Early this week, Draper Startup House Ventures and QBO Innovation Hub announced that they are partnering to support the Philippine startup community with access to opportunities beyond geographical borders.
Better together: A partnership to drive progress through levelled access to opportunities
Through collective action, this partnership between Draper Startup House Ventures and QBO Innovation Hub fosters a well-supported, resilient, entrepreneur community.
Apart from access to local opportunities through QBO’s partnerships and accelerators, Draper Startup House Ventures complements by bridging these startups to opportunities beyond geographical borders. Leveraging on Draper Startup House Ventures’ network of global partners, comprising of the Draper Ventures Network with access to 23 global funds, accelerators, incubators, Angels, VCs, PEs, niche investment firms, alternative debt firms, consulting firms and corporate investment arms who are interested in various opportunities not limiting themselves to physical borders, Filipino startups have the opportunity to launch and successfully scale their startups. Draper Startup House Ventures took off in May this year, to help connect entrepreneurs who were raising capital with relevant investors, looking to modernize the current venture capital model by democratizing the fund-raising process.
Collaboration is at the core of what we do. In partnering with Draper Startup House Ventures, we’re excited to expand our support, and boost access to funding for Filipino startups that are scaling up and changing the world. — Katrina Rausa Chan, Executive Director of QBO Innovation Hub
QBO has been integral in elevating the Philippine startup ecosystem. We look forward to this partnership, and to helping local entrepreneurs access both global capital and strategic opportunities through the Draper Startup House ecosystem. — Cristian Munoz, Founder of Draper Startup House Manila
With this collaboration, diverse-minded individuals in the Philippines now have borderless access to support, and opportunities to connect with the rest of the world to raise capital.
At one of Quezon City’s premier residential enclave addresses, Capitol Hills Drive, Primehomes is building a community that promotes sustainable living and enhances healthy and active lifestyles among residents.
This year, Primehomes enhances the experience it gives to the community, as well as its future members, through its newly-launched Sales Pavilion. This Pavilion will provide prospective buyers a preview of Primehomes’ newest set of units in Laselva, the newest phase from the developer.
Aside from its urban botanical development Larossa, Primehomes Capitol Hills also offers Laselva, a two-tower development that opens opportunities for many to become a part of the exclusive enclave in the heart of Capitol Hills.
Laselva offers spacious and well-designed units under Primehomes’ Living, Breathing Home series. These include the Studio Premiere, One Bedroom, and Two Bedroom units. The development also has its own basement parking, linear park, and direct access to the community’s main clubhouse and amenity.
Primehomes conveniently takes buyers to the Sales Pavilion from the main gate of its community through golf carts. As the only developer that transits people through golf carts, Primehomes gives both unit owners and potential buyers a country club feel while giving them a direct view of the developments being done within the community.
At the Sales Pavilion, visitors can see Primehomes’ projects showcased on a big LED screen on the pavilion’s Presentation Area. Also, representations of deliverable units show what the actual deliverable would look like. Model units, intricately designed at their interiors, show what buyers can do with the unit they have as well as what types of furniture they can buy.
Further improving the experience of buyers at the Primehomes community, the Sales Pavilion has its Pavilion Cafè, where the negotiations are made. The cafè features an unobstructed view of three buildings that are ready for occupancy. Right beside the pavilion is a mini lush garden, giving another breathtaking sight for buyers.
Pairing this new Sales Pavilion, Primehomes intends to have uniquely designed out-of-home placements that will guide buyers to the vibrant community at Primehomes Capitol Hills.
The Sales Pavilion can be visited at Primehomes Capitol Hills, located along Capitol Hills Drive cor. Zuzuarregui St., Old Balara, Quezon City.
Visit Primehomes’ website or chat with their representative at www.primehomes.com.ph.
Please be advised that the Annual Meeting of the Stockholders of ROXAS HOLDINGS, INC. for the year 2021 will be conducted by remote communication on Wednesday, 17th day of March 2021 at 10:00 a.m. (URL: https://asm2021.rhi.com.ph/).
Stockholders who are interested to participate in the proceedings may visit the above website, RHI’s website at https://www.roxasholdings.com.ph/or check the Company’s disclosures via PSE Edge, for the requirements to register.
