Not all crises are tragedies
Unlike other businesses, Kamuning Bakery Café thrived during the pandemic, according to its owner Wilson Lee Flores.
Interview by Edg Adrian Eva
Video editing by Arjale Queral
Renewed optimism, business reinvention in 2025
By Mhicole A. Moral, Special Features and Content Writer
Business leaders around the world are heading into 2025 with confidence about economic growth but face mounting pressure to reinvent their companies for long-term survival.
According to PwC’s 28th Annual Global CEO Survey, nearly three in five chief executive officers (CEOs) anticipate global economic growth will rise over the next year — almost double last year’s figure. However, 42% of CEOs believe their companies will not remain viable beyond the next decade without significant transformation.
Macroeconomic volatility and inflation at 27% top the list of global concerns, while regional differences highlight specific threats. For instance, geopolitical conflict is the primary risk in the Middle East at 41%; whereas in Western Europe, cybersecurity at 27% edges out inflation and labor shortages.
Regulatory challenges also shape business strategy, with 42% of global CEOs citing policy shifts as the greatest threat to long-term viability. More than a third have ventured into new sectors in the past five years to diversify revenue streams, but progress is slow.
Two-thirds of companies reallocate less than 20% of their financial and human resources year-over-year, raising questions about business agility.
Meanwhile, the same report said that Philippine-based chief executives are more confident in the country’s economic growth compared to their global counterparts.
The report, which surveyed 32 Filipino CEOs out of 1,520 respondents from the Asia-Pacific region, revealed that 78% of local executives expect domestic economic growth to improve in the next 12 months. Meanwhile, 9% foresee no significant change, while 13% anticipate a decline.
In terms of confidence regarding revenue growth, 38% of respondents are highly confident in achieving growth, while another 38% are moderately confident. Meanwhile, 19% expressed only slight confidence. Looking ahead, 44% of CEOs are strongly confident in revenue expansion over the next three years.
One of the most notable findings from the report highlights early productivity gains from generative AI. Philippine CEOs are leveraging artificial intelligence to enhance efficiency and streamline operations. At the same time, investments in sustainability are yielding rising payoffs, suggesting that businesses are beginning to reap the benefits of eco-conscious strategies.
Similarly, McKinsey & Company reported that artificial intelligence continues to dominate global discussions, with generative AI offering a $4.4 trillion economic opportunity. Yet, only 11% of AI pilot projects have successfully scaled.
However, 69% of Philippine-based CEOs believe their companies will only remain economically viable for the next decade or less if they continue on their current trajectory. This figure stands in contrast to the global average, where 55% of CEOs foresee longevity beyond ten years.
Balancing growth and challenges
According to Frederic C. DyBuncio, president and chief executive officer of SM Investments Corp. (SM Investments), the country’s economic fundamentals remain strong.
“The Philippines continues to demonstrate strong economic growth fundamentals in 2025, primarily driven by robust domestic consumption, the recovery of key sectors like tourism, and sustained remittance inflows,” Mr. DyBuncio told BusinessWorld in an e-mail.
While the economic outlook remains positive, he cautioned against looming challenges that could impact growth. Particularly, Mr. DyBuncio believes that inflation remains a primary concern, as rising costs of goods and services affect purchasing power.
Despite the challenges, the SM Investments executive sees opportunities, emphasizing that the Philippines’ demographic dividend, particularly its youthful population and growing middle class, continues to drive market demand across various sectors.
In addition, Mr. DyBuncio noted that retail, logistics, renewable energy, and digital services are expected to lead economic expansion in 2025. He said the continued expansion of the middle class, a rise in digital adoption, and enhanced infrastructure connectivity will help propel these sectors forward.
Tourism also presents a promising avenue for growth, with the hospitality sector showing strong recovery potential. As infrastructure projects improve connectivity across the archipelago, the logistics sector is expected to benefit, creating opportunities for supply chain optimization.
“Businesses can maximize these opportunities by investing in scalable technologies, enhancing customer experiences, and aligning with evolving consumer preferences,” he explained. “Companies that embrace operational efficiency, innovation, market expansion, and customer-centric strategies will be better positioned to thrive.”
Meanwhile, ride-hailing giant Grab commended the economic direction of the Philippines as Southeast Asia’s fastest-growing economy.
“This achievement underscores the resilience and potential of the nation under the Marcos administration’s leadership. The passage of transformative policies, such as the CREATE MORE Act, signals a forward-thinking approach to economic reform, further strengthening investor confidence. We remain committed to deepening our presence and investments in this dynamic and thriving market,” Grab was quoted as saying in a statement.
The CREATE MORE Act has been pivotal in enhancing investor confidence by offering tax incentives and streamlining regulatory processes for businesses to create an environment conducive to long-term economic sustainability.
Business tycoon and industry leader Manny V. Pangilinan also expressed renewed optimism for the country’s progress while emphasizing the need for strategic action.
“Another new year — with new hopes, fresh starts, and renewed optimism,” he was quoted as saying in his New Year’s message released two months ago.
This year, Mr. Pangilinan’s outlook centered on improving the lives of Filipinos through job creation and attracting more investments.
“I wish for a better Philippines — where people’s lives should be improved with more investments; where businesses can work together amongst themselves and with government in lifting the welfare of our people,” he added.
With the country facing evolving economic and geopolitical challenges, he believes a clear articulation of national economic goals is crucial. Businesses and policymakers, Mr. Pangilinan said, must work hand-in-hand to implement strategic initiatives that will drive growth and innovation.
He also highlighted the importance of cooperation between the private sector and the government in achieving long-term economic stability to define and align economic priorities for the next four years towards sustainable development.
Economic growth through digital transformation
For fintech giant GCash, this year presents an opportunity to showcase the current financial inclusion initiatives of the country through digital financial services. GCash President and CEO Martha Sazon emphasized that emerging technologies such as artificial intelligence (AI) are being leveraged to ensure accessibility and efficiency in financial transactions, benefiting Filipinos across all socio-economic backgrounds.
“We highlighted that GCash has been leveraging innovations and emerging technologies like AI to further enhance the accessibility, efficiency, and customer-centricity of our services, ensuring that no Filipino is left behind in our pursuit of financial inclusion,” Ms. Sazon said in a statement.
