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External review finds deeper rot in World Bank ‘Doing Business’ rankings

REUTERS

WASHINGTON – Weeks before the World Bank scrapped its flagship Doing Business rankings following a damning independent probe, a group of external advisers recommended an overhaul of the rankings to limit countries’ efforts to “manipulate their scores.”

An 84-page review, written by senior academics and economists, was published on the bank’s website on Monday, about three weeks after it was submitted to World Bank chief economist Carmen Reinhart.

The World Bank on Thursday said it would cancel the “Doing Business” series on country business climates, citing internal audits and a separate independent probe by law firm WilmerHale that found senior World Bank leaders, including Kristalina Georgieva, who now heads the International Monetary Fund, pressured staff to alter data to favor China during her time as World Bank CEO.

Georgieva has strongly denied the findings.

World Bank President David Malpass, in his first public comments since the data rigging controversy broke last Thursday, told CNBC that the WilmerHale report “speaks for itself” and that the bank will explore new approaches to helping countries improve their business climates.

The review published on Monday was written by a group assembled by the World Bank in December 2020, after a series of internal audits revealed data irregularities in reports on China, Saudi Arabia, the United Arab Emirates and Azerbaijan.

It calls for a series of remedial actions and reforms to address the “methodological integrity” of the Doing Business report, citing what it called “a pattern of government efforts to interfere” with scoring for the reports in past years.

“The World Bank needs an introspection. It has been advocating country reforms for better governance, transparency, and practices. Now it has to use the prescription for its own reform,” said Mauricio Cardenas, the Columbia University professor and former Colombian finance minister who chaired the expert panel.

The experts faulted the Doing Business series for lack of transparency about the underlying data and questionnaires used to calculate the rankings, called for a firewall between the Doing Business team and other World Bank operations, and creation of a permanent, external review board.

“We have been informed of multiple cases where national governments have attempted to manipulate the DB scores by exerting pressure on individual contributors,” the report said, pointing to lawyers, accountants, or other professionals.

“World Bank staff mentioned several countries where they believe government officials have instructed contributors how to respond. And even in the absence of explicit government pressure, of course, the perceived threat of retaliation may influence the scores contributors report.”

SELLING ADVICE

The authors also called for the bank to stop selling consulting services to governments aimed at improving a country’s score, noting that they constituted an apparent conflict of interest.

“The World Bank should not simultaneously engage in scoring countries’ business environment while accepting payment to coach countries on how to improve their scores,” the authors wrote. The World Bank offered these “Reimbursible Advisory Services,” or RAS in a number of countries, including some of those implicated in the data manipulation investigation, such as China and Saudi Arabia, the review said.

In December 2020, the review said, one internal audit reported that bank management had pressured nine of 15 staff to manipulate data in the 2018 and 2020 issues of the Doing Business index, boosting Saudi Arabia to the “most reformed” spot globally and buoying the rankings of the United Arab Emirates and China, while dropping Azerbaijan from the top 10 rankings, the external advisers reported.

The separate WilmerHale report said that changes to Saudi Arabia’s data were “likely the result of efforts by a senior bank staff member to achieve a desired outcome and reward Saudi Arabia for the important role it played in the Bank community, including its significant and ongoing RAS projects.”

Justin Sandefur, a senior fellow at the Center for Global Development in Washington and another member of the expert panel that produced Monday’s report, said that it showed “a governance problem” at the World Bank and he had not seen any assurances that similar problems would not continue with other data sets. — Reuters

TWG to make recommendations for localized ‘Doing Business’ report

PHILIPPINE STAR/ MIGUEL DE GUZMAN

By Jenina P. Ibañez, Reporter 

A TECHNICAL working group led by the Anti-Red Tape Authority (ARTA) will make recommendations on a localized Ease of Doing Business report in November.

The World Bank group last week announced that it would halt its flagship global Doing Business report after irregularities regarding data changes in the 2018 and 2020 versions, prompting ARTA to announce that it would look into doing a local index.

The Work Bank report assessed countries’ competitiveness by measuring regulations that enhance and constrain business activity. Countries with fewer regulations will have a higher ranking on the index, boosting investor attractiveness.

The Philippines rose to 95th place from 124th among 190 economies in the 2020 report after improving its overall score to 62.8 points from 60.9 points, although it was seventh among 10 Southeast Asian nations.

ARTA Director-General Jeremiah B. Belgica after a meeting with the interagency Anti-Red Tape Advisory Council on Monday said that the council will form a group that will discuss the localized report.

“The resolution was to create a technical working group that would come up with a recommendation on how we could localize, jumping from what we have learned through the World Bank surveys,” he said in a virtual interview.

“We could get everything that we were able to learn from those surveys and actualizing it and contextualizing it for the Philippine setting.”

ARTA on Saturday said the localized report would be applied to cities and municipalities “to nurture healthy competition and recognize good initiatives of local government units.”

Reforms done in response to the global World Bank report will be continued, Mr. Belgica said.

