Lenders from Asia and Europe are interested in establishing digital banks in the Philippines, central bank officials said.
“We continue to receive expressions of interest or EOI from a number of foreign banks abroad in establishing a digital banking business in the Philippines. We are awaiting submission of complete documentation on their obligations so that BSP can start the assessment process,” Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said in an online briefing.
“What we can say is at this point is that we received expressions of interest from banks in Europe and in the Asian region,” BSP Managing Director for Policy and Specialized Supervision Lyn I. Javier said.
The central bank last year released a framework differentiating digital banks from traditional lenders. It defined a digital bank as a lender that mainly caters clients’ financial needs via an online platform versus traditional banks’ brick-and-mortar model.
These all-online lenders are expected to help the BSP achieve its goal to bring 70% of the country’s adults into the formal financial system and have 50% of transactions, in terms of both value and volume, done digitally.
The BSP this month granted the country’s third digital bank license to UNOBANK, which is the local unit of Singapore-headquartered DigibankASIA Pte. Ltd. Tonik Digital Bank, Inc. (Philippines) has also converted its rural bank license granted in 2019 to an online banking permit, while Overseas Filipino Bank, a subsidiary of the state-owned Land Bank of the Philippines, was granted a license in April.
CIMB Bank Philippines, Inc. and ING Bank N.V. Manila also have all-online banking platforms that allow customers to transact via their apps.
“Meanwhile, we’re processing the application for conversion to a digital bank by an existing foreign bank operating in the country,” Mr. Diokno said on Friday.
The Monetary Board initially said it would only grant up to five licenses after the framework was released, but Mr. Diokno has said they could increase this limit if they see strong demand.
Mr. Diokno also noted that the country remains a favorable prospect for foreign banks looking to expand despite the impending exit of Citigroup, Inc. from its consumer banking business in the country.
“We do not see this as becoming a trend among foreign banks. Foreign banks in the country are increasingly focusing their attention on sustainability and mobilizing funds to economic sectors that will contribute to a net zero or low carbon economy,” the BSP chief said.
Among the 29 foreign banks currently operating in the country, Mr. Diokno said 12 are included in the 2020 list of Globally Systemically Important Banks.
However, these foreign banks remained stable and well-capitalized despite the pandemic, he said. The capital adequacy ratio of foreign banks in the country stood at 27.5% at end-March.
“Given their global market expertise, foreign banks can facilitate underwriting of green, social or sustainability bonds or finance infrastructure projects in key sectors such as renewable energy and low carbon transport,” Mr. Diokno said. — LWTN
THE PESO strengthened versus the greenback on Friday as central bank data showed more foreign funds entered than left the country in May.
The local unit closed at P48.481 per dollar on Friday, appreciating by 25.4 centavos from its P48.735 finish on Thursday, data from the Bankers Association of the Philippines showed.
Week on week, however, it weakened by 5.1 centavos from its P48.43 per dollar finish on June 18.
The peso opened Friday’s session at P48.65 versus the dollar. Its weakest showing was at P48.66, while its intraday best was at P48.45 against the greenback.
Dollars exchanged decreased to $985.2 million from $1.005 billion on Thursday.
The peso rose as data showed hot money yielded net inflow last month, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a text message.
Foreign portfolio investments posted a net inflow of $416.74 million in May, data released by the Bangko Sentral ng Pilipinas (BSP) on Friday showed. This is a turnaround from the $1.006-billion net outflow seen in the same month of 2020 as well as the net $373.95 million that left the country in April.
Meanwhile, a trader attributed the peso’s appreciation the central bank’s revised inflation forecasts.
“The peso appreciated after the BSP upwardly revised its inflation projections despite keeping policy rates unchanged,” the trader said in an email.
The BSP kept its key interest rate at a record low for a fifth straight meeting on Thursday, as it vowed to maintain an accommodative stance to support economic recovery.
The central bank left the rate on the overnight reverse repurchase facility at 2%, as widely expected by 14 of 16 analysts in a BusinessWorld poll last week.
