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55% of Filipino voters prefer partial continuity of Duterte policies — survey

PCOO.GOV.PH

MORE THAN half of Filipinos prefer partial continuity of policies implemented by the Duterte administration, according to a survey conducted by a public opinion research firm last year.   

WR Numero Research’s 2021 survey showed that 55% of voters want a soft continuity of President Rodrigo R. Duterte’s programs, while 30% prefer a full continuity. Those who wanted change accounted for only 16% of the respondents. 

In the same survey, the tough-talking leader whose six-year term is ending on June 30, received nearly 68% in satisfaction rating, with 34% saying he led the country very well, and another 34% noting he did good. 

Only about 20% found his administration lacking, with 11% and 10% voting poor and very poor, respectively. The remaining 13% were undecided.  

Mr. Duterte’s presidency has been largely marked by his controversial anti-drug campaign, the Build Build Build infrastructure program, pivot to a friendly policy towards China, and response to the coronavirus pandemic.   

WR Numero Research said the digital survey had 1,200 unique respondents from all classes with a 95% confidence interval. Using data from the Philippine Statistics Authority and the Commission on Elections, quota sampling and a proportional weighting method were used to ensure equal division of demographic profiles. — Alyssa Nicole O. Tan

Party-list pushes for fuel subsidy in cash for agri-fishery sector

BW FILE PHOTO

THE DEPARTMENT of Agriculture (DA) should distribute the fuel subsidy for farmers and fishermen through direct cash assistance instead of discount cards, a party-list group said Tuesday. 

“How could it be a subsidy when it will only be in a form of discount dispensed to a small portion of the total registered fisherfolk and farmers in the country?” Anakpawis President Ariel Casilao said in a statement.    

“This brings nothing substantial to the distressed rural sectors because what they need is a full fuel subsidy in a form of direct cash assistance.”  

He said that only 5% of the 1.7 million registered fisherfolk will be able to benefit from the P500-million fuel subsidy provided by the DA.  

Anakpawis, which does not have a seat in the current Congress but is running in the May elections, also said they are pushing for a huge rollback of oil prices until they become more affordable. 

“The rollback this week should correspond with the total oil price hikes this year,” Mr. Casilao said. “Local pump prices have dramatically increased by P20-P30 per liter, then the rollback should be as much.”   

The passage of House Bill (HB) No. 9192, which seeks to abolish the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC) and divert its funds to granting production subsidies to workers in the agricultural and fisheries sector, is also being pushed by Anakpawis.  

Members of the Makabayan bloc in the House of Representatives who authored the bill said in their explanatory note that the NTF-ELCAC has lost its mandated function and that it “threatens the pillars of human security.”  

“Thus, it has no moral ground to be allotted with a vast amount of public resources, and this should be shifted to a productive endeavor such as providing the 1 million small fisherfolk and fish workers with P15,000,” Makabayan lawmakers said.  

Gabriela Rep. Arlene D. Brosas, one of the principal authors of the bill, said that they will refile the bill if they win seats in the 19th Congress. 

“Yes, definitely we will file the HB 9192…There was no committee hearing done during the 18th Congress, so we hope there will be a movement on the next Congress about this bill,” Ms. Brosas said in a Viber message. — Jaspearl Emerald G. Tan

Election watchdog urges Comelec to investigate cash distribution in Cavite rally for Marcos-Duterte team

AN ELECTION Watchdog has urged the Commission on Elections (Comelec) to probe a possible vote-buying violation at a rally for the Marcos-Duterte tandem in Cavite City — with the incumbent mayor giving out money to people from the audience who were called onstage.  

Videos and photos of Cavite City Governor Juanito Victor “Jonvic” C. Remulla, Jr. giving away prize money in P1,000 bills to attendees of the rally have become viral on social media.  

In a statement on Tuesday, the group Kontra Daya said Comelec should investigate this incident as it may be a violation of the Omnibus Election Code on vote-buying.  

“Even if the campaign period for local posts starts on March 25, Remulla may still be liable not necessarily as a candidate but as a Marcos supporter. His actions, after all, directly benefit the national candidates he openly supports,” it said.  

The poll watchdog stressed that Comelec should take the initiative and not wait for a formal complaint to be filed.   

“Those who attended the campaign rally are there to support the governor’s favored candidates so the prize money may be seen as a reward for their loyalty,” Kontra Daya said.  

Comelec Spokesperson James B. Jimenez said in February that under the poll body’s rules, vote buying and selling incidents can only be investigated upon the filing of a complaint.  

Under the Omnibus Election Code, vote-buying is defined as “Any person who gives, offers or promises money or anything of value, in order to induce anyone or the public, in general, to vote for or against any candidate.” — John Victor D. Ordoñez 

Manila mayor says bigger budget for local governments should go to infra, agri programs

PHILIPPINE STAR/EDD GUMBAN

MANILA Mayor Francisco “Isko” M. Domagoso said Tuesday that if he wins the presidential race in May, he would direct local government units (LGU) to use their increased share from national funds starting this year to build key infrastructures and purchase agricultural equipment. 

“We will devolve the other functions of the national government to the local government due to the Mandanas ruling which they will benefit from. What we will provide them is direction,” Mr. Domagoso said in Filipino in an interview with Radyo Singko.  