The localized report will be tied up with ARTA’s report card survey guidelines, which measures red tape among all government agencies. The working group will also invite the local World Bank office to assist its efforts.

ARTA had previously asked the World Bank to review its methodology, noting that survey respondents in the Philippines are not necessarily familiar with government transactions assessed in the report and that it focused only on Quezon City and select processes.

“There were some issues that kept cropping up — hindi tugma case studies nila sa actual na ginagawa natin sa Pilipinas,” Mr. Belgica said.

The advisory council includes the Trade, Information and Communications Technology, Finance, and local government departments.

ARTA on Monday also announced the rollout of the first phase of its online regulatory management and government service databases systems, or the Anti-Red Tape Electronic Management Information System (ARTEMIS).

It also launched the first phase of the Philippine Business Regulations Information System (PBRIS) that provides information on government regulations.

SCG posts steady growth in Q2 and H1 2021 operating results

Polymer Packaging

Quick company response to crisis and opportunities from global market spur growth

Higher sales volumes, global economic recovery driving up chemical product prices, and efficient product distribution at home and abroad helped push up SCG profit for Q2 2021 by 15 percent over the previous quarter. SCG introduced “Bubble & Seal” measures to combat the Delta variant of COVID-19, maintained strict safety measures for employees and production facilities, and prepared hospital accommodations and home isolation guidelines for employees to mitigate the burden on public health. SCG aims to achieve long-term growth by adapting to market changes using digital technologies and online platforms, capturing home renovation trends, developing innovative high-quality recycled plastic resins, entering the circular economy business, and expanding its packaging business.

Mr. Roongrote Rangsiyupash, President and CEO of SCG

Roongrote Rangsiyopash, president and CEO of SCG, discloses that”The company’s unreviewed operating results for Q22021 registered revenue from sales of Php205,185 million (US$4,259million), an increase of 39 percent YoY, mainly from higher chemicals selling prices in line with higher oil prices, and an increase of 9 percent QoQ from contribution from all businesses and capacity addition, particularly in the chemicals business, which recorded higher product prices as well as sustainably high polyolefin sales volume despite freight tightness situation. The profit for the period reached Pph 26,327 million (US$546million), an increase of 83 percent YoY, largely attributable to improved Chemicals product spreads and equity income. Increase in earnings rose by 15 percent QoQ, attributed to higher chemicals spreads.”

SCG’s revenue from sales for the first half of 2021 rose 27 percent YoY to Php400,095million (US$8,297million) on the back of higher Chemicals selling prices. Profit for the period increased96 percent YoY to Php48,612 million (US$1,040million)from improved chemicals product spreads and equity income.

SCG’s revenue from sales of High-Value Added Products & Services (HVA) for H12021 reached Php135,954million(US$2,819million) or 34 percent of total revenue from sales. New products development (NPD) and service solutions such as Solar Energy Solution and Smart and Functional Solution made up 15 percentand5 percent of total revenue from sales, respectively.

SCG’s revenue from operations outside of Thailand, together with export sales from Thailand for H12021,registeredPhp175,727million (US$ 3,644 Million). This constituted 44 percent of total revenue from sales, an increase of 30 percent YoY.


SCG in ASEAN (ex-Thailand)

For SCG’s operation in ASEAN, excluding Thailand, Q2 2021 revenue from sales recorded a 48 percent increase YoY amounting to US$1,125 million, 26 percent of SCG’s total revenue from sales. This includes sales from both local operations in each ASEAN market and imports from the Thai operations.

As of June 30, 2021, SCG’s total assets amounted to US$25,337million while total assets in ASEAN (ex-Thailand) were valued at US$9,902million, 39 percent of SCG’s total consolidated assets.

Based on the Q22021 report, SCG’s total assets in the Philippines amounted toPhp19,901 million (US$ 409million), an increase of 5 percent YoY mainly from the Cement Building Material business. The company reported Q22021 revenue from sales ofPhp4,548million (US$94million),a128 percent increase YoY mainly from operations in Packaging and CBM (Ceramics), and huge export sales from Thailand and regional to the Philippines.

With trends signaling rising economic activities, SCG Marketing Philippines Inc. is grasping the opportunity by embracing a hybrid workplace, scheduling improvements, and exploring new solutions. The company plans to diversify and increase its product portfolio to address the recent upturn in home improvement as spending on home renovations and repairs is expected to stay strong in the coming quarters.

SCG’s high quality PCR

Operations at United Pulp and Paper Co., Inc. (UPPC) remained in full swing in Q22021 but with challenges from rising raw materials costs due to supply chain disruptions. Amid quarantine restrictions, UPPC continues to support manufacturers of essential goods from the F&B, personal care, pharmaceuticals, and other industries to ensure seamless supplies.

Mariwasa, a leading tiles manufacturer and brand in the building industry, marked its 55thanniversaryin June with the “Moving Forward” theme, driven by its commitment as the total home building solutions provider. Mariwasa continues to expand its product line to improve the manufacturing process and further meet growing demand in the industry.

