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Apple drops Intel in biggest MacBook Pro overhaul in years 

APPLE.COM

Apple Inc. took the most aggressive step yet to strip Intel Corp. chips from its computers, announcing more powerful homegrown Mac processors alongside a total revamp of its MacBook Pro laptop computers.   

The company showcased the chips at an event Monday called “Unleashed” that also included its latest audio products. The new components, called the M1 Pro and M1 Max chips, are 70% faster than its M1 predecessors, Apple said. It also unveiled a redesigned MacBook Pro, adding larger screens, MagSafe charging and better resolution.  

With the new processors and devices, Apple is aiming squarely at the high-end chips that Intel has provided for the MacBook Pro and other top-end Macs for about 15 years. Last year, Apple started transitioning its low-end Macs to its own M1 Apple Silicon chip. The new chips, however, are a bolder stroke, aiming at far outclassing Intel’s highest-performing products.  

Apple shares rose as much as 1.4% to $146.80 after the event. They had gained 9.2% this year through the end of last week. 

The chips include 10 total CPU cores — the components that handle processing — up from the eight in the M1 chip. The 10 cores are split into eight high-performance cores and two cores for tasks that require less energy. That compares with four high-performance and four low-performance cores in the M1.    

Apple is also upping the graphics performance for the M1 Pro and M1 Max, which come with 16 and 32 graphics cores, respectively. That’s up from the seven or eight-core options offered with the M1 Macs. Graphics performance with the M1 Max is as much as four times faster than on the earlier M1 chip, while the M1 Pro is twice as fast, Apple said. It’s also 13 times faster than earlier Intel models.    

The M1 Pro supports 32 gigabytes of memory, while the M1 Max has up to 64 gigabytes. That’s up from 8GB or 16GB offered with the M1.    

The new chips are at the center of the most significant update to the MacBook Pro since 2016. The new model comes in 14.2-inch and 16.2-inch screen sizes, and — like the latest iPad Pro — the displays use miniLED panels. That technology allows for improved color reproduction. The screens also have 24% thinner borders on the side and a 60% thinner border at the top thanks to a new display cutout. That feature, also called a notch, makes the display look more like the one on an iPhone.    

The new models have an updated, boxier look and lack the controversial Touch Bar, the touch-screen strip introduced with the 2016 redesign. Apple replaced the Touch Bar with a new circular fingerprint scanner and larger physical function keys. Besides reversing that change from the prior version, Apple is restoring three ports that users missed after they were removed five years ago: the HDMI port, an SD card slot and MagSafe charging.    

The displays also include ProMotion, a feature that allows the screen refresh rate to reach higher levels for a smoother overall experience. Apple added a similar feature to the iPhone 13 Pro and iPhone 13 Pro Max in September. And the company is adding a 1080 progressive-scan video-chat camera, improving a component that users of earlier MacBook Pros have found subpar. The microphones and speakers were upgraded as well.  

The HDMI connection makes it easier to tie the laptop to a TV or external monitor, while the SD card slot is a convenient offering for on-the-go photographers. MagSafe, meanwhile, makes its return to the MacBook Pro after the feature was added to the iPhone 12 last year. It uses a magnetic charging adapter for the laptop. That means if the charging cord is tripped on, it will be yanked out — rather than sending the computer tumbling to the floor. 

The new 16-inch model can reach up to 21 hours of battery life when watching video, while the smaller 14-inch model has 17 hours, Apple said. The products also support a new fast-charge feature, which can quickly juice the laptop’s battery to 50% from zero. 

Bloomberg previously reported on Apple’s plans for the MacBook Pro chips, design and other features.     

Despite the growth of wearables and other mobile devices over the past several years, the Mac has remained a steady seller for Apple. The computer line pulled in almost $30 billion, or about 10% sales, in the last fiscal year. The Mac has also seen its market share grow. It held about 9% of the global personal-computer market in the third quarter, with shipments rising 10% from the period a year earlier, according to data from IDC. That made Apple the second-biggest gainer in the PC market, after Dell Technologies Inc. 

