The country’s premier life insurance company, AIA Philam Life, has launched new investment funds which will give Filipinos access to the world’s biggest companies including Amazon, Apple, and Microsoft.
Available through its unit-linked insurance products, the new AIA Philam Life Elite Funds are designed to maximize the earning potential of common Filipinos’ hard-earned money through global funds. Policyholders may choose from different fund types depending on how much risk they are willing to take for the growth they would like their investment to achieve.
The Elite Funds will be available through Family Provider and the MoneyWorks. This expands the options policyholders can choose from to grow the account value of their life insurance plans. They may transfer to or add the peso-denominated Elite Funds in their portfolio. With access to a global portfolio of professionally-managed funds, customers will have the opportunity to grow their investment to meet their long-term savings objectives.
The AIA Philam Life Elite Funds are curated based on the customers’ risk profile and investment objectives. The Elite Adventurous Fund matches investors comfortable with higher risk in pursuit of higher return while the Elite Balanced Fund is perfect for those ready to take moderate risk for capital growth. For those with a low-risk profile but still seeking long-term total return, the Elite Conservative Fund is available. Each of these funds is uniquely created for AIA and managed by Best-in-Class asset managers.
AIA Philam Life has partnered with AIA Investment Management Pte. Ltd. (AIA IM) in the development of these funds. AIA IM is an AIA-affiliated company incorporated in 2016 as the hub for regional investment management that solely manages the assets of the AIA entities within the AIA Group. Through this collaboration, AIA Philam Life is able to open to Filipinos the opportunity to invest in global investments.
AIA IM has US$244 billion assets under management across 18 markets in Asia. AIA IM’s team of more than 150 investment professionals has access to the world’s finest global institutional fund managers. This partnership approach with external asset managers will help ensure the Elite Funds will deliver consistent long-term results.
The Elite Funds are invested in a combination of AIA Investment Funds managed by AIA IM and external fund managers Baillie Gifford, Wellington Management, and BlackRock. The underlying investments of the AIA Investment Funds include US Investment Grade fixed income securities, offshore traditional stocks, and new economy stocks such as Alphabet, Amazon, and Netflix.
With the new AIA Philam Life Elite Funds, AIA Philam Life stays true to its commitment of empowering Filipinos to live Healthier, Longer, and Better Lives through long-term savings solutions.
If you are like most people, you were likely affected by the global coronavirus disease 2019 (COVID-19) pandemic directly through infection or indirectly through the disastrous impact it has wreaked on the economy.
But a new year brings new opportunities and if you are looking to turn a new leaf financially in 2021, you are far from alone. In fact, a white paper released by AdSpark, Inc., a portfolio company under Globe Telecom’s 917Ventures last year, showed that consumption of Personal Finances as a topic grew by 800% from January 2020 to the end of March 2020 when most Filipinos were required to stay at home.
This was supported by the Global Web Index which tells in numbers how people foresee the impact of the situation on their personal finances. Of the Filipinos surveyed, 65% believed that the COVID-19 pandemic will have a big impact on their personal finances while 15.7% said the effect could be greater.
No doubt that number is far larger now that a full year has gone by. Yet, as awful as it had been, there is much 2020 could teach about the importance of being financially secure, especially now in a drastically different world.
Save whatever you can and build an emergency fund
Everyone from the billionaire tycoons to their hardworking employees were caught unaware by the pandemic. This has resulted in millions of lost jobs and lost income. And while naturally the worst affected had been those already poor and vulnerable, everyone has felt the effects that COVID-19 has had on the economy.
Being prepared for such events and setbacks is the main purpose of an emergency fund. An emergency fund is a stash of money set aside to cover the unexpected financial surprises that may come your way. Such events could be an unexpected car trouble, a bad illness, or other sudden expenses. Having an emergency fund is like having a safety net that you can rely on to save yourself the stress of financial instability or going into debt.
Most financial experts will recommend an emergency fund of about three to six months’ worth of expenses, put into an easily accessible deposit account. You should try to save up this amount even if you have any outstanding debt, budgeting wherever necessary. The peace of mind brought by having an emergency fund will make all the scrimping worth it.
Naturally, you should not touch this fund unless there is an emergency, or else it defeats the purpose.
Learn to use technology to your advantage
Many people will struggle with saving, especially in troubled times like these. Most banks nowadays have digital platforms where you can do your banking online. If you have never tried using such platforms before, now is the time to try.
Having an easily accessible way to check your finances wherever you are can be a great motivator towards spending responsibly. You can also check with your bank if they have features like automatic bills payments for your recurring bills, or even if they can automatically invest part of your income towards retirement funds or life insurance.