“I believe in (prioritizing) minimum basic needs, which is better known as HDI or human development index. So, these funds should be used for housing, if it suits them, schools, because we also know that in the far-flung areas, children do not have nearby access to them, (and) hospitals. If possible, or if the law allows it, this is where their new source of income should be focused on,” he said.  

The Supreme Court ruling on the Mandanas-Garcia case, which takes effect this year, expanded the share of LGUs from the government’s tax collections.  

The current mayor of the capital city added that for LGUs in agricultural areas, their budget should be centered on food production.   

“If the place is an (agricultural) area, the menu for spending should be on food production,” the standard-bearer of Aksyon Demokratiko said.  

Meanwhile, party chairman Ernesto M. Ramel, Jr. reiterated his request for a copy of the Bureau of Internal Revenue’s (BIR) demand letter to the family of presidential bet Ferdinand R. Marcos, Jr. over unpaid estate tax.   

“I am again writing you to formally request a copy of the Dec. 2, 2021 demand letter addressed to the Marcos heirs,” he said in a letter to BIR Commissioner Caesar R. Dulay.    

Mr. Domagoso earlier promised that the tax collected from the Marcos heirs will be distributed as cash aid for the drivers, farmers and those who lost their jobs during the pandemic. — Jaspearl Emerald G. Tan

LeBron’s triple-double leads Los Angeles Lakers over hometown Cavaliers

LEBRON James erupted for a game-high 38 points along with 11 rebounds and 12 assists to power the visiting Los Angeles Lakers to a 131-120 victory over the Cleveland Cavaliers on Monday.

James, who played for the Cavs for 11 seasons, was 17 of 29 from the field. He came into Monday’s game second in the league in scoring at 29.8 per game in a virtual three-way tie with Philadelphia Joel Embiid and Milwaukee’s Giannis Antetokounmpo.

The Lakers finished 2-2 on their four-game road trip. Russell Westbrook contributed 20 points and 11 assists for the Lakers, while D.J. Augustin had 20 points off the bench. Augustin didn’t miss a shot from the field (7 of 7) or the 3-point line (6 of 6), as the Lakers shot a season-high 56.4% from the field.

Guard Darius Garland was sensational with 29 points and a game-high 16 assists for the Cavs, who were 3-2 in their just-concluded five-game homestand. Garland has scored 20 or more points in 14 of his last 15 games.

Malik Monk and Stanley Johnson each tallied 12 points while Austin Reaves had 11 points, six assists and five rebounds.

All five Cleveland starters scored in double figures, as Lauri Markkanen added 18 points and nine rebounds and Lamar Stevens 16 points. Evan Mobley and reserve Caris LeVert chipped in 13 points apiece while Isaac Okoro scored 12.

Stevens’ putback with 5.5 seconds left handed Cleveland a 97-96 lead after three quarters. However, the Lakers left the Cavaliers in their dust in the fourth.

Mobley inadvertently kicked James in the chin with about 10:41 to play in the first half. That seemed to light a fire under James.

James had 21 points to propel the Lakers to a 67-62 advantage at half time. The Lakers outscored Cleveland in the second quarter, 39-27. Augustin had 17 points in the first half and was 5 of 5 from the 3-point line.

Carmelo Anthony’s baseline jumper with 7:06 left in the first half allowed the Lakers to regain the lead, 46-45, after starting the game on a 6-0 only to fall behind as many as 14 in the first quarter.

Markkanen’s 3-pointer capped a 12-1 run by the Cavs, handed them a 12-7 lead with 7:17 remaining in the opening period. Cleveland’s scoring spurt shortly grew to 31-17. — Reuters

Chelsea bidders shortlist to be cut to three

MANCHESTER, England — Raine Group, the US bank overseeing the sale of Premier League club Chelsea, plans to narrow down the shortlist of bidders to three on Monday or Tuesday, sources told Reuters, with one consortium lead by Nick Candy increasing their offer.

Chelsea was initially put up for sale by owner Roman Abramovich following Russia’s invasion of Ukraine and before sanctions were imposed on the oligarch by the British government, effectively giving it control of the club.

Raine set a deadline of 2100 GMT last Friday for bids to be put forward, with several being made public, while sources close to the deal said many more had been submitted privately.

To move things forward, Reuters has been told that Raine, in consultation with the club, will narrow down the shortlist, with the process slowed by revised bids still coming in.

One of the three bidders who made their offers public on Friday, Candy’s Blue Football consortium, revised their bid on Monday, they told Reuters in a statement, after being joined by “another large Korean financial institution.”

British property developer Candy submitted a bid of over two billion pounds ($2.63 billion) to Raine on Friday, but has since increased his offer “significantly”, without disclosing by how much or the name of the new investor.

He had already been joined in his consortium by South Korean companies Hana Financial Group and C&P Sports Limited before the new investors got on board.

“The Blue Football Consortium has access to immediate capital with funds readily available for deployment from day one,” Brian Gordon, partner of Squire Patton Boggs, the law firm working with the Blue Football Consortium, said.

“The bid is sourced from credible co-venturers whose attitude towards governance is top rated.”

PREFERRED BUYERS
Over the next few weeks, a preferred buyer or buyers will be submitted to the government who must issue a special license for any sale and who require evidence that Abramovich will not make any financial gain.

From there, it will be up to the prospective buyer to pass the Premier League’s Owners’ and Directors’ Test before completing a takeover.

The test outlines factors that would prohibit an individual from becoming an owner or director of a club.