Should you have queries, kindly send an email to: corporatesecretary@rhi.com.ph.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of ROXAS HOLDINGS, INC. will be conducted virtually via https://asm2021.rhi.com.ph/ on Wednesday, March 17, 2021, at 10:00 o’clock in themorning with the following Agenda:
Call to Order
Certification of Notice and Quorum
Approval of the Minutes of the Annual Meeting of Stockholders held on June 4, 2020
Presentation and Approval of the Annual Report to Stockholders
Ratification of All Acts and Resolutions of the Board of Directors and Management
lection of the Board of Directors
Appointment of External Auditor and Fixing its Remuneration
Other Matters
Adjournment
The Board of Directors has fixed the close of business on January 8, 2021, as the Record Date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting of Stockholders.
Given the current circumstances, stockholders may only attend the meeting by remote communication, by voting in absentia, or by appointing the Chairman of the meeting as proxy.
Duly accomplished proxies shall be submitted on or before March 5, 2021, to the Office of the Assistant Corporate Secretary at the 14F Net One Center, 26th St. cor. 3rd Avenue, Bonifacio Global City, Taguig, Metro Manila or by email to: corporatesecretary@rhi.com.ph. Validation of proxies is set for March 10, 2021, at 2:00 p.m.
Stockholders intending to participate by remote communication should notify the Corporation by email to corporatesecretary@rhi.com.ph on or before March 5, 2021.
Stockholders may vote electronically in absentia, subject to validation procedures.
The explanation on the Agenda items and the procedures for participating in the meeting through remote communication and for casting their votes in absentia are set forth in the Information Statement.
Copies of the Information Statement and Management Report, the Annual Report of the Company, and other pertinent documents necessary under the circumstances are available in the Company’s website and PSE Edge.
In compliance with the SEC Advisory dated May 6, 2015, a copy of the Interim Unaudited Financial Statements of the Company as of and for the quarter ended December 31, 2020, with Management Discussion and Analysis shall be posted in the website of the Company, as may be available under the SEC rules. A hard copy of the same Interim Unaudited Financial Statements will be provided to any requesting shareholder, free of charge, as soon as said Interim Unaudited Financial Statements becomes available.
(sgd.) AIMEE E. PEDAYO
Assistant Corporate Secretary
BANGKO SENTRAL ng Pilipinas (BSP) Governor Benjamin E. Diokno said it is “too early” to raise interest rates, as the central bank is keen on keeping an accommodative policy to support recovery.
“I think it’s too early [to] raise interest rates. We’re focused on assessing developments abroad and at home and right now, we don’t see the need to raise interest rates at this point,” Mr. Diokno said in an interview with Bloomberg TV.
“We’re looking at 2021 as our recovery year and 2022 that’s when we will be back to where we were before the crisis. So we think the current policy setting is appropriate for this kind of outlook,” he added.
Last week, the Monetary Board (MB) kept the overnight reverse repurchase, lending, and deposit rates at record lows of 2%, 2.5%, and 1.5%. It was the second consecutive policy meeting where the MB opted for a pause after cutting rates by 200 basis points last year amid the crisis.
The BSP’s decision to maintain rates came following the two-year high January inflation print of 4.2%, which puts the country under a negative real interest rate environment.
The central bank has raised its inflation forecast for the year to 4% from 3.2%, citing the continued upside pressures from rising food and oil prices.
“We see inflation to be elevated maybe within the first half of this year but it will taper off in the second half. We are optimistic that it will be within our target range of 2-4%,” Mr. Diokno said, noting inflation is expected to slow down by 2022 “as things normalize.”
For Ateneo de Manila University Economist Alvin P. Ang, the central bank will only likely consider a rate hike “maybe when inflation breaches 6% and remains within that level.”
On the other hand, data that will show banks are lending again may push the central bank to go for another rate cut, he said in a Viber message.
Mr. Ang said the BSP will likely keep rates until May before deciding whether to change the policy rates.
The Monetary Board will have its next policy-setting meeting on March 25. It will be followed by another one on May 13.
