A health worker attends to a patient outside a hospital in Quezon City, Aug. 29. — PHILIPPINE STAR/ MICHAEL VARCAS
THE PHILIPPINE economy’s rebound continues to be clouded by its “less effective” management of the coronavirus disease 2019 (COVID-19) outbreak, Moody’s Analytics said on Monday.
“The Philippines and Indonesia will struggle with less effective COVID-19 policies — vaccine shortages and ineffective social distancing measures — that create much uncertainty on the timing of a rebound,” Moody’s Analytics Chief Economist Steven Cochrane said in a note.
Based on the Relative COVID-19 Economic Risk Index released by Moody’s Analytics, the Philippines ranked near the bottom — 15th out of 20 economies in the Asia-Pacific region.
The index gauged the situation in Asia-Pacific economies based on the fully vaccinated as percentage of the population, new cases per million, and new deaths per million.
Singapore topped the index, followed by China, Cambodia, Hong Kong, and Japan. These countries are assessed to have the lowest relative economic risks from the ongoing pandemic.
The Philippines only fared better than Indonesia, Vietnam, Sri Lanka, Thailand, and Malaysia in the index.
According Moody’s Analytics, the Philippines ranked 13th in terms of the percentage of the population that has been fully vaccinated — which was at 12%.
The Philippines was also in 15th spot in terms of the 7-day moving average of new cases and new deaths per million.
The Health department on Monday reported a new record in daily COVID-19 infections at 22,366 and 222 additional deaths. Active COVID-19 cases stood at 148,594.
Moody’s Analytics also identified the Philippines as one of the countries that have seen the “most volatile” recovery paths this year.
“The Philippines, Malaysia, Singapore and Hong Kong have been the most volatile; each experienced a quarter-to-quarter decline of GDP in the second quarter of this year,” Mr. Cochrane said.
The economy exited recession in the second quarter after growing by 11.8%, mostly due to base effects. However, gross domestic product (GDP) declined by a seasonally adjusted 1.3% quarter on quarter in the April to June period, coming from the 0.7% growth in the first quarter.
Earlier this month, Moody’s Analytics downgraded its growth outlook for the Philippines to 4% from the 4.9% it gave in July due to the renewed restriction measures and limited government support.
Economic managers have also downgraded their full-year growth target to 4-5% from 6-7% previously, taking into account the economic cost of the two-week enhanced community quarantine earlier this month.
VACCINE ROLLOUT In a separate note, Fitch Solutions Country Risk and Industry Research said the sluggish vaccine rollout in countries that have large population such as the Philippines, India, and Indonesia will hinder further economic reopening and a rebound in business activities.
Fitch Solutions said Indonesia, the Philippines, Thailand, and Malaysia are under “severe domestic health crises” caused by the more transmissible Delta variant.
“As a result, the risks of further outbreaks remain and the outlook for the region reopening in a meaningful way this year is remote,” Fitch Solutions said in a note on Monday.
Fitch Solutions has trimmed its growth forecast for the Philippines this year to 4.2%.
The government is still hoping to have 70% of the population fully vaccinated by the end of this year.
BSP BOOST NEEDED Meanwhile, the recent strict lockdowns and a surge in COVID-19 cases continue to threaten recovery, which may prompt the central bank to ease monetary policy, according to a joint report by First Metro Investment Corp. (FMIC) and the University of Asia and the Pacific (UA&P) economists.
“We also think the Bangko Sentral ng Pilipinas (BSP) may ease slightly, likely through a reduction in reserve requirements, given the need to continue fueling the recovery,” they said on Monday.
The BSP retained key policy rates at a record low of 2% during the rate-setting meeting earlier this month but its chief Benjamin E. Diokno has said there is “no urgency” for the central bank to make drastic changes in the current monetary policy.
The same is true for the banks’ reserve requirement ratio (RRR) since the market remains awash with cash, he said, reassuring that the BSP will continue to support the economic recovery.
RRR of big banks is currently at 12%, following the central bank’s last cut in April 2020 with a 200-basis-point reduction.
Reserve requirements of thrift and rural banks stood at 3% and 2%, respectively.
FMIC and UA&P economists noted the economy’s improving growth prospects after promising GDP and manufacturing data. A sustained rebound in exports and imports should support a “brighter outlook” for the rest of the year until 2022, they added.
“The rise in COVID-19 cases due to the new variants, however, may still upend high hopes,” FMIC and UA&P economists said.
It is expecting the economy to grow at the lower end or slightly below its 5-6% projection for the year. — L.W.T.Noble and B.M.Laforga
THE GOVERNMENT is still proceeding with a plan to privatize state-owned mines, with Basay Mining Corp. being the first in line, as it looks for new sources of revenues amid the prolonged pandemic, Finance Secretary Carlos G. Dominguez III said.
“Regarding the Basay mines project, I don’t know yet how much the exact valuation is and how we will bid it out, but that is the first mine we are doing,” Mr. Dominguez told reporters on Aug. 17.
Last year, the Department of Finance (DoF) chief ordered the Privatization and Management Office (PMO) to review all government-owned mines ahead of a plan to sell these assets to raise more revenues.
In October, the DoF said Basay Mining’s copper mines in Negros Oriental, as well as the nickel mine of Marinduque Mining and Industrial Corp. (MMIC Bagacay Mine) cannot be operated due to the “legal concerns” which are hindering the privatization of these assets.