These include criminal convictions for a wide range of offenses, a ban by a sporting or professional body and breaches of certain key football regulations, such as match-fixing.

Along with Candy’s bid, the two other consortiums who made their offers public last week were the Chicago Cubs owners the Ricketts family, and the pairing of former Liverpool chairman Martin Broughton and World Athletics President Sebastian Coe.

Some bids are only being made public now, with London-based global investment firm Centricus confirming on Monday that they had offered to buy Chelsea, a move driven by co-founder Nizar Al-Bassam and CEO Garth Ritchie, who are said to be season-ticket holders.

British media reports have named several other bidders, including Saudi Media, headed by businessman Mohamed Alkhereiji.

Candy’s bid, while not assured of being on the shortlist, said on Monday that they had held initial discussions with tech platform PrimaryBid, with a view to potentially considering a community enfranchisement model for Chelsea, should the bid be successful, focused on improving fan involvement and engagement. — Reuters

Period of uncertainty

Rafael Nadal was clearly not himself as he battled supposed underdog Taylor Fritz at the Indian Wells Tennis Garden yesterday. As always, he persevered; his trademark resolve remained a constant. Yet, in his aim to preserve a win streak that had, by then, stretched to 20 matches, he labored far more than usual. And for all his checkered history with injuries, the reason for his inability to be at his best with the BNP Paribas Masters title on the line had to do with his breathing. As he noted in his post-mortem, “When I try to breathe, it’s painful and it’s very uncomfortable. It’s like a needle all the time inside. I get dizzy a little bit because it’s painful. It’s a kind of pain that limit[s] me a lot.”

Not that those from the outside looking in needed any confirmation. Nadal’s difficulties manifested itself early and often, and were readily apparent even beyond the two medical timeouts he called. Which, in retrospect, made the outcome, while unexpected, ultimately inevitable. Yesterday, Fritz was the better player by far, aided in no small measure by the handicap that had the top seed committing uncharacteristic errors. Significantly, the eventual winner came close to withdrawing from the final due to a sore ankle carried over from the semifinal round.

Nadal was his typical gracious self in the aftermath. He couldn’t have but acknowledged the result, of course. Fritz played excellently, hitting the ground running to jump to an early lead, and then not looking back. There may have been a second-set tie-break, but, really, there could be no discounting the achievement, which has the highest-ranked American on tour moving from 20th to 13th in the world. Not that the player at the top of the rankings has any complaints; after all, he was close to hanging up his racket at the end of 2021 prior to claiming the Australian Open for his 21st major triumph and going on his extended run.

“The last two months have been amazing, unforgettable, very emotional,” Nadal disclosed. “I enjoy things that I never thought I could live again a few months ago.” That said, he’s entering a period of uncertainty, made all the more perturbing by his advancing age. He’s slated to regroup as scheduled in his native Spain before embarking on his French Open campaign, but question marks abound. “The thing that worries me now, it’s about what’s going on there, what I have to do now to recover and how long it’s going to take.”

 

Anthony L. Cuaycong has been writing Courtside since BusinessWorld introduced a Sports section in 1994. He is a consultant on strategic planning, operations and Human Resources management, corporate communications, and business development.

We need a leader who recognizes the private sector

FREEPIK

Less than two months from now, Filipinos will elect the country’s next leaders who must lead a government that will inherit the enormous task of addressing the lingering socioeconomic issues brought about by the COVID-19 pandemic.

In recent months, our economy has displayed encouraging developments. The Philippine Statistics Authority (PSA) reported that the economy grew by 7.7% in the fourth quarter of 2021, which resulted in a 5.6% growth for the full year, exceeding the government’s target of 5-5.5%. Further, a few weeks ago, several areas across the Philippines, including the National Capital Region (NCR), were placed under Alert Level 1, allowing the resumption of more economic activities.

But the question is, will the Philippines be able to sustain its path towards long-term economic recovery?

In January 2022, the PSA announced that the country’s unemployment rate was at 6.4%, which translated to 2.93 million jobless Filipinos. This was slightly lower than the 6.6% registered in the preceding month. However, the underemployment rate increased slightly to 14.9% in January 2022 from 14.7% in December 2021.

Despite the positive GDP growth rates attained since the second quarter of 2021, this does not seem to reflect the realities on the ground as millions of Filipinos are still jobless or are looking to have additional hours of work. Hence, what the country seems to experience now is jobless growth. On top of these, the country’s increasing debt pile is something that needs to be dealt with in the near future. The latest data from the Bureau of the Treasury (BTr) show that the National Government’s total outstanding debt by end-January 2022 stood at a record-high P12 trillion. This would ultimately have to be paid for by each and every Filipino through possibly higher taxes.

A more practical way to address all these problems and to sustain the country’s positive economic growth trajectory is by strengthening collaboration between government and the private sector. Since the private sector has consistently proven itself to be a reliable and capable partner of government in the midst of an emergency situation like at the height of the COVID-19 pandemic in 2020, it could also play a key role in the country’s path to recovery.

To corroborate this, a survey conducted by the Social Weather Stations (SWS) in October 2021 found that 82% of Filipinos believe that the growth of the Philippine economy will be accelerated if the government collaborates more actively with the private sector.