One challenge Apple may face with its new MacBook Pro is the ongoing chip shortage and supply-chain slowdown sparked by the Covid-19 pandemic. The new computer goes on sale Monday and is due to hit stores next week, starting at $1,999 for the 14-inch model and $2,499 for the 16-inch model, but shipment delays have hampered other recent launches. Customers trying to order Apple’s latest iPhones, watches and iPads are being told that products won’t be delivered until November or December. 

Apple updated the low-end 13-inch MacBook Pro with an M1 chip last year, alongside similar updates to the MacBook Air and Mac mini. It revamped the iMac desktop with a new screen, different design and M1 chip earlier this year. Apple previously said it will complete its transition away from Intel in 2022. — Bloomberg

Oil at $100 a barrel is ‘possible’ this winter, Mercuria says

Reuters

It’s “possible” that oil will hit $100 a barrel this winter, but $80 to $90 is the expected range, said Marco Dunand, the chief executive officer of commodities trader Mercuria Energy Group Ltd.

With surging energy costs contributing to inflation, as the global economy recovers from the pandemic, prices could still go higher, Dunand said at the BloombergNEF summit in London on Monday afternoon.

“It’s difficult to think the psychology of the market can be anything but bullish ahead of the winter,” he said. “We have a bullish view on commodities and on energy.”

Global climate talks that will kick off in Glasgow later this month come at a difficult time, as world leaders balance their climate ambitions with their current reliance on fossil fuels to power their economies. That conundrum is particularly acute for China, the world’s biggest developer of renewable power and the biggest polluter, Dunand said.

“China’s in a complicated place,” he said. “They made an effort to reduce coal production and now there’s panic because there’s not sufficient inventory either of gas or coal.”

Still, Dunand believes China’s leaders want to move aggressively to cut emissions. — Bloomberg

Private sector consortium emphasizes need to accelerate vaccination for safe reopening of PHL economy

In a recent Task Force T3 meeting last October 15, recommendations were shared to accelerate vaccination rollout.

Acceleration of the jab rate is especially important outside NCR, the private sector groups of Task Force T3 (T3) highlighted. They believe that is now made possible by the growing number of vaccine deliveries, resulting from the relentless efforts of Vaccine Czar Secretary Carlito Galvez with the strong support of the private sector in procuring vaccine doses via the tripartite agreements.

Other measures that the private sector groups within T3 are proposing include ensuring that the policies to open up vaccination to the general population and vaccinating 12-17 year olds are implemented across all regions and that booster shots be implemented immediately starting with healthcare workers. For all of these, the mindset from scarcity of supply to sufficiency is key and embracing a simultaneous approach for all sectors over a sequential mode by sector. There should continue to be priority lanes for A1 to A4 individuals.

Members of T3 appealed for flexibility to administer the doses for 12-17 years old and for boosters among their employees at the soonest possible time as they expressed concern over expiration of the supply they procured.

Another recommendation is for the government to spread to provincial LGUs the processes and practices employed by NCR LGUs who have successfully achieved vaccination coverage of close to 80% fully vaccinated of the adult population. This includes a planning tool developed by T3 and employed by several NCR LGUs.

To reinforce the importance of vaccination and increase demand, the groups also proposed vaccine incentives for the fully vaccinated, allowing more mobility and unrestricted access to restaurants, gyms, tourism and other establishments and all forms of public transportation, as well as at airports and seaports. More mobility among the fully vaccinated can happen and restrictions can be removed or eased because this supports the move to re-open the economy safely. They underscored the importance of vaccination for health care workers, school employees and students and transportation and government workers.

T3 is optimistic that with increased vaccination rates, the focus can shift from lockdowns to a faster reopening of the economy. For NCR and other highly vaccinated areas, re-opening public transportation and schools was also proposed. They also called for the exertion of all efforts to reach Alert Level 2 in NCR by early November.

 

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What is an ETF? And why is it driving Bitcoin back to record high prices?

The Bitcoin bulls are racing again. A year ago the cryptocurrency was valued at less than US$12,000. Now it has passed the symbolic milestone of US$60,000, nudging the US$63,255 record it reached in mid-April, before its price fell to as low as US$30,000 in July.