Despite the aggressive easing in policy rates last year, lending has been tepid and even declined by 0.7% in December. This, as banks tightened their credit standards to guard against bad loan pileup while borrowers’ confidence remained weak. — Luz Wendy T. Noble
President Rodrigo R. Duterte on Tuesday signed the law allowing financial institutions to offload bad loans through asset management companies.
By Luz Wendy T. Noble and Beatrice M. Laforga, Reporters
THE BANKING industry’s nonperforming loan (NPL) ratio is expected to be reduced, with the implementation of the Financial Institution Strategic Transfer (FIST) law, Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno said.
“It will ease the NPL ratios of banks moving forward. FIST is expected to reduce the NPL ratio by about 0.63 to 7.0 percentage points,” Mr. Diokno told reporters in a Viber message on Tuesday night.
The banking industry’s NPL ratio stood at 3.61% as of end-December, much higher than the 2.08% a year earlier but still better than BSP’s 4.6% projection for end-2020.
Republic Act No. 11523, or the FIST Act, was signed into law by President Rodrigo R. Duterte on Tuesday. The law allows banks to clean up their books by selling their soured loans to so-called Financial Institutions Strategic Transfer Corporations (FISTCs).
Mr. Diokno said the draft for the implementing rules and regulations (IRR) has been circulated among industry players for comments. The Securities and Exchange Commission is the lead implementing agency.
At the same time, the Finance department is preparing the guidelines on tax exemptions for the covered financial institutions under the new law.
Under the law, the Department of Finance (DoF) and the Bureau of Internal Revenue (BIR) should issue revenue regulations implementing the fiscal incentives within 30 days after its effectivity.
“Meron na (IRR), ongoing review na BIR-DoF,” said Marissa O. Cabreros, a deputy commissioner at the bureau, in a text message on Wednesday.
The FIST law covers assets of financial institutions that will be deemed as nonperforming until Dec. 31, 2022. It exempts the transfer of nonperforming assets from the banks to a FISTC, and FISTC to third-party buyers or borrowers, from the payment of documentary stamp tax, capital gains tax, creditable withholding income taxes and value-added tax (VAT).
The transfers will also be subjected to lower fees. The registration, land registration and transfer fees of the Land Registration Authority (LRA), as well as the filing fees for foreclosures by the FISTC, have been slashed to 50% for two to five years.
Aside from the tax perks on transfers, the law also provides tax exemptions for FISTC to encourage capital infusion and financial aid to the firm, such as exemption from paying income tax on net interest income, documentary stamp tax, and mortgage registration fees on new loans, for up to five years.
The DoF earlier estimated the FIST, which forms part of the government’s recovery package, will result in a “manageable” P2.9 billion to P11.6 billion in foregone revenue in the next five years due to the tax exemptions.
‘RIPPLE EFFECT’ “Remember that this law is a repeat of the 2002 Special Purpose Vehicle Act and industry people know that the said law was helpful and achieved what it was meant for, and this time around, we are hoping that it will again be successful,” UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion said in a Viber message.
Banks have become conservative in extending credit due to the risks associated with the crisis. BSP data showed lending fell by 0.7% in December, the first in over 14 years after months of tepid growth.
Fintech Alliance.ph Chairman Angelito “Lito” M. Villanueva said the law will have a “ripple effect” that will benefit small businesses.
“Given that banks will improve liquidity due to this law, more fintech players, which are by themselves MSEs (micro and small enterprises), can re-lend to their clientele as well,” Mr. Villanueva said in a text message.
Meanwhile, ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said that while the law is “a step in the right direction” to help bring down the NPL ratio, it is not the sole solution to the bank lending crisis that is rooted in both the weak demand from borrowers and the risk-off attitude of banks on credit extension during the crisis.
“With incomes threatened, would-be borrowers are likely in cash conservation mode with a good majority possibly opting to put off investment decisions until the economy improves,” he said.
“Meanwhile, despite aggressive rate cuts by the BSP designed to bolster lending activity, banks have largely been unable to pass on these lower borrowing costs as they tack on additional premium due to elevated levels of risks given the recessionary environment,” he added.
