Home Blog Page 7162

Axelum allots P350 million for 2021 capex

LISTED Axelum Resources Corp. has allocated around P350 million for its capital expenditures (capex) in 2021 to support its growth amid the coronavirus disease 2019 (COVID-19) pandemic.

In a regulatory filing on Thursday, the company said it had earmarked the said amount to fund the modernization of equipment, upgrade its capacity, and new product research and development initiatives.

“The company is also seeking to extend its market reach both domestically and overseas by appointing reputable distribution partners in identified key growth areas and continues to look for strategic and value-accretive targets for either an acquisition or joint-venture,” the company said.

Axelum has started the production of pressed coconut water, which is a product of its client Vita Coco. The company projects to achieve double-digit volume growth in its coconut water segment due to stronger demand.

“Last year, we capitalized on downtime at our manufacturing facilities driven by the COVID-19 pandemic to increase capacity in existing products and introduce new products, both of which will drive substantial growth in the future,” Axelum President and Chief Operating Officer Henry J. Raperoga said.

Further, Axelum is currently operating its production lines at full capacity for products such as coconut milk powder, desiccated coconut, coconut water, and coconut cream and milk.

Citing industry experts, the company said the market for coconut milk powder is expected to quickly grow due to its commercial applications and higher demand for organic coconut milk powder as a component for plant-based food products.

“We are entering 2021 with a renewed sense of courage and optimism anchored on our collective efforts and various learnings from last year, which strengthened our character and resolve,” Mr. Raperoga said.

Axelum recently announced the extension of its share buy-back program up to P500 million until June 30, 2021. As of writing, the company has bought 80.43 million treasury shares.

On Thursday, shares in Axelum at the stock exchange fell 1.53% or five centavos to end at P3.22 apiece. — Revin Mikhael D. Ochave

OFW deployments estimated to have fallen up to 75% in 2020 — POEA

OVERSEAS WORKER deployments fell by up to 75% in 2020 as job markets shut down due to the pandemic while movement to work sites was hindered by travel restrictions, according to preliminary estimates issued by the Philippine Overseas Employment Administration (POEA).

The agency’s administrator Bernard P. Olalia said at a briefing Thursday that the decline in worker deployments takes in the tally from both land-based and sea-based overseas Filipino workers (OFWs).

The newest official POEA statistics on worker deployments found on the agency’s website only run to 2016, during which the total OFW population was recorded at 2.55 million, including 1.7 million land-based workers.

Ayon sa data natin, nasa 70% to 75% ‘yung decline ng ating deployment kumpara sa historical data (According to our data, the decline in deployment is around 70% to 75% compared to historical data),” he said.

Mr. Olalia said the slump in deployments also affected recruitment agencies in the Philippines, foreign employers that depend on imported labor, and insurance companies that lost premium income from the inability to issue policies to deploying workers, as required by labor rules.

As the global economy gradually reopens, Mr. Olalia said he hopes 2021 will see improved deployments.

Sana unti-unti itong sumisigla (I hope we see a gradual return to health for the job market),” he said. — Gillian M. Cortez

Upscale hotels popular for New Year stays

Pinoys choose ‘outdoorsy’ destinations

A YEAR of pandemic restrictions have prompted travelers to ring in the new year with more upscale stays, according to travel booking website, Agoda.

Using data Agoda collected from Dec. 10 for New Year’s Eve bookings, the company saw four- and five-star accommodations being the accommodation of choice globally to celebrate the new year in 2020, in contrast to 2019 where one- to 3.5-star hotels were in first place and upscale hotels in second, with the exception of Taiwan, Thailand, and the United States which continued to favor one- to 3.5-star hotels this year.

Four- and five-star hotel bookings saw an increase of 13 percentage points in 2020 compared to the year prior, according to a company statement.

In the Philippines, with travel restrictions loosening, Filipinos continued to enjoy their New Year’s Eve celebrations in Manila, Cebu, and Tagaytay which occupied the top three Domestic Destinations in both 2019 and 2020. Both the 2019 and 2020 lists feature similar domestic destinations including Baguio, Boracay, and Palawan, although 2020 saw the entry of Batangas and Laguna which Agoda said is because “Filipinos are also exploring destinations that are ‘outdoorsy’ for a quick respite.”

“While 2020 might have upended many travelers’ plans, Agoda’s data that 4- to 5-star hotels are most popular among New Year’s Eve bookings this year shows us that there’s great desire among travelers to pamper themselves and optimistically usher in the New Year in style. We are heartened that travelers are not letting the pandemic dampen their travel spirits, and are also spending the New Year exploring domestic destinations less traveled, supporting local tourism communities in those areas,” Errol Cooke, vice-president of partner services at Agoda, said in the statement.

Yields on gov’t debt to stay low

YIELDS on government bonds are likely to stay low this year, with a slight pickup seen in the later months, as financing pressure remains subdued, ANZ Research said.

ANZ Research said in a note titled “Asian Rates Insight: Philippines – RPGB supply and demand in 2021” on Monday that while the government’s financing needs this year will remain large due to its bigger budget and wide fiscal deficit, the increase will remain modest from the record borrowings worth P3 trillion last year.

It said the government has several financing options which ease the pressure on the local debt market, such as tapping offshore sources while global liquidity remains elevated. The Bangko Sentral ng Pilipinas (BSP) is also sharing the burden with its accommodative monetary stance, it added.

This means government bond yields will remain subdued and only start rising, especially for longer tenors, towards the end of the year, ANZ Research said. It noted that the 10-year bond could see its rate climb by 50-60 basis points (bps).

“Helped by the vaccine rollout, the Philippine economy will likely recover, with an upward bias in long-dated yields and curve steepening in tandem with external markets. All said, we expect only modest upward pressure on RPGB (Republic of the Philippines government bond) yields, mostly in the latter part of 2021,” ANZ Research said.

Economic managers have capped the budget deficit at 8.9% of gross domestic product (GDP) this year. It plans to borrow P3.025 trillion to help fund its P4.5-trillion budget — 85% or P2.58 trillion from local lenders and the balance worth P442 billion to be raised offshore.

“Pressure on the RPGB market will be alleviated by the government’s strong cash position, with retail bonds and offshore borrowing remaining viable funding channels,” it said.

ANZ Research estimates that the government’s cash position stood at P1.34 trillion at end-October 2020.

“BSP is ready to provide funding if needed. The central bank has been proactive in sharing the fiscal burden to fight the pandemic,” it added.

It noted the central bank’s purchase of three-month Treasury bills in March worth P300 billion, as well as the P540 billion it lent to the government in October.

The BSP last month also approved another cash advance worth P540 billion for the government.

ANZ Research said the central bank is likewise expected to buy securities from the secondary market again in the coming months in a repeat of its bond buying program last year that helped manage liquidity conditions. — B.M. Laforga

ICTSI’s new service links Mindanao to Asia, Middle East

TWO vessels operate the service covering the Singapore-Cebu-Cagayan-Singapore route. — ICTSI.COM

LISTED port operator International Container Terminal Services, Inc. (ICTSI) on Thursday said it had launched a service that connects Visayas and Mindanao (VisMin) to Asia and the Middle East.

“Mindanao Container Terminal (MCT) welcomes the new year strong with the launch of Regional Container Line’s South Philippines 6 (RSP6) service that connects the Philippines’ Visayas and Mindanao regions to Asia and the Middle East via Singapore,” ICTSI said in an e-mailed statement.

ICTSI said the fixed-day weekly service made its first port call to its port terminal in Mindanao on Dec. 19.

Two vessels operate the service covering the Singapore-Cebu-Cagayan-Singapore route, ICTSI noted.

“The vessels turn in Singapore, which serves as a transhipment hub and provides competitive connections from Cebu, Cagayan de Oro, and Zamboanga to other Southeast Asian markets, the Indian subcontinent and the Middle East, while additionally serving the markets further north such as China and South Korea,” it added.

The company said the new service will aid farmers, manufacturers, and other producers in the country.

MCT General Manager Roberto Locsin said, “Now, more than ever, local businesses need help to bounce back, and the new service line will undoubtedly give them the boost they need.”

PHIVIDEC Industrial Estate Administrator and Chief Executive Officer Jose Gabriel la Viña was quoted as saying: “For the city of Cagayan de Oro and the rest of Misamis Oriental, the new service strengthens our position as a major agro-industrial exporter.”

“The availability of a regular and predictable service to a major international hub also presents opportunities for entrepreneurs and industries to move up the value chain. This could only mean higher incomes, more jobs, and a more comfortable life for our people,” he added. — Arjay L. Balinbin

BlackRock raps board of world’s biggest glove maker over worker safety

KUALA LUMPUR — The board of directors of Malaysian firm Top Glove Corp., the world’s largest maker of medical grade gloves, has failed egregiously in protecting its workers from COVID-19, US investor BlackRock said, calling for its removal.

The comments from the world’s biggest asset manager come after Top Glove saw an extensive coronavirus outbreak among its workers late last year. More than 5,000 foreign workers were infected and one died in what became Malaysia’s biggest cluster.

Reuters reported last month that Top Glove fired a whistleblower who raised concern about the firm’s lack of COVID-19 mitigation efforts. Workers have also told Reuters that they lived in crowded dormitories.

BlackRock cited workers’ accounts of working and living conditions, the firing of the whistleblower and the virus cluster at Top Glove in its criticism of the board. It also voted against re-electing six board members at Top Glove’s annual general meeting on Wednesday.

“We view the board’s ineffectiveness in COVID-19 mitigation and inadequate oversight of worker health and safety issues as especially egregious with potentially serious implications for its reputation as a supplier of such equipment to hospitals around the world,” BlackRock said in a statement late on Wednesday.

Top Glove did not immediately respond to a request for comment. The company has acknowledged that much more needs to be done to raise the standard of employee welfare and has promised to rectify shortcomings quickly.

A BlackRock unit, BlackRock Institutional Trust Co., is the tenth biggest shareholder in Top Glove, holding 1.07% of its shares.

The US firm said it intended to hold other incumbent directors accountable by voting against their re-election at future meetings.

An influential Norwegian sovereign wealth fund, managed by Norges Bank Investment Management (NBIM), also voted against their re-election, according to voting records published by NBIM on its website. 

The fund, which owns 0.84% of Top Glove shares, declined to comment on worker safety concerns.

The board members were re-elected despite the objections.

BlackRock’s comments were the first public criticism of Top Glove from an investor since the virus outbreak among workers.

The company posted record profits last year as demand for its gloves soared due to the pandemic. Its share price more than tripled in 2020.

In July, the United States banned two units of Top Glove over forced labor allegations. Malaysian authorities plan to charge the company over poor worker accommodation.

BlackRock said the living conditions described by the workers, US and Malaysian authorities were in “stark contrast” to what the board conveyed to shareholders.

Top Glove’s factories, some of which were closed due to the virus outbreak, reopened last month. — Reuters

Audit of DITO’s internet speed starts

THE field assessment is expected to be completed within 30 days. — PHILSTAR/MICHAEL VARCAS

THE 30-day audit of DITO Telecommunity Corp.’s connectivity and internet speeds in various areas of the Philippines has officially started, the telco startup announced on Thursday.

In an e-mailed statement, DITO Telecommunity said it recently notified the National Telecommunications Commission (NTC) of its “readiness for the January 7, 2021 technical audit.”

“The chosen independent auditor, R.G. Manabat & Co. (an affiliate of KPMG, an international audit firm), is set to test the connectivity and internet speeds in various areas to ensure that DITO complies with its requirement to cover 37% of the population and provide a minimum average internet speed of 27 megabits per second,” the telco startup said.

The field assessment is expected to be completed within 30 days. It will take another 15 days to complete the final audit report, the company said.

It said the auditor uses “a percentage of the identified 1,600 sites that covers 8,800 barangays in the Philippines as base for the audit.”

DITO Chief Administrative Officer Adel A. Tamano said the results of the technical audit will not affect the telco startup’s planned commercial launch in March.

“As I have said before, DITO Telecommunity is poised to finally offer its services to the Filipino people in March, world-class connectivity that they truly deserve, as we launch commercially,” he noted.

In December, DITO announced that some former military men have joined the company amid security concerns over its partnership with a Chinese telecommunications firm. — Arjay L. Balinbin

Best and the rest of 2020

YEAH yeah yeah

Sick of essays mourning the disaster that was last year? Same.

Let’s get with it.

WW84 — Ah he he he. One of the biggest misfires of the year, and despite the high definition digital camerawork one of the gauziest movies of the year — gauzy action sequences, gauzy plot mechanic, gauzy villain (you’re not even sure why he does what he does, he has to keep explaining it to you), gauzy heroine. Diana Prince (Gal Gadot), wooden as in the first movie, can’t seem to be bothered to shake herself awake through much of this one — though the moment when she does (in a street corner, involving the love of her life) you probably wish she didn’t bother. Director Patty Jenkin’s action sequences mostly involve a cartoonish golden lasso that looks as if it was filched from a Super Friends Saturday morning cartoon, and her various bodies villainous and heroic fly around as if she hadn’t any notion how bodies in rest and motion should behave. Rumor has it a third Wonder Woman will happen — can they finally rope Kathryn Bigelow in to direct?

Mank — Well, not really; felt I had to address this title too before moving on. I like a lot of David Fincher’s late work — I think Mindhunter is very good and Zodiac his flatout masterpiece — but Mank is pitched between a too-careful recreation of ‘40s filmmaking (complete with cigarette burns and popping sounds) and a sterile digital approximation of one. The script — by David’s father Jack — proposes a secretly leftist Herman Mankiewicz who writes the script of Citizen Kane as belated revenge on William Randolph Hearst’s Machiavellian campaign against Upton Sinclair’s failed gubernatorial bid. The joker in the pack are the words “writes the script” — apparently Jack and David subscribe to Pauline Kael’s largely discredited assertion that Mr. Mankiewicz alone, without the help of Mr. Welles (and John Houseman), wrote the script. As history it’s questionable, as biopic risible, as an example of what ‘40s filmmaking was really like — well, you’re better off watching Citizen Kane.

Wolfwakers (Tomm Moore, Ross Stewart) — Mind you I loved Mr. Moore’s previous works: Secret of the Kells was gorgeously animated, an illuminated book come to glorious life, and so was Song of the Sea; both had a bittersweet adult sensibility that I appreciated, one that recognizes not everything works out best, that some broken families will never fully heal. Wolfwalkers feels different; the animation is still gorgeous but the story — of a young girl who befriends a wolf girl seeking to awaken her sleeping wolf mother — makes the kind of soppy in-your-face attempt at direct emotional appeal that reminds one of the worst of Disney, or Pixar. Of all of Moore’s works to date, the closest to being a dog.   

Ma Rainey’s Black Bottom — George C. Wolfe and producer Denzel Washington’s adaptation of August Wilson’s play is appreciated best as a small-screen visualization of August Wilson’s play: sumptuously produced, beautifully cast, adequately directed. Viola Davis is a force of nature as the eponymous Ma: demanding ice-cold Cokes, constantly playing brinkmanship with her record producers, belting out one show stopping song after another — but the real revelation is Chadwick Boseman abandoning his noble Black Panther persona to play Levee Green, the talented self-destructive trumpeter barely hanging on to his position in Ma’s backup band.

I’m Thinking of Ending Things — Charlie Kaufman plays his intricate metaphysical narrative games as well as anyone, and on occasion hits emotional paydirt: the melancholy tang of Eternal Sunshine of the Spotless Mind, the brave Lisa Hesselman (Jennifer Jason Leigh) standing out in a sea of uniform faces in Anomalisa. I’m actually willing to follow Kaufman pretty far up the recesses of his convoluted ass but it would help (as in the case of Eternal Sunshine and Michel Gondry’s fluid filmmaking, and Anomalisa with its beautifully detailed sets and puppets) to give me something to look at, instead of enigmas and mysteries halfheartedly staged and shot.

The Invisible Man — Leigh Whannell’s slickest script (not a fan of of his gimmicky Saw franchise), this shift in focus from the eponymous man to his emotionally abused wife is great fun, despite the clunky plotting and inconsistencies (Looking at you Oh swiftly vanishing splash of white paint!). Helps in no small measure to cast Elisabeth Moss as the aforementioned wife: no one plays terrified and abused and yet — somehow, some way — steely-strong the way Ms. Moss does.

Rebecca (Ben Wheatley) — Blasphemy! How dare they do a remake of Alfred Hitchcock’s beloved Oscar winning classic? Well, first of all, Oscars are a meaningless ritual; second, Mr. Hitchcock’s classic isn’t all that: too much interference from producer David Selznick, the master of middlebrow filmmaking (Mr. Hitchcock would do better six years later, with Notorious); third, Wheatley’s interpolations and smooth seductive style do make some kind of sense, until the disastrous Club Med ending. Oh well, there’s always the book.

Da 5 Bloods — Spike Lee’s Vietnam War movie corrective has five comrades go back into ‘Nam to recover lost CIA gold. The film is didactic and self-indulgently loud, the filmmaking characteristically exuberant; what lifts the proceedings to another level is DelRoy Lindo’s King Lear performance as a MAGA hat-wearing vet, haunted by ghosts he can’t exorcise.

Fireball: Visitors from Darker Worlds — Werner Herzog’s documentaries and fiction features have always had a starry eyed faraway look, the awareness that none of this is all, that beyond the horizon is something different, perhaps better; his eyes have never seemed starrier or more faraway (though we never see him onscreen) then here, his oddball wide ranging documentary on meteorites. The rocks themselves are fascinating: Mr. Herzog serves them up as an array of exotic erotic aliens, spiked and pitted and barbarically beautiful, like the throbbing glowing crystalline virus in The Andromeda Strain only real, and not as unfriendly. Just as fascinating are the creation myths and death rituals and stories people create around these rocks — for every traveler from outer space, it seems, people come up with an even stranger explanation for the visit.

Japan Sinks (Masaaki Yuasa) — I’ve heard the complaints: the plot is too coincidental; the animation in certain episodes wretched; this isn’t the Mr. Yuasa we know and love. To which I say: it’s as coincidental as life itself (if you don’t think life’s coincidental you need to read up on probability); it’s what Yuasa managed with the budget given him by Netflix; and Mr. Yuasa’s style shifts radically with every production (if you haven’t learned that by now you aren’t a fan).