Bitcoin’s rally over the past month is largely attributed to speculation the US Securities and Exchange Commission is poised to approve an exchange-traded fund, or ETF, based on Bitcoin futures.

So what is an ETF, and why does this matter to the value of Bitcoin?

An exchange-traded fund is an investment fund, comprising a pool of assets, traded on a stock exchange. The general attraction is that an ETF offers individual investors the benefits of diversification, protection and liquidity.

Suppose, for example, you want to invest $100,000 in commercial property. You can’t afford to buy an office building or a shopping centre by yourself – and, even if you could, buying just one building would be putting all your eggs in one basket.

Here’s where a funds manager with an ETF can help. The manager buys a number of office buildings and shopping centres across a range of locations. Suppose these assets cost $100 million. These are “bundled” into a fund with 1,000 units sold for $100,000 each.

It’s like buying a share in a company. It allows you, the investor, to avoid the exposure that comes from buying a single asset. Instead, you get a share of a diversified portfolio.

If the value of the portfolio rises, so does the value of your unit. If you want your money – to liquidate your asset by selling it – this is easy to do because the fund’s units are traded on an exchange.

An ETF is also regulated. This protects you from some of the risks (such as fraud) that come from buying assets directly.

Rather than physical assets (as in our example), many ETFs hold securities such as stocks and bonds or derivatives. These funds can be either passively or actively managed.

Passively managed funds, which are the most prevalent, hold a basket of assets that track the market, or a market segment. An “index fund”, for example, holds shares in proportion to their weight in a stockmarket index such as the Standard & Poor’s 500 Index. If a company makes up 5% of the index’s value, the manager will ensure its share makes up 5% of the fund.

Actively managed funds, by contrast, hold more shares whose price the fund manager expects to rise strongly, and fewer or no shares they expect to perform poorly. Whether the return on these funds exceeds those delivered by passive funds depends on whether the fund managers’ judgement (or luck) is better than that of the market as a whole.

A Bitcoin-based ETF is seen as something that will entice more investors to gamble on cryptocurrency.

Buying Bitcoin or other cryptocurrencies directly can be fraught. Forget your private key (the equivalent of a password or PIN) and you lose it all. There is no friendly local bank manager who can retrieve or reset a password or make good your loss.

Scams are also on the rise. In the US alone, more than 81,000 cases of fraud were reported in 2020.

So bundling up cryptocurrencies into products overseen by traditional funds managers and regulators can be seen to have advantages, bringing greater respectability to cryptocurrency trading. (So long as you aren’t bothered by that being the antithesis of the decentralised and distributed ideals that drove techno-libertarians to create cryptocurrencies in the first place.)

But while investing in cryptocurrencies through an ETF brings a number of safeguards, it does not reduce the market risk. An indirect gamble is still a gamble.

Indeed an ETF of Bitcoin futures isn’t even indirect ownership of a pool of bitcoins. It’s a pool of contracts about bets on the future price of the cryptocurrency.

If this sounds a bit like the complicated derivatives known as collateralised debt obligations that led to the Global Financial Crisis in 2008, you’d be right. The more complex the financial instruments become, the more dangerous they may be.

One of the few who who predicted the collapse of that market was hedge fund manager Michael Burry (portrayed by Christian Bale in the 2015 movie The Big Short). Last week he effectively warned that cryptocurrencies are a speculative bubble. This is a view shared by most economists and business leaders.

As with all bubbles, some will make fortunes, but many will lose. Take care. – Reuters

New York directs two cryptocurrency lending platforms to cease activity

Two cryptocurrency lending platforms were asked to cease activities in New York by the state’s attorney general on Monday and three other platforms were directed to provide information about their business.

The move comes weeks after New York Attorney General Letitia James won a court order forcing the closure of cryptocurrency exchange Coinseed.

In a redacted version of a letter dated Monday, James said the Office of the Attorney General “was in possession of evidence of unlawfully selling or offering for sale securities and/or commodities”.

