tech companies can develop great technology that can compete globally, even when international players are in town … we can compete and win,” Mr. Tan told Reuters.

He said Grab’s listing would help showcase the opportunity available to investors in Southeast Asia, a region with a population of about 650 million.

Grab’s listing brings a payday bonanza to early backers such as SoftBank Group Corp and Chinese ride-hailing giant Didi Chuxing, which invested as early as 2014.

They were later joined by others, such as Toyota Motor, Microsoft and Japanese bank MUFG. Uber became a Grab shareholder in 2018 after selling its Southeast Asian business to Grab following a five-year battle.

Analysts see scope for many players in Southeast Asia’s fragmented food delivery and financial services markets, but the road to profitability can be a long one.

In September, Grab cut its full-year adjusted net sales forecasts, citing renewed uncertainty over pandemic curbs on movement.

Third-quarter revenue fell 9% and its adjusted loss before interest, taxes, depreciation, and amortization (EBITDA) widened 66% to $212 million. Grab said GMV jumped 32% in the quarter to a record $4 billion.

It aims to turn profitable on an EBITDA basis in 2023.

Grab said it completed its business combination with the SPAC, Altimeter Growth Corp. Grab will begin trading on Nasdaq under the ticker symbol “GRAB.”

Grab raised $4.5 billion alongside the SPAC transaction, including $750 million from Silicon Valley tech investor Altimeter Capital Management in a deal in April. — Anshuman Daga and Aradhana Aravindan/Reuters

FACTBOX | Grab debuts on Nasdaq, marking biggest Southeast Asia listing

Grab, Southeast Asia’s biggest ride-hailing and food delivery firm, lists on Nasdaq on Thursday following its $40 billion merger with special-purpose acquisition company (SPAC) Altimeter Growth Corp. The deal is the world’s biggest ever by a blank-check company and the biggest US listing by a Southeast Asian firm.

WHAT IS GRAB?

Founded in 2012, Grab is Southeast Asia’s largest startup, valued at just over $16 billion last year. It launched as a Malaysian taxi-hailing service and now calls itself a “superapp” after expanding into food, grocery and parcel delivery and to digital payments, lending and other financial services.

Singapore-headquartered Grab operates across 465 cities in eight countries in the region, counting Indonesia as its biggest. Its venture with Singapore Telecommunications Ltd was awarded a digital bank license in Singapore last year.

Grab gained the global spotlight in 2018 when it bought the Southeast Asian business of Uber Technologies Inc in return for the US ride-hailing company taking a stake in Grab.

With some 8,000 employees, Grab has tech centers in Singapore, Beijing, Seattle, Bengaluru and other places.

WHO’S BACKING GRAB?

Early investors include Japan’s SoftBank, China’s Didi Chuxing and venture capital firms Vertex Ventures Holdings and GGV Capital.

Grab raised about $12 billion ahead of the listing. Investors range from venture and hedge funds to automobile companies and other ride-hailing firms, and include:

Uber, Booking Holdings Inc, China Investment Corp, Coatue Management, Hillhouse Capital, Hyundai Motor Co., Invesco Ltd, Microsoft Corp, Ping An Capital Co, Toyota Motor Corp, and Yamaha Motor Co.

In the SPAC deal, about three dozen investors came on board including Temasek Holdings, BlackRock, Fidelity International, Abu Dhabi’s Mubadala and Malaysia’s Permodalan Nasional Bhd and Altimeter Capital.

WHO’S THE COMPETITION?

GoTo Group, formed by the merger of Indonesian ride-hailing and deliveries firm Gojek and local e-commerce leader Tokopedia is Grab’s biggest competitor.

Singapore-based Sea Ltd, which has e-commerce, gaming and a digital payments business, and is also muscling into food delivery and financial services in Indonesia. Sea has also won a digital bank license in Singapore.

Grab is likely to increasingly start competing with banks as it expands its financial services.

It also competes with such delivery companies as Foodpanda and Deliveroo PLC.

WHAT ARE GRAB’S FINANCIALS?

Grab’s third-quarter revenue fell 9% from a year earlier to $157 million. Its adjusted loss before interest, taxes, depreciation and amortization (EBITDA) widened 66% to $212 million. Gross merchandise value hit a quarterly record of $4 billion.

The delivery business has emerged as the biggest segment as more consumers shifted to online food delivery during the pandemic.

Grab forecasts it will turn profitable on an EBITDA basis in 2023.