Interest rates on the overnight deposit and lending facilities were also kept at 1.5% and 2.5%, respectively.
Meanwhile, the central bank raised the inflation outlook for this year to 4% from the previous forecast of 3.9%. This matches the upper end of the BSP’s 2-4% target.
If realized, this would be faster than the 2.6% logged in 2020.
On the other hand, inflation is expected to average 3% for 2022 and 2023. — LWTN
THE GOVERNMENT’S move to adjust tariffs on pork is effective as prices have stabilized in the past few weeks, an Agriculture department official said.
“The prevailing retail price of imported frozen pork in kasim and pigue, this is about P250 (per kilo), and for liempo, it is P290 (per kilo), and this has been stable for the past weeks,” Department of Agriculture (DA) Undersecretary William C. Medrano said at a Tariff Commission hearing on Friday.
Mr. Medrano was referring to the prevailing retail prices of imported pork found in selected Metro Manila-based markets from April 21 to June 18.
“We see that this is the result of the implementation of EO (Executive Order) 133 and EO 134, and it’s really helping in stabilizing the supply of pork and reducing the prices of pork in the market, and therefore it is contributing to minimizing inflation,” he added.
EO 133 raised the minimum access volume (MAV) allocation for pork imports to 254,210 metric tons (MT) from 54,210 MT previously. Meanwhile, EO 134 adjusted the tariff rates on pork imports for one year. Both orders were signed last month.
Under EO 134, in-quota pork imports will be charged 10% tariff in the first three months and out-quota pork imports at 20% in the first three months. The tariffs will increase to 15% for in-quota and 25% for out-quota pork imports in the succeeding months.
Once the prescribed one-year period under the order lapses, the tariff rates for in-quota and out-quota pork imports will return to 30% and 40%, respectively.
Samahang Industriya ng Agrikultura Chairman Rosendo O. So, who was present at the hearing, said increasing tariff rates on prime cuts of pork will help local hog raisers be competitive “against the highly depressed landed price of imported pork.”
“Lowering tariffs have not redounded to lower retail price of pork. Consumers have never benefited from any and all tariff reductions,” he said.
Meanwhile, Philippine Chamber of Food Manufacturers, Inc. Corporate Secretary Rita Imelda B. Palabyab noted there has been no improvement in local pork supply, which was affected by the African Swine Fever.
“Given that pork supply is still very much affected by ASF, it does not seem timely at this point to move for the increase in tariff when imported pork is very much needed to meet the requirements of our consumers as well as of our processors,” she said. — A.Y. Yang
THE Philippine Skills Framework launched Friday will be linking government, industry, and the academe for worker skills development.
The interagency initiative uses the SkillsFuture Singapore framework as a reference in developing skills for local industry and creating a common skills reference to match employers and workers.
“Employers will be able to identify the skills and competencies a potential employee must have to be able to effectively fulfill a job role,” Trade Secretary Ramon M. Lopez said at the virtual launch.
“Companies can also use the framework to design progressive human resource management and talent development plans for their employees.”
Job seekers can use the framework to identify the skills they will need for their career paths, while educational institutions can use it to revise curricula or design new courses.
The frameworks will indicate relevant industry information, skills requirements for jobs, career pathways, and training programs.
Representatives from various agencies including the Labor, Trade, Tourism, and Education departments signed the memorandum of understanding in which they committed to coordinate in developing and upskilling the country’s workforce.
The Philippine Skills Framework will prioritize the construction, creatives, food, health, outsourcing, logistics, manufacturing, and tourism sectors. The first framework under the supply chain and logistics sector was also launched Friday. — Jenina P. Ibañez
THE DEPARTMENT of Agriculture (DA) has launched a solar-powered cold storage facility in its training institute in Quezon City, which it said is the “first of its kind in the Philippines” and would benefit farmers in areas with unstable power supply.