PMO estimates at that time showed Basay Mining may have at least 105 million tons of copper ore and could generate at least P1 billion. Its operations were suspended in 1983 due to insufficient funds.
The government has been scrambling to find new revenue sources as expenditures surged and tax collections plunged when the pandemic struck in 2020.
Mr. Dominguez said there are more than 30,000 land titles that are yet to be disposed by both the PMO and the state deposit insurer Philippine Deposit Insurance Corp., adding that majority of which are assets that are difficult to dispose of.
He noted the process of privatizing these mining assets is more complicated due to various legal and security issues.
“We are continuing to privatize whatever assets that we have but quite frankly, we don’t have any more crown jewels. That has been privatized by previous administrations already and the ones we are left with are really the difficult ones to privatize,” he added.
Meanwhile, Mr. Dominguez said there is no final decision yet on the possible privatization of the Philippine Amusement and Gaming Corp. (PAGCOR) and Philippine Charity Sweepstakes Office (PCSO).
The privatization of PAGCOR and PCSO is also among the measures considered by the government to generate additional revenues.
Preliminary data from the Bureau of the Treasury showed proceeds from privatization efforts of the government fell by 28% to P230 million in the seven months to July, all of which came from PMO’s operations. — BML
STATE AUDITORS reported that Philippine National Construction Corp. (PNCC) left idle its 9.9-hectare property at the Financial Center Area in Pasay City, depriving it of a possible income of around P1.543 billion.
In its 2020 audit report, the Commission on Audit (CoA) said that only three hectares out of a 12.95-hectare property allotted to the company in the area were used through a long-term lease contract with Pacific Concrete Products, Inc. The contract was forged on Oct. 8, 2019.
“Portions of the 9.9 hectares are under litigation with ejectment cases filed by PNCC against some former lessees who continuously occupied the premises despite expiration of their lease contracts,” CoA said.
The contested leases were entered through short-term agreements that ended on May 31, 2018 as PNCC’s board of directors had plans for property development in the area.
On July 10, 2019, the board passed a resolution that would approve the terms of reference for the bidding of the 9.9-hectare portion, prompting PNCC President and Chief Executive Officer Miguel E. Umali to seek the approval of the Office of the President (OP) on July 18 of the same year.
PNCC followed up on its request for approval on the terms of reference on Feb. 26, 2020, which was met with a letter from Deputy Executive Secretary for General Administration Mcjill Bryant T. Fernandez addressed to Finance Secretary Carlos G. Domínguez III on the lease and development of the property.
The company has yet to receive an update on its request from the executive department.
“Persistent and collective efforts to obtain necessary approvals from the OP should have been exerted, considering that it has been three years since the expiration of the previous leases,” the state auditors said.
They added that leaving the prime property vacant and partly used by illegal occupants deprived PNCC of potential income.
CoA recommended for PNCC to meet with the Department of Finance about the letter from Mr. Fernandez to bid out the lease contract and to immediately proceed with bidding activities once approved by the executive department.
In an audit comment, PNCC said that it had been communicating with the Finance department’s Privatization and Management Office, which it said had been made aware of the OP’s letter seeking approval on the plan to develop its property at the Financial Center Area.
Based on its website, PNCC was incorporated in 1966 and had been granted a franchise in 1977 to operate, construct, and maintain toll facilities. — Russell Louis C. Ku
INTELLECTUAL property (IP) filings increased by 20% in the first half after eased lockdown restrictions supported economic recovery, the Intellectual Property Office of the Philippines (IPOPHL) said.
IP applications in the first six months stood at 22,919, driven by a 23% increase in trademark filings to 19,649 from 15,969 in the same period last year.
The bulk of trademark filings were in pharmaceutical, health, and cosmetic products, along with agricultural products and services.
“This development is a strong indication that some businesses in the Philippines are recovering and seeing the importance of IP as a competitive tool,” IPOPHL Director General Rowel S. Barba said in a press release on Monday.
IP filings declined in 2020 as inventors and creatives delayed applications amid the lockdown declared to contain the coronavirus disease 2019 (COVID-19).
In the first half of 2021, utility model filings went up 26% to 744, almost 240 of which were in food chemistry.
Patent filings inched up 2% to 1,945, the top fields for which were pharmaceuticals and organic fine chemistry.
Copyright deposits surged 163% to 751.
In contrast, industrial design applications dropped 10% to 581. Although resident filings went up by 8% to 339, non-resident filings fell 27% to 242. Fields that received the most industrial design applications were furnishing and means of transport or hoisting, with 26 each.
Mr. Barba said that the agency’s online registration system helped increase IP filings, but he recognizes the potential impact of recent stricter lockdowns on intellectual property activities.
“We’ve been seeing how disruptive companies and those who have built their brands on IP are bucking the crisis’ adverse effects on businesses. As we gear up for faster economic recovery, the country will inevitably realize more how IP is a catalyst for resilient growth,” he said. — Jenina P. Ibañez
ONLINE film screenings, workshops, and international film festival participation are lined up for the first celebration of Philippine Film Industry Month in September.
President Rodrigo R. Duterte signed Presidential Proclamation No. 1085 on Feb. 3,declaring every September as Philippine Film Industry Month. The celebration aims to recognize the “invaluable contribution and sacrifices of all stakeholders and sectors of the film industry, as well as provide avenues to showcase and celebrate the achievements and progress of the discipline of film and filmmaking.”
The Film Development Council of the Philippines (FDCP) will lead in promoting and implementing programs and activities with the theme “Ngayon ang Bagong SineMula!”
All activities will be held online on the FDCP social media pages. Screenings will be hosted exclusively on the FDCP Channel virtual platform (fdcpchannel.ph).
“This is indeed in a seemingly dark year that affected not just our local industry but all industries around the world. But like the resilient industry that we always have been, we always find and sought ways to continue,” said Mary Liza Diño-Seguerra, FDCP chairperson and CEO, at an online press conference on Aug. 26 via Zoom.
THE ACTIVITIES The Philippine Film Industry Month opening celebration on Sept. 1 will feature the launch of the Nood Tayo ng Sine Campaign, plus announcements on the International Film Industry Conference (IFIC), First Cut Lab Philippines (FCL PH), the FDCP Film Philippines Incentives Program, and Mit Out Sound: International Silent Film Lab. It will be streamed on FDCP’s Facebook pages and YouTube channel.
The 5th Pista ng Pelikulang Pilipino (PPP) returns to the FDCP Channel, with free screenings from the Sine Kabataan Short Film Competition and Sine Isla: LuzViMinda Short Film Competition from Sept. 17 to 26.
Also screening for free for the entire month on the FDCP Channel are eight films that were restored by the FDCP Philippine Film Archive, including Insiang and Manila by Night, directed by National Artists for Film Lino Brocka and Ishmael Bernal respectively. Films in the special Elwood Perez Retrospective will be screening from Sept. 25 to 30.
The movies Ang Turkey Man Ay Pabo Rin by Randolph Longjas and the restored versions of Bata Bata Paano Ka Ginawa and Dekada ’70 by Chito S. Roño will be available for rent at the Pamana ng Lingkod Bayani screenings at the FDCP Channel from Sept. 1 to 12. This is a partnership between the Civil Service Commission (CSC) and FDCP to celebrate the 121st Philippine Civil Service Anniversary.
Meanwhile, the Philippine Film Industry Gala will be the only on-ground event for the month. It will be held at the Manila Metropolitan Theater on Sept. 12, and feature the by-invitation screening of Olive La Torre’s Dalagang Ilocana, and the launch of the Elwood Perez Retrospective.
Part of the gala are the book launches of Clodualdo “Doy” del Mundo, Jr.’s Ang Daigdig ng mga Api, books on Philippine cinema by Nick Deocampo, and the SouthEast Asia-Pacific Audiovisual Archive Association (SEAPAVAA)’s Keeping Memories: Cinema and Archiving in Asia-Pacific.
Aside from online film screenings, the Philippines will participate in the 78th Venice International Film Festival in Italy. Erik Matti’s On The Job: The Missing 8 is the only Southeast Asian film participating in the festival, which will be held from Sept 1 to 11. Filipino delegates will also participate in the China International Fair for Trade in Services from Sept. 2 to 7, the Kre8tif! Elevator Pitch in Malaysia from Sept. 8 to 10, and the Philippine International Comics Festival on all weekends of September.
Ms. Dino-Seguerra said that regular participation in international film festivals brought recognition to the Philippine film industry. The challenge now, she said, is to make Philippine films commercially available internationally.
“We have projects now that have international collaboration, that legitimizes our international path. While there are challenges that we face locally, there is a new generation of filmmakers with a goal to collaboration. The goal is to work with a global market in mind and work in a globally competitive environment,” she said.
The closing event on Sept. 30 will include the awarding of Sine Kabataan and Sine Isla winners, the launch of the revamped FDCP website, and special announcements from the FDCP Channel and CreatePHFilms.
For more information and for the schedule of activities, visit https://www.fdcp.ph/.— Michelle Anne P. Soliman
MASS housing developer 8990 Holdings, Inc. said it already entered the high-end property market via Monterrazas de Cebu in Cebu City, with a new development Monterrazas Prime in the pipeline.
“It’s the last remaining contiguous mountain property remaining in Cebu,” 8990 Holdings Chairman Mariano D. Martinez, Jr. said in a text message sent via a representative on Sunday.
The company told reporters on Friday that it launched a joint venture with Jan Slater Lee Young, engineer and former Pinoy Big Brother housemate, to develop Monterrazas Prime.
“This Monterrazas Prime is a very exclusive enclave of a group of houses. The prices are ranging from, I think, P40 [million] to P50 [million per unit],” 8990 Holdings Deputy Chief Executive Officer Anthony Vincent S. Sotto said during the briefing.
Monterrazas Prime is a house-and-lot project by Young-led SkyEstates Construction Corp., LLG Architects, and GENVI Development Corp.
8990 Holdings acquired in February 2019 a 72.83% stake in GENVI, the property firm behind Monterrazas de Cebu.
Monterrazas Prime offers 15 Soprano units with a lot size of 408 square meters (sq.m.) to 440 sq.m. and 15 Alto units with 350 sq.m. to 371 sq.m. in lot sizes. Its land development is at 15%, according to a video presentation on Friday.
However, the company said it has no plans of expanding the Monterrazas Prime brand yet.
“As with our other properties on our landbank, this was more opportunistic — our license to sell is just for selling the lots,” said Mr. Martinez.
The company currently has a landbank of 670.91 hectares, which it expects to provide P201 billion in potential sales within the next seven to 10 years. The majority or 59% of this is located in the Visayas with 397 hectares, Luzon at 25% with 170 hectares, and Mindanao at 16% with 104 hectares.
Luzon is expected to generate over half of the projected sales with P103 billion, Visayas is seen to account for 45% with P91 billion, and three percent from Mindanao with P7 billion.
Shares of 8990 Holdings at the local bourse closed unchanged at P7.20 each on Friday. — Keren Concepcion G. Valmonte
A STILL from the film Midnight in a Perfect World — PHOTO FROM GLOBESTUDIOS.PH/FILM
DODO Dayao’s sci-fi thriller Midnight in a Perfect World got the most nods — 11 — as the Manunuri ng Pelikulang Pilipino released the list of nominations for the 44th Gawad Urian on Aug. 27.
The film was nominated in almost all the categories: Best Picture and Best Director, Best Actress (Glaiza de Castro), Supporting Actor (Dino Pastrano), Supporting Actress (Bing Pimentel), Screenplay, Production Design, Editing, Cinematography, Sound, and Music.
Also nominated for Best Picture are the documentaries Aswang by Alyx Ayn Arumpac, and A Thousand Cuts by Ramona S. Diaz, Avid Liongoren’s animated film Hayop Ka: The Nimfa Dimaano Story, Lawrence Fajardo’s Kintsugi, Lav Diaz’s Lahi, Hayop, and Ben Rekhi’s Watch List.
Ramona Diaz and Lav Diaz, Dodo Dayao, Alyx Arumpac, Avid Liongoren, Lawrence Fajardo, and Ben Rekhi also received nominations for Best Director. The other nominees in the category are Joselito Altarejos for his work on Memories of Forgetting, Dolly Dulu for The Boy Foretold by the Stars, Antoinette Jadaone for Fan Girl, and Irene Villamor, On Vodka, Beers, and Regrets.
The nominees for Best Documentary, Best Short Film, and the recipients of the special honors, the Dekada Awards and the Natatanging Gawad Award, will be announced on a separate date.
The 44th Gawad Urian awarding ceremony will be held on Oct. 6. The event will be livestreaming on the Gawad Urian’s Facebook and YouTube pages. — MAPS
The nominees for the 44th Gawad Urian Awards
BEST PICTURE Hayop Ka: The Nimfa Dimaano Story
Aswang
Kintsugi
Lahi, Hayop
Midnight in a Perfect World
A Thousand Cuts
Watch List
BEST DIRECTOR Joselito Altarejos, Memories of Forgetting
Alyx Arumpac, Aswang
Dodo Dayao, Midnight in a Perfect World
Lav Diaz, Lahi, Hayop
Ramona Diaz, A Thousand Cuts
Dolly Dulu, The Boy Foretold by the Stars
Lawrence Fajardo, Kintsugi
Antoinette Jadaone, Fan Girl
Avid Liongoren, Hayop Ka: The Nimfa Dimaano Story
Ben Rekhi, Watch List
Irene Villamor, On Vodka, Beers, and Regrets
BEST ACTOR Elijah Canlas, He Who is Without Sin
Enchong Dee, Alter Me
Noel Escondo, Memories of Forgetting
Keann Johnson, The Boy Foretold by the Stars
Nanding Josef, Lahi, Hayop
Adrian Lindayag, The Boy Foretold by the Stars
Zanjoe Marudo, Malaya
JC Santos, On Vodka, Beers, and Regrets
BEST ACTRESS Jasmine Curtis-Smith, Alter Me
Glaiza de Castro, Midnight in a Perfect World
Alessandra de Rossi, Watch List
Charlie Dizon, Fan Girl
Shaina Magdayao, Tagpuan
Bela Padilla, On Vodka, Beers, and Regrets
Lovi Poe, Malaya
Sue Ramirez, Finding Agnes
Cristine Reyes, Untrue
BEST SUPPORTING ACTOR Micko Laurente, Watch List
Jake Macapagal, Watch List
Jess Mendoza, Watch List
Dino Pastrano, Midnight in a Perfect World
Enzo Pineda, He Who is Without Sin
BEST SUPPORTING ACTRESS Sandy Andalong, Finding Agnes
EDWARD ASNER at an event for Up (2009) — PHOTO COURTESY OF JESSE GRANT VIA IMDB.COM
ED ASNER, who played a gruff newsman for laughs and for drama in the classic TV series The Mary Tyler Moore Show and its spinoff Lou Grant in the 1970s and 1980s and was honored with seven Emmy Awards, died on Sunday at age 91, his family said.
Mr. Asner, whose diverse credits also included a key voice role in the acclaimed 2009 animated film Up, died at his home surrounded by his family, his publicist told media outlets.
His family confirmed the death on the actor’s Twitter feed, writing, “We are sorry to say that our beloved patriarch passed away this morning peacefully. “Words cannot express the sadness we feel. With a kiss on your head — Goodnight dad. We love you,” his family said.
Mr. Asner was known for his liberal politics and his stint as Screen Actors Guild president in the 1980s when he criticized US involvement in Central America during the administration of a previous head of the actors’ union, President Ronald Reagan. In a career of remarkable longevity, Mr. Asner acted into his 90s.