WHO ARE ITS KEY EXECUTIVES?

Anthony Tan, 39, is the company’s CEO and co-founder.

Fellow co-founder Tan Hooi Ling, 38, runs Grab’s operations, including corporate strategy and technology.

Both Tans, unrelated, met at Harvard Business School, where they conceived the idea of the ride-hailing company.

Grab’s president, Ming Maa, is a prominent dealmaker from SoftBank, who joined the company in 2016. — Reuters

Facebook says it removes accounts which targeted Vietnamese activists

December 2, 2021 | 1:25 pm

Facebook has removed a network of accounts from its platform which it said targeted Vietnamese activists who were critical of the country’s government, an official at Facebook’s parent company Meta said on Wednesday.

In July, the company removed a Vietnamese Facebook group called “E47” which mobilized its members to report posts they did not like to Facebook, in an effort to have them taken down.

The latest action was taken against a separate group, according to David Agranovich, Facebook’s head of global threat disruption.

“What we saw was a network of accounts in Vietnam that was engaged in this kind of coordinated targeting of activists, and other people who publicly criticized the Vietnamese government,” Mr. Agranovich told Reuters.

The attackers used Facebook accounts to submit “hundreds or thousands of reports” against their targets using Facebook’s built-in reporting tools, Mr. Agranovich said of the network, which was also detailed in a report released by Facebook on Wednesday.

“Many of the operators would use fake accounts, which they would use to pose as their targets, and then they would report the target’s real account as an impersonating account,” he added.

Some of the accounts were openly offering the taking down of other Facebook accounts as a commercial service, according to Agranovich.

“They essentially advertise this kind of abusive reporting service in their actual bios,” he said.

Unlike in neighboring China, Facebook is not blocked in Vietnam, where it has around 70 million users and is the country’s main platform for e-commerce.

It has also become the main platform for political dissent, however, putting Facebook and the government in a constant tussle over the removal of content deemed to be “anti-state.”

Vietnam’s foreign ministry, which handles enquiries to the government from foreign media, did not immediately respond to a request for comment. — James Pearson/Reuters

US Army keen to expand Southeast Asia access amid China worries

December 2, 2021 | 1:21 pm

Balikatan-2018-www.c7f.navy.mil — C7F.NAVY.MIL

WASHINGTON — The US Army is keen to expand its access and basing arrangements in Southeast Asia as part of a strategy to deter China, the secretary of the army said on Wednesday.

Christine Wormuth told a Washington think tank such a posture shift was in the interests of both the United States and its allies and partners in the region, but there was a need to be “realistic about what is possible”

She said positioning US military equipment in Asia had been heavily oriented towards Northeast Asia.

“There is very much a desire to be able to expand our access and basing arrangements more into Southeast Asia, because if we were able to do that, we would have a more dispersed posture that would give us much more flexibility,” she told the Center for Strategic and International Studies.

“It is very much in our interests and in the interest of our allies and partners, to explore how we can shift that posture over time,” she said, while adding:

“But my own view is that we need to be realistic about what is possible and as we look at the operational challenges we need to have realistic assumptions about the locations from where we might be able to operate.”

Ms. Wormuth spoke at a time when the Biden administration has been stepping up engagement with Southeast Asia, a region it sees as central to its strategy of competition with an ever more assertive and militarily expanding China.

The top US diplomat for East Asia, Assistant Secretary of State Daniel Kritenbrink, is currently in Southeast Asia in the latest visit by a senior US official.

Ms. Wormuth did not say where the army is interested in expanding its access, but said progress with the Philippines in renewing an agreement allowing the rotational presence of US troops had been very important.

She said a key part of an ongoing Pentagon force posture review was looking for more opportunities to pre-position equipment.

She said it was important to work collectively to avoid war in Asia and the best strategy was strong deterrence to ensure that Chinese leader Xi Jinping “to the extent that he might think about trying to forcibly reunify with Taiwan will decide that … today is not the day to do that.”

Among the roles for the army was in “long-range fires,” including hypersonic weapons it plans to start fielding, Ms. Wormuth said.

She stressed concerns about possible misunderstandings that could lead to conflict and the need to avoid “second Cold War framing” and to maintain lines of communication with Beijing.

“We really need to have channels where we can have dialogue with the Chinese government … That’s something I worry about,” she said. — Idrees Ali and David Brunnstrom/Reuters