Learn all you can about how digital technology can help you achieve your financial goals. Download free apps that can track your spending habits or can help you create a budget.
Check your lifestyle and make some cuts
As widespread as it was, the pandemic has changed everyone’s daily lives the world over. For many, it has been a massive lifestyle change. In an instant, there was no more travel to look forward to, remote work began to become mainstream, and eating out in restaurants became ordering delivery and dining in at home.
Examine how the pandemic has affected you and your spending habits. Maybe you stopped checking in for a morning coffee at your favorite cafe. Maybe you don’t order from restaurants as much because you can cook meals at home now. Whatever the changes may be, ask yourself if anything of value was lost. If you are satisfied with your life even with all the lifestyle cuts, then why not take them out of your budget altogether?
Educate yourself
They say the best investment you can ever make is investing in yourself. If you want 2021 to be the year you start on your journey towards financial security, then it is a good idea to invest in your financial education.
You don’t need to enroll in any classes or buy any books (though they help!). Resources about financial education is all over the internet, from Investopedia to podcasts to your own bank’s website. Being financially educated means changing your mind-set to learn and understand money and all the ways it can help you improve your life. — Bjorn Biel M. Beltran
Protection is what insurance mainly gives clients. Knowing that the future cannot be completely certain for anybody, insurance, in its various ways of protecting one’s hard-earned assets, can give clients and their families peace of mind when illness, accidents, disruptions, or untimely passing comes.
Life insurance, for instance, is considered as “a means of providing an instant estate for survivors.” For Edward J. Metzen, a former chair of the current Department of Personal Financial Planning in the University of Missouri (UM), this benefit life insurance provides shows how much it prioritizes protection for clients.
“When buying life insurance, your primary concern should be providing adequate protection; the possible savings feature is a secondary consideration,” Mr. Metzen advised in a guide to insurance on UM’s website.
Such protection is not limited, nonetheless, to providing income to an insured’s dependents. Insurance can, in fact, prevent them from having to give off assets. This is what is often referred to as estate preservation.
Before the ownership of one’s assets can be transferred to another, an estate tax should be given to the government. The amount of this tax, however, might surprise survivors that they might even consider selling off some, if not all, of those assets just to pay the tax. Add to that unsettled debts and the burden expands.
Life insurance can prevent survivors from bearing this burden by using the premium to pay for taxes and unsettled debts.
“Life insurance can potentially cover whatever is due to the government so your loved ones don’t have to make difficult decisions,” local financial literacy platform Pesolab wrote.
Aside from estate preservation, life insurance is also considered an efficient way of estate creation. In addition to the aforementioned ‘instant estate,’ life insurance can also help equitably transfer wealth to later generations.
Shares of a family business, for instance, can be distributed to all members instead of solely to family members who are active in that business.
“Often, the business is the estate’s major asset and the amount remaining for family members who are not involved in the business is significantly less. Life insurance can provide a lump sum to the family members who do not have an interest in the business, to ensure a fair inheritance,” US-based wealth management service TD Wealth wrote in a document on life insurance’s role in asset protection.
Another way estate is created and protected through life insurance involves annuity, which provides investors with a guaranteed regular income stream while consequently facilitating the creation of an estate.
“Usually, a portion of the annuity income is used to pay the premiums for a life insurance policy with a face value (insurance benefit) equal to the amount of the annuity principal,” TD Wealth explained. “Upon death of the annuitant, the tax-free life insurance death benefit is paid to the annuitant’s beneficiary(ies) to replace the capital originally invested in the annuity.”
Furthermore, there are other types of insurance tailored to protect certain assets.
Property insurance is designed to protect an insured’s house, whether owned or rented, as well as other items he or she owns. In cases of natural calamities, theft, or fire, among other uncertainties, this kind of insurance should at least cover most of the replacement costs. It can also protect the owner/renter against personal liability if someone is injured at that property.
“Without property cover, you absorb all the risks in acquiring these assets. If you have adequate cover, however, you can rest easy knowing your insurer will pay you a lump sum benefit when your properties are caught in a natural disaster or a man-made accident,” Pesolab noted.
Auto insurance, meanwhile, covers the replacement of vehicles in case of accidents. Beyond that, auto insurance also provides coverage for liabilities (if the driver is the offending party) as well as medical-related expenses. Another financial platform, Grit.ph, in its guide to car insurance, finely stressed the importance of such policy: “It’s ‘protection for your pockets’ against car-related damages or accidents.”
Businesses are also not exempted from uncertainties, more so at present; so a policy designed for them will greatly help. Business insurance protects businesses from potential losses by providing coverage for their financial assets as well as intellectual and physical properties from lawsuits, property damage, theft, loss of income, and employee injuries and illnesses.
Business insurance comes in several forms. One of these is the business owner’s policy, which covers damage to property and even business interruption. Workers’ compensation insurance, meanwhile, covers medical and health bills of employees in case of workplace accident.
Group life insurance, or employee benefits package, is collectively provided by businesses to their employees; while data breach/cyber liability insurance can be used to protect businesses from costs resulting in digital attacks.
Assets, in their various forms, should regularly be appreciated and taken care of, and various insurance products in the market are capable of helping consumers become better stewards of their assets and themselves. — Adrian Paul B. Conoza
With the start of a new year often come new opportunities: relationships, new set of goals, and commitments. Yet, with every new opportunity, there are always unforeseen challenges which one should prepare for.
Kiefer Ravena, Gilas Pilipinas Team Captain and Cocolife Brand Ambassador, finds it important to have the tools that will gear him up for whatever life throws at him.
“I have no way of predicting the future. I want some assurance that I will have the resources to live a comfortable life,” Mr. Ravena said.
Seeing this need among Filipinos to prepare for uncertainties, Cocolife, the biggest and first ISO-certified Filipino-owned stock life insurance company, has developed Cocolife FLEXI series, variable life insurance products that give you the freedom to design your investment and insurance plans according to your needs.
With a diversified investment mix, fund-switching options, and flexible payment terms, FLEXI enables you to tailor your plan to reach your goals closer.
Joseph Mark Y. Ronquillo, senior vice-president and chief of Retail Distribution Division, United Coconut Planters Life Assurance Corp.
“This is the type of investment that can provide you with peace of mind and an opportunity to make your money grow over time,” Cocolife’s Senior Vice-President Joseph Mark Ronquillo said.
For parents looking for a custom-fit educational plan for their children, FLEXI Education serves as a valuable investment companion. Amid rising tuition fees and school expenses, with this plan, parents can afford to give their children the best education as it provides the cash earnings to fund the schooling of their kids.
For investors who are looking for a means to fulfill their dreams, FLEXI Investment is the ideal choice. Offering an excellent investment and insurance plan, this allows clients to configure their plan to match with their life goals — from a dream house to a dream business.
FLEXI Protection, meanwhile, can help you protect your family in case the worst happens through cash benefits, as well as riders such as Accidental Death and Dismemberment, Waiver of Premium upon Disability and Critical Illness Benefit Rider.
To help you live a worthwhile life upon retirement, FLEXI Retirement enables you to start building your funds for a comfortable life as you age.
While each plan targets certain goals, all FLEXI plans provide the coverage to support your loved ones in the event of untimely demise. It also allows its holders to increase or withdraw their investments any time, or change their investment mix depending on their risk tolerance.
FLEXI is available in various payment modes depending on your financial capacity or goals. It can be paid regularly or for a shorter period of 5, 7, 10, 15, or 20 years via cash, credit card, ATM, or debit card.
Cocolife believes in the Filipino, and with its FLEXI plans it offers clients a convenient and comprehensive choice to plan ahead, protect their loved ones, and fulfill their dreams.
“Every Filipino should consider an investment that provides not only an opportunity for their money to grow but also provides their family income protection,” Mr. Ronquillo said.
These benefits can easily be found in Cocolife’s FLEXI plans. Learn more about FLEXI by contacting your Cocolife Financial Advisor, calling Cocolife Hotline 8810-7888, or visiting www.cocolife.com.
Uncertainties are inevitable in life — from illnesses, accidents, sudden economic downturns, and, ultimately, death. Not only do these events affect individuals, but more so their families. Such reality has been further stressed when the coronavirus disease 2019 (COVID-19) spread across the globe and suddenly impacted communities, businesses, and households.
These uncertainties, however, can be prepared for by making investments that enable breadwinners to protect their income as well as manage whatever risks that may come in.
For Joseph Mark Y. Ronquillo, senior vice-president and chief of Retail Distribution Division at United Coconut Planters Life Assurance Corp., more known as Cocolife, a wisely picked investment helps consumers secure their earnings as well as allow it to grow.
“In the face of pandemic and other challenges, every Filipino should consider an investment that provides not only an opportunity for your money to grow but will also provide your family income protection in case you, as the breadwinner, are taken out of the picture,” Mr. Ronquillo told BusinessWorld in an e-mail.
Among such investments include life insurance. As local financial literacy website Pesolab noted, life insurance achieves the goals of income protection and risk management. Yet, it goes beyond these purposes as it also helps consumers gain wealth.
“With the rise of products that include cash values or investments, it can be a financial planning strategy to save and grow your money over time,” Pesolab wrote.
This cash value component is what makes life insurance a good investment to embark on, according to financial information portal Investopedia. How it really benefits an insured, however, will depend on whether the policy fits his or her preferences.
“Whether or not life insurance is a good investment for you depends on your individual finances as well as the length you’ll need coverage,” Investopedia stressed in its guide to life insurance.
Choosing wisely
Joseph Mark Y. Ronquillo, senior vice-president and chief of Retail Distribution Division, United Coconut Planters Life Assurance Corp.
With many insurance options to choose from in the market, how can a consumer choose one that is worth investing in?
Mr. Ronquillo advises consumers that their choice should first match their objectives. “The desire to invest should always be driven by what specific needs an investor would like to address such as family income protection, educational fund for the children, retirement fund buildup, and other major goals and purchases,” he said.
Another aspect in which a preferred investment should match with is one’s investment horizon or the total length of time an investor expects to hold a security or investment portfolio. “A match between the choice of investment and investment horizon is a must to avoid problems in the future when you already need to withdraw your money,” Mr. Ronquillo advised.
Lastly, the investment should match with one’s risk appetite or risk tolerance. Basically, low-risk investments (e.g., money market instruments) would normally yield lower returns, while high-risk investments (e.g., equities, stock market) potentially yield higher returns in the long term.
“Every investor should do some kind of introspection before diving into any investments. In terms of investments, they have to also assess whether they are conservative or aggressive or somewhere in between,” Mr. Ronquillo said.
He also noted that clients should always keep abreast of current events as these can affect the current economic situation. By staying informed, they can make informed decisions on what type of investments will fit the current climate.
To keep these investments sound, especially given the current situation, the practice of diversification matters more than ever.
“Since there’s no way to predict how well a particular asset category will perform, setting the right amount of money to different types of investments should be your course of action,” BPI-Philam Life, the bancassurance arm of Philippine American Life and General Insurance Co., Inc. (Philam Life), wrote on its website.
A client should also make sure that debts are settled first so that they do not get in the way of current or new investments. “Your assets may be giving you a good amount of returns, but you won’t be able to maximize your earnings if the interest rate of your credit card bills is slowly chipping away at them,” BPI-Philam Life’s article read.
It helps as well, to regularly consult with financial advisors who can guide one’s investments to the right direction.
As Mr. Ronquillo shared, Cocolife ensures that all clients are given the most tailored advice to suit their specific needs and guide them in making the best decision for them and their family’s well-being.
Various options
Determining one’s objectives, investment horizon, and risk tolerance can greatly help consumers choose the insurance policy that adequately helps them address life’s uncertainties.
Yet, for those who might still find it difficult to determine what insurance product they should choose, Cocolife’s Mr. Ronquillo suggests that a variable life insurance is “ one of the smartest investments there is in the market today,” as it puts together insurance and investment into one policy.
Variable life insurance is defined as a type of permanent life insurance that provides death benefits as well as the ability to build cash funds through an investment component that an insured can manage. Therefore, the insured can control where he can place his investments.
“To put it simply, this is the type of product that can provide you with peace of mind and an opportunity to make your money grow over time,” Mr. Ronquillo said.
The SVP noted that while this kind of insurance product allows the insured to have a protected income, retirement fund, and educational fund, it can also help build wealth for major purchases such as a brand new car, a dream house, and even a dream vacation.
Cocolife’s variable life insurance products are under its FLEXI plans, which are payable in 5, 7, 10, or 20 years and can be configured according to a client’s needs. Products under this line include the FLEXI Investment, FLEXI Protection, FLEXI Retirement, and FLEXI Education plans.
Philam Life, on the other hand, offers a one-pay investment and life insurance plan branded as Money Tree Elite, which ensures guaranteed life insurance coverage of at least 125% of one’s investment.
The firm also offers life insurance plans powered by its wellness program Philam Vitality, which allows clients to enjoy rewards for taking active steps in knowing and improving their health. These products include AIA All-In-One and Family Secure plans.
Philam Life’s other life insurance plans include the Guardian plan and the Family Provider plan. The latter ensures life insurance coverage that does not take a lifetime to pay for, and it also links benefits to investment funds of a client’s choice.
Consumer spending likely increased in the fourth quarter, as Filipinos spent more during the holiday season. — PHILIPPINE STAR/MICHAEL VARCAS
By Beatrice M. Laforga, Reporter
THE Philippines’ gross domestic product (GDP) likely contracted slower in the fourth quarter due to a pickup in economic activity as lockdown restrictions were further eased and higher consumer spending during the holiday season.
A BusinessWorld poll of 18 economists and one institution last week yielded a median GDP contraction of 8.5% for the fourth quarter and 9.5% for the full year. Economic output grew by 6.7% in the fourth quarter of 2019, and by 6% during the year.
The quarterly forecast is less severe than the 11.5% slump seen in the third quarter and 16.9% contraction in the second quarter.
The full-year GDP contraction, if realized, would be the first decline since 1998 (0.5%) and the steepest on record based on available data dating back to 1947. It would surpass the 7% and 6.9% slump in 1984 and 1985, respectively.
The poll’s median estimate of a 9.5% slump for 2020 compares with 8.3% projected by the International Monetary Fund, 8.1% by the World Bank, and 8.5% by the Asian Development Bank. Fitch Ratings and Moody’s Investors Service gave contraction estimates of 8.5% and 8.7%, respectively, while ASEAN+3 Macroeconomic Research Office sees the GDP slump at 7.6%.
The Philippine Statistics Authority (PSA) will release GDP data on Jan. 28, a day after the release of latest quarterly data on agriculture and the December international trade deficit on Jan. 27.
Economists said the GDP decline likely softened in the fourth quarter due to further easing of lockdown restrictions and increased consumer spending during the holidays. Positive news on the development of a coronavirus disease 2019 (COVID-19) vaccine also likely helped boost consumer confidence.
“We forecast that the GDP declined at a slower pace of 6% year on year in 4Q20 from 11.5% year on year in 3Q20. In our estimates, we considered a more relaxed overall quarantine restrictions, which likely resulted in less subdued consumer spending,” Alvin Joseph A. Arogo, vice-president and head of equity research division at the Philippine National Bank (PNB), said via e-mail.
“Consumer confidence was also likely boosted by positive developments regarding the COVID-19 vaccine. Our full-year 2020 GDP forecast is -8.9% year on year,” he added.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the fourth- quarter GDP might have improved slightly from the previous quarters on “the pickup in spending by both businesses and consumers for the Christmas season, thereby also entailing more economic activities that generated more jobs.” Consumer spending accounts for at least 70% of the economy.
Mr. Ricafort said the seasonal increase in remittances of overseas Filipino workers (OFWs) ahead of the Christmas and New Year holidays also helped lift economic activity.
Latest central bank data showed OFW remittances inched up by 0.3% to $2.379 billion in November, the third consecutive month of growth. This brought year-to-date remittances to $27.013 billion, down by 0.8% year on year.
However, a string of strong typhoons in Luzon, subdued consumer and business sentiment, and insufficient fiscal boost from the government, weighed on the fourth-quarter GDP.
“We expect a 12.2% year-on-year contraction in 4Q2020 GDP vs 4Q2019; This translates to a FY2020 GDP decline of 10.6% vs FY2019,” said Emilio S. Neri, Jr., the lead economist of the Bank of the Philippine Islands.
The major reasons for these estimates include the major typhoons and floods in October and early November, which had a significant drag on economic performance in Cagayan Valley and Eastern Metro Manila economic performance, he said. “While not as serious as the drags of Ondoy and Pepeng in 2009, we believe this had a substantial dent on consumer and investment behavior in Metro Manila through late November,” Mr. Neri said.
Kanika Bhatnagar, an economist at ANZ Research, said the Philippine economy’s recovery had been slow due to “inadequate fiscal delivery and a weak labor market.”
In an e-mail, Ms. Bhatnagar said consumer spending might have been dampened by the high jobless rate, while investments remained sluggish as banks tightened lending.
“Also likely weighing heavily on the overall GDP numbers would be the absence of capital formation, which will likely post another startling double-digit drop as indicated by the sharp pullback in capital goods imports for the second half of 2020,” Nicholas Antonio T. Mapa, the senior economist at the ING Bank N.V. Manila Branch, said.
“Poor road vehicle sales on a year-on-year basis, cancellation of aircraft orders and a likely full slowdown in new construction projects all point to a severe contraction for this sector,” he added.
Industry data showed car sales reached 27,596 units in December, down by 18% from a year ago. Full-year sales stood at 223,793 units, 39.5% lower than in 2019.