Recently, we at the Stratbase ADR Institute, in partnership with the US-based advisory firm BowerGroupAsia (BGA), held our first virtual Business Roundtable for this year, entitled “Business Agenda for the New Administration.” This quarterly event gathered esteemed members of the business community to discuss a possible agenda to be taken up by the country’s next set of leaders who will steer the economy to recovery. Given the post-pandemic scenario, the next administration is expected to prioritize the expansion of investment opportunities, creation of jobs and livelihood, as well as the alleviation of poverty, hunger, and curbing the widening inequality.

During the forum, former Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa Guinigundo zeroed in on the need to veer the country towards more investment-driven growth. “Investment-led growth has always been the goal of public policy because it promotes sustainable and resilient economic growth… The fundamental challenge is to create an environment that is conducive to investment, whether domestic or foreign,” he said.

Meanwhile, Dr. Vicente Paqueo, a Distinguished Visiting Fellow of the Philippine Institute for Development Studies (PIDS), noted that a critical issue that must be addressed by the next administration is the continuing challenge of providing people with employment and income security. This can be addressed by including rapid labor productivity growth in the government’s agenda, especially since high and sustained productivity growth is essential to modern economic growth and development.

One cannot deny the invaluable role that the business community plays in a nation’s growth and development. As BGA President and CEO Ernest Bower IV stressed, “A new administration with confidence and a strong partnership with business can change that situation and drive new opportunities, equitable growth, creating jobs and driving more prosperity than ever before.”

The country’s next administration should be one that acknowledges the crucial role that the private sector plays in development, particularly through its expertise and capacity to attract investments. Aside from strengthening multi-sectoral collaboration, government should exert efforts in creating a conducive environment for the private sector to thrive and economic activities to fully prosper. If an administration is well-supported by a strong private sector, half of the task for long-term recovery is already achieved, since the burden for attaining basic goals is equitably and responsibly shared.

Then again, our next set of leaders should uphold the basic anchor of the rule of law and promote good governance, as these are the foundations on which stable partnerships are properly created and nurtured.

 

Victor Andres “Dindo” C. Manhit is the president of the Stratbase ADR Institute.

A strategic plan for the IT-BPM industry

VECTORJUICE-FREEPIK

(Part 3)

Continuing the SWOT analysis for the strategic plan for the Information Technology-Business Process Management (IT-BPM) sector, let us summarize the findings of the “Accelerate PH (Future Ready) Roadmap 2022” for the Philippine IT-BPM sector prepared in 2015 by the Frost & Sullivan group in partnership with the IT & Business Process Association of the Philippines or IBPAP.

Already in 2015, the Philippines was considered one of the leading destinations for IT-BPM services across the five major dimensions of service diversification, talent pool, affinity, vertical specialization, and cost. In terms of service destination, the Philippines occupied the spot as the top destination of choice for voice-based services and was expanding its horizontal BPM services in areas such as Finance and Accounting (F&A), as well as vertical-focused solutions such as health information management services. The country also had and continues to have a strong affinity to the North American market and has been consistently preferred by major buyers because of its cultural and historical links, English proficiency skills, and friendly and hospitable nature.

In 2016, revenues generated by the sector were expected to be $22.9 billion, comprising mainly outsourced services in contact center and BPO ($12.8 billion), IT services ($3 billion), health information management services ($2.4 billion), and Global in-house Centers ($4.7 billion). Animation and Game Development was then the smallest segment, contributing only $56.7 million or 0.2% of the total revenue. Before the pandemic struck the global economy, the market was expected to grow a compound annual growth rate (CAGR) of 9.1% from 2016 to 2022, reaching $38.9 billion. At that time, the projected revenue growth rate from 2016 to 2022 was considerably lower than the 17% attained between 2000 and 2016. Nevertheless, the Philippines was still projected to outperform the pace of global IT-BPM revenue growth of 5.6% (from 2016 to 2022) and as a result was expected to increase its share of the global market from 12.7% in 2016 to 15.5% by 2022.

The slower growth expected was explained by a perception of a maturing sector and the anticipated impact of the Industrial Revolution 4.0 (Artificial Intelligence, Robotics, Internet of Things, and Data Analytics). Each subsector of the IT-BPM market was expected to expand at different rates because of varying factors such as the maturity of the subsector, demand in the global market, supply constraints, changing service portfolios, as well as indirect factors such as the quality of infrastructures, connectivity, real estate availability and costs, and government incentives or disincentives.

The young, growing and English-speaking population of the Philippines is its greatest attraction for IT-BPM enterprises to choose it a destination for outsourcing services. In the study we have been citing, the total manpower employment of the sector was projected to increase from an expected 1.15 million Full Time Employment (FTEs) in 2016 to an estimated 1.8 million FTEs by 2022, an equivalent to a CAGR of 7.8%. The relatively slower growth rate in manpower compared to that of revenues (7.8% to 9.2%) can be attributed to technology-enabled, higher-value jobs (the waning of call centers and the greater prevalence of knowledge-intensive services). This would indicate an increase in revenue per FTE — a sign of moving up the value chain.

The key services offered were:

• Contact Center and BPO: Mature services (Customer care, helpdesk); growth services (ESO, Data analytics, performance management, legal process outsourcing).

• IT Services: mature services (application development, infrastructure, support); growth services (system integration, automation, enablement, IoT Enablement, languages, application development management [ADM]).

• Health Information Management services: mature services (payer services); growth services (preventive health, remote healthcare management, provider services).

• Animation and game development services: mature services (2D animation, game development); growth services (3D animation, AR/VR, gamification).

• Global In-House Centers: mature services (Finance and Accounting); growth services (industry-specific services for telecom, healthcare, insurance and pharmaceutical).

Considered mature, customer care services and support include voice and multi-channel support for customer requirements. “Support” refers to services (such as helpdesk) offered as part of an IT services contract predominantly targeting the buyer’s internal users. The Philippines remains a key offshore player for these services, providing considerable maturity in quality of services provided, skill sets, talent, and buyer confidence.

Application development and maintenance (ADM) services in the Philippines are provided by both large service providers, as well as mid-size to smaller companies. Large service providers typically use the Philippines as an alternate location for IT services contracts as part of their diversification and risk mitigation strategy, with India as the preferred destination. This can be explained by the lack of sufficient and experienced talent for complex application development projects. Mid-tier service providers, on the other hand, prefer smaller and less complex contracts from both foreign and local small to medium enterprises.

Finance and Accounting (F&A) services have been the most mature in the non-voice BPM segment of the market considering that one of our largest courses in higher education has to do with accounting and finance (I myself was an accounting major who became a CPA without practicing the profession). In the past few years, however, Human Resource (HR) services began to expand on the basis of increasing focus from large service providers. There has also been a steady growth in the maturity and value of KPO (Knowledge Process Outsourcing), ESO (Engineering Services Outsourcing), legal and analytics services being offered. Although many are niche services globally, these offer higher profitability to companies offering such solutions to their customers.

A trend discerned in 2015 that can be significantly reversed was the rapid maturing of healthcare services. After the pandemic, there will surely be a significant increase in consumer spending on healthcare services, especially on the preventive side. It is almost certain that the COVID-19 pandemic will become endemic and will result in increased demand for healthcare services. In the past, there were a few medical transcription services being offered, most of which were being serviced out of countries such as India in which costs were lower. The Philippines had been focusing on higher value services on both the provider and payer sides. The payer market is much larger than the provider in terms of revenue because the former consists of large, multi-year contracts being serviced by large BPO outsourcers. In contrast, the provider side of the market is more fragmented, with a large proportion being served by small-sized service providers.

The subsector that may undergo the most dramatic transformation in the coming years is Animation and game development. In 2015, the perception of the experts was that these services were already considerably mature, especially animation services. They were considered to offer small market value because of the nature of the industries they serve, as well as the type of work being outsourced. There was the recommendation that the Philippines as an animation and game development destination needed to leverage new platforms such as mobile and web to grow at a faster rate compared to the other service sectors in the market. In a separate study conducted also by Frost & Sullivan on this subsector, a brighter future for Animation and game development surfaced as key drivers of the sector were identified. These are the growing availability of new platforms, such as internet streaming and on-demand TV, along with the increase in global broadcasting hours among many countries through satellite and cable TV. Another driver is the advancements being seen in animation techniques, such as 3D animation, which opens a whole new market for the outsourcing industry. The obstacles that have to be overcome are a lack of skilled animators for digital or 3D animation and the high cost of specialized animation software.

These observations may have been rendered obsolete as we face the post-pandemic global economy. These two full years of strict lockdowns all over the world have resulted in an unprecedented acceleration in the demand for digital services in practically all fields of consumer behavior in such areas as education, shopping, dining, healthcare, and especially entertainment. Just witness the exploding markets of Amazon, Meta, Netflix, and Disney, and not to mention the even more phenomenal rise of their Chinese counterparts, TencentQQ, Sina Weibo, Tiktok, YouKu, and WeChat. In a separate article, we shall dwell on a Strategic Plan for Animation and Game Development as part of the burgeoning Creative Industry of the Philippines.

Meanwhile, as the pandemic significantly waned during the first quarter of 2022, the President of the IT-BPM Industry Association, Jack Madrid, presented to the presidential candidates a checklist of issues that should be addressed by the next president. Although the industry demonstrated great resilience and dynamism during the pandemic, growing its total revenues to $28.8 billion and adding 7-8% more in employment, there is still much to be done to defend the Philippine global market share versus such regions as India, Poland, and Malaysia. Top in the list is improving the ease of doing business for present and future investors. Also very important is enacting legislation providing more flexibility in the workplace through the adoption of hybrid, WFH, and location-independent work arrangements and models that will democratize job opportunities, improve employee productivity and work-life balance, reduce absenteeism and attrition rate and decongest Metro Manila while reducing the carbon footprint.

The industry also would require the Government’s support for higher budgets for talent and skills development to address the widening gaps and compete with other IT-BPM locations. The next Administration must add to its Build, Build, Build program addressing the inadequate digital infrastructure as the global landscape becomes more and more technology-driven. Expanding the coverage of fiber internet to more regions with significant talent pool availability, such as Palawan, Iloilo, Bicol, Tuguegarao, Dumaguete City, and Cagayan de Oro, is imperative. Mr. Madrid promised the next president that IBPAP will be publishing Roadmap 2028, the industry’s blueprint describing the industry’s key objectives, priorities, and strategies under the new administration. It is my hope that this series of articles on a Strategic Plan for the IT-BPM Sector has contributed in a small way to the ongoing formulation of this Roadmap 2028.

 

Bernardo M. Villegas has a Ph.D. in Economics from Harvard, is professor emeritus at the University of Asia and the Pacific, and a visiting professor at the IESE Business School in Barcelona, Spain. He was a member of the 1986 Constitutional Commission.

bernardo.villegas@uap.asia

Rising chaos makes the case for Just-in-Case management

KATEMANGOSTAR-FREEPIK

THE BUSINESS WORLD is in the process of adopting a revolutionary new philosophy — or perhaps having a new philosophy thrust upon it: just-in-case management. In the great age of globalization that started in the 1980s and entered its triumphant phase in the 1990s and 2000s, the twin watchwords of business were speed and efficiency. Today speed and efficiency must compete with security and resilience.

This new belt-and-braces world has been coming for some time. The climate crisis put a question mark next to efficiency. What is the point of creating the world’s most cost-effective machine if you torch the planet in the process? Donald Trump’s ill-tempered repudiation of the postwar consensus in favor of America First isolationism forced businesses to rethink their assumptions about tariffs, regulations and relations between the US and European Union. Then the global pandemic forced them to rethink even more basic assumptions about office life. Now Vladimir Putin’s invasion of Ukraine is completing the uncertainty revolution. Suddenly everything that business had taken for granted has been torn to shreds and replaced by a series of just-in-case questions.

The problems of war and pandemic reinforce each other. The war is sending markets gyrating while raising the long-term cost of inputs. It also raises the possibility of much worse to come if China sides with Russia and America imposes sanctions. The Chinese authorities recently imposed a lockdown on Shenzhen, a port city of 17.5 million people and one of the hubs of the high-tech economy, to contain the spread of the highly infectious Omicron strain of COVID-19. Foxconn Technology Group, the Taiwanese electronics firm that is Apple, Inc.’s primary iPhone assembler, was among dozens of manufacturers forced to suspend operations for a while.

The most obvious change is from just-in-time (JIT) to just-in-case manufacturing. JIT manufacturing was introduced in Japan after World War II, most notably by Toyota Motor Corp., to reduce the amount of capital tied up in idle capacity. The innovation replaced “push” manufacturing, whereby you had large stores of parts sitting next to the plant, with “pull” manufacturing, whereby you kept minimum inventories on hand and then replenished them with new deliveries from suppliers whenever you needed to.

This system of just-in-time manufacturing went global from the 1980s onward in two ways. Western companies had to adopt Japanese manufacturing techniques if they were to compete with Japanese companies in terms of cost and efficiency. And companies sourced their products in the far corners of the world in a restless search for the best combination of price and quality: Orders for components in Detroit sent signals to suppliers half a world away in Shenzhen.

The problem with JIT is that when it breaks down, problems cascade around the world: Ports pile up with containers, trucking companies are overwhelmed by orders, factories are buried under a backlog of goods and, on the other side, frustrated consumers are unable to get their hands on new cars or fridges or electronic equipment. A McKinsey & Co. survey of senior supply-chain executives in July 2020 found that 91% had encountered problems with suppliers, and 93% planned to increase resilience across the supply chain. Now the Ukraine War is driving the same lesson home with renewed force: Having a first-class supplier in China or Eastern Europe is pointless if the supply chains might well be cut by war or plague.

The result is a rush from just-in-time to just-in-case. JIC might involve one or all of the following alternatives: establishing back-up suppliers; looking for suppliers closer to home (“local to local” is a new buzz phrase); forming partnerships with suppliers of critical components, as Ford Motor Co. and General Motors Co. have done with chip-makers; or else increasing your inventories, perhaps even abandoning JIT for the old world of large warehouses sitting next to factories. A survey by McKinsey in Nov. 2021 found that 61% of companies had increased their inventory of critical products and 55% had made sure that they had at least two sources of raw materials. Warehouse costs are escalating as the sector struggles with shortages of labor, materials, and space.

The new philosophy of just-in-case extends well beyond supply-chain management, however. Bosses who had grown complacent about the inevitability of globalization must suddenly confront a plethora of just-in-case questions. What do they do if the oil price stays well above $100 a barrel? Or if a hostile power seizes one of their employees (the Russians recently threatened to arrest employees of multinational companies if they criticized the invasion of Ukraine)? Or if a new and even more deadly pandemic strikes (epidemiologists worry that global warming may bring tropical diseases such as Ebola to Europe)? Or if NATO is dragged into a war with Russia? Or if China becomes a hostile power? The only thing they are certain about is that the old way of doing things will need to be rethought.

What will this new world of just-in-case management look like — apart from angst-ridden and dispiriting? The obsession with “lean” (cutting waste out of manufacturing) will be replaced by a tolerance of “fat.” Much more redundancy will be built into manufacturing systems. That in turn will add to price pressures as companies tie up capital with inventories or spend money on taking out insurance in the form of back-up suppliers. Supply chains will shorten as companies calculate that a dependence on Asia for crucial parts is too risky. Just-in-case will inevitably add to all the other pressures to expand the role of the state as the greatest guarantor of security, with France’s President Emmanuel Macron already declaring that “the state will have to take control of several aspects of the energy sector,” Hungary banning grain exports, and Argentina and Turkey increasing their control over local food supplies.

The best guide to the new just-in-case business world is provided by Intel Corp.’s decision to build giant new chip plants in the Old World — one in Ohio, one in Arizona, and one in Magdeburg, in eastern Germany. This is designed to reduce European and American dependence on chip-making in Taiwan, the world’s biggest manufacturer of silicon chips but also a geopolitical hotspot, with Xi Jinping regarding it in much the same way that Putin regards Ukraine. Even before Putin’s invasion of Ukraine, Patrick Gelsinger, who took over as Intel’s CEO just over a year ago, set himself the goal of raising the US’s share of global chip production to about 30% over the next decade, from 12% today, and Europe’s share to 20% from 9%.

This is obviously good news for some Western workers: Magdeburg will get 3,000 long-term high-tech jobs and 7,000 construction jobs. For taxpayers, not so much. The US and the European Union are promising to stump up a combined $100 million to subsidize domestic chip-making and make up the difference between the cost of producing chips in Asia and the cost of doing so back home. Subsidy wars have a way of feeding on themselves as blocks compete to produce favored goods. They also have a way of stifling innovation as companies devote ever more time to wooing politicians rather than improving their products.

The prospect of a closer relationship between business and government, with all the attendant rent-seeking and arm-twisting, may have many of us longing for the frictionless world of just-in-time business. That world is unlikely to return any time soon, not only because of plague and war but also because of climate change. There’s always a chance that Putin will be toppled over the quagmire in Ukraine and that great plagues will prove to be a once-in-a-century phenomenon akin to the Spanish flu. But when it comes to the climate, just-in-case is the least that we can do.

BLOOMBERG OPINION

The shift to better Personal Property Security Laws

FREEPIK

It cannot be gainsaid that the Philippine economy has been severely impacted by the COVID-19 pandemic. The economic downturn has been brought about by the implementation of nationwide lockdowns, the closure of businesses due to serious business losses and financial reverses, the rise in unemployment, and the decrease in the productivity rate in agriculture, service, and other industries. While the Philippine government has put in place various relief measures to aid all the stakeholders on their road to recovery, the irreversible consequences of the pandemic nevertheless have taken a toll on a lot of enterprises.

One of the recognized driving forces of the Philippine economy is the Micro, Small, and Medium Enterprises (MSMEs). As reported by the Asian Development Bank Institute (2021), MSMEs accounted for 99.5% of all enterprises and employed 63.2% of the workforce as of the end of 2018. This, notwithstanding, MSMEs remain the most vulnerable to external factors that influence the business climate such as public health emergencies, disasters, and other natural calamities.

Now that the government is starting to ease restrictions, it has become a challenge for enterprises to think of ways by which they can bounce back and move forward. One of the methods that MSMEs can perhaps take into consideration is availing of the benefits granted under R.A. No. 11057, otherwise known as the Personal Property Security Act (PPSA). Should the Personal Property Security Registry (PPSR) be fully established and operational — which is a condition precedent for the provisions under the PPSA to take effect — these businesses will then have better opportunities to source out capital by obtaining loans from banks and other financial institutions with a wider range of objects that may be put up as collateral.

The Implementing Rules and Regulations (IRR) of the PPSA enumerates the variety of collateral over which a security interest may be created, to wit: a.) Rights arising from contracts, including but not limited to Securities, Commodity contracts, and Lease of goods including financial leases and operating leases for a period of not less than one year; b.) Equipment; c.) Inventory; d.) Deposit Accounts; e.) Negotiable instruments; f.) Negotiable documents of title; g.) Consumer goods; h.) Intellectual property; i.) Livestock; j.) Fixtures, accessions, and commingled goods; or, k.) Future property or after-acquired assets (Sec. 2.03, IRR).

The PPSA covers all transactions of any form that secure an obligation with movable collateral except interests in aircraft which are covered by the Civil Aviation Authority Act of 2008 and interests in ships by the Ship Mortgage Decree of 1978 (Sec. 4, PPSA).

These significant developments under the PPSA are a shift from the old laws, thereby giving mortgagor-enterprises better options over properties to put up as collateral. Prior laws on pledge and chattel mortgage were clear in that it allowed only as collateral personal properties that were absolutely owned by the pledgor or mortgagor. The old laws could not similarly cover future properties, there being a specific requirement for personal properties to be described with particularity, which description must appear in the Affidavit of Good Faith. The same is no longer controlling under the PPSA because other than removing the requirement of an Affidavit of Good Faith, the law also now expressly includes future property or after-acquired assets as among those that can be constituted as security interests subject to the qualification that the security interest over which is “created only when the grantor acquires rights in it or the power to encumber it” (Sec. 5[b], PPSA).

Moreover, the PPSA also adopts an expanded definition of security interest as a property right in collateral that secures payment or other performance of an obligation, regardless of whether the parties have denominated it as a security interest, and regardless of the type of asset, the status of the grantor or secured creditor, or the nature of the secured obligation; including the right of a buyer of accounts receivable and a lessor under an operating lease for not less than one year (Sec. 3[j], PPSA).

It is worthy to note, however, that the PPSA is crafted not only to entice borrowers but the lenders as well. One important development under the PPSA that is appealing to both parties is the simplified framework for purposes of creation, perfection, and enforcement of security interests in personal property. The PPSA paves the way for borrowers such as MSMEs to obtain loans from banks and other financial institutions by simply entering into a written and duly signed security agreement to create the security interest (Sec. 5[A], PPSA), which is perfected by registering a notice with the PPSR and by possessing the collateral by the secured creditor if it involves a tangible property or taking control over the same if it involves intangible property such as investment property or deposit account (Sec. 12, PPSA).

Personal security may be enforced by the creditor upon default simply by the sale or disposition of the collateral either publicly or privately. The only limitation provided for by the PPSA is that the sale or disposition must be done in a commercially reasonable manner (Sec. 50, PPSA). Under the old rules, it was required that the foreclosure of personal property must be made through a notary public in the case of pledge, while in the case of chattel mortgage, the sale must be done only publicly. Thus, the procedure under the PPSA is less cumbersome as the law now allows private sale.

Although it may now be simpler for lenders to enforce the collaterals under the PPSA, this does not mean to say, however, that pactum commissorium is now sanctioned by law. Pactum commissorium is the automatic appropriation by the creditor of the things given by way of pledge or mortgage (Art. 2088, Civil Code). There is no automatic appropriation under the PPSA as the law still requires the creditor to sell or dispose of the property either publicly or privately. Thus, while the PPSA expressly repeals Art. 2088 of the Civil Code, pactum commissorium remains to be against public policy.

Notably, all the foregoing developments are in keeping with the policy of the state to promote economic activity by increasing access to least cost credit, particularly for MSMEs, by establishing a unified and modern legal framework for securing obligations with personal property (Sec. 2, PPSA).

The PPSA aims to encourage lenders to grant loans to MSMEs with fewer risks involved. This, in turn, enables MSMEs to thrive, promote employment opportunities, and ultimately contribute to the country’s economic growth and recovery especially after the devastating effects brought about by the COVID-19 pandemic.

The views and opinions expressed in this article are those of the author. This article is for general informational and educational purposes only and not offered as and does not constitute legal advice or legal opinion.

 

Wildy L. Pahayahay is an associate of the Angara Abello Concepcion Regala & Cruz Law Offices (ACCRALAW), Davao Branch.

(6382) 224-0996

wlpahayahay@accralaw.com

Globe and its ecosystem of partners mobilize collective support for hunger alleviation and holistic assistance

Donate your Rewards points before March 31 expiry

Every day, millions of Filipinos go to sleep on an empty stomach.

In the Philippines, an estimated 2.5 million people reported experiencing involuntary hunger as of the third quarter of 2021.[1] Many lost their livelihood due to the pandemic and were challenged with making ends meet daily.

With these challenges, immediate and collective action is an imperative. In this regard, Globe, through its Globe of Good program, aims to provide a platform that can bridge multi-sectoral stakeholders and encourage collective action towards achieving sustainable and inclusive development for communities by leveraging the power of technology.

In partnership with the Ayala Foundation, Caritas Philippines, and Tzu Chi Foundation Philippines, the Globe of Good program intends to provide a holistic intervention focusing on hunger alleviation and livelihood opportunities to benefit vulnerable families. Through these partnerships, Globe also promotes employee and customer engagement by conducting fundraising activities to encourage them to contribute to these initiatives.

The digital solutions group intends to strengthen its ecosystem of partners to drive social impact and allow its multi-sectoral partners to connect with and provide holistic programs to disadvantaged communities through the power of technology. The program empowers stakeholders through digital volunteerism, value chain integration for smallholder farmers, sustainable livelihood initiatives, and employment opportunities.

“We aspire for Globe of Good to be a platform that will allow people to use digital tools to create social impact. We want to extend everyday acts of kindness to those in need, so that we can create wonderful and uplifting experiences for all Filipinos,” said Yoly Crisanto, SVP Group Corporate Communications and Chief Sustainability Officer at Globe.

Programs under Globe of Good include family feeding activities, skills training for micro-entrepreneurship and vocational courses, access to microfinancing for start-up businesses, and employment opportunities for skilled workers.

The Ayala Foundation currently implements the #BrigadangAyala Kaakay Program to support families of those who lost their jobs in Metro Manila during the pandemic starting with a 12-week supplemental feeding initiative. Likewise, Caritas Philippines has the Alay Kapwa Legacy Program to provide livelihood through Self-Help Groups for low-income communities in Visayas and Mindanao, in partnership with local dioceses.

Meanwhile, under its #TzuChiSeeds Program, Tzu Chi Philippines has organized the Davao del Norte Banana Planting Livelihood and the Zamboanga Youth Education to Employment projects. These are designed to strengthen and empower the capacities of affected individuals, families, and communities to become self-sufficient through education, livelihood creation and humanitarian assistance.

“As a technology partner, Globe brings together its ecosystem to push forward collective action. There is an urgent need for all of us to work together to ensure sustainable and inclusive recovery from the pandemic. For every Juan that we help and capacitate, there is a multiplier effect on his family, community, and the nation,” said Crisanto.

Globe encourages every Filipino who can help to be part of the ecosystem of impact.

In the spirit of bayanihan, customers can use their Globe Rewards points that are about to expire on March 31 to donate to the Globe of Good. For as low as 1 point, customers can help families put food on the table and contribute to sustainable community programs.

Customers can go to the Rewards section of the New GlobeOne app, click the “DONATE” icon, choose Globe of Good and the corresponding denomination you want to donate, and press “REDEEM.” A confirmation message will be sent by 4438 upon successful donation.

Globe strongly supports the United Nations Sustainable Development Goals, particularly UN SDG No. 9, highlighting the roles of infrastructure and innovation as crucial drivers of economic growth and development. It is committed to upholding the UN Global Compact principles and contributing to 10 UN SDGs.

To know more about Globe, visit www.globe.com.ph.

[1] Third Quarter 2021 Social Weather Stations Survey

 

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