Financial Executives Institute of the Philippines (FINEX) said in a statement on Wednesday that the law will help maintain a healthy financial sector while many businesses struggle to settle their debts amid a pandemic-induced recession.
“The new law eliminates barriers that prevented its predecessor law from fully achieving its objectives. Hopefully, it will encourage the banking sector to continue lending to the private sector and thereby achieve its objective to rehabilitate distressed business and make them meaningful contributors to our economic recovery,” FINEX said.
THE LEGAL representatives of industry groups affected by safeguard duties on car imports are questioning the validity of the petition for the protection measure filed by a labor group.
The Department of Trade and Industry (DTI) applied safeguard duties after it confirmed the Philippine Metalworkers Alliance’s (PMA) claim that employment in the industry sank after imports spiked.
The Safeguard Measures Act or Republic Act No. 8800 allows domestic producers to ask the government to conduct an investigation into their import competitors if they claim to have been injured by excessive imports.
“PMA is a national union of automotive, iron, and steel workers in electronics and electrical sectors. They do not represent the domestic industry,” Rodolf C. Britanico, the legal representative of the China Chamber of Commerce for Imports and Export of Machinery and Electronic Products, said at a conference with the Tariff Commission on Wednesday.
The Tariff Commission is conducting its own investigation on the duties and will submit a recommendation to the DTI.
The Safeguard Measures Act, Mr. Britanico said, covers domestic producers, which means that the labor group cannot file the petition.
Tariff Commissioner Ernesto L. Albano, however, said that the Trade department could conduct an investigation on its own accord, regardless of petitioner.
“So probably what happened was they thought the presentation of the labor unions which really affects them because of loss of employment, the DTI must have felt that in fact there is a need to investigate,” he said.
But Mr. Britanico maintained that domestic producers like Toyota Motors Philippines and Mitsubishi Motors Philippines Corp. opposed the application for safeguards.
“Down the line, there should be inspection, for example, of factories. There should be submission of data. I was wondering how PMA would be able to do that,” Mr. Britanico said.
Toyota and Mitsubishi have car assembly operations in the Philippines, and also import from overseas.
The Mitsubishi Philippines representative during the conference expressed the company’s opposition to the safeguard measures.
“Given there is an issue on the petitioner and we also share the concern regarding the presentation, your honor, on evidence of the PMA, may we ask for clarification on how they will be conducting it? … How will they be presenting documents or evidence on their end considering that they are not a domestic producer?” Jacqeline Ann A. Tan, who represents Mitsubishi Philippines, told the commission.
The domestic industry applying for safeguard measures are usually required by the government to submit a plan to adjust to competition.
Given that the domestic manufacturers oppose the measures, Eric R. Recalde, another Mitsubishi Philippines legal representative, asked if they will be required to submit such a plan as well.
He questioned PMA’s ability to present information and an adjustment plan as part of the domestic industry.
“The PMA is required to submit the adjustment plan and several data, being the petitioner,” Tariff Commissioner Marissa Maricosa A. Paderon said, adding that all concerns mentioned have been noted by the commission.
The DTI applied provisional duties in the form of a cash bond of P70,000 per passenger car unit and P110,000 per light commercial vehicle unit to protect domestic jobs. The duties are in effect for 200 days while the Tariff Commission conducts its own investigation.
DOUBLEDRAGON PROPERTIES Corp. has secured the corporate regulator’s approval to bring public its real estate investment trust (REIT) that aims to raise nearly P15 billion.
In a statement, the Securities and Exchange Commission (SEC) said the Commission en banc “considered favorably” the P14.71-billion initial public offering (IPO) of DDMP REIT, Inc. The shares will be listed on the main board of the Philippine Stock Exchange (PSE), pending compliance with the bourse’s requirements.
DDMP, formerly DD-Meridian Park Development Corp., plans to conduct the public offering from March 5 to 11. It is expected to make its PSE debut on March 19.
As much as 5.94 billion common shares, which are owned by DoubleDragon, businessman and Philippine Chamber of Commerce and Industry (PCCI) President Benedict V. Yujuico andTeresita M. Yujuico, will be offered to the public. Another 594.5 million shares were set aside for overallotment.