Regulators in the U.S. have been ratcheting up scrutiny of a world that has so far existed in a regulatory gray area, against the backdrop of rising tension between the crypto industry and regulators worldwide.

James filed a lawsuit in February to shut down Coinseed for allegedly defrauding thousands of investors, including by charging hidden trading fees and selling “worthless” digital tokens.

The state’s attorney general warned investors about “extreme risk” when investing in cryptocurrency and issued warnings to those facilitating in the trading of virtual currencies.

“Cryptocurrency platforms must follow the law, just like everyone else, which is why we are now directing two crypto companies to shut down and forcing three more to answer questions immediately,” James said on Monday. – Reuters

U.S. Democrats battle over climate change plans in $3.5 trillion bill

By Richard Cowan and David Morgan

WASHINGTON, Oct 18 (Reuters) – Negotiators of a U.S. bill to invest up to $3.5 trillion to expand social programs and attack climate change gave hints of progress on Monday, but some Democrats were resigned to the increasing likelihood that a proposal to reduce carbon emissions will be weakened or scrapped.

“Over the last weekend I held many productive conversations” with lawmakers and the White House, Senate Majority Leader Chuck Schumer, a Democrat, said. “We still have work to do,” he added, without providing details in a Senate floor speech.

The legislation is a pillar of President Joe Biden’s domestic agenda. He was set to speak on Monday with Democratic Senator Joe Manchin, whose support for the wide-ranging proposal is key to its passage.

Manchin, a moderate from West Virginia, has been an outspoken critic of the bill, saying it spends too much taxpayer money and contains climate change provisions that would hurt his state’s coal mining industry.

Democratic Senator Sheldon Whitehouse, a leading voice for reducing emissions blamed for the wildfires, floods and other natural disasters now confronting the warming planet, was asked by reporters whether the Clean Energy Payment Program (CEPP) included in Biden’s $3.5 trillion initiative was in jeopardy.

“It remains to be seen but I think it’s worth planning for that,” Whitehouse said.

Several Democratic senators were already touting other steps contained in the bill aimed at lowering greenhouse gas emissions in a sign that the CEPP, which would reward utilities that add more clean energy capacity like solar and wind power and fine those that do not, was in trouble.

“I think it makes the methane pollution fee and the carbon pollution fee all the more essential,” Whitehouse added.

Moderate Democratic Senator Mark Warner urged prompt House of Representatives passage of a separate, $1 trillion infrastructure investment bill already approved by the Senate, while awaiting a deal on the larger bill.

“People want us to put points on the board,” Warner told reporters. He gave as examples the need to pass the infrastructure measure or a bill making major high-tech investments so that the United States can compete more effectively with China.

The Virginia Democrat added that doing so would boost the candidacy of Democrat Terry McAuliffe’s gubernatorial bid in that state in next month’s election.

With virtually no chance of winning over any of the Senate’s 50 Republicans for the larger bill, Democrats are employing a special “budget reconciliation” strategy that would allow them to waive a 60-vote threshold required to advance most bills in the 100-member U.S. Senate.

All 50 Democrats would have to vote “yes” on the bill, with Democratic Vice President Kamala Harris on hand to break any 50-50 ties. Another Democratic moderate, Senator Kyrsten Sinema, also has voiced opposition to the bill as currently written.

House of Representatives Speaker Nancy Pelosi is aiming for passage of the social investment bill and the $1 trillion infrastructure bill by the end of this month. – Reuters

U.S. bill would stop Big Tech favoring its own products

By Diane Bartz

WASHINGTON, Oct 18 (Reuters) – About a dozen U.S. senators from both parties on Monday formally introduced a bill that would bar Big Tech platforms, like Amazon and Alphabet’s Google, from favoring their products and services.

The bill follows others introduced with the goal of reining in the outsized market power of tech firms, including industry leaders Facebook and Apple. Thus far none became law, although one, which would increase resources for antitrust enforcers, passed the Senate.

Senators Amy Klobuchar and Chuck Grassley’s bill would prohibit platforms from requiring companies operating on their sites to purchase the platform’s goods or services and ban them from biasing search results to favor the platform.

A companion has passed the House Judiciary Committee. It must pass both houses of Congress to become law.

Reuters reported on Wednesday, after reviewing thousands of internal Amazon documents, that Amazon’s India operations ran a systematic campaign of creating knock-offs and manipulating search results to boost its own private brands in the country, one of the company’s largest growth markets.

When news of the bill broke last week, both Amazon and Google warned of potential unintended consequences.

Amazon said in a statement that the bill, if it became law, “would harm consumers and the more than 500,000 US small and medium-sized businesses that sell in the Amazon store, and it would put at risk the more than 1 million jobs created by those businesses.”

Google said that the measure would make it more difficult for companies to offer free services — Google’s search and maps are both free — and would make “those services less safe, less private and less secure.”

Facebook, which said that it competes with a range of social media, including TikTok and Twitter, said antitrust laws should “not attempt to dismantle the products and services people depend on.”

Klobuchar chairs the Senate Judiciary Committee’s antitrust subcommittee while Grassley is the top Republican on the full committee. Co-sponsors include five Democrats and five Republicans.

Companies expressing support for the bill included Spotify, Roku, Match Group and DuckDuckGo, Klobuchar’s office said in a statement.

The bill would not break up the companies or force them to drop services but bars some bad behaviors that affect businesses that rely on their platforms, said Stacy Mitchell with the Institute for Local Self-Reliance who said that she would prefer a more aggressive bill. – Reuters

Philippine casino operator will pursue Japan expansion, CEO says

Okada Manila / Company handout

Jason Ader, chairman and chief executive officer of 26 Capital Acquisition Corp., plans to pursue casino opportunities in Japan and elsewhere after completing the purchase of a large casino resort in the Philippines.

“The company will own assets beyond the Philippines over the next several years,” Ader said in an interview Monday.

“This company is not expecting to be just a single asset company in perpetuity.”

Ader, who took 26 Capital public earlier this year as a shell company, agreed to merge it last week with Okada Manila, a luxury resort in the Philippines owned by Japan’s Universal Entertainment Corp. Universal will receive an 88% stake in the new business.

Ader, a former casino analyst, didn’t name any specific cities the company will pursue. Okada Manila identifies itself in a merger-related presentation as the only Japanese owned and operated casino in the world. Japan has recently begun awarding casino licenses as part of a broader push to develop its tourism industry.

“We like the market and think we’re well positioned should something come up,” Ader said.

The Manila resort, which was valued at $2.6 billion in the transaction, gets a significant share of its customers from South Korea, Japan, Singapore and Hong King, he said. — Bloomberg

The Lexus Car Maintenance weekend is happening from Oct. 21-23

Come in for periodic maintenance service and get a 40% discount on Lexus Genuine (Fully-Synthetic) engine oil

Hard-working vehicles need to endure varying road conditions; extremes in ambient temperatures; and stop-and-go traffic. For an engine to operate at its best, it must be kept in tip-top shape. Following a periodic maintenance schedule (PMS) is vital for this, as is the use of genuine parts and lubricants during every service.

Lexus is offering a 40% discount on Lexus Genuine  (Fully-Synthetic) Engine Oil to all customers who will avail of PMS at Lexus Manila and other Lexus Accredited Dealerships (Toyota Mandaue-South, Cebu; Toyota Davao City; Toyota San Fernando, Pampanga; Toyota Santa Rosa; and Toyota La Union) during the promo period from October 21-23 2021.

Having your car serviced at Lexus gives you access to Lexus Genuine Engine Oil which is formulated to work with your vehicle perfectly. When you buy a Lexus, you’ll not only enjoy the vehicle’s unparalleled luxury and advanced technology, but also the complete customer care experience. From regular servicing requirements to emergency roadside assistance, Lexus has got it covered.