The increasing adoption of AI-driven financial solutions aligns with the Philippine government’s broader push toward digital transformation. GCash reaffirmed its commitment to working closely with policymakers to foster a more inclusive digital economy.
Year of opportunities for sustainability initiatives
According to AboitizPower Chief Finance Officer Sandro A. Aboitiz, the government’s target of at least 6% gross domestic product (GDP) growth this year could translate to a higher demand for electricity, necessitating new generation capacities.
“A 6% growth in GDP will require additional baseload, mid-merit, and peaking generation capacities,” he said in an interview with BusinessWorld.
With La Niña expected to impact energy consumption patterns, the country is set to energize around 6,841 megawatts (MW) of additional capacity in 2025. This includes 3,930 MW from solar, 1,320 MW from natural gas, 773 MW from wind, 500 MW from coal, 107 MW from hydro, and 104 MW from geothermal sources.
Despite these developments, Mr. Aboitiz emphasized the need for vigilance in the face of global economic uncertainties and rapid technological shifts, which could impact public policy and business costs.
The executive said that AboitizPower has embedded environmental, social, and governance (ESG) principles in its business strategy to create shared value for investors, customers, and host communities.
“In its 2024 Corporate Sustainability Assessment, S&P Global ranked AboitizPower in the 73rd percentile among its global peer group, while Sustainalytics placed the company in a Medium Risk rating category,” Mr. Aboitiz noted. The company has also received the Golden Arrow Award, a notable recognition in corporate governance, for three consecutive years.
He also mentioned the importance of innovative thinking, scenario planning, change management, and risk assessment to navigate industry disruptions. “The digital age is powered by electricity, and the role of the power sector is to provide electricity when and where it’s needed at a reasonable cost,” Mr. Aboitiz explained.
AboitizPower’s approach to balancing energy affordability, reliability, and decarbonization involves an “all-options-on-the-table” strategy. This includes utilizing dispatchable fossil fuel sources as today’s affordable baseload fuel alongside the development of alternatives like nuclear, offshore wind, and battery storage to reach scalable viability.
Call for initiatives and partnerships
Mr. DyBuncio said that companies like SM Investments are committed to navigating economic headwinds through innovation, investments, and consumer-centric strategies.
“The private sector, including the SM group, plays a critical role in harnessing these growth opportunities,” he stated. SM Investments, a conglomerate with interests in retail, banking, and property development, continues to expand its portfolio to align with evolving market demands.
Mr. DyBuncio highlighted the importance of maximizing opportunities by investing in scalable technologies, enhancing customer experiences, and aligning with evolving consumer behaviors.
“At SM, we continue to leverage these strategies alongside strong partnerships to ensure our businesses remain accessible, dynamic, and responsive to market needs,” he said. We remain committed to building businesses that not only deliver strong financial performance but also create meaningful impact for communities and stakeholders. By fostering resilience and embracing change, entrepreneurs and executives can help shape a more robust and dynamic Philippine economy.”
For AboitizPower, ensuring economic stability and fostering growth require stronger collaboration between the public and private sectors. Mr. Aboitiz said that the need for a long-term energy plan transcends political administrations, allowing businesses to invest with confidence.
“In the electric power industry, a segment that is heavily regulated and wherein upfront capital costs are high, there should be a long-term energy plan that can be passed on from one administration to the next and ensure continuity. This will allow developers to invest with confidence,” he added.
Ayala Corp. Chairman Jaime Augusto Zobel de Ayala is calling on investors to take advantage of the Philippines’ sustained economic momentum as the country enjoys resilience amid global uncertainties.
“We in the Philippine business community remain hopeful at the country’s prospects for growth, which have not dimmed despite a volatile global environment,” Mr. Zobel de Ayala was quoted as saying during a board meeting of the US-Philippines Society, where he serves as co-chair. “The country is certainly ready to accept high levels of partnerships and investments from our friends around the region, most especially the United States.”
Mr. Zobel de Ayala also stressed that the economy could reach even greater heights with stronger alignment between the public and private sectors.
“A consistent six-percent growth is certainly a respectable achievement, but imagine what more can be achieved if we hit a continuous growth rate of eight percent or more over a sustained period, which economists feel is possible if we align the government and private sectors,” he added.
January BoP gap widest in 11 years
By Luisa Maria Jacinta C. Jocson, Reporter
THE PHILIPPINES in January posted its biggest balance of payments (BoP) deficit in over a decade, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.
The BoP deficit stood at $4.1 billion in January, ballooning from the $740-million gap in the same month a year ago.
It was also nearly triple the $1.5-billion deficit posted in December.
This marked the widest BoP deficit in 11 years or since the $4.48-billion shortfall in January 2014.
The BoP summarizes the country’s transactions with the rest of the world. A deficit means more funds left the country, while a surplus shows that more money came in.
“The BoP deficit in January 2025 reflected the BSP’s net foreign exchange operations and drawdowns by the National Government (NG) on its foreign currency deposits with the BSP to meet its external debt obligations,” the central bank said.
Latest data from the Bureau of the Treasury showed the NG’s outstanding debt hit P16.05 trillion at the end of 2024, up by 9.8% from P14.62 trillion at end-2023.
Earlier BSP data showed the country’s outstanding external debt hit a record high of $139.64 billion as of end-September. This brought the external debt-to-GDP ratio to 30.6% at the end of the third quarter.
The external debt service burden jumped by 14% to $15.735 billion in the 11-month period, according to the latest central bank data.
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the wider BoP deficit was also due to the recent peso volatility.
The peso depreciated to P58.365 at end-January, weaker by 52 centavos from the P57.845 finish at end-December.
“The BoP deficit for January is primarily due to interest and debt payments, which can also be considered as foreign exchange intervention by the central bank to maintain the Philippine peso’s stability against the US dollar,” Oikonomia Advisory and Research, Inc. economist Reinielle Matt M. Erece said.
“This entails large withdrawals of the country’s cash reserves to pay its obligations and meet its targets,” he added.
At its end-January position, the BoP reflects a gross international reserve (GIR) level of $103.3 billion, down by 2.8% from $106.3 billion as of end-2024.
Mr. Ricafort said the relatively higher GIR provided “greater cushion for the peso exchange rate vs. the US dollar.”
This was supported by the “continued growth in the country’s structural US dollar inflows especially from overseas Filipino worker remittances, business process outsourcing revenues, foreign tourism receipts and foreign investments, among others.”
Despite the decline, the dollar buffer is enough to pay for 7.3 months’ worth of imports of goods and payments of services and primary income.
The reserves can also cover about 3.7 times the country’s short-term external debt based on residual maturity.
For the coming months, the BoP position could improve due to the NG’s latest global bond issuance, Mr. Ricafort said.
The Philippines raised $3.3 billion from the sale of dual-tranche US-dollar global bonds, as well as a euro sustainability bond, in late January.
In 2024, the country’s full-year BoP position stood at a surplus of $609 million, falling by 83.4% from the $3.672-billion surplus at end-2023.
This year, the BSP expects a $2.1-billion surplus position, equivalent to 0.4% of economic output.
Saudi’s Aramco returns to PHL market via 25% stake in Unioil
By Sheldeen Joy Talavera, Reporter
SAUDI ARABIA’S Aramco is returning to the Philippine market as it is set to acquire a 25% equity stake in Unioil Petroleum Philippines, Inc.
In separate statements, the Saudi oil giant and Unioil said they signed a definitive agreement, which is subject to certain conditions including regulatory approvals.
No financial details of the transaction were provided.
“This investment represents another step forward in our global strategy to expand Aramco’s retail network, and we look forward to introducing Aramco’s high-quality products and services to customers in the Philippines,” Yasser Mufti, Aramco’s executive vice-president of products and customers, said in a statement.
The deal comes 17 years after Aramco, widely considered the world’s largest oil producer, exited the Philippines after it sold its 40% stake in Petron Corp. In 1994, Aramco had invested in Petron when it was privatized by the Philippine government.
Aramco, the national oil company of Saudi Arabia, said in a statement that it aims to “capitalize on anticipated growth of the high-value fuels market in the Philippines.”
“It (the acquisition) represents further progress in Aramco’s strategic downstream expansion and growth of its global retail network, which aims to secure additional outlets for its refined products,” the company said.
Unioil, established by the Co family in 1966, is a diversified downstream fuels operator with 165 retail stations and four storage terminals in the Philippines.
“The strategic investment by Aramco is fully in line with our ambition to be the fuel retailer of choice and support our customers with top tier fuel solutions,” said Kenneth C. Pundanera, president of Unioil.
Janice Co Roxas-Chua, chief executive officer of Unioil, described the deal as “a major milestone in Unioil’s 58-year history.”
“We are confident that this will equip ourselves in accelerating our growth and development, further innovate, and strengthen our position as a leader in the wholesale and retail fuels market,” she said.
As part of the partnership, Unioil will introduce the Aramco’s brands and Valvoline-branded lubricants to Filipino consumers.
Asked to comment, Jayniel Carl S. Manuel, an equity trader at Seedbox Securities, Inc., said that Aramco’s global reputation could also elevate Unioil’s market standing, encouraging local and international confidence in its brand and potentially boosting market share.
“By securing a direct link to one of the world’s largest oil producers, Unioil may benefit from a more stable and cost-effective supply of crude and refined products, which would enhance its competitiveness in both the retail and industrial segments,” he said via Viber.
Mr. Manuel said that the “high-profile nature” of the investment signals that the Philippine downstream sector is an attractive environment for foreign investors, which may spur more international partnerships, heighten competition, and drive technological innovation.
Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said Aramco’s re-entry into the Philippine retail market would likely stimulate competition, encouraging existing players to innovate and improve their services.
“The entry of a global leader like Aramco could bring more attention to the Philippines’ fuel market, indirectly benefiting local brands through heightened consumer and investor interest,” Mr. Arce said in a Viber message.
He said that the anticipated growth in infrastructure to support Aramco’s operations “may lower barriers to entry for other foreign investors, creating a ripple effect.”
Juan Paolo E. Colet, managing director at China Bank Capital Corp., said that the entry of Aramco as a strategic investor will better position Unioil for expansion and competition as a major fuel retailer.
“Aramco’s return to the local petroleum market also demonstrates optimism and conviction about the economic prospects of the country,” he said in Viber message.
He added that the move could “invite other global oil players who have no or limited domestic exposure to explore significant partnerships or investments in the Philippines.”
C-suite viewpoints on the path ahead
The Asian economy tells a compelling story — one that is resilient, transformative, and shaping the global economic landscape. Such story is carried by executives who see 2025 as another year poised for economic growth, filled with optimism and reinvention, as reflected in recent reports.
In PricewaterhouseCooper’s (PwC) 28th Annual Global CEO Survey — Asia-Pacific, about 55% of leaders expect notable progress in the economy compared to last year. This confidence is reflected in their business outlook, with 34% confident in their revenue growth projections and 46% planning to increase hiring this year.
While the region shows positive signs for economic growth, there’s also a cloud of uncertainty that could complicate its outlook. The report highlighted top concerns such as macroeconomic volatility (rising from 21% to 32%) and the low availability of workers with skills (increasing to 25%). Other risks include technological disruptions, rising trade tensions, and severe weather conditions, among others.
Business reinvention
Given such an environment, CEOs are driven to lead reinventions in businesses. According to PwC, business reinventions are “radically transforming how a company creates, delivers, and captures value. Or, put another way, it’s how a company fundamentally changes how it makes money, serves customers, or provides new products or services.” This reinvention is imperative for advancing businesses, leveraging innovation, unlocking new value and opportunities that are key to business longevity.
Many are confident about their company’s viability, with 52% believing they will last for more than 10 years, which is a substantial increase from the 34% in 2024. Mirroring the growing confidence, the last five years have seen CEOs take reinvention actions such as targeting a new consumer base, developing innovative products or services, fostering organizational collaborations, exploring new market routes, and implementing new pricing models.
By staying ahead with the curve, organizations are turning economic uncertainties into growth opportunities that create long-lasting value.
Upskilling employees
Having a strategic vision and investing in the workforce is considered as an essential driver of growth. An example of this undertaking is upskilling employees to keep pace with technological advancements.
According to Ernst & Young’s (EY) CEO Outlook Survey: Global Confidence Index, 85% of global CEOs believe that balancing human talent with new technologies can address the current skill gaps and will be crucial for business growth in the next year.
More notably, key differences in priorities among CEOs were observed: 60% were focused on improving employee and customer experiences, while 40% prioritized top-line growth and margin expansion.
“Adaptability is the ultimate advantage in today’s landscape. Organizations that embrace transformation can turn disruption into opportunity, continuously learning, pivoting and growing to shape their future with confidence. The survey reveals that the most confident CEOs are taking a long-term approach to transformation, focusing on enhancing customer and employee engagement amid macroeconomic and technological shifts, and always placing humans at the center as the best path to sustainable value creation,” an EY report noted.
Digital transformation
The push for digital transformation continues to significantly influence businesses, impacting both strategies and operations. In Asia, there’s a strong emphasis on investing in emerging technologies like artificial intelligence (AI) to reshape business models. This shift led to increased revenue and employee efficiency among businesses.
According to EY’s CEO Outlook — Asia-Pacific report, 74% of CEOs believe their companies are extremely or very proficient in leveraging technologies to enhance innovative work strategies, and 72% feel confident in their ability to rapidly adopt technologies to create new business models.
However, trust issues around AI still persist, as evidenced by the low trust levels (37%) among executives. As a result, as PwC’s report noted, many organizations are adopting a more cautious approach.
To move past AI challenges, CEOs should prioritize aligning AI with their business strategies. This involves equipping leadership teams with the necessary knowledge and tools, ensuring AI aligns with company initiatives and objectives, utilizing AI agents, redesigning operating models, and implementing responsible AI practices.
“Today you have high AI potential and a significant level of investment, but not a lot of value being unlocked. Meaningful AI value will only be realized if CEOs get personally involved, because only they can align the AI agenda to the broader enterprise agenda,” said Nicolas de Bellefonds, a managing director and senior partner at the Boston Consulting Group (BCG) in an article published on the firm’s website.
Sustainability as growth opportunity
Placing sustainability at the heart of business operations and transforming it into a valuable opportunity is another key aspect of business reinvention. An increasing number of leaders are recognizing the critical role that sustainability plays, with 39% already seeing real gains from climate-friendly investments, according to PwC.
“Climate considerations are no longer just about meeting stakeholder expectations — they’re becoming a cornerstone of investment. A substantial 87% of CEOs have initiated climate-friendly investments in the last five years,” the report pointed out.
“It appears that companies in Asia-Pacific that benefited financially from climate-friendly investments tend to be large, financially robust and strategically focused on sustainability and reinvention,” it added.
However, the reality remains unpleasantly clear; and if climate action continues to lag, the climate is likely to become more volatile and extreme. Therefore, it is only crucial to accelerate the pace of climate action.
More specifically, companies can face significant financial risks when they are impacted by extreme climate events. This risk is particularly high for sectors such as agriculture, construction, communication, and utilities.
“BCG and the World Economic Forum estimate that if global warming stays on its current trajectory, extreme weather could place up to 25% of EBITDA (earnings before interest, taxes, depreciation, and amortization) at risk within the next 25 years,” BCG’s report said.
“While physical and transition risks will vary depending on the region and industry, it is imperative that CEOs fully understand their current exposure — an area where many appear to be falling short,” it added.
“By our analysis, many companies are significantly underestimating the risks from climate change, especially as catastrophic floods, hurricanes, droughts, and wildfires continue to become more frequent and extreme.”
CEOs, then, have a bigger role to play in mitigating risks and accelerating climate action. Assessing climate scenarios and identifying the best strategies to reduce their companies’ exposure to risk is essential. Additionally, they should focus on reducing carbon footprints, especially to those in high-emission industries, and forming partnerships to drive green initiatives forward. — Angela Kiara S. Brillantes
Carmakers set 500,000 sales target for 2025
By Justine Irish D. Tabile, Reporter
PHILIPPINE AUTOMOTIVE sales are expected to reach 500,000 units in 2025, according to the Chamber of Automotive Manufacturers of the Philippines, Inc. (CAMPI).
A joint report by CAMPI and Truck Manufacturers Association (TMA) on Thursday showed vehicle sales jumped by 10.4% to 37,604 units in January from a year ago’s 34,060 units.
Month on month, sales fell by 10.6% from 42,044 units sold in December when demand is typically higher.
“With yet another good performance in January 2025 sales, CAMPI is projecting to hit 500,000-unit sales for the year,” said CAMPI President Rommel R. Gutierrez in a statement on Thursday.
“Newly rolled out models and the anticipated introduction of new models are some of the factors that will contribute to achieving this target,” he added.
The industry’s sales target of 500,000 would represent a 7% year-on-year increase from the record-high 467,252 units sold in 2024.
CAMPI-TMA data showed passenger car sales slipped by an annual 8.5% to 7,729 units in January from 8,446 units a year ago. Month on month, sales of passenger cars fell by 23.7% from 10,125 units in December.
Meanwhile, commercial vehicle sales climbed by 16.6% to 29,875 from 25,614 in the same month a year ago. This accounted for 79.5% of the industry’s total sales.
Month on month, sales of commercial vehicles declined by 6.4% from 31,919 units sold in December.
Broken down, light commercial vehicle sales went up by 17.8% to 22,350 units, while Asian utility vehicle (AUV) sales rose by 13.7% to 6,698. Sales of light commercial vehicles and AUVs declined on a month-on-month basis by 7.3% and 1.9%, respectively.
Sales of light trucks surged by 20.6% to 497 in January but dropped by 19.3% month on month. Medium truck sales were down 7.4% year on year to 261 and 5.4% down from December.
Sales of heavy trucks increased by an annual 9.5% to 69 in January but dropped by 30.3% month on month.
Electric vehicle (EV) sales stood at 1,600 units in January, which was composed of 1,445 hybrid EVs, 146 battery EVs and nine plug-in hybrid EVs.
“Car sales in January 2025 likely reflected a combination of strong consumer demand, improved supply chain conditions, and continued economic recovery,” John Paolo R. Rivera, a senior research fellow at the Philippine Institute for Development Studies, said in a Viber message.
Mr. Rivera said the industry’s 7% sales growth target is achievable but may be dampened by risks such as inflation, higher fuel costs, and trade disruptions.
“A 7% increase is within reach, but several risks could affect the projection. If inflation or interest rates unexpectedly rise, it could dampen consumer spending,” Mr. Rivera said.
“Higher fuel costs or stricter regulations through emissions standards and excise taxes could slow demand. While supply chain bottlenecks have eased, any disruptions in global trade or manufacturing could impact inventory levels,” he added.
Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., said that the 7% sales growth target is “achievable if the current momentum continues.”
“However, the decline in passenger car sales and potential risks from economic challenges, such as inflation or supply chain disruptions, could hinder progress,” he added.
In January, Toyota Motor Philippines Corp. remained the market leader with a 48.07% share as its sales rose by 12.3% to 18,078 units.
Mitsubishi Motors Philippines Corp. came in second with a 21.2% increase in sales to 7,374 units in January.
In third spot is Nissan Philippines, Inc. which saw a 3.9% decline in sales to 2,366 units.
Rounding out the top five were Suzuki Phils., Inc., which saw a 19.9% increase in sales to 1,781 units, and Ford Motor Company Phils., Inc. whose sales dropped 36.1% to 1,577 units.
PHL unlikely to see big impact from Trump tariffs
THE PHILIPPINES is unlikely to be impacted by US President Donald J. Trump’s tariff plans, S&P Global Ratings said, but warned this could change if service exports are also targeted.
“Thankfully for the Philippines, the export component of the economy is not large. The Philippines’ economy is mostly domestic and driven by consumption as well. So, largely, any impact will not be big,” S&P Global Ratings Director and Lead Analyst Ivan Tan said in a webinar on Thursday.
Markets are bracing for the potential impact of Mr. Trump’s trade policies, such as reciprocal tariffs on all countries that tax US imports.
“One caveat is that the export services from the Philippines are fairly large,” Mr. Tan said.
Earlier data from the central bank showed the Philippines booked $37.4 billion worth of services exports in the first nine months, up 6.25% from a year earlier.
In 2024, exports of services jumped by 8.3%, data from the local statistics authority showed. It also accounted for 13% of gross domestic product (GDP).
Under the Philippine Development Plan, service exports are projected to hit $48.15 billion this year.
“Now, the Trump tariff policy is mostly on goods. He hasn’t targeted services yet,” Mr. Tan said.
“So, that’s not our base case, but should he turn his attention to the services industry, then that is where we need to relook at and think about the potential impact on the economy and, of course, the flow-on impact on the banks.”
Mr. Tan noted the country’s robust remittances from overseas Filipino workers as well as service exports.
“Because of a good educational system and English literacy in the Philippines, there’s a lot of service workers working in the US, that includes doctors and nurses. And remittances are a meaningful contribution to the GDP.”
In 2024, the US was the top source of cash remittances. It accounted for almost half or 40.6% of the total remittance flows.
RISKS TO BANKS
Meanwhile, S&P Global said the Philippine banking system has maintained good capital buffers, though it flagged risks to the sector, citing the shift to consumer loans.
“Generally, the capitalization and the profit has been quite good, like most Southeast Asia banks in the investment-grade space,” Mr. Tan said.
“The only incremental risk we are seeing is that banks are pivoting away from corporate loans, which are low-yielding but very safe, towards the higher-risk and higher-yielding consumer loans.”
Latest data showed bank lending jumped by 12.2% year on year to P13.1 trillion at end-December. This was the fastest lending growth in two years.
“Corporate loans will be about 3% of nonperforming loans (NPL). Consumer loans, even though the margins are very high, the nonperforming loans are twice as high. The average consumer loans will be about 6% NPL or more.”
“There is a little bit of risk on at this point, so we are looking closely at that. But just to be clear, the majority of the bank books are still in the safe, low-yielding corporate loans,” Mr. Tan said.
“It’s going to take some time before consumer loans become a larger, more meaningful portion of their balance sheet.”
The Philippine banking industry’s gross NPL ratio slid to 3.27% in December from 3.54% in November. This was also the lowest NPL ratio since the 3.24% posted in December 2023. — Luisa Maria Jacinta C. Jocson
Effective strategy and execution for 2025
After the coronavirus disease 2019 (COVID-19) pandemic brought a debilitating start to the 2020s, the halfway point of the decade promises to bring distinct opportunities, new challenges, and rapid changes that can impact professionals and organizations.
To get a headstart in 2025, business leaders and executives create their plans and strategies to navigate what could be a complex year. Although various approaches exist to develop an annual strategic plan, effective strategies usually involve actionable, measurable, and concise enough steps that align with their organizational goals.
Setting the right targets makes sure that every initiative and decision aligns with the company’s objectives for the year. This begins with a thorough review of the past year’s performance which involves gathering insights from employees across all levels to determine what strategies were effective and which areas need improvement. By evaluating successes and setbacks, businesses can identify what drove growth and what hindered success then finally create a realistic target.
Once clear targets are established, the next step is determining how to track progress and measure success. Key performance indicators (KPIs) allow businesses and professionals to ensure accountability and keep the strategy on course. While it can lead to pressure if achieving the KPI becomes less and less likely, having the ability to monitor one’s performance can also give enough time to adjust strategies, make more projects, and exert more effort.
With well-defined KPIs in place, the focus shifts to execution. Turning strategic goals into actionable plans requires a clear road map that outlines the specific steps, resources, and timelines needed to achieve set targets and a willing team who are prepared to execute the strategy, follow instructions, and dedicate themselves to company goals.
This means breaking down larger goals into smaller, manageable tasks, assigning responsibilities, and setting deadlines to keep the team on track. Without a structured approach and commitment to execution, even the most well-defined goals risk remaining as mere aspirations rather than driving real progress.
Aligning with trends
As companies refine their strategies for the year ahead, understanding the key themes that will persist throughout the whole of 2025 becomes essential. Identifying these emerging trends and aligning them with strategic objectives will enable companies to stay competitive, resilient, and well-positioned for growth.
The world is just five years away from the deadline of the 2015 Paris Accords, which means that sustainability and environment-friendly priorities should be near the top of any strategic plan. The international treaty’s goal is to hold “the increase in the global average temperature to well below 2°C above pre-industrial levels” and pursue efforts “to limit the temperature increase to 1.5°C above pre-industrial levels.”