If the overallotment option is fully exercised, new investors will own 36.67% of DDMP’s issued and outstanding common shares. DoubleDragon will have a 44.33% interest, and the Yujuicos will own a combined 19%.
With a maximum offer price pegged at P2.25 each, DDMP may raise up to P14.71 billion from the offering.
The proceeds will be given to the selling shareholders and will be reinvested in the Philippines in accordance with the implementing rules of Republic Act No. 9856 or the Real Estate Investment Trust Act of 2009.
In a statement last November, DoubleDragon said majority of the proceeds will be injected as equity into CentralHub Industrial Centers, Inc. to boost its leasable industrial warehouse space around the country.
DDMP REIT includes the first six completed buildings in DD Meridian Park, located at the Bay Area, corner of Macapagal Avenue and Edsa Extension in Pasay City. The 4.75-hectare Meridian Park offers up to 280,000 square meters of prime office space.
Credit Suisse (Singapore) Ltd., DBS Bank Ltd., Nomura Singapore Ltd., and PNB Capital and Investment Corp. have been tapped as joint global coordinators and joint bookrunners for DDMP’s REIT offering.
CIMB Investment Bank Bhd, Investment & Capital Corp. of the Philippines (ICCP), Macquarie Capital Securities (Singapore) Pte. Ltd., Maybank Kim Eng Securities Pte. Ltd., and RCBC Capital Corp. were also named as joint bookrunners as well.
Credit Suisse, DBS, Nomura, CIMB, Macquarie, and Maybank were tapped as international bookrunners for the offer, while PNB Capital, ICCP, and RCBC Capital were chosen by DDMP as its domestic underwriters. — K.C.G.Valmonte
INVESTORS have fallen victim to scams as the pandemic has left them with more screen time, the head of the Securities and Exchange Commission (SEC) said, as he advised Filipinos to educate themselves to prevent losing their hard-earned money.
“Filipinos are now glued to the screen, which is why there has been an increase in investment scams. Besides, the current situation is difficult for Filipinos as a result of the pandemic,” SEC Chairperson Emilio B. Aquino said on Wednesday.
He said investor education is important in preventing investment scams amid the financial difficulties brought by the coronavirus disease 2019 (COVID-19) pandemic.
He gave the advice during a virtual meeting of the Financial Executives Institute of the Philippines on Wednesday, adding that there is an existing problem in terms of investor education in the Philippines.
According to Mr. Aquino, the SEC’s enforcement and investor protection department has issued 127 advisories on unauthorized investment schemes for 2020, an increase of 95% from the 65 advisories it released in 2019.
“As far as our enforcement is concerned, our enforcement department in the SEC has delivered. Almost double the advisories compared to the previous year. I think there is a problem in terms of investor education,” he said.
Mr. Aquino said one way to educate Filipino investors is to hold information programs, adding that scammers would usually use social media sites such as YouTube, Instagram, and Facebook for their unauthorized investment schemes.
“We use the same social media platforms that scammers use when it comes to launching our investor education programs,” he said.
Meanwhile, Mr. Aquino said some of the investors are aware that they are entering unauthorized investment schemes, but do so as a result of the financial struggles caused by the pandemic.
“I would expect that some of the people getting into investment scams to be somehow aware that they are entering a scam. Not all of them, but quite a number do enter because of these difficult times,” he said.
“They are not exactly clueless of these scams. That’s how we see it. This is the reason why it is very important to be aggressive in investor education,” he added.
METRO Pacific Investments Corp. (MPIC) on Wednesday said its tollways unit Metro Pacific Tollways Corp. (MPTC) sold 100% of its stake in Thailand’s AIF Toll Roads Holdings Co., Ltd. for $149.25 million.
FPM Tollway (Thailand) Ltd., a 100% indirect subsidiary of MPTC, entered into share purchase deals with “several parties” on Feb. 16 for the sale of 100% of its shares in AIF Toll Roads Holdings (Thailand) Co., Ltd., MPIC said in a disclosure to the stock exchange.
AIF Toll Roads owns about 29.45% of the outstanding shares of Don Muang Tollway Public Co. Ltd., the operator of a major toll road facility in Bangkok, it added.