Beyond that there’s a mood captured not unlike these pandemic times: of empty streets, and the constant search for food and water; of families thrown together for survival; of the paranoid chill inspired by a stranger’s passing. Easily Mr. Yuasa’s most emotionally moving work, and a perfect metaphor for the disaster of a year that was 2020.

Emma — and sometimes you don’t want grim and realistic; sometimes you want the effervescence of Jane Austen, as interpreted by photographer and first-time feature filmmaker Autumn de Wilde, who envisions Austenland as a series of constantly shifting fireplace screens and stunningly shot tableaus, through which waddle a gaggle of scarlet-robed Margaret Atwood handmaidens. It’s comedy of the highest order, with Anya Taylor-Joy — she of the Margaret Keane eyes — at one point flicking open a carriage screen panel so sarcastically you can’t help but giggle.

Is it better than Amy Heckerling’s Clueless? Well, no — that transported Ms. Austen’s shallow but precisely observed world of early 19th century England to the shallow but precisely observed world of 1990s Beverly Hills high schools, a triumphant feat of reimagination, and my favorite Austen adaptation. This has a style and spirit all its own, though, and I’m thoroughly seduced.

Fan Girl — Antoinette Jadaone’s updated, more darkly comic take on Lino Brocka’s classic Bona, with real-life celebrity Paulo Avelino (acting as both star and producer) extravagantly slandering himself in an act of (presumably fictional) self-flagellation. Mr. Avelino is the draw, but Charlie Dizon gives the breakout performance: her acting here is fresh and exciting as she walks the line between pathos and comedy. Ms. Jadaone’s script gives both actors the chance to shine, her direction shifting from showbiz realism to fangirl fantasy, sometimes within the same scene.

We Still Have To Close Our Eyes — John Torres, maddeningly enigmatic as ever, taking footage from Lav Diaz, Dodo Dayao, and his own films, and fashioning a no-budget dystopia where “remote avatars” take over bodies and teach them how to ride motorbikes. Well that’s the idea; in the wrong hands — in the Philippines everything falls into the wrong hands — the bikers (or convicts, or, at one point, children) do worse. Cops rove the streets, seeking these remote controllers; at one point men push a motorbike out of the way while the rider, lying broken on the ground, stares lifelessly at the camera. All done in under 13 eerie evocative minutes.

Midnight in a Perfect World (Dodo Dayao) — I thought Violator one of the best of recent horrors; I think this sophomore effort proves that the originality and self-assured talent of that debut was no fluke. This time Mr. Dayao proposes a Philippine society of the future that works fairly well: clean rivers, on-time public transportation, and all. Only, why are there occasional “blackouts” from which two or three people disappear? And why are the creatures (Aliens? Interdimensional visitors a la Lovecraft?) so insistent on giving us a happy contented existence, producing healthier, happier, meatier versions of ourselves?

Lahi, Hayop (Genus Pan) — Lav Diaz using his spare leisurely storytelling style to tell an allegorical fable, of evolutionary development (or the relative lack of) and how we as a species have not developed much further than apes. A withering statement on present Philippine society.

First Cow — I liked Kelly Reichardt’s Meek’s Cutoff well enough; a gently eccentric Western that doesn’t even get to its first medium shot till a few minutes into the film and doesn’t get to its first closeup (of the film’s putative star, Michelle Williams) till nearly the film’s end. The film reminds one of John Ford’s Wagon Master though Ms. Reichardt doesn’t seem to want to emulate Ford; her concerns are stranger, otherworldly almost.

The film First Cow most resembles I’d say is McCabe and Mrs. Miller: the entrepreneurial spirit in a beautifully desolate Northwestern town, the random characters assembled seemingly out of nowhere — and, wait, is that Rene Auberjonois muttering to himself on the sidelines? Again, though Ms. Reichardt seemingly takes off from another old master (this one of more recent vintage), her concerns and obsessions are her own, in an elegantly told deliberately paced narrative.

Don’t know what it is about the Slavic sensibility — the bleak wintry landscapes, the equally bleak personalities, the long history of war, repression, suffering — that I seem to respond to what they have to say best, at least this year, under these circumstances. Hence my next two choices — one Russian, the other Czech — both in my book the best of 2020:

The Nose or The Conspiracy of Mavericks — Andrey Khrzhanovskiy’s 50-year quest to realize Nikolai Gogol’ bizarre short story onscreen, arguably the longest in the history (only The Other Side of the Wind with its 48-year gestation period comes close), has resulted in this, an often hilarious, wildly imaginative yet somehow timeless (critics would say anachronistic or worse yet inconsistent) work of art. I say the animation — using a mix of stop-motion and cut-outs — is breathtakingly done, with a whirling dizzying spirit matched only by Shostakovich’s whirling dizzying music.