Mr. Asner was integral to the success of the situation comedy Mary Tyler Moore, which ran on CBS from 1970 to 1977 and boasted one of the best assemblages of actors and writers in US TV history. Ms. Moore starred as Mary Richards, an associate producer for a local TV news operation in Minneapolis. The short, barrel-shaped Mr. Asner played her brusque and irascible boss, Lou Grant. In the first episode, Ms. Moore’s character interviews for a job with Mr. Asner’s Grant but objects to prying questions about her religion and marital status. “You know what, you’ve got spunk,” Mr. Asner tells Ms. Moore, who mistakenly takes it as a compliment. “Well, yes,” she replies. “I hate spunk,” snaps Mr. Asner, who hires her anyway.
Mr. Asner was not known as a comic actor before landing the Mary Tyler Moore role but demonstrated deft comic timing in working with a cast that included Ted Knight, Betty White, Valerie Harper, Gavin MacLeod, and Cloris Leachman.
“I didn’t really put my toe into the water of comedy until I went up to read for Mary Tyler Moore. I was afraid of it,” Mr. Asner said in a 1995 Montreal radio interview. “Not that I couldn’t do an initial spark of humor but I didn’t know how to maintain it.” The series ran for seven years and won the Emmy for outstanding comedy series three straight years starting in 1975. Mr. Asner won three Emmys for his work on the show.
Mary Tyler Moore spawned a number of spinoff series. After the show ended, Mr. Asner brought his Lou Grant character to a series of his own. Whereas Mary Tyler Moore was a fun sitcom, the new show, Lou Grant, was a drama with Mr. Asner’s character relocated to Los Angeles to become city editor of a daily newspaper.
CANCELLATION CONTROVERSY The series ran from 1977 to 1982 as Asner became the first actor to win an Emmy — two of them, in fact — playing the same character in both a comedy and a drama. Asner asserted that Lou Grant was canceled by CBS due to his outspoken political views, not due to ratings.
“I have no proof. But most insiders seem to think that the show would not have been canceled had it not been for the controversy that arose over my stand on El Salvador,” Mr. Asner said in an interview for the Archive of American Television. As head of the actors’ union from 1981 to 1985, Mr. Asner also clashed with conservative actor Charlton Heston.
Mr. Asner also won Emmys for his work in two miniseries —Roots in 1977 and Rich Man, Poor Man in 1976 —and his total of seven was more than any other male actor. He was nominated for an Emmy 20 times.
Later in his career, Mr. Asner became a successful voice actor for animated TV shows and films and played Santa Claus in several projects, including the 2003 Will Ferrell comedy Elf.
In the sentimental 2009 animated film Up, Mr. Asner provided the voice for the main character, 78-year-old Carl Fredricksen, who after the death of his beloved wife ties balloons to his house and floats off to fulfill his fantasy of exploring South America, only to find he has a youthful stowaway. The movie won an Oscar for best animated film and a nomination for best picture. Mr. Asner remained a busy actor into his 90s with appearances in such series as Dead to Me and Cobra Kai.
Mr. Asner, born in 1929, became a regular on television and later the movies starting in the 1950s. Before their series began, he acted alongside Ms. Moore in the Elvis Presley movie Change of Habit (1969). Mr. Asner also appeared in the film They Call Me Mister Tibbs! (1970) with Sidney Poitier.
Mr. Asner also was instrumental in the 2017 creation of the Ed Asner Family Center, founded by his son and his daughter in law, to help children with special needs and their families.—Reuters
THE ANTI-MONEY Laundering Council (AMLC) is confident that the Philippines can show it has made progress in implementing tighter anti-money laundering and counter-terrorism financing (AML/CTF) regulations in the country’s first report to the Financial Action Task Force (FATF) after it was placed on its “gray list” in June.
“In reference to our first progress report, we are confident that we will be able to get positive results as we have completed widest dissemination of the process of delisting and unfreezing. If the FATF confirms this in its October Plenary, our action plan items will be down to 17,” AMLC Executive Director Mel Georgie B. Racela said in a Viber message.
As part of the FATF’s gray list of jurisdictions under increased monitoring, the Philippines is required to submit progress reports on its implementation of AML/CTF measures. The first report is due next month, while the next ones are required to be passed in January and May 2022.
The FATF earlier said the country needs to implement 18 action plans in order to exit its gray list.
The country’s report will be evaluated by the Asia Pacific Joint Group assessor who will submit a final report for the consideration of the FATF Plenary.
Mr. Racela earlier said the Philippines’ first progress report to the FATF will focus on the issuance of guidelines for the delisting and unfreezing procedures for targeted financial sanctions related to proliferation financing of weapons of mass destruction. These were released by the AMLC in July.
Meanwhile, he said the Asia/Pacific Group’s (APG) assessment earlier this month, which moved the country to the enhanced follow-up list from the enhanced (expedited) classification, is a welcome development. He, however, noted that this classification refers to the country’s technical compliance with and not its implementation of AML/CTF measures.
“These reassessments pertain to our technical compliance so it does not affect our action plan items. However, these upgrades confirm that our legal framework has achieved an acceptable level of compliance with the FATF’s 40 recommendations,” Mr. Racela said, noting this makes the country mostly compliant with 35 out of the 40 recommendations under the Mutual Evaluation Report 2019 for the Philippines
The AMLC has earlier filed a request for a re-rating for six recommendations under the Mutual Evaluation Report in 2019.
The other recommendations on technical compliance will be addressed “in due time,” Mr. Racela said.
“Currently, all our resources are concentrated on meeting the 18 action plan items. Meeting these will ascertain our exit from the gray list, not the other technical compliances, so this [action plan items] is presently our top priority,” he said.
Countries that are part of the enhanced follow-up list also need to report to APG regarding their progress on strengthening the implementation of AML/CTF measures.
Bangko Sentral ng Pilipinas Governor and AMLC Chairman Benjamin E. Diokno has said they expect the country to exit the FATF’s gray list on or before January 2023. — L.W.T. Noble
While online banking is not new in the Philippines, banks without physical branches could sooner or later become the norm in the country as the central bank distinguishes digital-only banks from those with brick-and-mortar presence.
This distinction was made clear in Circular 1105 that was released by the Bangko Sentral ng Pilipinas (BSP) in December last year. Just as with traditional banks, digital banks will be allowed to grant loans, accept savings, time deposits and foreign currency deposits, invest in securities, issue e-money products and credit cards, sell micro-insurance products, and buy and sell foreign exchange currencies, among others.
Lenders that will be granted a digital bank license are required to put up a minimum capital of P1 billion, a physical office in the country to serve as the main point of contact for stakeholders and regulators, and are subject to the same regulatory requirements as traditional banks.
Existing banks converting to digital banks will be given a period of three years from the BSP’s approval to meet the minimum capital requirement and implement the transition, which include divesting or closing branches or branch lite units; limiting stocks of foreign individuals or nonbank entities, Filipino individuals or local nonbank parties, and family groups at 40% of the voting stocks; and phasing out activities not associated with a digital-only bank and submitting the amended Articles of Incorporation and By-Laws registered with the Securities and Exchange Commission within six months from the date of receipt of the approval notice.
These all-online banks are expected to help the BSP reach its goal to bring 70% of Filipino adults into the banked population and 50% of payments done online by 2023.
Initially, the BSP limited the number of digital bank licenses to five for the next three years as it wants to monitor these new lenders as well as gain experience on digital banking. This was later expanded to seven in August.
As of this writing, the BSP has granted five digital bank licenses: the state-owned Overseas Filipino Bank (OFBank); the Singapore-based Tonik Digital Bank, Inc. (Philippines); UNObank; the UnionBank of the Philippines, Inc.’s Union Digital Bank; and a partnership between the Singapore-headquartered Tyme and Philippine-based Gokongwei Group’s GOtyme.
The central bank is still evaluating two more applications as the window for applications is set to close on Aug. 31. Still, BSP Governor Benjamin E. Diokno has said the chances for other firms to get a digital bank license or convert their existing banking licenses at this point are “very slim” given the applications are processed on a first-come, first-served basis and that the two applications would have to be disqualified or would be unable to comply with all requirements for other applications to be considered.
As noted in the BSP Circular, the authority to establish a digital bank “shall be automatically revoked” if the lender is not organized and opened for business within one year after it receives the approval of its application from the central BSP’s Monetary Board. It can also be revoked if the BSP has determined that the bank “provided false or misleading information” during the processing of the application.
Still, there have already been banks in the Philippines offering no-branch banking services through their apps prior to having the digital bank as a new and separate category. For instance, CIMB Bank Philippines and ING Bank N.V. Manila provide all-online retail banking services, even as they currently have an existing commercial and universal bank license, respectively.
CIMB Philippines Chief Executive Officer (CEO) Vijay Manoharan said in a Zoom interview that since they started in 2019, their clients’ behavior has evolved in how they evaluate digital banking services and carry out their transactions. In particular, he noted how their clients are now using their accounts to transfer funds, pay bills, and mobile top-ups as compared with just pouring in savings and visiting their accounts once a month prior to the pandemic.
Mr. Manoharan also noted CIMB Philippines already has close to 800,000 loan customers coming from just about 10,000 in early 2020.
“They’re [clients] now asking for more. They seem to be able to compare and contrast versus our other fellow digital banks and then also weigh their options and evaluate which offering is more relevant to them,” he said.
Meanwhile, Rizal Commercial Banking Corp. (RCBC) Executive Vice-President and Chief Innovation and Inclusion Officer Angelito “Lito” M. Villanueva said in an e-mail that their DiskarTech app has been utilized to disburse P16.3 billion in financial aid from the government’s social protection programs for 4.5 million low-income families across 73 of the 81 provinces. He added that eight out of 10 of DiskarTech users are in the provinces, showing how the app has become inclusive of providing financial services to the countryside.
RCBC’s DiskarTech, which was launched in July of last year, allows users to open a basic deposit account that does not require an initial deposit amount and a maintaining balance. It also features card-less ATM withdrawals, allows deposits and cash-outs from agent partners, and includes a Taglish (a mixture of Tagalog and English) and Cebuano version of the app.
Mr. Villanueva noted that despite these efforts, digital banks and other financial institutions still have a long way to go to make Filipinos appreciate the value of formal financial services.
“While there has been an increase in digital transactions or utilization of the platform globally because of the pandemic here in the Philippines, most are actually done as a pass-through channel, or a means to… send and receive money. We still haven’t been fully successful in keeping their money within the digital finance system,” said Mr. Villanueva.