DA Secretary William D. Dar, who attended the inauguration of the demo unit at the DA Agriculture Training Institute (ATI Building), said the facility can be easily installed in remote areas that do not have access to power.
Mr. Dar said in a statement that the department has partnered up with local firm Next Agri Corp. Philippines Inc. and Indian agri-tech cold-storage provider Ecozen Solutions Private Ltd. India for the project.
He said the project, which can be adopted anywhere in the country, will benefit off-grid rural areas that rely on agriculture, fisheries and related activities.
“Like other developing countries, the Philippine agriculture sector has been suffering from the high post-harvest losses. In high-value crops alone, the losses can easily reach 20% to 40%,” he said, noting farmers in remote islands are unable to preserve their produce as they do not have access to cold storage units.
This causes them to sell their crops at lower prices of below 50% of the actual production value to middlemen and loan sharks. — AY
STOCKS closed the week in the green after the Bangko Sentral ng Pilipinas (BSP) kept benchmark interest rates at record lows and as the country received more coronavirus disease 2019 (COVID-19) vaccines.
The bellwether Philippine Stock Exchange index (PSEi) climbed 64.51 points or 0.93% to close at 6,950.51 on Friday, while the all shares index gained 29.69 points or 0.7% to 4,229.58.
“[The] market [is] looking forward to reopening given greater vaccine supply and better growth prospects also assured by [the] continuation of BSP accommodative policy despite the Fed taper and still elevated local inflation,” First Metro Investment Corp. (FMIC) Head of Research Cristina S. Ulang said in a Viber message.
“Philippine shares made another climb once again towards the 7,000 level after the new infrastructure framework drafted by a partisan group of US senators roused the market and after the conclusion of the latest BSP meeting,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a separate Viber message on Friday.
The BSP kept its key interest rate at a record low for a fifth straight meeting on Thursday, as it vowed to maintain an accommodative stance to support economic recovery.
The central bank left the rate on the overnight reverse repurchase facility at 2%, as widely expected by 14 of 16 analysts in a BusinessWorld poll last week.
Interest rates on the overnight deposit and lending facilities were also kept at 1.5% and 2.5%, respectively.
Meanwhile, two million doses of the CoronaVac vaccine from Chinese pharmaceutical Sinovac Biotech Ltd. were delivered on Thursday.
On the other hand, in the United States, senators reached a bipartisan agreement for a $579-billion infrastructure package.
Back home, all sectoral indices posted gains on Friday. Services went up by 21.89 points or 1.4% to 1,583.55; mining and oil climbed by 95.44 points or 1.03% to 9,322.39; holding firms improved by 65.86 points 0.95% to end at 6,931.29; property rose by 21.98 points or 0.64% to 3,415.61; financials inched up by 3,415.61 or 0.6% to 1,500.37; and industrials improved by 37.34 points or 0.39% to close at 9,542.4.
Value turnover increased to P6.55 billion with 2.54 billion shares switching hands on Friday, from the P6.48 billion with 4.36 billion shares traded the previous day.
Decliners outnumbered advancers, 118 against 88, while 44 names closed unchanged.
Net foreign selling dropped to P228.39 million from the P912.22 million seen the previous day.
FMIC’s Ms. Ulang said she expects the PSEi to test 7,000 next week. — Keren Concepcion G. Valmonte
Bux, the payment gateway of UBX (the fintech arm of UnionBank of the Philippines, Inc.), now allows merchants to accept payments made through GrabPay, Grab’s in-app digital wallet.
“The whole idea is to allow entrepreneurs to receive payments and make transactions on a digital platform in the safety of their homes,” said Bux in an e-mail to BusinessWorld. “Usage of the platform was organically accelerated and made more valuable during the pandemic, because … there was an emphasis on no-contact transactions.”
Launched in December 2019, the e-commerce payment gateway was designed to support small- and medium-sized entrepreneurs, with options to scale.
“Anytime a consumer decides to enter into the informal economy as an occasional seller, Bux has the tools to enable that,” the company said. “Bux’s connection with UBX ventures can also enable higher-level entrepreneurial engagements… all the way to enterprise-level solutions.”