Faster inflation, especially in food items and fuel products, during the period also hampered the economy’s recovery, according to Colegio de San Juan de Letran Graduate School Dean Emmanuel J. Lopez.
Headline inflation quickened to a 22-month high in December, rising faster at 3.5% from the 3.3% in November, due to a spike in food prices and nonalcoholic beverages. This brought the average inflation for 2020 to 2.6%, within the Bangko Sentral ng Pilipinas’ 2-4% target.
Noelan Arbis, an economist at Hongkong and Shanghai Banking Corp. Ltd. (HSBC) who expects GDP to have shrunk by 9% in the fourth quarter and by 9.7% for the entire year, said economic activity might have picked up amid relaxed quarantine restrictions in the past three months of 2020, while financial markets continued to receive support from the accommodative stance of the central bank.
“The outlook for 2021 depends on the government’s handling of the pandemic and its vaccine rollout. We expect GDP growth of 6.5% in 2021, barring a new wave of COVID-19 infections and vaccine inoculations beginning sometime in the first half of the year,” Mr. Arbis said.
Badly hit sectors such as tourism and commercial aviation are expected to see a prolonged weakness and could drag the economy’s recovery, said IHS Markit Asia-Pacific Economist Ravis Biswas, who gave a 6.3% contraction GDP estimate for the fourth quarter and an 8.9% slump for 2020.
“The outlook for 2021 is for a strong economic recovery based on a gradual rollout of COVID-19 vaccines during 2021 in the Philippines as well as a strong economic rebound in key export markets such as the US, China and the EU. IHS Markit forecasts that the Philippine economy will rebound strongly in 2021, growing at a pace of 7.7% year on year,” he added.
THE Philippines’ gross domestic product (GDP) likely contracted slower in the fourth quarter due to a pickup in economic activity as lockdown restrictions were further eased and higher consumer spending during the holiday season. Read the full story.
The government will release the updated Philippine Development Plan on Feb. 4. — PHILIPPINE STAR/MICHAEL VARCAS
THE NATIONAL Economic and Development Authority (NEDA) board, chaired by President Rodrigo R. Duterte, has approved the country’s medium-term economic development blueprint which was updated to consider the impact of the coronavirus disease 2019 (COVID-19) pandemic.
“The Updated Philippine Development Plan (PDP) has been approved by the NEDA board on Jan. 7, after the majority of the NEDA board members signed the ad referendum in favor of the plan,” said Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua said in a statement late Friday.
The government began reviewing its economic goals and programs under the PDP 2017-2022 last year, as the pandemic drove the economy into its first recession in nearly 30 years.
The updated plan, which NEDA will release on Feb. 4, covers the government’s priorities for the next two years, Mr. Chua said. These include the enhanced implementation of the Universal Health Care Act, raising the quality of instruction in education, upskilling workers and institutionalizing social safety nets.
“It includes other reforms and strategies we will undertake to meet the sustainable development goals and help every Filipino achieve the long-term vision of a strong, convenient, and peaceful life by 2040,” Mr. Chua said, referring to the longer-term vision of the government formally called AmBisyon Natin 2040.
The 2017-2022 plan and AmBisyon Natin 2040 were both crafted in 2016, with the latter serving as the anchor for development planning for four administrations. AmBisyon Natin 2040’s 25-year vision is to eliminate poverty and make the country a predominantly middle-class society.
In its October Labor Force Survey report, the NEDA said the updated plan includes an unemployment target of 7-9% by 2022, lower than the initial goal of 3-5% adopted in 2016.
The jobless rate spiked in April after the strict lockdown forced most businesses to close amid the pandemic. The unemployment rate averaged at 10.2% last year, according to official data.
Under the original blueprint, the government had targeted to become an upper-middle income economy by 2022; achieve a 7-8% annual growth rate; increase per capita income to $5,000 (from $3,850 in 2019); reduce the poverty rate to 14% (from 16.7% in 2018); and keep inflation rate within 2-4%. — Beatrice M. Laforga
A test tube labeled with the coronavirus is seen in front of US dollar, yuan and pound banknotes, in this illustration taken on March 1, 2020. — REUTERS/DADO RUVIC
By Luz Wendy T. Noble, Reporter
THE DECLINE in foreign direct investments (FDI) may have already bottomed out in 2020, but the Philippines’ ability to attract investments will depend on key reforms and the government’s handling of the coronavirus pandemic, the International Institute of Finance (IIF) said.
“We believe the worst is over for the Philippines’ FDI flows, but we still expect it will remain at a low level in 2021, around $7 billion,” IIF Associate Economist Yuanliu Hu said in an e-mail to BusinessWorld.
FDI net inflows shrank by a quarter to $423 million in October from $561 million a year earlier, data from the Bangko Sentral ng Pilipinas (BSP) showed. For the 10-month period, FDI flows slipped by a tenth to $5.255 billion.
The central bank expected FDI inflows to have reached $6 billion as of end-2020 and set a $7.5-billion target for 2021. Net FDI stood at $7.647 billion in 2019.
Inflows of FDI will likely remain tempered due to cautious investor sentiment, as the pandemic continues with a new coronavirus disease 2019 (COVID-19) variant bringing “a new wave of crisis to the world,” said Mr. Hu.
Global COVID-19 infections have continued to rise with over 95 million cases and two million deaths. In the Philippines, COVID-19 cases stood at 513,619 as of Sunday, the second highest in Southeast Asia.
Aside from the pandemic, Mr. Hu said risks from the US-China trade war are unlikely to fully dissipate even as Joseph R. Biden, Jr. assumes the presidency. Uncertainties caused by the tension between the world’s biggest economies have weighed on investor sentiment even before COVID-19.
Mr. Hu said the Philippines should focus on curbing the spread of COVID-19.
“The most important tasks of the government are to control the pandemic and speed up the vaccination process. A safe environment can attract more FDIs,” he said.
The government is seeking to start the vaccination program by next month.
A report by ANZ Research last week showed the Philippines wasamong “economies slow in confirming vaccine supplies,” alongside Taiwan and Vietnam where infections are much lower. Meanwhile, it grouped Singapore and South Korea as among “economies achieving potential herd immunity in 2021” due to their speedy vaccination rollouts.
Mr. Hu said government reforms are also key to attracting more foreign investments.
“It is necessary to accelerate the implementation of the corporate tax cut plan and other reforms to create a friendly business environment,” he said.
Once enacted into law, the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) will immediately bring down corporate income tax to 25% from 30% and will streamline fiscal incentives for firms. The Bicameral Conference Committee is set to meet to reconcile the conflicting provisions of the House and Senate versions.
A CAR industry group is urging the government to support local assembly after another manufacturer stopped its Philippine production.
Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI) President Rommel R. Gutierrez said that Nissan Philippines, Inc.’s recent announcement to end car assembly in the country highlights the importance of government support to local production while still allowing for imports.
“The rationalization of production operations in the Asian region takes into account the competitiveness of local operation,” he said in a mobile message on Friday.
“The remaining local assemblers need more support to stay competitive without undermining regional complementation on supply chain, among others.”
Nissan Philippines will be stopping local assembly of its Almera vehicles in March, laying off 133 employees. Honda Cars Philippines, Inc. shut its local assembly activities last year.
Both firms will continue to sell cars in the Philippines through their regional networks.
Trade Secretary Ramon M. Lopez had said that the recent closures are proof of the need for the recently imposed safeguard duties on imported cars, which had been placed after the Trade department’s investigation confirmed a link between a surge in imports and a decline in local automotive jobs.
CAMPI had pushed back against the measure, saying that it would impede the recovery of an industry hit hard by a demand slowdown caused by the lockdown. But the Trade department had countered that the move would protect local jobs.
Mr. Gutierrez said that there should be a balance between assembling completely knocked down (CKD) cars and importing completely built up (CBU) units for the survival of local assembly.
“CKD operation cannot survive without a combination of CBU importation,” he said.
“The industry and government should work together towards a more progressive policy to preserve the remaining local vehicle assembly/manufacturing in the Philippines.”
Workers group Philippine Metalworkers Alliance, which had petitioned for the safeguards, said in a recent statement that the duties are not enough to save the industry. The group said that the government must revisit its car industry development program and address the high costs of power and transportation.
Car sales in the Philippines declined by 39.5% to 223,793 units in 2020 compared with the previous year after restrictions declared to contain the coronavirus disease 2019 (COVID-19) pandemic lowered demand, data from CAMPI and the Truck Manufacturers Association showed.
PARIS Men’s Fashion Week has just ended, and Paris Couture Week is about to start. In a changed and changing world, the world’s fashion capitals have had to adjust too. Gone are the runway walks of years past, of applause and pageantry, for all had to make do with fashion films while their audience clapped from their screens. We’re seeing now how three household names in luxury — Hermès, Louis Vuitton, and Dior Homme — are interpreting our new lives.
DIOR This new Dior man for 2021 is handsome, well-dressed, and artistic. He’s also dressed in a suit with pajama piping because he probably works from home.
Either way, the silhouettes for this year for menswear is decidedly more relaxed, with an enviable slouch in trousers and jackets that make one sigh with relief.
It’s definitely still luxurious: the show opens with a gold-embroidered black cashmere coat, with an accompanying video at the Dior website showing how it was made at the Vermont ateliers in Paris. The look, then, is relaxed bohemian opulence. The coat was inspired by the Rosella, a haute couture dress designed by Marc Bohan (a Dior designer who replaced Yves Saint Laurent, and a designer to icons Princess Grace of Monaco and Sophia Loren).
For this season, Dior’s Creative Director Kim Jones collaborated with Scottish-born, Trinidad-based artist Peter Doig. While a large chunk of the collection is either in neutrals like beige and gray, Mr. Doig’s influences are seen in acid tones like pink and orange, painted with examples from his work in figurative art.
HERMÈS The silhouettes of Dior and Hermès are quite similar, down to the slouchy riding pants tucked into boots. But while Dior veers towards bohemian excess, the offerings of Hermès are soberly academic. Its presentation was shot at the Mobilier National in Paris (a cultural office that takes care of state furniture and manages Gobelins and Beauvais). There’s a huge use of tartans and safe taupe this collection, perhaps teasing a trend for this season.
LOUIS VUITTON We’ve saved the best for last: Louis Vuitton’s Artistic Director Virgil Abloh made a 15-minute fashion film spectacle centered around an art heist. This is by no means exciting or action-packed. Louis Vuitton’s website says, “The performance revolves around the figurative notion of the art heist that is the art world’s theft and re-appropriation of foundations of cultural heritage.”
The film is both a fashion show and a commentary on racial politics. The film is directly influenced by African-American writer James Baldwin’s essay “Stranger in the Village.”
For trends, we spotted the return of a 2000s favorite, the metallic Louis Vuitton Miroir; reflected as well in suits of silver. There are bags shaped like airplanes, a lemon yellow duffel, but also tartans and stripes. That should set you up for this year.
However: what strikes a viewer in the film aren’t quite the clothes, but the performances by rappers Saul Williams, Yasiin Bey (a.k.a. Mos Def), and poet Kai Isaiah Jamal. Saul William takes a walk in the runway with a big black coat with airplanes marking the closures (while other men behind him look decidedly 1960s — dressed in fashions during the rise of the civil rights movement). While he walks, a voice says, “Make space for me… make it up to me.” Later in the video, these words were spoken: “Those who burn, those to the fire, and the countless unnamed.” While the message is timely, does it hinder or help that the message is seen through the lens of luxury fashion? “Stranger in the Village” reads, “The rage of the disesteemed is personally fruitless, but it is also absolutely inevitable: the rage, so generally discounted, so little understood even among the people whose daily bread it is, is one of the things that makes history.”
LISTED fiber internet provider Converge ICT Solutions, Inc. is aiming to cover more than half of the country’s households by 2025, its top official said.
“We are hopeful that we can contribute to economic recovery as we reach our objective of 55% household coverage by 2025 with our fiber network and, in tandem, drive rapid take-ups once we deploy our ports,” Converge ICT Chief Executive Officer Dennis Anthony H. Uy told BusinessWorld in a recent e-mail interview.
The company is hoping to serve around four to five million customers in five years, he noted. “We passed one million subscribers before the end of 2020, and we continue to see strong demand as we entered the new year of 2021.”
Converge is also expecting to sustain the growth it saw in 2020, as it extends its services to other parts of the country.
“We are expecting to complete our national loop within the year, which will allow us to offer fixed broadband connection to other regions that remain underserved,” Mr. Uy said.
The newly listed company recently reported an attributable net income of P2.19 billion for the first nine months of 2020, up 57.63% from P1.39 billion it earned in the same period in 2019.
Its total revenues for the January to September 2020 period jumped 67% to P10.68 billion from the previous year’s P6.39 billion.
Converge had initially said its residential and enterprise segments generated revenues of P8.41 billion and P2.26 billion, respectively, in the first nine months.
The company attributed the increase to the “higher revenue and prudent management of direct costs, including its international bandwidth and leased line costs.”
“Our expertise puts us in the prime position to help the community adapt to the digital lifestyle by serving their at-home needs,” Mr. Uy said.
“The work-from-home and study-from-home arrangements that we have seen at the height of the pandemic as well as the proliferation of online ventures have shown us another and more efficient way of going about our business, and we expect that to continue in some form or another,” he added.
Converge ICT shares closed 0.13% lower at P15.56 apiece on Friday.