The move was to “take advantage of the increased interest from third parties to acquire MPTC’s entire shareholdings” in Don Muang Tollway, which holds the concession for a 21.9-kilometer elevated toll road facility in Thailand’s capital, the Philippine infrastructure holding firm said.
“The transaction will allow MPTC to realize a gain on its investment in DMT and benefit from the increased liquidity,” the company noted, adding that the proceeds will be used to fund MPTC’s projects.
Shares were sold to nine Thai citizens, including Sombath Phanichewa, an existing shareholder of Don Muang Tollway and chairman of its board of directors, and one investment company.
The transaction should strengthen the balance sheet of MPTC, according to MPIC.
In a phone interview, Astro C. del Castillo, managing director at First Grade Finance, Inc., said: “Number one, maybe it’s really an opportunity for them to make use of the money to fund additional projects here in the Philippines or outside.”
“Second, given the political condition of Thailand, they opted to take advantage of, perhaps, the attractive price offered by third parties,” he added.
He noted this liquidity will allow MPTC to be more flexible in other opportunities, “which they deem are better compared to the Thai opportunity.”
Nationalist pride, given the political climate, likely played a major role in third parties’ interest in MPTC’s shares, he also said.
MPIC is one of three key Philippine units of First Pacific, the others being Philex Mining Corp. and PLDT, Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.
MPIC shares closed 0.96% higher at P4.21 apiece on Wednesday.
TELECOMMUNICATIONS service provider Eastern Communications said it is allotting P2.8 billion for its expansion plans this year.
“The expansion plans will cover wider service areas, including Davao City, Cagayan De Oro, Dumaguete, Tagbilaran, Bacolod, Roxas, Kalibo, Caticlan, Boracay, Naga, Legazpi, Iriga, and Sorsogon,” the company said in an e-mailed statement.
The company intends to support the government’s “digital cities” program aimed at boosting rural development.
The company had also set a capital expenditure budget of P2.8 billion last year.
“The network modernization program started last year, and despite the pandemic, Eastern Communications continued its expansion project, which will likely run throughout 2021,” it said.
The telecommunications firm recently completed its expansion in Iloilo and Tuguegarao.
Aileen D. Regio, co-coordinator of Eastern’s executive office, said: “Eastern will continue this trend and we plan to be available nationwide in the next few years.”
“This is an exciting time of growth for all of us and we, as a telecommunications company, look forward to being a big part of the Philippines’ stronger tomorrow,” she added. — Arjay L. Balinbin
STI Education Services Group (ESG), STI West Negros University (WNU), and iAcademy have received the go signal from the Commission on Higher Education to offer programs specializing in data science and business analytics.
In a disclosure to the exchange on Wednesday, STI Education Systems Holdings, Inc. said STI ESG and STI WNU began offering programs for a Bachelor of Science degree in Retail Technology and Consumer Science and for an Associate degree in Retail Technology for the school year 2020-2021.
Meanwhile, iAcademy’s Bachelor of Science in Computer Science degree now offers specialized tracks for those who wish to major in either Data Science or Cloud Computing.
“We have already seen before that more and more data science-related jobs and careers will be created in the future. It’s actually happening now and it will continue to unfold in the coming years. This is why we wanted our youth to become more prepared and equipped to take on this trend and get ahead in the game,” STI Holdings Chairman Eusebio H. Tanco said in a statement.
STI Holdings President and CEO Monico V. Jacob said recent developments affirm the company’s decision to offer the new courses.
“Just recently, the Bangko Sentral came out with data saying that e-wallet transactions have more than tripled due to the COVID-19 pandemic, showing a significant increase in the use of technology. This development just affirms STI Holdings’ decision to offer these new courses, which is a testament to our commitment to advancing the use of data science for our country’s progress,” Mr. Jacob said.
STI ESG is working with Smart Communications, Inc. and Globe Telecom, Inc. to assist its students with the online learning set up.