As an added bonus, customers will also receive a discount if they avail of any or a combination of the following products:

-20% less on Lexus BactaKlenz Service

-20% less on UV Lamp & Air Purifier Bundle

-10% less on UV Lamp and Air Purifier if purchased separately

The Japanese philosophy of hospitality affects everything Lexus does, including the five-star treatment you get with the brand’s personalized aftersales services. This is the Lexus experience, the embodiment of ‘omotenashi’–or Japanese hospitality. This customer-first philosophy continues to serve as a mission statement and solemn oath. Lexus is a benchmark of customer satisfaction. “We will treat each customer as we would a guest in our home,” is its mantra.

Contact Lexus at (02) 8856-5252 or https://fal.cn/3fESo to book a service.

To learn more, visit the Lexus website at lexus.com.ph or visit their social media pages on Facebook and Instagram.

To arrange a consultation with your personal sales consultant, visit the Lexus Remote page at https://fal.cn/3eSWW.

 

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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Duterte signs bill regulating LPG industry

COMPANY HANDOUT

President Rodrigo R. Duterte has signed into law a measure regulating the domestic liquefied petroleum gas (LPG) industry, setting standards for one of the country’s key energy sources.

Republic Act 11592 or the LPG Industry Regulation Act, enacted on Oct. 14, sets best practices for local industry players such as importers, bulk suppliers, distributors, haulers, refillers, trademark owners, marketers, dealers and retail outlets.

Under the law, the industry must come up with a cylinder exchange and swapping program within six months of its enforcement to allow consumers to buy any LPG brand of their choice.

Unsafe LPG cylinders or cartridges will be retired to prevent LPG-related explosions and other accidents.

The law penalizes underfilling of LPG cylinders, tapering with markings and selling adulterated LPG.

The city where a player is registered will get a 40% share from the penalties,.The Energy department will use the rest to enforce the law. — Kyle Aristophere T. Atienza

BSP sees no rate adjustments this year

PHILIPPINE STAR/ MICHAEL VARCAS
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said that moving too early on rate hikes may hurt the economy’s recovery, which is just starting to take hold. — PHILIPPINE STAR/ MICHAEL VARCAS

By Luz Wendy T. Noble, Reporter

THERE appears to be no need to adjust policy settings until the end of this year, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said on Monday.

“We have two more policy meetings — one in November and in December. It would appear that there will be no policy adjustments between now and end of the year,” Mr. Diokno said in an interview with ANC news channel on Monday.

The Monetary Board has kept its key interest rate at a record low of 2% in its last seven meetings. It will hold two more policy review meetings this year, scheduled on Nov. 18 and Dec. 16.

The BSP chief stressed that raising rates may be premature, considering the Philippine economy’s recovery is just starting to take hold.

“Some central banks raised their rates because they fear inflation and they see their exchange rate deteriorating so fast as a result, so some of them have adjusted rates,” he said.

In the Asia-Pacific, the Bank of Korea and New Zealand have already hiked interest rates, while the Monetary Authority of Singapore tightened monetary policy by raising the slope of its currency band.

“We have hefty international reserves and we continue to get fresh support from overseas Filipino remittances, business process outsourcing receipts and our exports, and foreign direct investments. So we are fairly comfortable that we do not need to raise interest rates at this time,” Mr. Diokno said.

He reiterated his belief that the elevated inflation is “transitory.” In September, inflation eased to 4.8% from 4.9% in August.

While inflation is expected to reach beyond their 2-4% target at 4.4% this year, Mr. Diokno said it is expected to return to within target at 3.3% next year and 3.2% in 2023.

The central bank chief is hopeful the economy’s recovery will firm up, citing the rebound in exports, the drop in daily new COVID-19 cases and the rise in vaccination rate.

“The economy will pick up in the fourth quarter this year, and in fact some good numbers might come up in the third quarter,” Mr. Diokno said.

The reimposition of strict mobility curbs in the capital region for two weeks in August prompted economic managers to downgrade its full-year growth target to 4-5% from 6-7%.

Coronavirus restrictions in Metro Manila were further relaxed last Friday, in hopes of reviving the pandemic-battered economy.