While embracing sustainability can be driven by advocacy and care for the environment, studies have indicated that consumers and stakeholders resonate with companies that prioritize environmental and social responsibility. For example, the 2024 Global Workforce ESG Preferences Study by Pricewaterhouse-Coopers (PwC) found that 57% of employees prioritize a company’s environmental, social, and governance (ESG) strategies as their top consideration or second only to salary.
Beyond sustainability, businesses that thrive will always be those that embrace agility, innovation, and a forward-thinking approach to strategy. Adapting technologies like AI, automation, and cloud computing can drive efficiency and competitiveness, but only when integrated thoughtfully into a company’s broader strategic goals. These assets can be a priority for companies looking to streamline operations, reduce costs, and respond quickly to changes.
However, embracing innovations does not mean jumping on every trend. Everything depends on how well these advancements align with the organization’s core objectives, industry dynamics, and vision for the year. Well-crafted plans evaluate these technologies, pinpoint where they can help the company, and slowly integrate the innovation to an area where it can contribute meaningfully.
Balancing efficiency and flexibility
Another factor to consider for strategic planning is the unpredictability of global markets. Events that may occur within the year including the 2025 National Elections, the impending impeachment trial of the Vice-President, Donald Trump’s policy changes, and many other circumstances can lead to disruptions, risks, and opportunities that will require businesses to adapt, stabilize, and take advantage quickly.
This is why balancing efficiency and flexibility is a must for any annual strategic plan. Having the ability to pivot while maintaining a clear direction allows businesses to respond effectively to unforeseen challenges without losing sight of their long-term goals. A strategy that is too rigid may leave organizations vulnerable to disruptions, while one that is too reactive can lead to instability and misaligned priorities.
While external factors such as market shifts and new technology play a role in making business strategies, an organization’s greatest asset remains its people. Companies that invest in developing their talent are better positioned to retain them, recruit new personnel, and improve employee performance.
Meeting people where they are
The pandemic years saw the rise of hybrid and remote work along with employee well-being initiatives while skill-based hiring and upskilling became norms in 2024. For this year, strategic plans can learn from the lessons of the past half-decade and incorporate continuous learning opportunities, leadership development, and inclusive workplace cultures that enhance workforce engagement, and pay dividends in the long run.
While innovation, flexibility, and talent development are important for growth, long-term success ultimately depends on a company’s ability to understand and meet customer needs. Personalized experiences, seamless interactions, and brands that align with their values are becoming more in demand as customers expect more than just quality products and services.
Consumer preferences constantly evolve and businesses that can anticipate these changes — and proactively adapt — will maintain a competitive edge. With digital advancements, economic conditions, and societal values dividing customer bases, companies that prioritize consumer-centric strategies will build stronger brand loyalty and drive sustainable growth in 2025 and beyond.
Success in 2025 will depend on a company’s ability to set clear objectives, execute strategic plans, and adapt to emerging trends. Almost two months into 2025, businesses are already seeing the impact of their strategic plans unfold with some gaining momentum and others making necessary adjustments to stay on course. As the year progress further, companies that stay committed to their goals, invest in their people, and remain flexible to emerging trends and disruptions will be best-positioned for a big year. — Jomarc Angelo M. Corpuz
AboitizPower aims to sustain momentum in 2025
Aboitiz Power Corporation (AboitizPower) expects continued progress in 2025, bolstered by its business and operational achievements last year, which saw developments in its ambitious program to grow its renewable energy fleet by three times by 2030.
“AboitizPower remains focused on delivering operational excellence in its power plants, developing a pipeline of new energy capacity, and pursuing opportunities in its distribution and retail business,” said AboitizPower Chief Finance Officer Sandro Aboitiz.
The Company cited the 159-MWp Laoag solar; the 17-MW Tiwi binary geothermal; the 45-MWp Armenia solar; and the 173-MWp Calatrava solar — all energy projects that went online in 2024 — as accomplishments in its 10-year growth strategy of adding approximately 3,700 MW of new renewable energy capacity by decade’s end.
“The energization of the Armenia and Calatrava solar plants in the fourth quarter were the final touches to AboitizPower’s strong performance in 2024,” Aboitiz said. “AboitizPower intends to grow its momentum and we are excited to build the next wave of renewable energy projects in 2025 and beyond.”
AboitizPower will help contribute to the power supply as the Philippine economy continues to grow in the near term. The Company will drive impact through its portfolio of thermal, renewable energy, energy storage systems, and distribution, as well as from its retail electricity services segment.
“Power plants and power networks are crucial components to powering the nation’s development. With the completion of big-ticket transmission projects like the Mindanao-Visayas Interconnection and the Cebu-Negros-Panay Backbone, more generated power can be delivered to demand centers,” Aboitiz said.
AboitizPower believes in a holistic approach to the Philippine energy transition, requiring all available and viable technologies on the table; from thermal, to renewable, to energy storage. Currently, the Company still has over 1,000 MW of disclosed projects from various indigenous energy sources, while constantly pursuing opportunities in solar, hydro, geothermal, wind, and energy storage systems.
Last year, AboitizPower’s Transition Business Group sustained multi-year best-in-class availability and reliability. Through a digital transformation program called “Project Arkanghel,” which is in partnership with Thai company REPCO NEX Industrial Solutions, AboitizPower aims to transform its thermal power plants into smart power plants, integrating digital twin technologies and asset monitoring systems to predict equipment failures and minimize the number of plant outages.
“The energy transition will require thermal capacities to support variable renewable energy capacities and ensure the affordability and security of our energy system,” Aboitiz explained.
In the first nine months of 2024, AboitizPower’s distribution utilities observed an increase in energy sales from residential and commercial and industrial customers, growing by 14% and 5%, respectively, year on year. This reflects the anticipated increase in electricity demand, a trajectory that will continue on in the decades to come.
Collectively, AboitizPower’s EBITDA saw a 12% increase year on year to P56.09 billion in the first nine months of 2024. This is attributed to higher generation portfolio margins and the integration of additional capacities, as well as the growth in retail volume and increase in energy sales from the distribution utility business.
For three years in a row, AboitizPower also received a Golden Arrow Award, which marks its compliance with corporate government standards and favorable standing with international best practices. For the 2023 ASEAN Corporate Governance Scorecard, the Company was accorded a 3-arrow recognition.
“This award acknowledges our efforts to maintain transparency, accountability, and ethical business standards and is a testament to our team’s dedication in upholding the highest standards of corporate governance,” Aboitiz said. “We strive to Transform Energy for a Better World by delivering strong performances across business segments, generating a positive impact in host communities, and minimizing adverse effects to the environment.”
AboitizPower along with the rest of the Aboitiz Group has long upheld ESG strategies — or environmental, social, and governance — in its operations, spanning decades of aspiring and being recognized as role models of environmental stewardship, social responsibility, good governance, and corporate citizenship.
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Unwavering service to Philippine insurance
Established on Jan. 3, 1949, through Republic Act No. 275, the Insurance Commission (IC) was created to regulate and supervise the insurance, pre-need, and health maintenance organization (HMO) industries in the country.
From its humble beginnings, the IC has grown into a forward-thinking agency, consistently striving to meet global standards and implement best practices to serve the Filipino people.
According to the commission’s 2024 report, insurance density reached P3,882.77, an increase of 12.58% from P3,457.84 in 2023. Insurance penetration, which measures the industry’s contribution to the country’s gross domestic product (GDP), rose slightly from 1.62% in 2023 to 1.67% in 2024.
“This is explained by the faster growth of the insurance premiums vis-à-vis the 8.84% growth in the GDP (in current prices), which underscores stronger expansion within the insurance and MBA (mutual benefit association) sectors as of Q4 2024,” said Insurance Commissioner Reynaldo A. Regalado.
The total number of licensed insurance companies grew to 137, up from 136 in 2023. However, the number of companies that submitted reports declined from 132 to 128, a 3.03% drop.
Meanwhile, the industry’s total assets grew by 6.43%, reaching P2.46 trillion in 2024, compared to P2.31 trillion in 2023. Total liabilities also rose by 7.09%, amounting to P1.98 trillion from P1.85 trillion.
Net worth also increased by 3.77%, from P462.4 billion in 2023 to P479.8 billion in 2024. The total invested assets of insurance companies also rose to P2.20 trillion, up by 7.23% from P2.05 trillion the previous year.
The report also stated that the industry collected P440.3 billion in total premiums, a 12.81% increase from 2023. Providers also paid out P160.3 billion in benefits and claims, an 18.97% jump from P134.7 billion in 2023.
The Insurance Commission also received an unmodified opinion, the highest rating, for its 2023 financial statements from the Commission on Audit (CoA).
Strengthening public service
The IC recently revoked the practice of granting provisional insurance agents’ licenses to reinforce stricter regulatory measures and ensure consumer protection and market integrity.
The IC issued Circular Letter (CL) No. 2024-21, which declares the grant of provisional authority for insurance agents pending their regular licenses as inoperative. This new directive effectively repeals previous circulars that allowed provisional licensing while awaiting regular approval.
“The issuance of this Circular Letter is also part of the IC’s initiatives on consumer protection, as it ensures that only agents with duly issued regular licenses will be allowed to transact with the insuring public,” said Mr. Regalado.
This move aligns with Republic Act No. 11032, the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, its Implementing Rules and Regulations (IRR), and related issuances from the Anti-Red Tape Authority (ARTA).
The Insurance Commission also launched its Online Billing and Collection System, integrated into Landbank’s Link.BizPortal. The new system is expected to improve IC’s efficiency in processing fees from its regulated entities, including registration, examination, and supervision fees, which contribute significantly to the IC’s revenue.
Meanwhile, the IC has issued new guidelines allowing insurance and reinsurance companies to invest in infrastructure projects under the Philippine Development Plan (PDP) 2023-2028.
The CL No. 2024-23 supports President Ferdinand R. Marcos, Jr.’s eight-point socioeconomic agenda outlined in Executive Order No. 14, series of 2023. Under the new framework, regulated insurance and reinsurance companies may engage in equity or debt investments, acting as financiers or sponsors.
“The Commission will be closely coordinating with the Department of Finance, the National Economic and Development Authority (NEDA), and the Public-Private Partnership (PPP) to ensure that requests for these kinds of investments are in line with national government policy objectives,” said Commissioner Regalado.
Boosting partnerships
Last December, the IC and National Privacy Commission (NPC) partnered to strengthen data privacy in the insurance industry by adopting Privacy-Enhancing Technologies (PETs).
The initiative, formalized through a memorandum of agreement (MoA), aims to improve consumer protection and ensure insurance providers, pre-need companies, and health maintenance organizations (HMOs) comply with the Data Privacy Act (DPA), especially since the insurance sector processes vast amounts of personal data daily, from policy underwriting to claims processing and customer service transactions.
“The insurance industry processes vast amounts of personal data daily. As the industry regulator, we are committed to strengthening privacy measures to protect consumer information and uphold the integrity of the insurance sector,” Mr. Regalado said during the MoA signing.
The IC also joined the Department of Migrant Workers (DMW) to provide a more robust support system for overseas Filipino workers (OFWs). Particularly, the initiative will create a dedicated hotline under IC’s Public Assistance and Mediation Division to handle insurance-related concerns for OFWs. This hotline will allow workers abroad to easily report complaints, seek assistance, and obtain crucial information about their insurance policies.
Furthermore, the commission has partnered with the Integrated Bar of the Philippines (IBP) to ensure accessible legal support for individuals filing claims or complaints related to insurance, pre-need, and HMO products. Through this initiative, marginalized citizens will receive free legal assistance, including consultation and representation during mediation, conciliation, and adjudication proceedings.
The Insurance Commission may now endorse complainants to the IBP, which will assess eligibility for legal aid based on a means and merit test, and the availability of volunteer lawyers.
Achieving local and global recognitions
The Philippines, through the IC, earned commendations from fellow ASEAN nations for its entry into the Takaful market at the 27th ASEAN Insurance Regulators’ Meeting (AIRM) and the 50th ASEAN Insurance Council (AIC) Meeting, held in Bandar Seri Begawan, Brunei Darussalam, from Nov. 26 to 28, 2024.