Apart from GrabPay, BUX’s other payment partners include UnionBank, 7-11, GCash, VISA, and ecPAY. Transaction fees are from P10+2% to P20 per transaction for e-wallets and over-the-counter transactions, respectively. A buy now, pay later option with a 1.5% transaction fee is also available.
“The market of UBX ventures is currently local, but all the tools that the UBX venture suite provides … are easily replicable in other economies once the relevant cross-border regulatory frameworks are set in place,” Bux told BusinessWorld. “But for now, even as the market is limited to the Philippine setting, we are constantly looking for new ways and developing features that will help our customers make the journey from users of the payment gateway to becoming enterprise accounts.” — Patricia B. Mirasol
It may be a "tough balancing act," but Meralco is focused on delivering uninterrupted service while practicing compassion for its customers.
Aligned with its mission to keep the lights on, Meralco is continuously innovating to better serve its customers.
How can Meralco balance the cry of its customers struggling to pay their electric bills with the energy industry requiring the cash flow to stay afloat and keep the electricity flowing?
“It’s a tough balancing act,” admits Meralco Chief Commercial Officer Ferdinand O. Geluz.
Meralco collects payments in behalf of the energy industry, and only gets 19% of the bill. 59% goes to the generation companies that own the power plants, 10% to the transmission company NGCP (National Grid Corporation of the Philippines), and 12% to government fees and subsidies.
More than half of proceeds from bill payments go to companies that generate electricity.
If Meralco is unable to collect, the energy industry’s viability is jeopardized and the investments needed to keep pace with the country’s development may not happen. As consumption increases, we need more power plants and a future-proof grid that can overcome the challenges of pandemics and calamities.
When the pandemic hit in March 2020, Meralco complied willingly with regulatory directives to subject Enhanced Community Quarantine (ECQ) bills to 4- or 6-month installment arrangements. These were computed based on the February 2020 consumption of customers, since Meralco was unable to deploy meter readers during this time. On its own, the energy provider gave its customers a 30-day grace period and further extended payment for ECQ and MECQ (Modified Enhanced Community Quarantine) bills by 3 months. As of April 2021, around 986,000 customers are still paying their quarantine bills in installments. This is on top of the 81,832 installment payment agreements that Meralco granted beyond the regulatory directives.
Meralco offered installment payment arrangements to extend a helping hand to residential customers.
When General Community Quarantine (GCQ) was declared in May 15 this year, Meralco resumed disconnections the following week. “But we understand the struggle to pay with many just getting back to work,” said Geluz, “that’s why we asked customers who could not settle their bills in full to get in touch and arrange an installment plan to be exempted from the standard disconnection process. In our Facebook page, we had a simple message: ‘Usap tayo.’ ”
How have customers reacted to Meralco’s invitation? Geluz replies, “With a signed agreement, the installment plan is automated in the billing system. Customers are generally relieved with the plan, and we got very good ratings from our survey.” Meralco is the first utility provider in the country to implement a Customer Experience Index, which rates a customer’s transaction on if their needs were met, if they felt valued, and how easy the overall process was. Meralco piloted the study just before the implementation of installment payment arrangements.
More channels for safety
Meralco also encourages its customers to get in touch safely and easily through the live chat function on Meralco’s Facebook page and website, which allows customers to talk to Meralco agents in real-time. They may also reach out by calling its 16211 hotline. The installment plan may be arranged in any of these digital channels.
If customers still feel the need to go to a Meralco Business Center (BC), they may schedule their visit via the Online Customer Appointment system. BCs are also made safer and more efficient through the Virtual Customer Assistant (VCA) service, which allows customers to speak to Meralco representatives who are working from home. Meralco also worked with Bayad Center to have VCAs available at selected Bayad Centers, with more VCAs continuously being rolled out.
The Virtual Customer Assistant (VCA) was one of the many projects launched by Meralco to enhance the overall customer experience.
Meralco BCs are open to accept payments, applications, and customer assistance. Business hours are from 7 A.M. to 5 P.M. from Mondays through Fridays and 7 A.M. to 12 P.M. on Saturdays for payment transactions only. Find your nearest Business Center here.
For large corporations and national government accounts, they may contact their Relationship Manager, call the 16210 business hotline, or email at corporatepartners@meralco.com.ph. For SMEs who have a query or require assistance, they may call the business hotline, email at biz@meralco.com.ph, or get in touch with their Biz Partner Manager.
Real-time payment validation
Apart from increasing its communication channels, Meralco is also piloting back-end solutions to improve the customer experience, which includes the Real-time Payment Validation App. Through this app, Meralco field personnel are able to validate the status of Disconnection Field Orders before proceeding with the actual disconnection of customers’ meters. This serves as an additional safeguard so that customers who pay their bills even right before disconnection commences are no longer inconvenienced by having their power cut off. To date, the company estimates to have averted around 1,300 salisi disconnections with the help of this new app, which is slated for full rollout in July.
Partnerships with vital government agencies to promote safety and economic growth
Expect a stronger effort from Meralco to lower electricity bills, prevent fires caused by and profiteering through illegal connections, and speed up the energization of homes, buildings, and other establishments.
In order to better serve its customers and the general public, Meralco signed a Memorandum of Understanding (MOU) with the Philippine National Police (PNP), Department of the Interior, and Local Government (DILG), and Bureau of Fire Protection (BFP).
Meralco, in partnership with PNP, DILG, and BFP, will promote safety and economic growth through initiatives that will help resolve a variety of public concerns.
Through the landmark agreement, the power distributor, together with its partner agencies, will tackle illegal connections and the issues caused by these, as well as improve the process of obtaining the Certificate of Final Electrical Inspection (CFEI) required for energization.
Despite these dark and tumultuous times, the country finds itself powering through steadily and optimistically—and Meralco is helping light that path, balancing continuity of service with compassion.
Chinese ride-hailing giant Didi Global Inc.’s New York initial public offering (IPO) to raise up to $4 billion has been fully covered on the first day of its bookbuild, according to four sources with direct knowledge of the matter.
The sources could not be named as the information is not yet public. Didi did not immediately respond to a request for comment.
The bookbuild is due to run until Tuesday and the price will be set after the US market closes that day, according to a term sheet seen by Reuters.
Didi is aiming for a valuation of over $60 billion in its New York listing, less than initially expected due to worries about its growth prospects and the potential for tighter regulation over Chinese tech firms, sources said.
The world’s largest mobility-technology platform plans to start trading on the New York Stock Exchange (NYSE) on Wednesday after a short roadshow for investors for its keenly awaited initial public offering (IPO).
It will be the biggest US share sale by a Chinese company since Alibaba raised $25 billion in 2014 and is likely to be the biggest US IPO this year.
Didi set a price range of between $13 and $14 per American Depositary Share (ADS), according to a regulatory filing on Thursday, and said it would offer 288 million such shares in the IPO. At the top of the range, the deal will raise $4.03 billion.
An overallotment option could see the company sell an extra 43.2 million shares to raise up to an extra $605 million.
Terms of the deal suggest a conservative approach for Didi that sources said had earlier been eyeing a valuation range of $80 billion and $100 billion. Its valuation exceeded $60 billion a year after its 2017 fundraising, sources have said.
The final price will be set after the close of the US market on Tuesday, according to a term sheet reviewed by Reuters.
The company has started presentations to investors, led by Didi’s vice president and head of capital markets David Xu, which will run until Tuesday.
The roadshow for a US listing of this size is shorter than usual, with most normally running for about 10 days.
Morgan Stanley Investment Management has indicated interest in subscribing for up to $750 million worth of stock in the IPO and Singapore’s Temasek for $500 million, according to Didi’s updated prospectus.