ANZ Research Chief Economist Sanjay Mathur said he agrees with Mr. Diokno’s guidance that inflation is transitory as it was fueled mainly by food and fuel prices. He noted that core inflation, which stood at 3.3% for the second straight month in September, is within target.

“Core inflation has been steady but the point is that domestic demand is as yet weak. How much it can recover we will know only when the economy re-opens,” Mr. Mathur said in an e-mail.

Given that the labor market remains weak while business and consumer confidence appear lackluster, Mr. Mathur believes a rate hike can wait until 2022.

“I think the BSP can comfortably wait until late next year if not 2023 before tightening. In fact, targeting transitory inflation with higher interest rates would be adverse,” Mr. Mathur said.

Mr. Diokno on Sunday said there is more harm in tightening monetary policy too soon than in doing it too late.

However, Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said a preemptive 25- to 50-basis-point (bp) rate hike will not be harmful to the economy.

“If inflation does persist and even worsens, sizeable Federal Open Market Committee and BSP policy adjustments later on may trigger disorderly behavior in markets and significantly disrupt our fragile recovery,” Mr. Neri said in a Viber message.

Last year, the BSP slashed rates by a total of 200 bps to support the economy before pausing in December 2020.

PHL companies projected to raise worker salaries by 5.6% in 2022

PHILIPPINE STAR/ MICHAEL VARCAS

COMPANIES in the Philippines are expected to raise the salary of employees by an average of 5.6% next year, as the economy is seen to rebound from the coronavirus pandemic, according to a Willis Towers Watson report.

In its latest Salary Budget Planning Report, Willis Towers Watson said companies in the Philippines are looking to hike salaries of employees amid challenges hiring new workers and retaining the current workforce.

Next year’s projected pay rise of 5.6% will be higher than the 5% average salary increase actually implemented this year.

This is also above the 5.3% average salary rise projected by companies in the Asia-Pacific for 2022, while countries in Western Europe and North America expect salaries to remain flat.

Willis Towers Watson data showed Philippine firms involved in medical technology (MedTech) are seen to give the biggest average raise at 7.3% in 2022, after raising wages by an average of 5.7% this year.

Construction, property and engineering companies are projected to increase salaries by 6.2% versus 4.8% this year. Firms involved in pharmaceutical and health services, and business support services, including business process outsourcing, are looking to hike salaries by an average of 6.1%.

On the other hand, firms in energy and natural resources are only expected to raise salaries by 4.7% in 2022, while insurance firms will increase pay by 4.8%.

“Although there is a positive outlook among businesses, companies are also monitoring the Philippine economic landscape, hence, organizations may further adjust their 2022 salary budget forecast in the later part of this year,” Rewards, Data and Software Practice Leader of Willis Towers Watson Philippines Chantal Querubin said in a news release on Monday.

Nearly half of companies in the Philippines expect their business performance to be in line with targets this year, the report showed.

Organizations are also looking to create more jobs in sales, information technology and engineering in the next 12 months, Willis Towers Watson said.

The survey also showed 65.3% of companies will keep their headcount in the next 12 months, while 25.8% are planning to add more employees and 8.9% are seeking to cut jobs.

“Companies are between a rock and a hard place when it comes to compensation planning. On the one hand, employers need to continue effectively managing fixed costs as they rebound from the pandemic. On the other hand, companies recognize they need to boost compensation, especially in sectors where there may be a manpower crunch,” Ms. Querubin said.

Foundation for Economic Freedom President Calixto V. Chikiamco in a Viber message on Monday said the projected pay increase is possible for some companies “which did well during the pandemic” such as those in the telecommunications, information technology companies, and food and beverage industries.

With inflation hovering near 5% with fuel and food prices expected to escalate, Mr. Chikiamco said some companies may feel compelled to give workers an increase to just keep up with inflation.

However, enterprises that were badly hurt by the pandemic “would likely be unable to increase pay, or even 13th month pay,” he added.

Willis Towers Watson conducted the survey between April and June this year, covering 1,405 companies representing a cross section of industries from 13 markets in the Asia-Pacific region. In the Philippines, 266 companies participated. — Bianca Angelica D. Añago

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