PERKS OF A NO-BRANCH MODEL For digital banks, not having to maintain a physical branch means less operating costs, which they believe is a big advantage over traditional lenders.
“We can take this perspective that given the very nature of it being digital, the use of a digital platform from end to end of its business model will afford it a wider coverage of its market at a lesser cost,” BSP Deputy Governor Chuchi G. Fonacier said in a Viber message.
UNObank co-founder and CEO Manish Bhai hopes this very nature of a digital bank will be key not just for their business to flourish, but also for consumers to benefit from their services as well.
“By leveraging a branch-less structure and latest agile technology, which directly leads to significant savings in operational costs, it will also be able to make loans and lower much more competitive rates than traditional lenders,” Mr. Bhai said in an e-mail.
Mr. Bhai added that they were particularly interested in the Philippines considering organized credit penetration in the country is significantly smaller than other markets in Southeast Asia. Despite this gap, he said, the bank sees opportunity for digital banking in the country given its relatively high mobile penetration rate.
Another advantage of digital banks over traditional banks is the former’s capacity to offer higher interest rates compared with the latter. Since starting their all-online retail banking services in the country in 2019, CIMB Philippines and ING Bank have been luring clients through all-online applications and higher interest rates. East West Banking Corp. and RCBC, through their respective apps Komo and DiskarTech, are also positioning themselves with similar digital banking services.
CIMB Philippines’ Mr. Manoharan believes the bank will be able to do so in the long run beyond just having to entice people into signing up.
“We will always pay a much more attractive savings rate vis a vis traditional banks. Why? Because our cost-structure enables us to do that. For traditional banks, their [employee-to-customer] ratio is 1 to 500. For digital banks like us, our ratio is 1 to 30,000,” he said, noting they have about 200 employees.
Maybank Philippines, Inc., a commercial bank, also acknowledges how digital banks, in their own way, help bring financial inclusion by focusing on credit disbursement.
“The emergence of digital lenders and other fintech companies would likely promote accessibility to loans and other financial products and services. We’ve seen that those new lenders are moving into key areas where they can compete and position themselves, especially in micro-financing,” Maybank said in an e-mail.
Maybank has partnered with payment providers and key merchants for their prepaid top up facilities such as Autosweep RFID, EasyTrip, Meralco (Manila Electric Co.) prepaid load, PLDT, Inc. and Cignal TV, Inc.
“Our present digital roadmap already covers products and services that a digital bank can offer at this time, but we support efforts for digital bank licensing. The bank has been fortunate that it has invested early and heavily on digital banking, which has allowed us to gain significant traction in our online products,” Maybank said.
DIGITAL BANKS AS MAINSTREAM? The full impact of these digital-only banks on the economy may take a while, but their success in the first few years of their operations would determine future applications.
The OFBank, which was granted the first digital bank license in late March, started operations in June 2020 using its existing license to operate as a thrift bank.
VECTORJUICE-FREEPIK
Meanwhile, TONIK Digital Bank officially launched last March following its pilot launch in November 2020 for select and limited customer reach. Previously, it had a rural bank license that was granted by the BSP in September last year.
UNObank became the third bank granted a digital license and is the first to receive a license outright to operate as a digital bank. It was granted the license in June and is targeting to set up shop by the first quarter of 2022.
The UnionBank subsidiary Union Digital Bank is expected to start its operation formally by the second quarter of 2022, UnionBank Executive Vice-President and Chief Mass Market and Financial Inclusion Executive Manuel G. Santiago, Jr. said at an online forum.
“The digital bank will be a vehicle for financial inclusion. It will run on the latest and best technologies available so that UnionDigital can reach a wider segment of the population, particularly unbanked and underbanked Filipinos, in a cost-effective way through its digital proposition,” parent lender UnionBank said in an e-mail.
For their part, GOtyme President and CEO Elmer “Jojo” M. Malolos said they will tap on the Gokongwei Group’s retail footprint where they can set up digital kiosks to allow people to have the option to register there apart from their app. He said the digital bank will likely start its operation in the second quarter of next year.
“GOtyme will leverage the Gokongwei Group’s extensive ecosystem that is highly integrated into the daily lives of Filipinos — where they already shop, eat and spend family time. This distribution strategy will assist in the democratization of financial services, addressing the needs of all Filipinos regardless of age, income, or geography,” Mr. Malolos said in a statement.
Prior to the BSP’s announcement of its deadline and limit for digital bank license applications, Philippine National Bank (PNB) President and CEO Jose Arnulfo A. Veloso said they are prioritizing completing the application requirements to secure a digital bank license within the year.
“Of course, the digital bank will be innovating financial solutions aimed at new, younger, more sophisticated and demanding markets. But we also intend to offer innovations to our existing clients to help make their banking experience more convenient and safe, especially in the ‘New Normal,’” he said in an e-mail.
PNB Senior Vice-President and Special Assistant to the President on Digital Bank Initiative Paolo Eugenio J. Baltao said that with PNB having the widest global footprint among local banks, they plan to focus on retail lending that would benefit local borrowers as well as overseas Filipinos and their remittance recipients in the country.
“Likewise, we would like to offer online investment solutions. The product and service lineup is still in the drawing board as we identify how we could best serve our clients and attract new ones,” he said.