STI will train students in using data to analyze consumer and market behavior. Students enrolled in the Retail Technology and Consumer Science program will be learning retail marketing, consumer psychology, information technology, and data science to prepare them for careers in business and consumer analytics, digital marketing, and e-commerce specialists.
iAcademy’s Data Science program aims to train students to make data-driven decisions, relying heavily on statistics, data mining, and machine learning. The cloud computing track meanwhile is offered in collaboration with Amazon Web Services, where students will learn to design and maintain local and wide cloud networks. These programs may lead to careers in programming, data analytics, and program management.
On Wednesday, STI Education Systems shares at the stock market declined 2.38% to close at P0.41 per piece. — K. C. G. Valmonte
ACCUSED by the Trump administration of being a front for the Chinese government, TikTok’s ad business looked bleak last July.
Big brands backed off on spending even as TikTok executives offered refunds to advertisers in the event the hot social media platform were to be banned from operating in the United States.
But after it became clear Joe Biden had won November’s US presidential election, that all changed.
“The interest in TikTok has exploded,” said Erica Patrick, vice-president and director of social media at Mediahub Worldwide, which has worked with brands including Netflix and Twitch. She said she expects client spending to increase significantly over the next six months.
While the Biden administration pauses a government lawsuit filed by Trump officials, corporate sponsors have raced back to the popular short video sharing app, booking advertising campaigns and experimenting with new ways to reach consumers, three ad agency executives told Reuters.
The clamor around national security and TikTok during the previous administration appears to have been “more of a stunt,” and has not been a serious concern for advertisers, Ms. Patrick said.
Mr. Trump’s defeat in the election was the turning point for many advertisers who were previously “on the fence” about TikTok, according to one media buyer.
As business picks up, the platform has also approached major brands individually in an effort to address lingering concerns such as the placement of their ads, the buyer said.
Although TikTok’s US advertising business is estimated to be small still compared with larger social platforms, TikTok said it tracked a 500% increase in advertisers running campaigns in the United States over the course of 2020. It says it continuously has conversations with advertisers on brand safety.
Since late last year, TikTok has signed up McDonald’s, Kate Spade, Chobani and Bose, as well as nonprofits including St. Jude Children’s Research Hospital, a TikTok spokeswoman said.
Bose has found that ads on TikTok are watched for longer than on other platforms, said Christina Kelleher, manager of global social media for Bose.
St. Jude has raised about $50,000 since September through a donation button on TikTok, according to ALSAC, the fundraising and awareness organization for St. Jude.
“TikTok is one of our fastest growing platforms,” said Rick Shadyac, chief executive of ALSAC, adding that the organization’s first ad campaign in December with actress Ashley Tisdale had “tremendous engagement.”
NEW OPPORTUNITIES As the app seeks to earn more money and capitalize on its large Gen Z audience, TikTok’s revenue ambitions have grown and now include selling top-dollar ad packages centered around holidays or major events.
To celebrate Black History Month, TikTok will hold a virtual event with 500 Black creators on Thursday and has invited brands to sponsor the event for $750,000, according to a TikTok slide deck obtained by Reuters.
The company has also asked brands for $1.5 million to sponsor a live finale event on Feb. 26 featuring artist performances and special guest appearances, the slide deck showed.
E-commerce is a growing priority, TikTok said in a statement, as the company aims to take on Facebook’s Instagram, which lets users buy products directly through the app.
TikTok said it is exploring letting users share affiliate product links on the app, which could allow influencers and TikTok to earn a commission from sales.
Influencer marketing, already a major form of advertising on TikTok, is booming as more brands rush to pay top stars famous for their dance routines or comedy skits to promote products to their millions of fans.
The Influencer Marketing Factory, which has worked with brands including Dunkin and Amazon to arrange content deals with social media stars, has seen a five-fold increase in requests from brands wanting to work with TikTok influencers since November, said Alessandro Bogliari, chief executive of the agency.
Even staid companies such as financial services firms are asking how they can get in on the app, after the GameStop trading mania showed younger consumers have more varied interests than some advertisers had expected, said Joe Gagliese, chief executive of influencer marketing agency Viral Nation.
“TikTok has diametrically changed. You’re seeing finance and sports on there,” Mr. Gagliese said. “That’s what’s fueling other brands to come in and play.” — Reuters
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS