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Navigating the digital post-pandemic world

By Bjorn Biel M. Beltran, Special Features Writer

Digital transformation, a process that has been decades in the making, has accelerated at an unprecedented pace in the wake of the COVID-19 pandemic. Schools and universities began offering remote learning curricula, companies big and small started adopting new work-from-home models for their employees, and many have transitioned to digital businesses to keep revenue flow.

Yet with new developments come new challenges. The Organisation for Economic Co-operation and Development notes that while on the one hand, digital transformation offers immense potential throughout various aspects of society, on the other, it can also accentuate gaps and issues present in the current system.

“It is unlikely that economies and societies will return to ‘pre-COVID’ patterns; the crisis has vividly demonstrated the potential of digital technologies and some changes may now be too deep to reverse,” the organization had stated in its Digital Economy Outlook 2020.

“Faced with a future where jobs, education, health, government services, and even social interactions may be more dependent on digital technologies than ever before, failing to ensure widespread and trustworthy digital access and effective use risks deepening inequalities, and may hinder countries’ efforts to emerge stronger from the pandemic.”

Cybersecurity and data privacy are concerns that are increasingly becoming critical in a new digitally-enabled world. Addressing such issues while simultaneously navigating the constantly-evolving needs of society is a challenge that many organizations, both in the public and private sectors, face.

The case is no different in the Philippines, where many organizations are attempting their first foray into the digital world.

“It is important to note that how companies transform or pivot to digital is not a one-size-fits-all approach. Every industry and individual business will have specific needs to assess, different resources to allocate, and distinct challenges to overcome. Nevertheless, there are some universal concepts that we have witnessed across successful transformations: an ability to recognize new opportunities; the agility to capitalize on them; and the optimal culture to best support the requisite changes. When executed in harmony, they represent the art of pivot,” said TELUS International Philippines.

Accomplishing these goals depends on a number of factors, not least of all smart applications of technology. TELUS International Philippines, a firm that specializes in delivering integrated DX and CX solutions, notes that thoughtful application of technology needs to go hand in hand with continuous digital enablement initiatives to educate and upskill the team members who will ultimately be the ones utilizing these innovations to deliver better services to customers.

The benefits

Pivoting to digital is a monumental endeavor for any company, both in an operational sense and a financial one. This is also partly the reason why many businesses fail in their digital transformation, as many lack the capital and the resources to see the process through.

Yet, that leaves many companies unable to keep up with the demands of the times, which are increasingly reliant on digital platforms and technologies. Many companies keep legacy systems based on outdated technologies, keeping them from the benefits of a modernized IT infrastructure, which TELUS International Philippines points out, is no longer a luxury or an option.

“It is becoming necessary for day-to-day operations, business continuity, and data security. Additionally, as the customer journey has increasingly moved from in-person to digital transactions, updating a company’s tech infrastructure is now also directly linked to a company’s ability to provide the seamless, omnichannel customer experiences that are in-demand by today’s consumers. Overall, having a strategy to update IT infrastructure will result in increased agility and efficiency while reducing risk and better securing data on a sustainable basis,” the company said.

Businesses aiming to thrive today should recognize how IT modernization aligns a company with omnichannel needs and better positions the brand to meet its business goals. Investing in IT may even directly lead to financial benefits due to enhanced customer experience that can generate increased consumer loyalty and spending, as legacy technology often struggles with the demands of the personalized, seamless, cross-channel customer engagement that is expected today.

The challenges

Security has long been used as a reason companies have hesitated to permit remote working. But amid the pandemic, there was very little choice in the matter. Remote working, a new workplace model enabled by today’s hyperconnected society, has given companies a method of keeping some of their day-to-day operations unaffected by the pandemic without affecting their bottom line.

Yet as more employees have spread out, security risks have risen exponentially.

“That’s why it is absolutely critical to set up proper user controls and ensure employee devices — whether those are company-owned assets or the employees’ own devices — are regularly patched and updated,” TELUS International Philippines said.

“At the same time, we also firmly believe that making your employees partners in ensuring data security and cybersecurity starts with educating them regularly. Helping them understand and appreciate the ‘whys’ behind the safety protocols and procedures we implement can make a big difference in how they approach these remote work processes and guidelines.”

Such measures are necessary, but often overlooked, steps in the digital transformation process. TELUS International Philippines added that because of the immediate need for digitalization at the onset of the pandemic, many organizations had to quickly put solutions in place that kept them connected to the business, their customers and one another. Due to the unprecedented rate at which they were forced to adapt, there were difficult trade-offs that had to be made in the short-term to accommodate immediate business needs. Perhaps most notably, cybersecurity was oftentimes deprioritized in favor of expediency.

“That’s the way you end up with a very, very poor long-term design and a very panicked, rushed, unmanageable short-term solution,” the company said. “You’re in the band-aid business.”

With remote workforces likely becoming a permanent part of business moving forward, it’s critical for organizations to develop better solutions for data security. One such solution is to create a company culture that is suited for future-proofing the business.

“Culture is the foundation for long-term success. When you see an extremely agile company, it typically follows that there is something very special about its people and its culture, because, in addition to speed and responsiveness, agility also requires an element of stability,” TELUS International Philippines said.

“The importance of investing in culture cannot be overstated. A strong corporate culture fostered over time that places people and a shared set of values at the forefront of what it does equates to the ability to innovate, achieve higher customer satisfaction, and ultimately deliver stronger financial performance. Without it guiding the organization and driving decision-making, all other elements can be in place, and yet companies will see few benefits,” it added.

Inflation eases to 6-month low in June

PHILIPPINE STAR/ MICHAEL VARCAS
Inflation slipped to the lowest level in six months in June. — PHILIPPINE STAR/ MICHAEL VARCAS

PHILIPPINE INFLATION eased to a six-month low in June following three straight months of steady price increases, the Philippine Statistics Authority (PSA) said on Tuesday.

Preliminary data from the PSA showed headline inflation at 4.1% in June, slowing from the year-on-year rate of 4.5% in May. However, this was still above the 2.5% recorded in June last year.

The latest headline figure is lower than the 4.3% median in a BusinessWorld poll conducted late last week. Nevertheless, it fell within the 3.9%-4.7% estimate given by the Bangko Sentral ng Pilipinas (BSP) for June.

Headline inflation rates in the Philippines (June 2021)

The June print was also the slowest in six months, or since the 3.5% annual rate recorded in December 2020. Prior to the June result, year on year inflation remained unchanged for three straight months at 4.5%.

Year-to-date inflation settled at 4.4%, still above the BSP’s 2%-4% target this year and above the forecast of 4% for the entire year.

Core inflation, which discounted volatile prices of food and energy items, stood at 3%. This was slower than the 3.3% recorded in the previous month, but was steady from the rate recorded in the same month last year. Core inflation averaged 3.3% so far this year.

The PSA attributed the slowdown in June primarily to the lower annual rate of increase in the transport index at 9.6% from 16.5% in May. Other commodities that saw slower price increases include alcoholic beverages and tobacco at 11.2% from 11.8% in May, clothing and footwear at 1.6% from 1.7%, health at 2.9% from 3.2%, and communication at 0.2% from 0.3%.

The heavily weighted food and non-alcoholic beverages inched up to 4.7% in June from 4.6%.

Similar to the headline inflation result, the inflation rate for the bottom 30% of income households eased to 4.3% in June from 4.5% the previous month. This was still, however, faster than the 3% print in June 2020.

The inflation rate for the bottom 30% takes into account the spending patterns of this income segment. Thus, its consumer price index differs from that of the average household with the former assigning heavier weights on necessities.

In a statement, the National Economic and Development Authority (NEDA) attributed the easing inflation in June to government policies enacted to drive food prices down, particularly that of meat.

Food inflation stood at 4.9%, unchanged from May, but still higher than the 2.7% posted in June last year.

The annual price increases for meat and milk, cheese, and eggs slowed to 19.2% and 1%, respectively, from 22.1% and 1.4% in May.

Meanwhile, annual declines were observed in rice (-1.1% in June from -0.8% in May), fruits (-0.6% from -1.1%), and vegetables (-2.7% from -6.6%).

Bucking the trend slightly were faster price increases in fish (8.7% from 7.8%); corn (5.3% from 5.1%); oils and fats (4.2% from 4%); sugar, jam, honey, chocolate and confectionery (1% from 0.9%), and food products “not elsewhere classified” (1.4% from 1.2%).

“The declining meat inflation points to the positive effects of Executive Orders (EO) 133 and 134. These are expected to further bring down meat prices during the second half of the year,” Socioeconomic Planning Secretary Karl Kendrick T. Chua was quoted in the NEDA statement as saying.

President Rodrigo R. Duterte signed EOs 133 and 134 that increased the quota of pork imports and modified the tariff rates on imported pork products, respectively.

NEDA also cited other government interventions such as hog repopulation programs, the zoning and vaccine development amid the African Swine Fever (ASF), and the signing of EO 135 which lowered the tariff on rice imports to 35% from 40% for a year.

To recall, Mr. Duterte declared a one-year state of calamity on May 10 due to the ASF outbreak.

NEDA also noted the downtrend in transport inflation, but said the costs of transport services “remain elevated” due to physical distancing measures and the recovery of global oil prices.

“This is expected to partially decrease in the near term with the government’s accelerated vaccination program,” NEDA said.

OUTLOOK
Economists expect inflation to be on the downtrend in the next few months, but flagged risks to the outlook such as elevated global oil prices and the peso’s depreciation that will contribute to inflationary pressures due to the rise in import prices.

Bank of the Philippine Islands Lead Economist Emilio S. Neri, Jr. said their full-year inflation forecast was lowered to 4.3% from 4.5% despite the “upside risks” that may keep inflation above 4% in the coming months.

“Despite the reduction in pork tariffs, the price of pork has not shown a substantial decline. Moreover, oil companies have announced several oil price hikes in recent weeks and could translate to less favorable base effects for transport,” Mr. Neri said in an e-mail.

“Aside from inflation, another factor that could challenge the BSP’s ability to keep interest rates steady is the hawkish tilt of the Federal Reserve. The US central bank recently provided a timeline on when it could possibly hike its interest rates, hinting that it could happen in 2023. This means there is a chance that the Fed could start tapering its bond purchases in 2022,” he added.

Mr. Neri also pointed to the possibility of “monetary adjustments” in the coming months as the peso reached the P49-per-dollar level — its weakest in nearly a year.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort also pointed to the peso as an “offsetting risk factor for inflation” as it “would gradually lead to some pick up in import prices and overall inflation,” he said in a text message.

Nevertheless, Mr. Ricafort expects monetary policy to remain accommodative in terms of keeping the key interest rate at the record low 2% “as long as necessary, with a possible cut in large banks’ reserve requirement ratio from the current 12%…”

In a statement, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the probability of inflation hitting 5% this year “has diminished considerably” with BSP expected to “only consider adjusting policy by mid-2022.”

“With price pressures fading, we expect inflation to decelerate in the second half of the year as meat prices normalize with authorities allowing higher import volume for the commodity. Meanwhile, base effects tied to social distancing guidelines for transport and other services are also likely to fade in the coming months, offsetting a projected acceleration in utility and fuel costs given the surge in global oil prices,” Mr. Mapa said.

In an e-mail, UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said inflation will likely be “slightly over” the BSP’s 2%-4% target range for this year with further easing to occur next year.

“Expect upward pressure on price levels due to oil price increases, but we maintain our view that subdued demand due to limited reopening of the local economy. This may counter the expected rise in fuel prices overall,” he said. — B. T. M. Gadon

BSP may withdraw support only if there are ‘indisputable’ signs of economic recovery

PHILIPPINE STAR/ MICHAEL VARCAS

THE CENTRAL BANK will only withdraw monetary support once it sees “indisputable” signs of economic recovery, its governor said on Tuesday.

Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno said the timing for the unwinding of its support measures is crucial, adding the central bank will “carry out a disengagement strategy in a way that avoids risks associated with early or late implementation.”

“The BSP will withdraw monetary support only when there are indisputable signs of solid economic recovery amid manageable inflation environment as well as sustained downtrend in community transmission of the virus,” he said at an economic briefing hosted by foreign chambers of commerce.

The Philippine economy has been battered by the pandemic, with gross domestic product (GDP) shrinking by a record 9.6% in 2020.  In the first quarter, GDP contracted by 4.2%.

Despite the gradual easing of lockdown restrictions, the outlook remains uncertain due to the slow pace of the vaccine rollout and the threat of another wave of infections as variants emerge.

“We recognize that economic recovery is still in its nascent phase. As such, we will keep our monetary policy supportive of growth and allow previous monetary easing to work its way through the economy,” Mr. Diokno said.

Mr. Diokno had earlier said they will only consider rate adjustments when economic recovery becomes more sustainable, which he expects to happen around the second half of 2022.

The central bank on June 24 kept the key policy rate at a record low of 2%, citing the need to keep an accommodative policy as the coronavirus continues to be a risk to economic recovery.

“When it comes to exit strategy, the BSP recognizes the necessity of carefully balancing the need to ensure sustainability of recovery and the need to guard against risks to the BSP’s price and financial stability objectives,” Mr. Diokno said.

He said that while the BSP has purchased government securities in the secondary market to boost market confidence, the activity “has been scaled down as the economy recovers.”

Meanwhile, Fitch Solutions Country Risk & Industry Research Head of Asia Country Risk Anwita Basu warned that rising oil prices will be a concern for countries like the Philippines and India, which are also seeing inflation beyond target. This could “reduce room” to maintain an accommodative policy, she said.

“They [Philippines and India] are also net oil importers which means that as global oil prices rise, inflation in these countries will also rise further. This will cause more policy makers to reconsider their accommodative stances,” Ms. Basu said at a separate online briefing on Tuesday.

The Philippine Statistics Authority on Monday reported that headline inflation in June rose 4.1%, still above the central bank’s 2-4% target although slower than the 4.5% in May. This brought inflation in the first five months of the year to average 4.4%.

The central bank in June had raised its inflation forecast for 2021 to 4% from 3.9%, citing the impact of higher oil prices and more favorable global economic outlook. — Luz Wendy T. Noble

Pork imports surge after gov’t cuts tariffs

PHILIPPINE STAR/ MICHAEL VARCAS

PORK IMPORTS surged in the first two months of the implementation of lower tariffs, the Finance department said on Tuesday.

However, the lower tariffs resulted in over P1.3 billion in revenue losses for the Bureau of Customs (BoC).

The Department of Finance (DoF) said pork imports jumped by 500% to 24.45 million kilograms (kg) in April from just 4.07 million kg in the same month last year, citing a report by Customs Commissioner Rey Leonardo B. Guerrero.

Pork imports further increased to 36.5 million kg in May, which was 506% higher than the 6.02 million kg a year ago. Another 15.14 million kg in pork imports were brought in during the June 1-11 period.

“For the period April 9 to June 11, 2021, the BoC posted a total collection of P846.96 million. We estimated the revenue losses from Executive Orders (EO) 128 and 134 to have reached P1.356 billion for this period,” Mr. Guerrero said.

EO 128, which took effect from April 7 to May 14, temporarily lowered the tariff rate on pork imports to 5% for shipments within the minimum access volume (MAV) threshold and 15% for those outside the quota, from the previous rates of 30% and 40%, respectively.

This order was amended by EO 134, signed by President Rodrigo R. Duterte on May 15. It lowered the tariff on pork imports within the MAV quota to 10% in the first three months and 15% over the subsequent nine months. Out-of-quota pork imports were to be charged 20% and 25% over the first three months and subsequent nine months, respectively.

Mr. Duterte also signed EO No. 133 that increased the MAV quota of pork imports to 254,210 metric tons (MT), from the previous 54,210 MT.

Finance Secretary Carlos G. Dominguez III had estimated that the government stands to lose P11.2 billion in duties and taxes this year due to the reduced tariffs on pork imports.

Customs data showed in-quota pork imports totaled 10.46 million kg in April, 10.47 million kg in May and 2.78 million kg. in the early part of June.

The DoF said consumers will likely save P50.1 billion from lower pork prices and subdued inflation following the tariff cut, citing data from the National Economic and Development Authority (NEDA).

However, consumers haven’t felt the promised lower market prices yet since pork prices remained high at P370 per kg based on Agriculture department data, while farmgate prices stood at P235 per kg, Laban Konsyumer, Inc. President Victorio A. Dimagiba said in a Viber message on Tuesday.

“Imported frozen pork [prices] are lower at P270 a kg. These numbers were taken out from the Tariff Commission hearing last week,” he said.

Mr. Dimagiba said there is still room to further reduce the prices of local hogs and align these with frozen pork prices, but so far, the government’s move to reduce the tariffs is “hardly” addressing the issue of supply-side driven inflation for these meat products.

Headline inflation rose by 4.5% year on year in April but this slightly eased to a six-month low of 4.1% in June. — Beatrice M. Laforga

Taper tantrum nightmares won’t haunt Asia’s emerging markets

REUTERS

FOR ALL the worries of emerging markets staring down a repeat of the 2013 taper tantrum, policy makers in Asia should be considerably calmer.

Unlike then — when the Federal Reserve sent shock waves through global markets with surprise plans to unwind its massive monetary stimulus programs — Asian emerging economies are largely in stronger positions, while the Fed has signaled a longer lead time on any change.

The fear has been that a hike in US rates will trigger an outflow of capital as investors chase yield elsewhere, setting off an inflation-fueling currency selloff, a spike in borrowing costs or forcing policy to be tightened faster than what seems healthy for local economies.

But, compared with their situations in 2013, as well as to their global emerging-market peers now, Asian central bankers can rely on bigger foreign reserve stockpiles, relatively benign inflation, a thriving goods trade and deeper local-currency bond markets. Rather than the Fed, the biggest risk now is a worsening virus outbreak as the Delta variant spreads through the region.

“EM Asian central banks are able to be more accommodative precisely because of improved fundamentals,” said Mitul Kotecha, chief emerging-market (EM) Asia and Europe strategist at Toronto Dominion Bank in Singapore. “Inflation remains relatively well-behaved across the region — though there are some exceptions — while external balances have strengthened.”

“The only caveat is that several countries are lagging behind in terms of pace of vaccinations, fueling risks to recovery,” he said.

Once Fed Chair Jerome Powell signaled last month an openness to starting discussions about curbing asset purchases, analysts rushed to compare the eventual tightening to what happened eight years ago. It’s already helped prompt interest-rate hikes in Mexico, Brazil, and Hungary in June.

To be sure, the Fed has tried to be more transparent and signal its plans clearly. Federal Reserve Bank of Dallas President Robert Kaplan said last week in a Bloomberg Television interview that the Fed has given sufficient lead time to investors to allow for a smoother tapering this time.

Yet policy makers and investors also see a different story in emerging Asia, where South Korea is the lone central bank expected to hike as early as this year — and more for growth reasons around normalization, rather than inflation. During the first half of the year, 13 Asia-Pacific central banks held interest rates steady, the only exception being a cut in February by Indonesia.

Asia remains an attractive investment destination, Mr. Kotecha said, despite some temporary flows toward higher-yielding markets in Latin America and the Europe, Middle East, Africa region as rate hikes boost yields.

Since the Fed’s surprise hawkish shift in June, the Mexican peso — a popular candidate for carry trades — has outperformed, gaining about 2.8%. In contrast, declines in Asian emerging currencies range from 0.7% in the Taiwan dollar to 3% in the Thai baht.

“Any flow that is happening right now is still chasing the recovery,” said Paul Sandhu, head of multi-asset quant solutions Asia Pacific at BNP Paribas Asset Management. “I do think it’s temporary because the fundamentals in Asia are better.” 

Outside of currencies, foreign funds continued to favor Asian assets last month, demonstrating confidence in the region. Led by China, they added $14.4 billion worth of securities, more than half the total to all emerging markets, according to data from the Institute of International Finance.

Here’s a closer look at some of the region’s biggest emerging economies:

CHINA
In China, a continued rebound in the economy and a more stable — albeit slowing — recovery is reassuring for the nation’s central bank, which had already taken steps to normalize policy late last year.

Being a step ahead of the Fed, it’s unlikely to raise interest rates to follow the US tightening cycle to prevent capital outflow fears, especially as money has been gushing into China. The benchmark 10-year bond yield in China peaked in November and has since resumed a downtrend.

THAILAND
For Thailand, stronger foreign reserves, low external debt, local-dominated bond markets and a hearty financial sector all are providing some buffer, even as the tourism-related economy still struggles to pick itself up.

“It’s different! It’s different. EM Asia is very different from other EMs,” Bank of Thailand Governor Sethaput Suthiwartnarueput told Bloomberg last month. “If you look at the context and the policy challenges for, say, emerging markets in Latin America and the policy challenges for other emerging markets, it’s very different. It’s very different.”

INDONESIA
Bank Indonesia Governor Perry Warjiyo was similarly dismissive of bets that a taper tantrum would repeat this time around, noting that the world was getting sufficient lead time from the Fed on its tapering, which seem a way off from execution.

As well, positive developments in the financial markets and global economy have “reinvigorated the capital flow to developing markets, including Indonesia, and has contributed to the strengthening of the exchange rate in some nations,” Mr. Warjiyo said June 17 as the central bank announced a decision to keep its benchmark interest rate unchanged.

WAR CHEST
Asia-wide, the world’s export engines continue to be cushioned by strong global goods trade. Many of the continent’s economies — not just Thailand — have massively built up their foreign reserves over the past decade. And inflation largely remains benign, removing a threat that’s very real to other emerging markets.

Emerging economies in Asia can also take comfort in the fact that since inflows weren’t surging before the pandemic set in — as they were before the last crisis — thus capital flight won’t be on the same scale as in 2013, according to Khoon Goh, head of Asian research in Singapore at Australia & New Zealand Banking Group Ltd.

“While the foreign equity selling this year put pressure on Asian currencies, it also means that there will be a limit to how much more outflows we will see due to Fed normalization concerns,” he said.

The mean of seven real-effective exchange rates in the region is 0.5% below a five-year average, indicating undervaluation that could limit a selloff, according to Bloomberg calculations. This compares with a significant overvaluation of 7.4% before the taper tantrum. — Bloomberg

Philippines may see better growth if ‘community protection’ reached by November, says ADB

PHILIPPINE STAR/ MICHAEL VARCAS

THE Asian Development Bank (ADB) said growth prospects for the Philippine economy could further improve if a “good level of community protection” against the coronavirus disease 2019 (COVID-19) is seen in the capital region by November.

ADB Country Director Kelly Bird said they are seeing greater upside risks on their April’s forecast of a 4.5% growth this year since the pace of the vaccine rollout has picked up with 250,000 doses administered per day.

“At that rate and if it continues to increase, we do expect to see a good level of community protection achieved by November of this year, particularly in NCR (National Capital Region). That’s helping us to improve the upside risks to the growth scenario this year,” he said in an online forum on Tuesday.

“We are very confident that with a lot of these reforms that have been implemented, the Philippines will return to its longer-term growth of over 6% by 2023,” he added.

The government aims to vaccinate 70 million adults by year’s end to achieve herd immunity, with a focus on the NCR where COVID-19 infections remain elevated.

The Health department reported 4,114 new COVID-19 cases on Tuesday, bringing the active cases to 49,613.

The government has administered 11.71 million doses of coronavirus vaccines from March 1 to July 4, of which 8.84 million were first doses. So far, 2.869 million Filipinos have been fully vaccinated.

However, Mr. Bird cautioned that new COVID-19 variants and potential surge in new infections still pose a threat to the recovery.

The government set a 6-7% growth target for this year. The Philippine economy slumped by a record 9.6% in 2020.

Mr. Bird said the Philippines remains well-positioned as a good investment location with its massive infrastructure program expected to provide huge boost in the economy and increased spending on the healthcare system.

In that same forum, National Economic and Development Authority (NEDA) Undersecretary Rosemarie G. Edillon highlighted the need for the government to focus on innovation to accelerate growth.

State economic managers projected the Philippine economy will expand by 7-9% in 2022 and 6-7% annually for the 2023-2024 period.

“The effective way to foster innovation is to create a level playing field and to promote healthy competition. Business strategies would actually tell us that we need to be open to technological advancements and it is these technological advancements that will pave the way to more innovations and a more efficient way of doing things,” Ms. Edillon said. — Beatrice M. Laforga

Converge to double data transmission capacity

CONVERGE ICT SOLUTIONS INC./YOUTUBE

CONVERGE ICT Solutions, Inc. will be doubling its data transmission capacity as it anticipates more demand on its fiber optic network.

The company announced in a disclosure to the stock exchange on Tuesday that it will double capacity to 800 gigabits per second (gbps) in response to cloud computing, big data, and virtual reality use.

These technological developments combined with remote storage and streaming technology use has led to massive demand on the company’s network and data centers, Converge Chief Executive Officer Dennis Anthony H. Uy said.

“We want to respond to the high-capacity needs of our network and customers, and to be able to accommodate any new-generation technologies they may have,” he said.

The upgrade would allow for more data center capacity, decreasing latency and improving high-speed data transfer that could support Internet of Things and smart cities technologies, Converge said.

“This latest technology allows us to use less hardware to efficiently deliver our services, limits the possibility of congestion whether in normal or outage situations, and reduces our energy consumption and cost,” Converge Chief Operating Officer Jesus C. Romero said.

Converge aims to link more than half of Philippine households to its pure fiber connectivity by 2025. The company’s fiber optic network has reached over seven million or 28% of total household as of March.

The company last month announced that it would start building a P1-billion data center in Cebu this year to serve the demand surge in Visayas and Mindanao. Its first data center was built in Metro Manila in 2016.

Converge’s attributable net income in the first quarter nearly tripled to P1.55 billion from P573.60 million in the same three months last year, mostly due to an increase in subscribers during the pandemic.

Converge shares closed 0.89% or 20 centavos higher at P22.75 each on Tuesday. — Jenina P. Ibañez

SEC greenlights Filinvest-sponsored REIT

The Securities and Exchange Commission (SEC) has approved the initial public offering (IPO) of the real estate investment trust (REIT) sponsored by Filinvest Land, Inc.

“In its meeting on July 6, the commission en banc resolved to render effective the registration statement of Cyberzone Properties Inc. for a total of 4,892,777,994 common shares for listing on the main board of the Philippine Stock Exchange (PSE), subject to the company’s compliance with certain remaining requirements,” the SEC said in a statement on Tuesday.

Based on the latest timetable submitted to the SEC, Cyberzone Properties aims to conduct the IPO from July 19 to 28. Meanwhile, its PSE debut is tentatively slated for Aug. 6.

Cyberzone Properties will change its name to Filinvest REIT Corp.

The REIT offer will include 1,634,187,850 common shares, with an overallotment option of up to 163,418,785 common shares. It will be priced at P8.30 each at most.

“New investors will corner 36.74% of Cyberzone Properties’ issued and outstanding common shares, while existing shareholders will retain the remaining 63.26%, should the company exercise the oversubscription option,” the SEC said.

Cyberzone Properties may net up to P14.35 billion from the IPO if the overallotment option is exercised.

Filinvest Land owns the offer shares and will be the sole recipient of the offer’s proceeds.

Its REIT portfolio includes 17 office buildings, 16 of which are located in Alabang and one is Cebu-based. The portfolio has an aggregate gross leasable area (GLA) of 299,158 square meters (sq.m.) for office spaces and 2,204 sq.m. for retail.

On Tuesday, shares in Filinvest Land at the stock market went up by 0.90% or one centavo to finish at P1.12 each. — Keren Concepcion G. Valmonte

Phoenix unit targets do-it-yourself asphalt sales

PHOENIX Asphalt Philippines, Inc. is targeting do-it-yourself consumer asphalt sales after launching its cold mix asphalt product on Tuesday.

The company will initially target large construction companies, tollway operators and distributors to small businesses before expanding to supermarkets by the end of the year.

Cold mix asphalt, which does not require heating, is new to construction firms in the country, Phoenix Asphalt General Manager Julius Jerry Aguas said at the virtual launch event.

“For hot mix, it’s really for large-scale repairs in terms of road maintenance and road construction. But for the cold mix, it’s really meant for small scale works.”

A unit of Dennis A. Uy-led Phoenix Petroleum Philippines, Inc., Phoenix Asphalt will be selling the new products in 20-kilogram bags that can cover one square meter of space with at least two-centimeter thickness.

“It’s basically a do-it-yourself product,” Mr. Aguas said. “The plan is engaging these targeted hypermarkets before the year ends so that the product is really readily available.”

Phoenix Petroleum plans to focus on its retail and liquified petroleum gas (LPG) businesses to drive growth over the next five years.

Phoenix Petroleum shares went up eight centavos or 0.62% to close at P13.08 apiece on Tuesday. — Jenina P. Ibañez

A Brown sees gains from power, water units

LISTED A Brown Co., Inc. is expecting its power generation portfolio and its water business to contribute to the company’s flow of income as it moves to expand in these segments.

“We expect projects in the power generation, irradiation, and bulk water segments to be income contributors in the future as they progress in development,” Robertino E. Pizarro, president and chief executive officer of A Brown, said in a press release on Tuesday.

The company will expand its power generation portfolio, which will include wholly-0owned unit Vires Energy Corp.’s combined-cycle floating liquefied natural gas (LNG) power plant in Simlong, Batangas.

Meanwhile, its other unit Irradiation Solutions, Inc. is putting up an e-beam commercial sterilization facility in Tanay, Rizal. Construction will begin this year for completion by the second half of 2023.

Its AB Bulk Water Co. business segment aims to expand to Opol and Laguindingan corridors and further expand its services in Cagayan de Oro City.

For its real estate offerings, the company plans to build a “master-planned” community in Tanay, Rizal, as well as a golf and retirement estate in Bukidnon.

A Brown is also eyeing to add new phases to its existing property developments, including in West Highlands in Butuan City, Coral Resort Estates in Misamis Oriental, and Teakwood Hills in Cagayan de Oro City.

The company’s shareholders approved the reclassification of its authorized but unissued capital to give way to 50 million preferred shares, which will be offered to the public. A Brown expects to net up to P1.5 billion from the offer.

PNB Capital and Investment Corp. was assigned as the transaction’s sole issue manager and lead underwriter.

Shares in A Brown closed unchanged at the local bourse on Tuesday at P0.94 each. — Keren Concepcion G. Valmonte

Aboitiz group to redeem P8.5-B fixed-rate bonds

ABOITIZ GROUP

ABOITIZ Equity Ventures, Inc. (AEV) said it would fully redeem the outstanding Series B of its fixed-rate retail bonds issued in 2015 a year ahead of its maturity date.

The company will prepay the bonds for P8.467 billion at an early redemption price of 100.5% of its face value on Aug. 6 this year.

“The repayment of the bonds is part of our continuing efforts to reduce costs and further improve profitability for all of our stakeholders,” AEV Chief Financial Officer Manuel R. Lozano said in a statement on Tuesday.

The seven-year Series B bonds with a fixed interest rate of 5.0056% were listed at the Philippine Dealing & Exchange Corp. on Aug. 6 in 2015. It was said to be “crucial for AEV’s continued overall growth.”

Majority of the proceeds were used to finance the company’s cement venture with the acquisition of Lafarge assets in the Philippines via a joint venture with CRH Plc.

The Series B bonds were part of the first tranche of the company’s P25-billion debt securities program, which was issued in three series including Series A with a fixed rate of 4.4722% per annum and matured in 2020. It also includes the 12-year Series C bonds with a fixed rate of 6.0169%, which matures in 2027.

AEV said it would further refinance maturing debt and prepay existing higher-cost debt this year.

The company is now coordinating with BPI Asset Management and Trust Corp. and the Philippine Depository and Trust Corp. for notices and computation of the amounts due to bondholders of the 2015 Series B bonds.

On Tuesday, shares of AEV at the stock exchange went down by 0.59% or by 25 centavos to close at P42.05 apiece. — Keren Concepcion G. Valmonte

And the 13 winners are…

TAA 2021 trophy study by Mac Valdezco

CCP announces the 13 Artists Award recipients online

FOR the first time since it began in 1970, the Cultural Center of the Philippines’ (CCP) 13 Artists Awards (TAA) nominations and announcement of awardees were held completely online.

This year’s awardees are painter Allan Balisi, painter and new media artist Nice Buenaventura, painter Gino Bueza, printmaker Mars Bugaoan, visual artist and writer Rocky Cajigan, photographer Geloy Concepcion, painter and educator Patrick Cruz, painter and interactive installation artist Ian Carlo Jaucian, street art group KoloWn, photographer, video and site installation artist Czar Kristoff, painter Lou Lim, papercuttings sculptor Ryan Villamael, and interdisciplinary artist, designer, and writer Catherine Sarah Young.

The online submission of nominations closed in March. Then 97 nominees were contacted to submit digital portfolios. The selection committee chose 88 portfolios for evaluation. The selection of the 13 awardees was done through online evaluation.

This year’s selection committee was composed of artists who were themselves 13 Artists awardees — Imelda Cajipe Endaya (1990), Nona Garcia (2003), Nap Jamir II (1974), and Gerry Tan (1988) — along with Rica Estrada, the CCP’s Head of the Visual Arts and Museum Division.

“It was such a great dive into their practice to be able to see what all of the artists are doing now. And it’s really hard to box people in. And I think that’s a really great thing…,” said CCP’s Ms. Estrada at the online award announcement on July 1 held via Zoom.

“Moving forward, I’m seeing more diversity, [and] more experimentation. I’m seeing how artists will find new ways to talk about what’s happening in the world, in ways that we can’t even imagine yet,” she added.

The 13 Artists awardees will each receive a production grant to produce new work for a group exhibition at the CCP. This year’s exhibition will be curated by 2018 13 Artists awardee Shireen Seno. The trophy which the artists will receive will be designed by Mac Valdezco, a 13 Artists awardee in 2006. The awarding ceremony and exhibition will be announced at a later date.

CCP Chairperson Maria Margarita “Margie” Roxas Moran-Floirendo said in a video during the announcement: “We are always on the lookout for passionate and persistent creative visionaries to provide thought-provoking relevant ideas that can help international development. We hope the new batch of 13 Artists Awards recipients will continue to uphold the honors and responsibilities that come with the recognition.”

“We want to position the TAA as a springboard to the careers of exceptional young talent and believe that they will be noteworthy contributors of the Philippine art scene who continuously pursue artistic excellence over years of art practice,” she added.

Now on its 18th year, the CCP 13 Artists Award is the oldest government award for visual artists.

The award is named after the 13 Moderns, a group of artists in the mid-20th Century who broke with convention and moved away from the conservative formality of the country’s old masters. The idea of the 13 Moderns inspired then-CCP Museum Director Roberto Chabet to curate an exhibit called “Thirteen Artists” in 1970, all of whom were young and whose works were “a turning-away from past, familiar modes of art-making, a movement towards possibilities and discoveries.” In the decades that followed, exhibits and awards for the 13 Artists were held, with the artists chosen at first by Mr. Chabet, then by nomination and a review committee. Originally an annual then biannual event, the awards have been granted every three years since 2003.

It has named 198 artists-awardees since 1970, including one National Artist and four Gawad CCP awardees. — Michelle Anne P. Soliman

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