The Painted Bird — Vaclav Marhoul’s adaptation of Jerzy Kosinski’s novel has been compared to Elem Klimov’s searing Come and See, but where the latter is a propulsive straight-ahead film about the atrocities inflicted by Nazis on the Belarusians, the latter is a sprawling, sometimes meandering narrative that goes on for nearly three hours. The horrors of Come and See revolve mainly around the Nazis with their distinct style of sadism: well-equipped, deadly efficient, marked by touches of black humor; The Painted Bird sketches a darker vision of the world, where Slavic peasants are as capable of cruelty — they just don’t have the equipment to get things done as quickly, though they do have the determination and imagination to improvise something just as ingenious. Come and See’s Flyora (Aleksei Kravchenko) gave an extraordinary performance of nearly unrelieved intensity, his increasingly war-stressed face one of the most unforgettable images in recent cinema; The Painted Bird’s boy (Petr Kotlar) has a more ambiguous, altogether more mysterious presence: both in the thick of it all and yet somehow above it all, he somehow acts as both the film’s hardpressed protagonist and its cooly ironic commentator.

BSP looking to auction off other tenors of securities

THE BANGKO SENTRAL ng Pilipinas (BSP) is studying the possibility of offering other tenors of its securities depending on market developments and liquidity conditions.

“The BSP has the flexibility to consider the issuance of longer-dated BSP securities particularly during periods of persistent structural excess liquidity in the system,” BSP Governor Benjamin E. Diokno said in a virtual briefing on Thursday.

Mr. Diokno said specific tenors and offer volumes will continue to be based on the central bank’s assessment of market developments and liquidity conditions.

The central bank in September started offering short-term securities as another tool to mop up excess liquidity in the market and better guide interest rates.

Demand for the 28-day bills reached P1.532 billion since its launch until Dec. 18, which was the last auction date for 2020. This is an oversubscription of its cumulative offerings worth P890 billion in the same period.

“As of Dec. 18, outstanding placements in the BSP securities amounted to P259.7 billion. Said amount accounts for 14.2% of the total amount of system liquidity absorbed by the BSP through its liquidity management facilities,” Mr. Diokno said.

The BSP in October halted offering 28-day term deposits which have the same tenor as its bills.

However, Mr. Diokno said the tenor has not been phased out and “remains very much in the BSP’s monetary toolkit.”

“It will continue to be part of our set of fine-tuning instruments to deal with short-term fluctuations in system liquidity,” he said.

“We will decide on the appropriate configuration of offered tenders for our monetary operations based on industry consultations,” Mr. Diokno said.

Meanwhile, BSP Department of Economic Research Senior Director Zeno Ronald R. Abenoja said they have approached some trust entities to explore how to increase their involvement in the BSP bills.

“We’ll also take into account market appetite for longer securities based on discussions and consultations with counterparts,” Mr. Diokno said. — L.W.T. Noble

Making ‘promotion from within’ successful

I’m the human resources manager of a medium-sized corporation. I just started with the company this week. During the onboarding process and review of current policies, I noticed one important factor that is missing that I hoped to fill as part of my initial goals. I’m referring to the company’s lack of a “promotion from within” policy. When I asked my boss about it, he told me that management should be flexible with promotions. He told me it’s the main reason why I was hired in the first place. Can you help me change his mind? — Lady Luck.

Women at a college dorm were discussing how to turn down a proposed date with someone they don’t like. Many confessed to being at a loss for words when facing that situation. One of them came up with a list of 10 handy excuses, which she shared with the group.

It worked pretty well until one girl got nervous and said to her prospective date: “I’d like to go out with you, Tom. But I can’t because of number seven.”

Your boss can’t simply hide behind excuses. He must be specific on why management prefers to be “flexible about promotion,” and whether it is aware of the possible adverse implications for employee morale. If there is no concrete policy on promotion, then how can management motivate people to do their best in the absence of prospects for growing in the organization?

“Flexible about promotion” is a no-win situation for both employees and management. Any promotion made without a clear policy is a recipe for low employee morale, low productivity, and high turnover, among other things. It can have serious repercussions.

Therefore, there’s no other option but to come out with a formal policy to help minimize, if not eliminate, problems and ensure fairness in the promotion process. Here are some important requirements to help you in drafting an objective policy that may convince your management to abandon its flexibility mindset:

One, establish a comprehensive succession plan. This lies at the heart of any “promotion from within” policy. This is a key element of business continuity planning, which lays out the courses of action for emergency situations, whether manmade or natural. Without a succession plan, your organization will be like a ship without a compass on a turbulent ocean.

Two, recognize the value of meritocracy over seniority. If you have to consider only one factor, it should be consistent, above-average work performance over the preceding three years at least. This must be validated by tangible accomplishments as reflected in performance ratings, commendations, and various awards inside and outside of the organization. Seniority may only be used as a last resort to break any tie between two candidates for promotion, which is unlikely to happen.

Three, create a systematic coaching program featuring bosses. Make this a key performance indicator for all managers. If workers have not learned anything and must rely heavily on their boss’s decisions, then that boss has failed as a coach. This also means that the boss can’t be promoted himself because there’s no one who can perform his job. It is as simple as that.

Four, establish a procedure for dynamic inter or intra-department transfers. Even at the risk of losing hardworking employees to other departments, managers must give way for the good of the organization overall. Transfers must be done every three years as a matter of routine. If the managers are confident about their coaching skills, then they should not worry about training other workers.

Five, expose all employees to challenging assignments. This is related to number four, and establishes the principle that transfers are not be limited to other departments or other postings within the department, but may include secondment to affiliates, subcontractors, and major clients. The objective is to teach all qualified personnel to become multi-skilled and be well-versed in the many facets of the company’s business.

Last, validate all these things through an annual morale survey, otherwise known as an employee satisfaction survey or organizational climate survey. Management should be able to understand whether it is doing a good job. It is also useful to hire an external consultant to lend objectivity and professionalism to the process.

Even if you have done all of the above, you can’t simply promote people on the basis of excellent work performance. It’s no guarantee that the newly-promoted can handle the new duties. For example, some people may work well even under pressure or in managing the most difficult tasks on their own, but beyond that, they may be completely different dealing with workers or teams.

If there is an opportunity to promote some people to supervisory positions, they still could be the wrong person for the job. If that happens, the best thing to do is to promote people to staff functions that do not perform line tasks. This means assigning them to an advisory or support capacity like research, working with the general public or government agencies, or other related assignments.

If promoting some people is not practical, you can hire external candidates as a matter of exception rather than as a general rule. After all, it’s laborious, expensive, and demotivating for those who feel they’re qualified and yet not appointed to the job. Any indication from you that veteran workers are considered lacking in capacity to assume higher responsibility means you can’t expect much from the holdover workers, and also run the risk of them displaying animosity to the newcomers.

 

Send anonymous questions to elbonomics@gmail.com or via https://reyelbo.consulting

NGCP ready to ‘take steps’ towards IPO

By Angelica Y. Yang

NATIONAL Grid Corporation of the Philippines (NGCP) is pressing onward with preparations to hold its initial public offering (IPO), the power grid operator’s spokesperson said, prompting analysts to look into the company’s attractiveness.

“We were previously advised that market conditions may not be ideal at the moment, but we continue to take steps to prepare for an eventual IPO,” NGCP spokesperson Cynthia P. Alabanza told BusinessWorld on Viber.

She added that the privately owned company has always been preparing for its public listing since 2014, while keeping in mind its “compliance to its franchise.”

Asked about the estimated size of the IPO and other details, Ms. Alabanza said that nothing was definite, and that she was not at liberty to disclose more information.

In 2019, Ms. Alabanza told the Senate that the IPO was delayed because of the absence of price control arrangements, pending disputes among state agencies, and the public threats against NGCP’s concession.

The National Transmission Corp. (TransCo) said on Thursday that it welcomed NGCP’s long-overdue public listing.

“We welcome NGCP’s long-overdue IPO, which — if indeed forthcoming — we hope to be in keeping with the spirit of the law, which is to strengthen power consumers’ rights through a fair distribution of NGCP’s ownership to the Filipino People,” Transco President Melvin A. Matibag told BusinessWorld on Viber.

Two years ago, the state-led TransCo asked the Energy Regulatory Commission to deny NGCP’s petition to defer its IPO, saying that the grid operator should not be allowed to benefit from its inaction on the provisions of its franchise.

BusinessWorld has reached out to the Department of Energy for comment on NGCP’s eventual listing, but has not yet received a reply as of press time.

INVESTORS WEIGH NGCP’S APPEAL
AAA Southeast Equities, Inc. Research Head Christopher John Mangun said that the IPO would be attractive to investors as it would come from a “utility company that has been favored by long-term investors and institutions.”

Asked about Synergy Grid & Development Philippines, Inc. (SGP), which was previously seen as the vehicle firm for NGCP’s backdoor listing, Mr. Mangun said it was one option that could be considered, but it would in turn affect dividends.

“The backdoor [listing] through SGP was one option that they were leaning towards from the beginning since the owners are the same and it would consolidate their holdings, however it would significantly impact dividends as the public would have indirect ownership over the company rather than direct through IPO,” Mr. Mangun said.

Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the attractiveness of NGCP’s proposed IPO would depend on various factors. These include its pricing, industry standing, financial performance, overall valuation, and future business or industry prospects, and the public interest or security involved in the industry or business.

Meanwhile, Regina Capital Development Corp. Managing Director Luis A. Limlingan said that investors would most likely find the IPO “attractive if it is reasonably priced, given prevailing market conditions.”

He also said that NGCP has a business model that investors would be interested in.

“Their power transmission operations is also an attractive business model, which investors would have a keen interest in,” he said.

The biggest business lessons of 2020

“The coronavirus will peak in March and will die down in April.” These are the unanimous pronouncements from a medical doctor and an economist when I attended a business lunch seminar in early February 2020, about the prospects on the coronavirus. I must admit that it was comforting to hear those words from experts, exactly the words I needed to hear. All businessmen in the filled hotel ballroom expressed a sigh of relief, and in fact, agreed with the prognostications.

In mid-March, the coronavirus did not show any sign of waning, registering 140 cases with 12 deaths. On March 12, President Duterte announced the “community quarantine” of Metro Manila that would start at 12 midnight on March 15 up to April 14 that covers 16 cities and one municipality, banning majority of means of travel and halting mass transportation.

Several countries announced lockdowns during the same period, heralding the onset of a pandemic and a global crisis. Businesses were caught by surprise. In the Philippines, companies hurriedly implemented business continuity plans and struggled to tweak their business models. By September 2020, the country had the most business closures among medium, small, and micro enterprises (MSMEs) which stood at 70%, the highest in the region according to a study of Asian Development Bank.

Governments and businesses obviously downplayed the gravity of the coronavirus. As early as Jan. 30 last year, the World Health Organization declared the 2019-nCoV outbreak a Public Health Emergency of International Concern. But what businessmen like me heard from expert opinion in February last year reduced the coronavirus to just a fleeting infection.

This brings us to one of the biggest business lessons of 2020 — the need to detect and recognize black swans and grey swans and plan for their impact.

Grey swans are events with low probability of occurring but producing high to extremely high impact globally, such as COVID-19, population growth, climate change, a stock market crash, and Brexit.

Grey swan is a by-product of black swan, a term popularized by Nassim Nicholas Taleb in his best-selling book with the same title. He described a black swan as an extremely unpredictable event that is beyond what is normally expected of a situation and has potentially severe consequences. Black swan examples he cited include the rise of the internet, the personal computer, World War I, the dissolution of the Soviet Union, and the 9/11 terrorist attacks.

Recognizing black swans and grey swans and preparing for their impact is easier said than done. Businessmen and educated leaders are subject to cognitive biases that cloud one’s judgement.

One is optimism bias, which causes some people to believe they are less likely to experience the impact of a negative event. Most of us are victims to this when we dismissed the scale of the coronavirus’ effect. We also observed how traditional retailers held on to their brick-and-mortal business model during the quarantine, clinging to the false optimism that everything will be normal soon.

Another is confirmation bias, or the tendency to search for, interpret, favor and recall information in a way that confirms or supports one’s beliefs or values. I saw this when we businessmen, liked and agreed with the speakers who said that the spread of the coronavirus will end soon.

We need to be cognizant of black swans and grey swans and be wary of our cognitive biases by learning what needs to be learned, balancing opposing views about a potential event, and preparing and acting on the impact assessment.

This brings us to another lesson from 2020 — the bias for action in response to grey swans. Some companies quickly learned about changes in their customer behaviors during the quarantine, and calculatedly innovated their business models, like how Jollibee invested in cloud kitchens and how San Miguel and Emperador retooled their production lines to produce disinfecting alcohol.

But many companies, those which are casualties of the pandemic, adopted a wait-and-see stance and dilly-dallied on their investments. Investing in innovations even before an external event happens is another life-long lesson that businessmen should embrace. Those organizations which have digitally transformed before the pandemic are reaping the rewards of staying ahead of the curve in this time of digitization.

Grey swans and even black swans are bound to happen at some point in time. Another pandemic, a global cybersecurity attack, accelerated global warming, and war between nations are just some of the external events that we need to be constantly scanning, assessing, and preparing for. These may present both opportunities and threats to businesses. We just need to learn the lessons of 2020.

 

Reynaldo C. Lugtu, Jr. is CEO of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is the Chairman of the Information and Communications Technology Committee of the Financial Executives Institute of the Philippines (FINEX.) He is Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University.

rey.lugtu@hungryworkhorse.com