REGULATION CONCERN
The valuation target and raising size were set after initial meetings with potential investors over the past fortnight. The likelihood of Didi facing greater regulation from the Chinese government was raised as a topic, according to sources with direct knowledge of the matter.
The sources could not be named as the information was not yet public. Didi did not respond to a request for comment.
Reuters reported last week that China’s market regulator has begun an antitrust probe into Didi, citing sources with knowledge of the matter.
The State Administration for Market Regulation (SAMR) is investigating whether Didi used any competitive practices that squeezed out smaller rivals unfairly. The regulator is also examining whether the pricing mechanism used by Didi’s core ride-hailing business is transparent enough.
Didi said then it would not comment on “unsubstantiated speculation from unnamed source(s).”
Four ADSs represent one Class A ordinary share, Didi said in the filing that was registered under its formal name Xiaoju Kuaizhi Inc.
The company is backed by Asia’s largest technology investment firms including SoftBank Group Corp, Alibaba Group Holdings and Tencent Holdings.
Didi had considered Hong Kong for its IPO, but opted for New York due partly to concerns that a Hong Kong IPO application could run into tighter regulatory scrutiny over its business practices, including the use of unlicensed vehicles and part-time drivers.
Excluding China, Didi operates in 15 countries and has more than 493 million annual active users globally.
Didi Chief Executive Officer Cheng Wei said last year the firm aims to have 800 million monthly active users globally and complete 100 million orders a day by 2022, including ride-sharing, bike and food delivery orders.
In 2016, Uber sold its Chinese operation to Didi for a 17.5% stake in the Chinese firm, which also made a $1 billion investment in Uber. The US firm now owns 12.8% in Didi, IPO filings show.
Goldman Sachs, Morgan Stanley and J.P. Morgan are the lead underwriters for Didi’s NYSE float. It added more than a dozen new ones on Thursday, including BofA Securities, Barclays, China Renaissance, Citigroup, HSBC, and UBS Investment Bank. —Scott Murdoch, Julie Zhu and Anirban Sen/Reuters
Image of Nobuo Kishi via Cabinet Secretariat of Japan /CC BY 4.0/Wikimedia Commons
Image of Nobuo Kishi via Cabinet Secretariat of Japan /CC BY 4.0/Wikimedia Commons
The security of Taiwan is directly linked with that of Japan, Japan’s Defense Minister Nobuo Kishi said in an interview with Bloomberg News.
“The peace and stability of Taiwan is directly connected to Japan and we are closely monitoring ties between China and Taiwan, as well as Chinese military activity,” Mr. Kishi said in the interview with Bloomberg on Thursday.
“As China strengthens its military, its balance with Taiwan is tipping heavily to the Chinese side,” Mr. Kishi said, adding the gap is widening every year.
Mr. Kishi told the European Parliament’s security and defence sub-committee earlier this month that China was expanding its national defense budget enormously. “The international community must come up with one voice to approach China,” he said at the time.
A US warship this week sailed through the sensitive waterway that separates Taiwan from China, a week after Taiwan reported 28 Chinese air force aircraft, including fighters and nuclear-capable bombers, entered Taiwan’s air defense identification zone (ADIZ).
Military tension between Taiwan and Beijing has spiked over the past year, with Taipei complaining of China repeatedly sending its air force into Taiwan’s air defense zone. — Reuters
Cocolife Group’s young leaders share their notable journeys as executives
Millennials, whose ages currently range from 25 to 40, are beginning to take more vital roles and responsibilities within organizations as they are expected to succeed current executives.
While they bring with them the lessons they have learned from their mentors, millennial leaders are set to drive organizations afresh towards growth and relevance, especially amid a very defining pandemic that brought forth the ‘now normal.’
For instance, at Cocolife, the biggest Filipino-owned stock life insurance company, millennials are taking the lead as some of its current executives were appointed to their roles as early as their thirties.
Atty. Martin Loon, president and chief executive officer of Cocolife, observed that while this course in his career was not planned, he was led to accept this challenge of making a difference through leadership.
Atty. Martin Loon, Cocolife president and chief executive officer
“I never planned for this, but when I felt I was needed and I could make a difference, I accepted the challenge,” Martin said. “I stopped planning my career, at some point I realized it’s not up to me. There’s a more powerful hand guiding our lives and decisions.”
Atty. Darren De Jesus, president of Cocogen Insurance Company, Inc., also saw a new challenge when he was appointed in his current post after taking other roles in certain subsidiaries of Cocolife.
“I always thought that the feeling of contentment is a red flag for mediocrity. It is always good to diversify, recreate yourself, and take risks on your career every so often,” Darren shared. “These may bear fruit in the form of success if done strategically and correctly.”
Atty. Julio Bucoy, president of Cocolife Asset Management Company, Inc. and head of Cocolife’s Corporate Finance and Strategy Division, started his journey with the company as a consultant, and thereafter assumed a full-time role upon seeing the company’s potential.
“I am driven by the desire to make the most out of what we are given,” Julio said. “I was fortunate enough to grow up with a privileged life, getting the best education and personal security, so I want to make the most out of it and allow others who are not so fortunate to change [their standing in life].”
Leading as millennials
While taking an executive role at a young age is an impressive feat, it nonetheless requires the ability to make the decisions quickly, as well as the grit to face whatever challenges might come.
For Cocolife Group’s millennial leaders, they look up to the vast experiences they have gained, as well as the wisdom gained from former leaders, in effectively performing their roles.
“I believe that the preparation for the roles we eventually play in life starts even in childhood,” Martin said. “Our values, our sense of fairness and justice, our sense of compassion and forgiveness, our determination and grit — all of it started to develop when we were young kids.”
Cocolife’s president, who also is the founder of YDL Law (Yebra, De Jesus, and Loon Law), finds that running a law firm has sharpened his skill of solving problems immediately. “I’m that type of guy. When a problem emerges, I don’t wait for the next day. I solve it right away. I never waste time,” he added.
Atty. Darren De Jesus, Cocogen Insurance Company, Inc. president
Darren, meanwhile, finds that his several experiences as a staff in the House of Representatives and Bangko Sentral ng Pilipinas have helped him in understanding people faster as the president of Cocolife’s non-life business. “In government, you have to be extra mindful of the people you are dealing with,” he said, adding that his former work also helped him understand deeper how to get things done on a larger scale.
Julio, on the other hand, pursued the notable designation of being a Chartered Financial Analyst while in law school. This allowed him to distinguish himself as a lawyer and a financial professional. Currently, he is one of the very few CFA-lawyers in the world.
“Specific to my role in Cocolife, it has helped me understand both our business under the legal framework we need to operate in,” he shared. “Internally, we joke about myself being a one-stop shop for anything that needs to be done.”
The head of Cocolife’s asset management business also noted that millennial leaders, as they experienced series of changes in their lifetime, are geared up to embrace disruptions that affect their organizations.
“We are the generation that experienced a rotary phone, Easy Call pagers, to the early generation cell phones, dial-up internet, etc. We are the generation that experienced so much change which has forced us to adapt to change quickly. We have seen the consequences of failing to do so,” he said. “[W]e can already see [disruptions] happening and this is where we can provide value at the most critical time. We try to bring in a dynamic vision for the organization that adapts to changes in our business environment.”
Martin finds, nevertheless, that millennials have a role to improve on what has already been built and to further strengthen fundamentals.
“I think we owe a lot to those who came before us, the older generation who laid the foundations and groundwork for what we’re doing now,” he shared. “We cannot claim too much credit for this since the previous generation laid the foundations for the things we do now.”
In overcoming challenges, Martin clings to faith through prayer, as this gives him a lot of clarity and purpose. “I just have faith that all struggles and difficulties are part of the process to form me into the person and leader God wants me to be.”
For Darren, meanwhile, since challenges are meant to be tackled head-on, decisions should be made swiftly yet with complete confidence. Nevertheless, he continued, it helps to have a relaxed mind for these situations. “It does not help to be rattled and jittery when presented with a problem,” he said.
Determination and gratitude
Darren encouraged his fellow millennials to embrace challenging and difficult situations, as this forces them to expand their capacity and hasten their learning curve. “A lot of young workers tend to look for what is most comfortable. This should never be the case,” he said.
Atty. Julio Bucoy, Cocolife Asset Management Company, Inc. president
Millennials are to put themselves as well in a position to succeed and to be prepared when the opportunity arises, Julio added. “Luck is when preparation meets opportunity.”
Martin emphasized being grateful for all those who helped them become who they are, who cared about them, and who always tried to find what was best for them in life.
“Whenever we become grateful, we are reminded of where we came from and how we started,” he continued. “It also gives us a chance to reassess and look back at our lives and see what we did right, and what we could’ve done better.”
“Just have faith in the process,” Martin added. “Don’t get tired waiting. Just believe that God’s plans are perfect and trust that His plans for all of us are perfect as well.”
TOKYO — Japanese financial institutions are struggling to put a price tag on the cost of climate change, an effort made difficult by the long timeframe and a lack of data for making credible predictions.
Non-life insurer MS&AD, for one, foresees the potential rise in claim payments in 2050 to be anywhere between 5% to 50% compared to current levels.
Below are issues at stake for financial institutions, and where Japan stands on the global debate on assessing financial risks associated with climate change.
WHAT’S AT STAKE FOR FINANCIAL INSTITUTIONS?
Financial institutions are under increasing pressure from investors and regulators to disclose how much their balance sheets are exposed to climate-related risks.
Climate risks consist mainly of two categories. One is “physical risks,” or the physical damage caused by disasters and rising sea levels. “Transition” risks, which occur from big shifts in society towards a greener economy, hit industries like energy and steelmakers.
Financial institutions are required to assess what type of risks their borrowers or insurance holders face, and take that into account in measuring their exposure to climate risks.
WHY IS IT HARD TO MEASURE?
Climate risks are hard to gauge because past experience and conventional methods do not necessarily serve as appropriate measurements. A uniform global standard is a work in progress.
Insufficient data and the long timeframe until risks materialize also make it difficult to produce credible projections.
WHAT ARE REGULATORS DOING?
Global regulators are working towards creating a common set of guidelines for assessing climate-related financial risks.
The Financial Stability Board, an international body that monitors the global financial system, created the Task Force on Climate-related Financial Disclosures (TCFD), which released in 2017 recommendations on climate risk disclosure.
A network of central banks also released climate-change scenarios and guides for measuring risks, while the UN Environment Programme Finance Initiative (UNEP FI) last year published methods insurers can use to disclose climate risks.
HOW ARE CLIMATE RISKS MEASURED IN STRESS TESTS?
Countries are moving at varying speeds in prodding financial institutions to conduct stress tests. The Netherlands led the pack by conducting stress tests in 2018, while British and French central banks have announced plans to do so.
Australian regulators also unveiled plans earlier this month to increase their oversight of climate change reporting by listed companies and financial institutions.
HOW IS JAPAN FARING?
Japanese regulators are cautious about conducting blanket stress tests and are prodding financial institutions individually to conduct scenario analysis.
The country’s mega-banks have published their findings on the estimated increase in credit costs from physical and transition risks their borrowers are exposed to.
Some big insurers have internally conducted calculations on the potential increase in claim payments from climate change. MS&AD and Sompo Holdings, the country’s second and third largest non-life insurers, plan to disclose some of their findings to investors in August.
The Bank of Japan (BOJ) has stepped up efforts to raise awareness among financial institutions on climate risks. It released a staff paper in March on how flooding, which makes up 70% of natural disasters in Japan, may affect credit costs.
BOJ Governor Haruhiko Kuroda has warned that various hurdles are “no reason to delay” efforts to address financial and economic challenges posed by climate change. — Reuters