Roongrote added, “The global COVID-19 situation is highly uncertain, particularly in ASEAN, where the Delta variant has caused a surge in infections. Many countries have reinstated stringent measures aimed at curbing the spread of the virus.SCG has accordingly stepped up its health and safety protocols to serve all stakeholders and maintain business continuity. These measures include moving from the “Egg Yolk, Egg White” measure, which isolates employees on the production line from contact with general employees, to the”Bubble & Seal” measure in plants at home and abroad. “Bubble & Seal” involves regularly and proactively doing COVID-19 screening, sealing off a risky area, and providing accommodation within the plant. In addition to providing hospitalization to infected employees to ensure a quick and safe treatment, SCG gives affected personnel guidelines and suggestions for effective home isolation.

Additionally, SCG has adapted its business strategies to drive sales to markets less impacted by the COVID-19 pandemic as well as increase its reliance on e-commerce. SCG has also expanded into the automation industry to provide customers with automation solutions to help boost productivity and propel the Thai industry into Smart Factory 4.0. These measures boostedSCG’s operating performance in Q2 and H1 2021 despite the regional economic slump.

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US to relax travel restrictions for vaccinated foreign air travelers

An American Airlines passenger jet glides in under the moon as it lands at LaGuardia airport in New York, Aug. 28, 2012. — REUTERS

WASHINGTON – The United States will reopen in November to air travelers from 33 countries including China, India, Brazil and most of Europe who are fully vaccinated against COVID-19, the White House said on Monday, easing tough pandemic-related restrictions that started early last year.

The decision, announced by White House coronavirus response coordinator Jeff Zients, marked an abrupt shift for President Joe Biden’s administration, which said last week it was not the right time to lift any restrictions amid rising COVID-19 cases.

The United States had lagged many other countries in lifting such restrictions, and allies welcomed the move. The U.S. restrictions have barred travelers from most of the world including tens of thousands of foreign nationals with relatives or business links in the United States.

The United States will admit fully vaccinated air travelers from the 26 so-called Schengen countries in Europe including France, Germany, Italy, Spain, Switzerland and Greece, as well as Britain, Ireland, China, India, South Africa, Iran and Brazil. The unprecedented U.S. restrictions have barred non-U.S. citizens who were in those countries within the past 14 days.

Restrictions on non-U.S. citizens were first imposed on air travelers from China in January 2020 by then-President Donald Trump and then extended to dozens of other countries, without any clear metrics for how and when to lift them.

Zients did not give a precise start date for the new rules beyond saying “early November,” and many details of the new policy are still being decided.

Separately on Monday, the United States extended its pandemic-related restrictions at land borders with Canada and Mexico that bar nonessential travel such as tourism through Oct. 21. It gave no indication if it would apply the new vaccine rules to those land border crossings.

The United States has allowed foreign air travelers from more than 150 countries throughout the pandemic, a policy that critics said made little sense because some countries with high COVID-19 rates were not on the restricted list, while some on the list had the pandemic more under control.

Monday’s action means COVID-19 vaccine requirements will now apply to nearly all foreign nationals flying to the United States – including those not subject to the prior restrictions.

Americans traveling from abroad who are not vaccinated will face tougher rules than vaccinated citizens, including needing to show proof of a negative COVID-19 test within a day of travel and proof of purchasing a viral test to be taken after arrival.

‘BASING IT ON SCIENCE’

Airlines for America, an industry trade group, said that through late August, international air travel was down 43% from pre-pandemic levels.

The announcement comes as President Joe Biden makes his first U.N. General Assembly speech on Tuesday, and hosts leaders from Britain, India, Japan and Australia this week.

White House spokeswoman Jen Psaki told reporters on Monday the policy was not timed for diplomacy. “If we were going to make things much easier for ourselves, we would have done it prior to June, when the president had his first foreign trip, or earlier this summer. This is when the process concluded,” she said. “We’re basing it on science.”

U.S. COVID-19 infections and deaths have skyrocketed since June as the Delta variant spreads, particularly among the unvaccinated. Nearly 29,000 new U.S. cases were reported on Sunday.

British Airways Chief Executive Sean Doyle said the U.S. announcement “marks a historic moment and one which will provide a huge boost to Global Britain as it emerges from this pandemic.”

Shares in U.S. airlines were little changed, while some European carriers gained. British Airways parent IAG SA rose 11.2%, while Air France-KLM and Deutsche Lufthansa AG closed up more than 5%.

British Prime Minister Boris Johnson called the announcement “a fantastic boost for business and trade, and great that family and friends on both sides of the pond can be reunited once again.” Germany’s U.S. ambassador, Emily Haber, said on Twitter it was “hugely important to promote people-to-people contacts and transatlantic business.”

It will have less impact travel from China, which requires its residents to quarantine for at least two weeks on return home. International flights from China are capped and running at around 2% of 2019 levels, a situation expected to last until the second half of next year.

CDC HAS FINAL WORD ON VACCINES ACCEPTED

Foreign nationals will need to present proof of vaccination before travel and will not be required to quarantine on arrival.

The White House said the final decision on what vaccines would be accepted is up to the U.S. Centers for Disease Control and Prevention (CDC).

The CDC on Monday pointed to its prior guidance when asked what vaccines it will accept.

“The CDC considers someone fully vaccinated with any FDA-authorized or approved vaccines and any vaccines that (the World Health Organization) has authorized,” said spokesperson Kristen Nordlund. That list could change pending additions by either agency, she said.

Exceptions include children not yet eligible for shots. Airlines heavily lobbied the White House to lift the restrictions, and it has been working since August on the new plan.

The U.S. Travel Association trade group previously estimated that the U.S. restrictions, if they ran to the end of the year, would cost the American economy $325 billion.

Zients said last Wednesday that given the rise of the Delta variant, it was not the right time to lift travel restrictions. Asked on Monday what had changed since then, Zients cited rising global vaccinations, adding: “The new system allows us to implement strict protocols to prevent the spread of COVID-19.”

Zients said the new system would include collecting contact tracing data from passengers traveling into the United States to enable the CDC to contact travelers exposed to COVID-19.

The administration has been considering imposing vaccine requirements for foreign nationals since May, officials said, but the White House only decided on Friday to move forward. — Reuters

Senate ratifies bicam on retail trade

PHILIPPINE STAR/ MICHAEL VARCAS

THE SENATE on Monday ratified the Bicameral Conference Committee report on a measure that seeks to lower the minimum investment hurdle for foreign retailers to P25 million.

Senators approved the Bicameral Conference Committee report on the conflicting provisions of Senate Bill No. 1840 and House Bill No. 59, which amends the 20-year-old Retail Trade Liberalization Act. This is one of the three priority economic measures being pushed by the government and foreign business groups.

The House of Representatives has yet to ratify the bicameral report as of Monday. Once approved, it will be sent to Malacañang for President Rodrigo R. Duterte’s signature.

Under the reconciled version, the minimum paid-up capital requirement for foreign retailers was set at P25 million or around $500,000, with a per store requirement of P10 million.  This is lower than existing law’s minimum paid-up requirement of $2.5 million or P125 million for foreign retailers.

The House version originally proposed lowering the minimum paid-up capital requirement to P10 million, while Senate version had approved a P50-million requirement.

Senator Aquilino Martin de la Llana Pimentel III, a primary sponsor, said these amendments could hopefully attract more investments and create more jobs.

Mr. Pimentel said the lawmakers introduced changes in the existing law that would allow Philippine corporations with not more than 40% foreign equity to engage in retail trade, even below the minimum threshold amount.

Among the retained provisions from the Senate version were the preferential use of Filipino labor and foreign retailers’ use of local products in their stock inventory, the senator said.

Penal provisions, imprisonment and fines were also amended, making them more “reasonable,” said Mr. Pimentel, without providing details.

“We are not after charging persons criminally, we are after their investments and providing jobs in the Philippines,” he added.

“The passage of the amendments of this 21-year-old law comes at the most opportune time when the country needs all the support to help our economy recover because of the pandemic,” Minority Leader Franklin M. Drilon told the upper chamber. “I am confident that this key trade reform bill will create more jobs for our people, improve our competitiveness and ease our FDI restrictiveness,” he added.

The country is currently ranked as the third-most restrictive out of the 83 economies on the foreign direct investment regulatory restrictiveness index, according to the Organisation for Economic Cooperation and Development. — A.N.O.Tan

Duterte OK’s pilot test of in-person classes

PHILIPPINE STAR/ MICHAEL VARCAS
The Philippines is one of 17 countries that have kept schools fully closed since the pandemic began, according to a report released by the United Nations children’s agency. — PHILIPPINE STAR/ MICHAEL VARCAS

By Kyle Aristophere T. Atienza, Reporter

PHILIPPINE President Rodrigo R. Duterte has approved a pilot test of limited in-person classes in areas with a low number of coronavirus disease 2019 (COVID-19) cases.

Education Secretary Leonor M. Briones said in a televised briefing that only 100 public schools and 20 private institutions will participate in the pilot test.

Ms. Briones said the pilot test will be done in low-risk areas based on the Department of Health’s (DoH) criteria and which have passed the safety assessment of the Education department.

Face-to-face learning will be limited to three to four hours and will require written consent from parents of the students, she added.

The pilot test will be conducted with a combination of face-to-face classes in school and distance learning for two months. In-person classes will be conducted half-day every other week.

Class size will be limited to 12 students in kindergarten, 16 in grades 1-3, and 20 at senior high school level, the Education department said.

Ms. Briones emphasized that “very strict” health standards will be observed during the pilot test which will begin as soon as possible.

“If there are changes in the risk assessment, then we will stop it,” she said.

The Philippines is one of 17 countries that have kept schools fully closed since the pandemic began, according to a report released by the United Nations children’s agency. UNICEF has pushed for a phased reopening of schools, beginning in low-risk areas, noting that the right to learn of over 27 million Filipino students has been affected.

Last year, Mr. Duterte turned down a proposal to hold the pilot test as the Philippines fought a coronavirus surge that almost paralyzed its healthcare system.

In June, the President also rejected a similar proposal as the country had yet to vaccinate most of its adult population.

“I cannot gamble on the health of children,” Mr. Duterte said three months ago.

HEALTH CONCERNS
The reopening of schools comes as the Philippines is battling a sustained surge in COVID-19 cases. The Health department reported 18,937 new COVID-19 cases on Monday, bringing the active cases to 176,850 nationwide.

“The pilot was approved for ‘low-risk areas’ to be determined by DoH but just in this aspect, how will DoH ascertain which areas are truly low-risk if testing is still insufficient in capacity and inequitable in distribution?” said Joshua L. San Pedro, convenor of the Coalition for People’s Right to Health, in a Facebook message.

Citing DoH data, Mr. San Pedro said more than 30 provinces in the country still do not have testing laboratories, while majority of the 280 accredited laboratories are in urban areas or city centers.

“The question is are they low-risk because they truly have low prevalence of COVID-19, or simply because there is a low number of cases being detected?” the medical doctor asked.

Mr. San Pedro said the government also needs to boost its vaccination drive and prioritize education workers to prevent community transmission.

The Department of Education’s (DepEd) Ms. Briones said teachers participating in the pilot run would not be required to be fully vaccinated.

Last week, DepEd said about 40% of its teaching and non-teaching personnel have been inoculated against the coronavirus.

Mr. San Pedro said there must also be a mass hiring of school nurses and physicians to ensure the safety of students and school personnel. “This is much more important than relying merely on physical distancing and vaccination protocols.”

“First and foremost, there needs to be an increase in school health capacity and workforce in order to monitor and ensure health and safety protocols,” Mr. San Pedro said. “As it stands, school nurses are hired at the district level, instead of a school level.”

“With the pandemic still in community transmission, we cannot afford that these school health professionals are only present in the schools certain times a week.”

Mr. Duterte’s economic planners have said that the prolonged closure of schools could lead to about 11 trillion in productivity losses in the next four decades.

The President’s approval of the dry run is “a welcome development,” ACT Teachers Rep. France L. Castro said in a statement.

“The DepEd must now ensure that those schools where the pilot face-to-face classes would happen would have adequate facilities and health protocols in place,” Ms. Castro said.

PHL restaurants pin recovery hopes on ‘revenge dining’

PHILIPPINE STAR/ MICHAEL VARCAS
Workers are busy cleaning in preparation for the restaurant’s reopening in Marikina City. — PHILIPPINE STAR/ MICHAEL VARCAS

THE RESTAURANT industry is anticipating some recovery next year modeled after the resurgence seen in major global cities like New York and Hong Kong that reopened their economies, the Restaurant Owners of the Philippines (Resto PH) head said.

“There is hope for us when you look at the restaurant industry for the Philippines. There should be a resurgence, what we call ‘revenge dining’… that might happen next year,” Resto PH President Eric Teng said at a Philippine Chamber of Commerce and Industry forum on Friday.

The restaurant industries in some major cities are already experiencing growth higher than 100% of pre-pandemic levels, he said, adding that restaurants in key cities in China are also seeing a resurgence.

Since the start of the lockdowns declared to contain the coronavirus disease 2019 (COVID-19) last year, restaurants have seen drastically lower demand due to limited consumer mobility and ongoing restrictions on dine-in capacity.

Mr. Teng said that improved vaccination levels are encouraging, hoping that the rates would be enough to ease public health fears leading up to the holidays.

He said that there is a dearth of assistance in the form of relief packages or overt eviction moratoriums for businesses affected by lockdown restrictions.

“Tax breaks, tax holidays and other remedial packages that local, National Government can offer can go a long way in having us reinvest in our own businesses or in our industries,” he said. “It’s a shame if we cannot reinvigorate the restaurant industry again.”

Restaurants operating in areas under Alert Level 4 such as Metro Manila are allowed to run up to 10% indoor dine-in for fully vaccinated customers. Outdoor dining can operate up to 30% capacity.

Around 6.2 million individuals or 63% of the capital region’s eligible population has been fully vaccinated against COVID-19, Metro Manila Development Authority Chairman Benjamin de Castro Abalos, Jr. said on Friday.

The national rate is under 17%, the Johns Hopkins University COVID-19 tracker showed. The Philippines aims to inoculate 70% of its population by end-2021.

TOURISM RECOVERY
Meanwhile, the tourism sector will have to generate at least 50% of its P3.14 trillion income from domestic travel in 2019 to recover from the coronavirus pandemic, an industry group said.

“Our target now is at least half of that P3 trillion is more than enough for the tourism recovery in the Philippines,” Cesar R. Cruz, president of the Philippine Tour Operators Association (PHILTOA), said during Thursday’s hybrid press conference for the Philippine Travel Exchange 2021 held virtually and physically at the Subic Bay Freeport Zone.

Mr. Cruz said PHILTOA, which also includes members from the hotel, transport and other allied sectors, is “very optimistic” that the industry can get back on its feet by the end of 2022 given the local market’s eagerness to get out of their homes after more than a year in lockdown.

Their promotional strategy now, he said, is initially focused on land trips as domestic air travel faces more restrictions and documentary requirements.

For international visitors, Tourism Secretary Bernadette Romulo-Puyat said they are closely watching the “Phuket model or sandbox model” in Thailand, which has reopened to fully vaccinated foreign guests without a quarantine requirement.

Ms. Puyat stressed that a key factor to border reopening is having the entire tourism workforce fully vaccinated.

She cited that popular tourist destination Boracay already has a 73% vaccination rate. Other island destinations such as Cebu, Bohol, Palawan, and Siargao are also being prioritized.

“Hopefully we can vaccinate everyone (in the tourism establishments) at least before the end of the year, then we can accept vaccinated foreign tourists, and hopefully without quarantine days,” Ms. Puyat said.

Maria Anthonette Velasco-Allones, chief operating officer of the Tourism Promotions Board that organized the Philippine Travel Exchange, said there was a lot of interest in the event’s business-to-business meetings for resumption of travel among the country’s major foreign markets such as South Korea, China, and Japan as well as Spain.

The tourism sector was on a steady growth from 2017 to 2019, contributing 11.7%-12.7% to the country’s economy, based on data from the Philippine Statistics Authority.

Foreign tourist expenditure in 2019, including those from non-resident Filipinos, reached P548.76 billion.    

In 2020, the Tourism Direct Gross Value Added dropped to P973.31 billion and the sector’s contribution to the economy declined to 5.4%. Domestic tourism expenditure decreased by 82.3%, while inbound visitor receipts went down by 78%.

In terms of employment, the industry had an estimated 5.71 million workers in 2019, which dropped to 4.68 million in 2020. — Jenina P. Ibañez and Marifi S. Jara

Excise tax collections from cigarettes reach P83 billion

BW FILE PHOTO

EXCISE TAX collections from cigarettes jumped by 31% to P83 billion in the first seven months, with more than half coming from Philip Morris Fortune Tobacco Co., Inc. (PMFTC), the Department of Finance (DoF) said on Monday.

In a statement, the DoF said data from the Bureau of Internal Revenue (BIR) showed PMFTC was the top cigarette manufacturer with P42.04 billion in excise tax payments from January to July. This was 7% higher than the P39.3-billion excise tax payments during the same period in 2020, when sales slumped due to the pandemic-induced lockdown.

The increase in excise taxes from tobacco products was attributed to higher tax rates and sales improvement, based on a report from Finance Assistant Secretary Ma. Teresa S. Habitan.

“People are still smoking despite the pandemic, hence the industry is still selling a higher volume of its products. PMFTC is still in the books of good taxpayers,” Ms. Habitan said in a separate Viber message on Monday.

She said the P5 increase in excise taxes slapped on each pack of cigarettes contributed P8.285 billion to overall collections, while improvement in sales of these so-called “sin” products pushed the total higher by P11.328 billion.

PMFTC’s tax payments increased even as its volume of tobacco removals — or the products released to market from tax-regulated storage — declined by 3.8% year on year.

Volume slipped to 841 million packs from 874 million.

Excise tax payments of PMFTC accounted for 50.65% of the BIR’s total tobacco excise tax collections in those seven months.

This was followed by the Japan Tobacco International (Philippines), Inc. (JTI), which saw its total excise tax payments surge by 73.2% to P38.8 billion as of July from P22.4 billion in the same period last year, thanks to a 56% rise in volume.

JTI remained the second-biggest taxpayer of cigarette excise taxes accounting for 46.7% of the total. Its volume of removals reached 777 million packs as of end-July, against the 498 million recorded in the same period last year.

Smaller cigarette manufacturers, including the Associated Anglo American Tobacco Corp. (AAATC) and Kenstand Philippines, Inc. (KPI), accounted for the remaining P2.13 billion excise tax collections in those seven months.

Excise taxes on cigarettes and other tobacco products have been raised three times since 2016 as the government sought to generate funds for the Universal Health Care (UHC) program and other priority areas. — Beatrice M. Laforga

Megaworld to develop P40-B Palawan township

SAN VICENTE, PALAWAN

MEGAWORLD Corp. will be spending P40 billion to develop an eco-tourism township in Palawan in the next 10 to 15 years, Andrew L. Tan’s listed property company said in a statement on Monday.

“As we grow our sustainable developments portfolio, this new township in the beautiful town of San Vicente in Palawan will showcase the best of sustainable tourism and green living,” said Kevin Andrew L. Tan, chief strategy officer of Megaworld.

Paragua Coastown will be located in a 462-hectare property that will feature the beaches along the San Vicente coastline, including Port Barton. The development’s name took inspiration from Palawan’s old name, Paragua.

The first area to be developed in the project is around 83 hectares of land in Kemdeng, which has its own beaches.

“More than just sustainable tourism, our vision for this expansive Palawan property is to provide an opportunity to those who want the island life to live and even raise their families here,” Mr. Tan said. 

“Aside from the preserved natural surroundings of the beach, mountains and cliffs of San Vicente, we will also provide the facilities and amenities for holistic wellness for our future residents,” he added. 

San Vicente town is said to have the longest white-sand beach in the country and the second-longest beach in Southeast Asia. Its Long Beach spans 15 kilometers of coastline, which is said to be three times longer than Boracay’s White Beach. 

Paragua Coastown will have hotels and resorts, health and wellness sanctuaries, a cultural center, educational institutions, a boutique hotel district, and a shophouse district.

It will also have residential developments like private villas, serviced apartments, and themed residential villages.

The township will also feature a mangrove reserve park.

“While we transform it into a world-class development, we also commit to the preservation of the island’s biodiversity,” Mr. Tan said.

The township is located a few minutes away from the San Vicente Airport, which has regular flights to and from Manila and Clark.

Paragua Coastown will be Megaworld’s 27th township. The property developer has integrated urban townships, lifestyle communities, and estate projects located across Metro Manila, Cebu, Iloilo, Boracay, Batangas, Cavite, Davao, Laguna, Las Piñas City, Rizal, Negros Occidental, Pampanga, and Parañaque City.

Megaworld shares at the stock exchange declined by 1.71% or five centavos on Monday, closing at P2.87 apiece. — Keren Concepcion G. Valmonte

Converge stocks to be traded in US markets via ADRs

LISTED fiber internet provider Converge ICT Solutions, Inc. announced on Monday that it will soon be traded over the counter in the United States financial markets in the form of unsponsored American Depositary Receipts or ADRs.

Citing a filing with the US Securities and Exchange Commission, Converge told the local bourse on Monday that “the total American Depositary Shares (ADS) registered amounted to 50 million ADS for a maximum offer price of $5 each or a total aggregate offering price of $2.5 million,” or approximately P125 million.

“An ADR is a negotiable security that represents securities of a foreign company and allows that company’s shares to trade in the US financial markets,” Converge noted.

“ADRs represent an easy, liquid way for US investors to own foreign stocks. An unsponsored ADR is an ADR issued by a depositary bank without the involvement, participation, or consent of the foreign company it represents ownership in.”

Given that Converge has no participation in the issuance, it is expected to have no direct impact on the company, Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a phone message when sought for comment.

“We may watch out how these unsponsored ADRs will be received by the market. If there is strong demand seen, then it would reflect robust confidence towards the company,” Mr. Tantiangco added.

In an e-mailed statement, Dennis Anthony H. Uy, chief executive officer and co-founder of Converge, said: “We welcome this development as it opens up another channel for US investors to invest into Converge shares. This signals the confidence of an increasing number of investors in the continued strong growth of the company as we continue to reach the unserved and [underserved] areas in the Philippines.”

Converge aims to cover 55% of Philippine households by 2025. It recently launched its services in Cebu province and Davao City.

The company is also expanding the rollout of its fiber optic cables in the Cordillera Autonomous Region from Benguet province to Kalinga and Mountain Province.

According to its latest data, Converge has reached 32.5% coverage, or 8.3 million homes, in the Philippines as of end-June 2021.

Converge shares closed 0.14% lower at P34.45 apiece on Monday. — Arjay L. Balinbin

Vivamax earmarks P1B for online content 

Lockdowns lead to focus on change, more difficult shoots, and scripts that avoid mentioning the pandemic

VIVA Entertainment was set to produce about 40 films in 2020 when the pandemic hit and the lockdowns started. So, the entertainment company decided to put its P1-billion investment earmarked for films into content for streaming services.

“The pandemic caused the shift to digital to accelerate across all industries,” Vivamax Chief Operating Officer Ronan de Guzman told BusinessWorld in an e-mail. “For us, the service of entertainment had to continue amidst the pandemic and in spite of the challenges faced by our world.”

In Jan. 2021, Vivamax was launched after seven months of planning. It launched with 500 titles from its library and added then Tagalized Hollywood and Asian films.

Mr. De Guzman said that the P1-billion investment is allocated for exclusive content and that “the level of production spending will only increase every year as Vivamax grows.”

FOR THE PINOY AUDIENCE
From the 40 titles intended for theatrical release, Vivamax has increased its target to 60 titles for online streaming over the next 12 months.

In an online interview with BusinessWorld, Viva Entertainment executive Vincent del Rosario stressed that original content is important for growth.

“Another thing that we learned is dapat meron kang ino-offer na hindi available sa ibang platform. Through the originals, nakita namin na attraction siya sa mga subscribers (Another thing that we learned is you have to offer original content which is not available in other platforms. Through the originals, we found that it is an attraction to subscribers),” Mr. Del Rosario said. He added that new titles — whether a film, a series, a documentary, or a concert — are released weekly.