This recognition follows the recent issuance of Takaful operator licenses to two companies in the Philippines, in line with Circular Letter No. 2024-13 on the Consolidated Guidelines for Takaful Window Operations.
Investopedia defines Takaful as a type of Islamic insurance wherein members contribute money into a pool system to guarantee each other against loss or damage.
In 2023, the IC received an award from the Presidential Communications Office (PCO) in the Top Requested and Performing Agencies category. The recognition also indicated that during the third quarter of 2023, the IC achieved a 98.16% score for responsiveness and a 97.88% score for reliability and integrity, resulting in an overall satisfaction rate of 97.24%. — Mhicole A. Moral
IC’s vision for a more resilient and inclusive insurance industry
The Philippines’ insurance industry is one of the country’s budding sectors driven by financial inclusion efforts, digital innovations, and increasing consumer awareness. Tasked to strengthen and regulate these pre-need companies in the Philippines, the Insurance Commission (IC) has been implementing prudent and progressive regulatory and supervisory policies at par with international standards since its establishment in 1949.
The commission’s main goals collectively support the development, regulation, and consumer protection of the insurance industry. Among its objectives are to promote growth and financial stability of insurance, pre-need, and health maintenance organizations (HMOs); to professionalize insurance, pre-need, and HMO services, and develop insurance, pre-need, and HMO consciousness among the general populace; to establish a sound national insurance market; and to safeguard the rights and interest of the insuring public, pre-need and HMO customers.
To achieve these objectives, the IC continues to introduce strategic initiatives and reforms aimed at enhancing industry resilience, expanding market reach, and ensuring consumer welfare.
This year, the IC is looking to set standards for the computation of mutual benefit associations’ (MBA) policy reserves. The MBAs are organizations that provide security, protection, and meaningful financial solutions for their members; while policy reserves are the funds set aside by the insurance companies to pay future benefits and ensure that insurers have enough money to pay claims when they happen.
The valuation standards that the IC is expected to use will be in line with internationally accepted actuarial standards, as well as the principles of the financial reporting framework promoted by the Actuarial Society of the Philippines. The MBAs will be required to compute their required reserves using gross premium valuation.
“Every MBA supervised by the Insurance Commission shall value their policy reserves for Basic Life Insurance and Optional Life Insurance coverages at the end of each valuation period in accordance with this set of Valuation Standards,” the industry regulator said in a draft circular last December.
Similarly, the commission is planning to regulate the sale of insurance to overseas Filipino workers. This would ensure that Filipinos working outside the country receive adequate protection and benefits while working abroad, aligning with industry standards and consumer safeguards.
However, there are some roadblocks for the potential circular. Republic Act No. 10607, also known as the Amended Insurance Code, states that all licenses granted to companies and agents are only valid within the Philippines. Furthermore, IC Circular Letter No. 2020-109 also emphasizes that insurers are only permitted to cover individuals or risks located within the Philippines.
“We cannot remove that. We have to see how best we can have that implemented. There must be some way, even prior to entering a foreign country,” Insurance Commissioner Reynaldo A. Regalado was quoted as saying in a BusinessWorld report last August.
Another initiative that the IC is working on involves handing over the supervision and regulation of HMOs to another government agency under the Department of Finance. While the transfer of responsibilities is still being discussed with other concerned agencies, oversight from a financial regulatory body is required as HMOs are subject to anti-money laundering regulations.
To further strengthen the industry and make insurance more accessible to Filipinos, the IC has been actively pursuing initiatives aimed at increasing insurance penetration, as higher incomes could drive greater demand for protection products, potentially improving the country’s penetration rate.
Last year, insurance penetration, which measures premium volume as a percentage of gross domestic product and reflects the insurance sector’s contribution to the national economy, remained low at 1.67% for 2024, albeit higher than 1.61% a year prior.
One of the cited reasons for the country’s low insurance penetration is a lack of financial literacy and awareness. To address this, the IC hopes life insurance agents and underwriters can help in advocating financial literacy and prudence among Filipinos, “for the ultimate goal of financial inclusion for all.”
Recognizing the role financial literacy plays in improving insurance penetration and financial inclusion, policy makers filed House Bill No. 9162, or the Financial Literacy Education Bill, which aims to equip senior high school students with the knowledge, skills, and attitudes necessary for informed financial decision-making.
As the insurance industry slowly caters to more Filipinos, the collaboration between regulators, industry players, and policy makers has become critical in forming a financially secure and well-informed society. With the Insurance Commission at the helm of these efforts, initiatives such as regulatory reforms, financial literacy programs, and industry-wide collaboration are paving the way to a future where Filipinos are secure and confident about their finances. — Jomarc Angelo M. Corpuz
AboitizPower shutting down aging Naga power plants
ABOITIZ POWER Corp. (AboitizPower) said it will shut down two fossil fuel power plants in Naga City, Cebu, with a combined capacity of 45.08 megawatts (MW).
Therma Power-Visayas, Inc. (TPVI) will decommission its 44.64-MW Naga Oil-Fired Power Plant and 0.44-MW Black Start Diesel Engine Generating Unit, both located at the Naga Power Plant Complex, AboitizPower said in a stock exchange disclosure on Thursday.
AboitizPower said TPVI received a letter of confirmation from the Department of Energy, effective March 31, approving the decommissioning of the power plants.
“The decommissioning was pursued in view of the technical and operational issues of the plant caused mainly by the advanced age of the diesel engines,” the company said.
Notices regarding the confirmation will be sent to relevant offices and entities, including the Independent Electricity Market Operator of the Philippines, the National Grid Corp. of the Philippines, and the Energy Regulatory Commission, AboitizPower said.
TPVI, a wholly owned subsidiary of AboitizPower through Therma Power, Inc., acquired the Naga Power Plant Complex from its previous operator, Salcon Power Corp., in 2018. Since then, TPVI has undertaken “extensive rehabilitation, operation, and maintenance of the facility.”
Last week, AboitizPower announced that another subsidiary, Therma Mobile, Inc., had temporarily shut down two power barges in Navotas City due to technical and commercial challenges. Operations are scheduled to resume on Feb. 1, 2027.
At the local bourse on Thursday, AboitizPower shares declined by 1.17% to close at P42.20 each. — Sheldeen Joy Talavera