Meanwhile, RCBC’s Mr. Villanueva said they are not yet looking to apply for a digital license in the near future.
“RCBC does not see the immediate need to apply for a digital bank license, as we have already been, and continue to provide our customers, quality banking services using our innovative, interoperable, and inclusive digital platforms,” Mr. Villanueva said.
Back in June, RCBC President and CEO Eugene S. Acevedo stated at an online briefing their plans for applying for a new license, albeit he did not provide a timetable. He added the bank is currently incubating “at least one” of their business including DiskarTech that they can potentially spin off in the future as a separate digital bank.
Incumbent players that are offering all-online digital services believe there is still much growth for the sector despite more entrants coming in.
“To capture the underbanked and underserved Filipino market, financial services should be ‘non-intimidating, simplified, secure, and innovation-driven,’” Tonik Digital Bank President Maria Lourdes Jocelyn S. Pineda said in a BusinessWorld Insights session back in July, adding that not all of the population are comfortable with using technology to do banking transactions.
CIMB Philippines’ Mr. Manoharan believe the new players will awaken the incumbents to raise their game and push them to the next level.
“We are not even close to anywhere even addressing the early adopters [as] they are still coming in big waves. We have not yet reached that part where we are now searching for the 50 and above. Those below 35 are still coming in very active and in high volume,” he said.
For RCBC’s Mr. Villanueva, current conditions point to the ever-increasing importance of technology as more customers start using or increase their usage of online banking services.
“[W]e believe technology can help promote synergy among banks, regulators, and financial industry partners. More automation is necessary to lessen or manage human contact, which is a banking setup the industry must be able to implement moving forward, if we are to make our business pandemic-proof,” he said.
ALLDAY Marts, Inc. said it recently launched a “dark store” concept, which acts as “last-mile fulfillment centers” for its e-commerce website.
In a statement on Monday, the company described dark stores as “dedicated distribution outlets that cater exclusively to online shoppers served by last-mile delivery providers (including AllValue’s very own, GetAll), effectively expanding the geographic coverage of AllDay Supermarket while keeping operating cost to a minimum.”
The supermarket chain currently has 33 physical stores in 25 cities and municipalities across the country. These stores already offer services such as self-checkout kiosks and personal shopper services.
“AllDay has always been proud to hold itself to a global standard in our thrust to compete in the local supermarket landscape,” said Manuel B. Villar, Jr., chairman of AllDay’s parent company AllValue Holdings Corp.
AllDay aims to establish more dark store locations in the second half of this year, it said in its preliminary initial public offering (IPO) prospectus.
Villar-led AllDay filed a registration statement for a P6-billion IPO this month, which consists of 6,857,143,000 common shares offered to the public for 80 centavos each with an overallotment option of up to 685,714,000 shares.
It aims to list on the main board of the Philippine Stock Exchange by November under the ticker symbol, “ALLDY.”
The company said it plans to use the majority of the proceeds to repay a P4.1-billion debt incurred to fund its past and ongoing store network expansion. The balance will be allocated for capital expenditures and to partially finance another round of store expansions.
AllDay aims to grow its 33-store network to 45 by next year and to 100 by the end of 2026. — Keren Concepcion G. Valmonte
SM DEVELOPMENT Corp. recently launched the ICE Tower Residential Offices, located at the Mall of Asia complex, Pasay City. — COMPANY HANDOUT
SM DEVELOPMENT Corp. (SMDC) is developing a new residential-office project with a “live at work” concept, which it hopes will attract young entrepreneurs.
SMDC’s ICE Tower Residential Offices (RESO) will rise on a 3,859-square meter (sq.m.) property located at the Mall of Asia (MOA) complex, Pasay City. The 14-storey building will have 844 units, composed of studios, one-bedroom, and two-bedroom spaces.
Now on its pre-selling phase, ICE Tower RESO is expected to be completed by end-2024.
“What differentiates this development is you actually have those amenities that kind of compliment, or as a business owner, [have] things that you actually need to run your business,” SMDC Senior Assistant Vice-President for Marketing Chad D. Africa said during the project’s online launch last week.
Units at ICE Tower RESO may be used as a residential space or as an office and owners are allowed to combine units to suit their needs.
“When you put all these people into one environment, they tend to synchronize and synergize, and create something that’s much larger than just a small idea that’s struggling to get off the ground,” Danny Juric, director of Australia-based Plus Architecture, said.
ICE Tower RESO will feature a business hub with work spaces, meeting rooms, boardrooms and a function hall. It will also have a fiber-optic connection and a 100% backup power system.
It will also have a fitness hub, a swimming pool, and a sky lounge on the roof deck with a view of Manila Bay and the MOA complex.
Since the project is designed to be both a residential and office space, it is seen as a sustainable property investment.
“The innovative concept itself has not been implemented in that area, so you actually widen your market base. It gives a lot of confidence to investors that not only will you be attracting the residential market, but also the office market,” said Roy Amado Golez, director of research and consultancy at Leechiu Property Consultants.
SMDC said all of its future projects will be suitable for a work-from-home environment. The company will have to see if investors would want more residential-office development.
“What we’re trying to do is we’re trying to understand if this is something that will really connect with the market and if this is something that people will really want,” Mr. Africa said. — Keren Concepcion G. Valmonte