Mr. Del Rosario also noted that Vivamax recently saw an increase to 800,000 subscribers from 600,000 in its first six months. That made the platform the No.1 app on Google Play. “We were surprised, because obviously our targets weren’t high when we started.”

With the focus on creating content that would appeal to the masses, Mr. De Guzman noted that majority of their subscribers are between the ages of 18 to 35 with “a 50-50 male-female profile.”

“Our data estimates show 56% are watching local movies while 14% watch Hollywood and Korean movies,” he said. “Comedy, romance, and concerts are appreciated by our audience.”

When it comes to shooting and producing new films, Mr. Del Rosario admitted that filmmaking during a pandemic while observing health protocols is more difficult and expensive. The actors and crew observe a quarantine period prior to the lock-in shoot and must accomplish their shots prior to curfew.

Currently, Vivamax has 15 titles in production.

“We avoid time stamping our movies with the mention of the pandemic because we think that it needs a long shelf life,” Mr. Del Rosario said. “When we hear pitches from writers and directors, many are pandemic-related. So, we give it back to them. We ask them to avoid… putting a time reference on the film.”

Upcoming titles on the platform include Yam Laranas’ romantic film Paraluman, starring Rhen Escaño and Jao Mapa; Darryl Yap’s romcom Ang Manananggal na Nahahati ang Puso, starring Aubrey Caraan and Marco Gallo; and Mes De Guzman’s drama Ang Pamilyang Hindi Lumuluha, starring Sharon Cuneta.

FUTURE PROJECTS
Vivamax also plans to extend its presence in Visayas and Mindanao and work with regional artists and professionals.

“We have big plans to grow the content that emanates from Visayas and Mindanao,” Mr. Del Rosario said, adding that two projects were already greenlit and are pending for production.

“This opportunity makes us happy because we get to work with other producers,” he said.

“The streaming business will continue to grow exponentially in the next years. Entertainment viewing will be decided upon by the audience based on occasion not just location,” Mr. De Guzman said on the outlook for entertainment consumption.

“Free to air will continue to be relevant as an occasion in the home. Cinema will continue as part of a social occasion. Video streaming will be consumed on a more personal ‘alone time’ basis,” he added.

A Vivamax subscription is available on a variety of plans ranging from one week to six months long, with prices ranging from P49 to P3,699 The app is available on the Apple App Store, Google Play, and AppGallery. — Michelle Anne P. Soliman 

Digitalization may cut carbon emissions from construction

PHILIPPINE STAR/ MICHAEL VARCAS
The Philippines’ construction industry is expected to drive economic recovery this year with a growth rate of 8.3%. — PHILIPPINE STAR/ MICHAEL VARCAS

By Angelica Y. Yang, Reporter

CONSTRUCTION FIRMS must consider using modern technologies and digital systems if they want to lessen carbon emissions and become more productive, according to a Finnish-based startup that develops artificial intelligence (AI) technologies.

“Making more use of modern technologies would make the construction industry more profitable and have better productivity, which would also decrease the carbon dioxide emissions of the industry,” Aku Wilenius, chief executive officer and co-founder of Caidio, told BusinessWorld through a public relations firm last week.

For him, the use of automated, digital quality control systems can lessen concrete waste. He added that there was a need to adopt digital working methods, tools and technologies to overcome the sector’s “relatively low profitability and productivity.”

“Today, most of the tasks in construction are implemented very traditionally by using manual working methods,” Mr. Wilenius said.

Caidio develops AI solutions which optimize the quality and productivity of global concrete construction. The startup was also featured in the Asian Development Bank’s Ventures’ “Climactic,” a series dedicated to improving Asia’s climate-resilience.

A recent report from the United Nations Environment Programme showed that global material use will surge more than two-fold by 2060, with the construction sector comprising a third of this increase. It also noted that the production of concrete is expected to contribute to 12% of global greenhouse gas emissions in 2060.

One of the raw materials used in making concrete is cement, which Mr. Wilenius described as a significant contributor to carbon dioxide emissions because of how it is made.

“Producing cement involves heating limestone, sand, and clay at very high temperatures, which is a very energy-intensive process creating a lot of carbon dioxide. The more cement one uses in producing concrete, the more carbon dioxide the concrete contributes to our atmosphere, driving climate change,” he said.

Sought for comment on what is being done to reduce carbon emissions in concrete production, the Caidio executive said that firms around the world are actively studying the use of cement alternatives such as fly-ash, a fine powder derived from the burning of coal.

Other startups are looking at using “Carbon Cure,” a developing technology which injects and locks carbon into concrete, he added.

In its July 2021 outlook, the consultancy Market Research Southeast Asia firm estimated that the Philippines’ construction industry will spearhead economic recovery this year with a growth rate of 8.3% driven by infrastructure investments amounting to $24.4 billion.